You'll Never Prosper When You're Tied Down With Payments

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Normal is broke and common sense is weird.

So 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.

George Camill, Ramsey personality, number one best-selling author, co-host of Smart Money Happy Hour, is my co-host today.

Open phones at 888-825-5225.

Matthews in Lexington, Kentucky.

Hey, Matthew, what's up?

How you doing, sir?

I was told to just get straight to the point.

So

I lost my job this morning as a construction worker.

I'm roughly 12 to 14 grand in debt, if you count my credit card.

I'm on the hunt for a new job at the moment.

I'm just a little lost.

I was hoping to get a new house by the end of the year, and now everything's just kind of been ripped away.

So I was calling to kind of see about any advice I can get from you guys.

I've been watching for a while.

Wow.

That's a day that sucks.

Yeah.

Oh, yeah.

What happened?

How'd you get fired?

So I was working in construction

and

oh, okay, sorry.

He said it was poor attendance.

And I've had the job for about eight months and I've only called in twice.

I've never been late.

So I called his boss,

another foreman that's over him, and he said that it was something else, but he doesn't know what it was.

So I'm not sure what specifically to do in the situation.

Now I'm kind of broke.

What type of work were you doing on the construction site?

I was a laborer, so just all the grunt work that they could possibly have.

What were you making?

So I was promised $27 an hour.

I was only making $22 an hour.

How long did you work in this place?

Roughly seven and a half, eight months.

Okay.

And they never kept their promise.

And then fired you, and you really don't know why.

Yeah.

Sounds like wonderful people to be rid of.

Wow.

But you still got to go get a job like instantaneously, right?

Yes, sir.

I'm guessing you have to have any money in your checking account.

Yeah, I've got enough to cover, you know,

whatever I have for bills coming up, you know, in the next couple of weeks.

Okay, good.

All right.

And you've probably got another check coming from them, right?

Yes, sir.

Okay.

That'll help some.

All right.

So, well, I mean, you're right.

It's asking a lot to emotionally bounce back in the afternoon from being fired in the morning.

But like you said, you don't have a lot of choices.

So you've got to go get some work immediately.

And so, yeah, I'm going to go just start visiting construction sites in the area.

Well, I also have experience in driving as well, and the construction industry is just kind of dropping down here a lot compared to the market.

Yeah, it may have been the actual reason you got fired.

The

may have been a layoff, actually, but the

you got a CDO.

So I'm partially towards my CDO.

I was in classes at my other job.

What can you do today that involves driving?

I can drive a non-CDO vehicle just like everybody else can, but I am one

written test away from Class B C D O.

And that'll give you a nice raise if you choose to do that.

Yes, sir.

Yeah.

Well, especially if you could get somebody to hire you this week based on that one written test coming through in the next couple of weeks

and you could get started with them just moving stuff around the lot or whatever else you had to do.

Yeah, I think

that's not a bad option.

And you probably would make more than they were going to pay you even if they had paid you what they promised they were going to pay you and all that.

So,

yeah, I think the trick here is there's

two ways to think about this.

The The first way is you got to get off of desperation onto a job and don't even care what it is as long as it's legal and moral, you know, as long as you're not hurting someone or yourself, right?

And so, you know, go get something.

I don't care.

Driving, another construction site.

Target, FedEx.

You know, we're going to be in Christmas season four.

You know it.

You know, driving for Amazon.

I don't care what you land, but land something immediately because

if you know you have enough coming in to eat and to keep the lights on and the rent paid, you will interview differently for the next job.

Yes, sir.

So the first job is just take anything in desperation that is legal and moral and get to where you know you got food deed.

Are you married?

I am, yes.

Does she work outside the home?

Yeah,

she works in the medical field.

What does she make?

She makes about $15 to $16 an hour.

Not much either.

Okay.

No.

All right.

But you got, but you do have enough to eat that way, right?

And so not enough for you to sit on the couch permanently, but you don't have to panic between now and next Friday, right?

No, no.

Okay, so let's get out there and scoot around.

Now, then once you've landed that next thing where you're eating, the second stage is you start figuring out, okay, what do I want to be in 10 years?

And what is the steps to get to be one of those?

And it needs to be something that makes more money.

Yes, sir.

And it's not just for the money, but what do you want to be?

You know, like mom and dad used to ask when you were growing up, what do you want to be when you grow up, right?

And, you know, what do you got some passion about?

What do you got some talent in?

And those kinds of things.

I'm going to send you a copy of Ken Coleman's book, Finding the Work You're Wired to Do.

It has a great assessment in it.

I want you to take that assessment and start planning out your long-term landing place,

but your short-term landing place is anybody that will pay you and you can show up having showered and shaved and brushed your teeth and on time.

Oh, why don't we make it 15 minutes early for the heck of it?

And leave 15 minutes late while you're there and make sure that you're the hardest working dude that they've ever seen during the time that you're there.

And don't you pull out your phone one time during the time you're working, actually be doing work and stuff.

And so, yeah, that changes everything.

And there's so many, you know, the economy side gigs right now that you can just literally download an app and get started within an hour.

Like what?

I mean, I did Instacart last December as a test.

And literally I downloaded the app, made my account, and I was on the road.

And I went, you know, got groceries for people.

Another one is Uber Eats and DoorDash, all of those because if they showed up at somebody's door with Instagram, they had to be freaking out.

I mean, I made sure to not actually, I left it at the doorstep.

But someone on their camera.

Oh, they should have done it was you.

The best part was.

They would have thought I didn't pay you.

Well, I embarrassingly, I went to my, I didn't realize, like, this is an awful

street I recognized.

It was my neighbor's house.

And I'm like, they're probably looking at the camera going, is that George, my neighbor, delivering groceries?

What's going on?

That's so funny.

But I thought I wanted to.

I just wanted to see how it worked.

I wanted to practice what I preach.

I tell people to go get these side jobs.

And for a week, I did it in December.

And I calculated it.

It was about 25 to 30 bucks an hour.

How did I not know this?

Well, I kept it from you, Dave.

He completely ragged on you for

a whole year.

Now you know why.

And you share it.

And now I, Instagram, or Instacart George.

Tragedy plus time equals comedy.

So I needed to wait long enough to where it was funny.

It didn't look desperate.

But man, it was, I'll tell you, it's a grind out there, Dave, getting people's groceries.

I was in the bulk bins at 9 p.m.

just getting in one pound of rice, measuring it out, going, this is, this is, I remember the sacrifice.

I don't want to relive this again.

Literally, rice and beans out there.

And you're doing it for

the show.

I thought maybe I can make content out of it, but it was too stressful to even get my phone out and film.

I was hustling.

You look stressed.

I did.

A year later.

I'm still stressing.

I'm sweating and reliving this.

So shout out to everyone sacrificing on on their second, and third, and fourth side hustles.

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Leah is in Bangor, Maine.

Hi, Leah.

How are you?

Hi, Dave.

I'm great.

How are you?

Better than I deserve.

What's up?

So I'm calling seeking advice on how to best approach homeownership.

My husband and I took your financial peace course back when we were engaged.

We currently use the Every Dollar app for our budgeting, which has been incredibly helpful.

So thank you for that.

And now we are looking at home ownership and trying to figure out how to make that happen.

Currently, we do rent for $1,000 a month, and it's really an ideal situation.

But we have one baby and we are hoping to expand our family.

And so home ownership is ultimately our goal.

Good.

My husband is the only one working.

I'm home full-time.

And so that's kind of where the challenges come in.

He brings home roughly $3,000 a month and there is potential for that to grow over time.

He's kind of new still to the company.

He's starting out and learning the job.

But

with all that being said, he is working on picking up some extra hours on his days off.

He works for 10-hour days.

And so on his two days off, he's looking at picking up some extra work because currently our monthly expenses do exceed our monthly income by a couple of hundred dollars.

And so that's the challenge.

We do have good savings.

We have about 58,000 saved.

We have about 16,000 for an emergency fund.

We have no debt and he does contribute to his 401k, but we just aren't really sure how to move towards 400K.

How long have you done all that on $3,000 a month?

It started way, way before then.

I've just always been a diligent saver.

So from the time I started working, most of my money just went right into saving.

And then when we got married, when you had a baby, you came home.

I see.

Okay.

All right.

So what happens long term to get his income up to double what it is now?

So he does have to take some certifications.

He's a technician.

So he needs to take classes to get certified as a master tech.

That's one way that he'll increase his pay.

And then I think also just experience as he becomes more efficient, he'll be able to work faster because he gets paid by the job and not by the hour or salary.

What's he working on?

So there's

vehicles.

He's a Honda tech.

Okay, good.

Yeah, I want to

a Honda tech ought to be making more than $36,000 a year.

So he must have just gotten started.

And so he's got,

yeah, he's going to have to go to all the classes as fast as he can take them and move up as fast as he can move up to get your all's income up.

Because what you're describing is not a situation where you buy a house.

Math, the math doesn't work for you, does it?

No, and that's what we thought.

We were getting advice from other people saying, just buy a house.

You'll figure it out.

Who's going to pay for it?

The house ferry?

I wish.

Yeah, I mean, there's there's not one unless you all got them in Maine.

We don't have them in Tennessee.

You know.

I haven't found one.

I mean, you have a deficit right now, and your rent is only $1,000 a month.

Yeah.

And so this is all.

I'm going to buy a house.

It'll all work out.

What are you, a congressman?

Who says that?

Yeah.

How are you covering the difference now?

Are you guys dipping into your savings?

Yeah.

No, he's working extra.

He's taking a side house.

He's picking up some extra shifts.

He's got a family friend who's a contractor.

Yeah.

Well, here's what I want.

I want a career path that leads us to more income, which allows us to buy a home.

Okay.

And that's what answers your question.

That makes sense.

That's what answers your question.

And so if it's a Honda Tech and he's making $6,000 or $7,000 a month because he's gotten every Honda certification and whatever other brands are at that dealership, go ahead and get all those certs as well.

And let's just get certified in everything out there.

And we can work on everything and we can make a bunch of money.

Because, you know, a really good guy turning a wrench with the proper certs ought to be making a lot more than he's making.

Yes.

So the hard truth is that home ownership is not going to happen in the next six or 12 months.

No.

It's going to need to get your income up and maybe a bigger down payment and maybe not the house you really wanted.

You got $58,000 for the down payment, right?

Yeah.

That's everything we have saved.

Yeah, and you're debt-free.

Well, thank God you're living on a detailed plan because it's allowing you to make it on almost nothing

while you're able to stay at home with the child, which is great.

But basically what we've said is we put a house on hold while his career develops.

And then the math will allow us to buy a house.

And by the way, that's kind of normal

unless you grew up in a generation where when you pushed a button in your hand, everything happens automatically.

Oh, wait.

Yeah, you did.

So, yeah, it doesn't work that way.

It's going to take some time.

It's a process, and it's got to cook a while.

Yeah.

Well, right now you can just doom scroll on Zillow and look at all the things you can't afford.

But back in your day, Dave, not to aid you, but the internet didn't exist to go look at every house that's available that you can't have.

No, we had to go to open houses.

Oh.

And then we would get house fever that way.

We had to do it the old-fashioned way.

But

it's really show up.

House fever is highly contagious, and it has been among us for several decades.

It just got easier with the digital age.

Yeah, you can, yeah, well, a lot of addictions

have advanced themselves.

But anyway, yeah, just take your time, honey.

You're going to be okay.

You're going to get there.

But the two things do work together, and it sounds like you really have a wonderful handle on where you are.

Congratulations.

Hunter is in New York.

Hi, Hunter.

How are you?

Hi, guys.

How are you doing?

Good, man.

How can we help you?

Sure.

Yeah, so I'm not too financially savvy.

I graduated college in May, so I just got my first job.

Hopefully a long-term

career job.

I really like it.

What are you doing?

How much do you make?

I'm making $60,000 a year before taxes.

Way to go.

What kind of job is that?

It's the sales role.

I'm in medical device sales.

Oh, so you're just starting?

Okay, cool.

What's your degree?

Yeah, just starting out.

Business management.

Good for you.

Medical device sales, I know a lot of folk making two bills with it.

Not their first year.

That's why

I really looked into it.

I had to.

work pretty hard to get the job because they don't really hire out of college too much.

Yeah, so you're going to to have to get with it.

And really, the 60 is just your first year.

You probably truthfully should double that in almost a year.

Really?

Yeah, if you get with it, assuming I don't know what their product line is or who it is you're talking to or working for, but that's the thing.

So, what's your question, sir?

You said you're not financially savvy.

How can we help you?

Yeah, so I was just curious what I could be doing

to set some money aside, invest it properly to set myself up for the future.

I mean, I have a Roth 401k with my company.

Are you debt-free?

Yes.

Yes, no debt.

No student loan debt.

No, I have an athletic scholarship.

Good.

No car debt.

No car debt.

Good.

No credit card debt, anything.

Good for you.

I think you're more financially savvy than you think, my friend.

Way to go.

Just setting yourself up like that is a big win.

Would you just please stay that way?

If you stay that way, you'll always have some money instead of giving it all to the bank.

Because your coworkers are probably going to be driving nicer cars than you and buying houses before you are, and that's going to be tempting.

So don't let that stop you from living on less than you make.

Do you have an emergency fund?

Yeah.

I have a savings account with like $7,000 in it.

Good.

Way to go.

So let's keep building that up a little bit to three to six months of expenses.

Are you renting on your own right now, or do you got roommates?

What's the situation?

I'm still living with my parents at home.

Okay.

Maybe the next step might be getting your own place.

Yeah.

Definitely.

And then on top of that, once you get that emergency fund.

That's kind of another question I have.

When to move out?

I mean, mean, right now, yeah, when to move out.

Like, right now I'm living rent-free, saving money on food, on all that stuff.

How long have you been out of school, May?

I've been in the out of my own place.

I got out in May, yeah.

Yeah, okay.

Yeah,

I don't want you there next May.

Yeah.

Okay,

that's your max.

So you decide when and how.

But

start planning your exit.

And

time to sprout the wings and fly, be the eagle that leaves the nest.

And, of course, by then, we'll see what your income trajectory is.

And that's going to help you as well.

Yeah, your Roth IRA is fine.

And if you want to start saving even more than that over just in your savings account, build up that emergency fund really thick.

That was not a bad idea either.

The Roth 401k, it works, not a bad idea.

I'll send you a graduation gift, the copy of the book, The Total Money Makeover, and it will walk you through in detail exactly what to do next and next and next and next, all the way through.

It will take you up through what we call the baby steps here.

And we're going to keep you out of debt into investing and that's going to be your shortest route moving into wealth and you got a great career field

a lot of upside there you're just getting started you're asking the right questions keep asking lots of questions keep working like a crazy man hang on we'll send you a copy of that book

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Kylie is in Greenville, South Carolina.

Hi, Kylie.

How are you?

Hi, thank you so much for taking my call.

Sure.

What's up?

Okay, I'm seeking wisdom on how to help my dad.

I don't know what to do, and so I figured I'd call you and maybe you could guide me in the right direction.

My dad is 83, coming up on 83.

He has Social Security.

He has no retirement, but according to our calculations,

he should have a lot more in the bank than he does.

And with a recent diagnosis of onset dementia, we

are finding that we can't find where his money has gone and we don't know how to either find it or figure out if he's being scammed or

how to make what he has left stretch.

Wow.

So, how much do you think is missing?

Okay,

we think that there's somewhere between $150,000 to $175,000 missing.

Wow.

And that's from Social Security payments that have disappeared?

No, he had investments.

Well, he sold his house for $400,000 in 2021.

He bought himself a $14,000 truck.

He moved across country and bought a $195,000 house.

So

roughly, we thought he had around $200,000.

He's getting $1,500 a month on Social Security.

He told us he put his money that he had remaining left over.

into

two different banks and opened up a couple checking and savings accounts in in those banks.

But recently we started getting involved because his electricity would get cut off.

He couldn't remember how to pay his electricity bill.

We heard that he was paying people money over the phone that he did not have an account with.

Like people would just call and say, hey, you owe us $500 for a late fee and he would just pay it.

And then he can't answer simple questions of like, who's his cell phone carrier?

Who does he owe bills to?

So we can help him straighten it out.

He doesn't know.

he doesn't know who the two banks are

he doesn't he he thinks he knows where they are but his stories don't aren't they are not straight like he he will tell us that he had an account with u.s bank but then he'll tell us he closed it and then he tells us it's open and then he knows he has wells fargo he goes to wells fargo every day but then he can't keep straight

is there i don't have any money yeah is there a power of attorney been assigned not yet no sir uh that needs to happen yesterday.

I'm not even sure it'll work now.

Doesn't sound like he's competent now, but I don't know.

That means you're taking over financial powers to handle his accounts.

Somebody needs to.

Okay.

Desperately.

Okay.

I mean, he's not even sure what day it is and what cell phone carrier and that kind of stuff.

He does not need to be handling his money.

Okay, then how do we find a lost $175,000?

I really don't know is the answer.

Do you have any kind of a paper trail or an electronic trail of any kind?

We are digging through stacks of

bank notices that we have found in his house.

Have you checked his email?

I have not yet.

That's a great idea.

I'd be going through everything, digital, physical, calling banks, looking for debit cards attached to those banks.

Okay.

I mean, it's possible.

It's possible he's been scammed out of it.

It's also possible it's sitting over there in U.S.

Bank, but you don't have any access to it without a power of attorney.

Okay.

You can't walk over there and ask him if I have an account either.

They won't let you.

It's against federal privacy laws.

Okay.

So, I mean, but if you've got a power of attorney, you can go on his behalf and do it.

And you all need to do that yesterday.

Okay.

Like six months ago yesterday.

But to go do it today.

Do not let this.

I mean, 48 hours, kid, right now.

Go get it done.

And so then you can start to inquire with these people because otherwise they're just going to to shut you down.

I mean, just like if you called up and asked where George Bank, they're not going to tell you.

Okay.

Okay.

So, but if you just go, here's the power of attorney.

Here's a copy of the power of attorney.

He's 82.

He's got onset.

And I'm trying to find some money that's lost.

Do you have an account there?

Okay.

What's the balance?

What's the account number?

And then you just start tracking everything down that you can.

If you reach a complete dead end on all stacks of paper and all email and text and anything else you can get a hold of, if everything is run to ground and you still haven't found it, you could go to our local, our endorsed local provider for taxes, our tax ELP.

They probably can make you a recommendation of

a forensic accountant.

And a forensic accountant is someone who knows how to dig through those things and try to find a trail maybe that you didn't see and trace back through.

If he's been scammed, I don't know where you'll be.

But in the meantime, y'all are taking care of him anyway.

I would think of every professional he's interacted with, CPAs, accountants, tax pros, real estate.

I mean, if there was a real estate transaction, that money was wired somewhere.

And maybe you can go to the title company that handled the wiring and figure out where it went.

And that might give you some clues at least.

Yeah.

Which account did that go into?

And then if you find that account, you can go from there.

Where did it go from that account?

Check the statement.

Every account, every touch point, do a full audit on it.

And I want to see a full list of every transaction for the last seven months or since he sold the house.

And what we're trying to do is follow that 175 or that 150 around, that extra equity around, because we do know he bought two things, but he should have somewhere around 150 left, give or take.

And yeah, find out where it went.

That's a good thing, George.

Go to the closing and see where that money went, and then do an audit there, find out for where it went from there, then find out where it went from there.

And in every case, you'll see transactions and you can run them down.

You're going to have to have a power of attorney to do all that, though.

And you're just going to have to run it to ground.

But the big thing is, is everybody is no longer in denial.

We have a power of attorney, and he is shut down, and he's not allowed to do any more transactions at all.

He does have no access to any accounts because people are calling him up, and he's giving people 500 bucks.

And then y'all are having to put 500 bucks over there to feed him.

So they're stealing money from you, is who they're stealing money from.

So you've got to shut this funnel down for his sake.

And

he doesn't want you to.

You don't want to admit admit that your dad is finally at that stage.

But here we are.

The longer you stay in denial, the more checks are going to be written to bad people.

And so you guys have really got to shut this down hardcore fast just because he's getting screwed over if he hadn't already lost $150,000.

Yeah, I feel like we're getting more and more calls of people getting scammed out of hundreds of thousands of dollars because they're just, you know, they prey on the elderly.

Exactly.

They prey on people who, you know, who mentally can't handle this and don't know if it's a scam.

Colin in Jacksonville, Florida.

Hey, Hey, Colin, what's up?

Hey, Dave and George.

Thanks first and foremost for everything you guys do.

Really helpful content.

Thank you.

But to be direct and yeah, of course, my question is this.

My wife and I, I'm almost certain we're on baby step seven.

We're totally debt-free, including the mortgage.

And to your guys' point, the peace of mind is amazing with that.

But with that being said, we're in a two-bed, one-bath currently.

It's myself, my wife, and a year-and-a-half-old daughter.

I also work from home as well.

So things are starting to feel a little cramped.

And although need is a pretty strong word, I do think that we're inching toward a need for additional space.

And so I'm kind of battling or going through the pros and cons of having another mortgage and upgrading the space versus kind of remaining cramped and having that piece every month of not having a mortgage.

What do you guys make?

What do you make?

We make about $2.25 as a household.

So how much can you bank a year?

Right now we're investing in 15% and saving about 6 grand a month.

Okay.

All right.

And so what's your current home worth?

It's worth 250.

I think

what's the target home?

How much is the target home?

500.

500.

500.

So you need 250.

500K.

Yeah.

Yeah.

Well, I mean, there's two ways to do it.

One is take out a small mortgage, and two is we'll move in two and a half years and we're going to save $100,000 a year because we don't borrow money anymore.

That would be sharing's my only option because we don't borrow money for anything ever, even though that's uncomfortable, inconvenient, and all that.

But if you want to go just a little bit in and kind of meet in the middle and knock off a mortgage in two or three years, you can do that.

But it's emotionally very hard to go back in debt once you finally got out.

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Not in all all states.

Today's question comes from Mark in England.

We are retired, mortgage-free, and financially stable with no debt except our credit cards.

We buy what we need on a credit card that gives us points, which we use to pay for clothes, food, etc.

We then take that credit card debt and put it onto a long-term interest-free credit card for a period of 12 to 34 months, only paying the minimum balance each month.

At the same time as the start of the 0% deal, we put an equal amount into a savings account that pays us 7% interest.

At the end of the 0% term, we pay it off from the savings and then keep the interest earned to pay for travel or a large cash purchase.

We've been doing this for 10 years with no interest incurred.

Cash back to us has been $6,000 plus $8,000 earned in interest from the savings.

Why shouldn't we keep doing this?

Because it's exhausting, number one.

This is how you lost the Revolutionary War, Ryer.

Zinger.

Oh, my God.

Take that, Redcoats.

Unbelievable.

The mental calories needed has got to be worth something.

Your time is worth something.

And here's what's ridiculous.

We do not know the dollar amounts.

What it took to get.

If you took,

I mean, what could you, what can we talk about?

50,000 bucks, and you run it through all of those ringers.

When you get done, you got enough money to buy a biscuit.

I mean, there's no money involved here.

This is a, it's like a math riddle for a sixth grader, and you fell for every bit of it.

I think you need a hobby.

Really?

This is like exhausting.

So the problem with all this is, is you have set up a

house of mirrors, a house of traps,

and you have figured out how to...

No, you know, I'm trying to remember

what's the thing where the kid, where the people,

the ninja thing, where they go through all the

American Ninja Warrior?

Yeah, like you're American Ninja Warrior, or the English Ninja Warrior for credit cards.

So you've got this full obstacle course laid out, and you know how to do it.

But if you miss one handhold, you're in the water.

If you jump just wrong, you're going to turn your ankle and be on your head.

And so that's exactly what...

This is like a...

It's like an obstacle course.

It's like you did a treasure hunt with an obstacle course in your backyard and you're 12 years old.

No, and it's not worth the money.

If you actually add up the actual dollars that you're benefiting from all these gyrations, it's so small it almost makes you want to giggle.

Like, really, if you just gone and done like work or something while you spent all this money, I mean, all these calories on this chasing your tail all over the place and trying to somehow beat the credit card company, you'd actually have some money.

So, no, no, no.

And also, Mark, let me tell you this.

We have not done a study in the UK,

but we have done the largest study of millionaires ever done in North America.

We studied 10,167 of them.

89% of them, 9 out of 10, are first-generation rich, meaning they started with nothing and they became millionaires.

The number of those self-made millionaires, starting from nothing, that became a millionaire working a system that remotely looks like yours

is precisely zero.

Out of 10,167,

not one

said they played the airline mile game, the high yield savings versus repay old credit card and 30 days out and back and forth gyration game.

And that's how I made my million dollars, Dave.

Not

one.

Not uno.

Not one.

None.

Zero proof text that your system causes wealth building.

Zero.

There's zero humans we have found that your system made rich.

Zero.

None.

Was I unclear?

I think that's as clear as mud right there, Dave.

Well, the key is the fallacy is that he wouldn't be financially stable without this.

You've become financially stable in spite of the credit card game.

You decided that we're not going to have a mortgage anymore.

Well, why would you do that when you can make a spread on that?

I mean, you can, you know, reverse engineer this logic and just stay in debt the rest of of your life if you think you can outsmart it.

But clearly, you value a debt-free life, and I think this credit card game is costing you more than you think.

And here's a good test: for one year, use your own money and see if you don't save more than you have doing this credit card churning, arbitrage

gyration.

Here it is: the number's actually on here.

I got tired before the end of the email, but it's on here.

Cash back to us has been $6,000

plus interest earned from this plus $8,000 from the interest earned.

So, $14,000.

Over Over 10 years.

Oh, my God.

Yeah, that's over a 10-year period.

You made $1,400 a year doing this.

It's worse than I thought.

$1,400.

I mean,

dude, how hard is it to make $1,400 in England?

You really have taken a lot of risk and played with a lot of bear traps, hoping not to get your arm ripped off by a bear trap in order to make $1,400 a year.

And here's the other thing, George.

A guy that writes us an email that says this, the chances of him not doing it anymore are zero.

He's going to keep doing it.

Yeah.

He just wanted to, I guess, brag about how amazing

wants to be the subject of the latest Ramsey meme.

I don't know.

But

that's a bad choice, dude.

But the

yeah.

Part of the entertainment value of this show is you watch other people do something so stupid that you're entertained by it.

And that's sometimes why people watch this show or listen to the show.

Sometimes they do it to learn from what we're teaching here.

And then other times it's just human beings are entertaining.

Entertainment value.

I think you just fell in the second bucket.

All right.

Daniel's in New York.

Hey, Daniel, how are you?

Hey, Dave, how are you doing?

Better than I deserve.

What's up?

So, me and my wife are currently on Baby Step 2, and we're strongly considering selling our car.

Kind of thing is we have one unreliable car, and this car is kind of our, you know, put the kid in the car, make sure it's safe.

Yeah, we're just wondering if we should sell it and maybe even potentially have my stay-at-home wife go work part-time.

Okay.

What do you make, sir?

I make about $144,000.

Okay.

And how much do you own the good car?

$29,000.

Okay.

All right.

And the the car that's not not reliable is worth what?

I'd say maybe $1,000.

Oh, okay.

So probably somewhere between there is a reliable car, isn't there?

Yeah.

What could you sell the good one for?

You owe $29,000 on it?

I owe $29 on it.

We could probably sell it for around $30, $31, $32.

Okay.

And you have any money saved at all?

So we have the emergency funds saved.

The $1,000 starter emergency fund?

That's correct.

Okay, good.

And what else?

Well, that's about it.

And then the rest, we're just paying off debt right now.

Good for you.

Okay.

So you have a $29,000 card debt.

What other debt do you have?

Just student loans.

We have zero credit card debt.

The student loans equate to about

$70-ish,

$75,000.

Okay.

All right.

And so you got $100,000 in debt and you make $100,000.

Yeah.

And you live in New York City?

Yeah, just

very close, yeah.

Okay.

All right.

Um, expensive area, though.

Yeah, so we're actually lucky because our parents own a house and uh we're actually renting with them.

Um, so we're we're not paying as much as we as the normal person would pay here.

Okay, that's good news.

Okay.

Well, here's the thing.

If you guys can get out of debt and keep the car within two years,

I'd be okay with you keeping it.

I don't think you can.

I think that'd be too tough.

That'd be $50,000 a year on debt, and somebody's going to be making some more money, you or her one.

What could she make working part-time?

So she has an English degree, and before she became a stay-at-home mom, she was an English teacher.

Yeah, why does she do tutoring for $45 an hour?

We were thinking about that as well.

Yeah, that's not even a part-time job, you're just doing that from home.

I mean, she can tutor 45 bucks an hour and work 10 hours a week, and all of a sudden now we got some serious money coming in.

That's um, yeah, I'm gonna do something like that for sure.

And then you pick up what you can pick up, and then if you can keep the car, fine, but I'm probably gonna get rid of it and get me about a ten thousand dollar paid-for car.

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

George Campbell, number one best-selling author and Ramsey personality.

He's my co-host today.

Rex is in Los Angeles.

Hi, Rex.

How are you?

I'm good.

Thanks.

All right.

How can we help?

Yeah, so we're not on the steps yet.

We've just, my wife and I just started reading you and listening to your stuff.

We've got a bunch of debt, a lot of credit card debt, some student loans we took over for my daughter,

other stuff, a car loan, mortgage.

We've also got a lot of money and investments.

And if we're going to do this, should we just take that money in the investments and pay that stuff off?

Or should we do the work to

pay that down out of my salary?

Is that taking the easy way out to just pay it off?

That's the gist of the question.

Yeah, it's a good question.

It's a fair question.

How much debt do you have, not counting your home?

Including the car loans, everything, $167,000.

And how much in the brokerage account?

$844,000.

None of that is retirement.

No, we have an additional $401 that's about $85,000.

Okay.

What was this account for?

The brokerage account, half of it was

when my dad died, we got an inheritance, and the other half is just investments, sort of just making money for retirement.

Okay, good.

Except it's not in a retirement account.

Yeah,

yeah.

Yeah.

And what do you make a year?

About $175.

Good for you.

And what do you owe on your home?

$776.

Okay.

All right.

Well, Rex, the

thing that we teach, and you guys have to decide as a couple if you're going to buy into that in order for the answer to your question to make sense.

The thing that we teach and believe, and we've proven to be true over 30 years of doing this, is that when someone can get out of debt and stay out of debt and live on a detailed plan, that both spouses are in agreement to where the money's going, and you've done a great job saving money.

I mean, you're millionaires.

You've done a great job saving money.

We got lucky on full of it.

Yeah, maybe.

But, I mean,

some of it was an inheritance.

But overall, I mean,

you've not done horrible or anything like that.

I mean, you've done a good job.

So now you've got to ask yourself the question of what is the shortest distance between where I am with money and where I want to be?

And we have found that the people that build the most wealth are those that get out of debt, stay out of debt, and live with a plan.

Okay?

Because when you don't have any payments,

all your money is not going to stupid card loans and so forth.

You can do stuff with it.

Now, if you can do that and commit to that

and you're both in agreement to that and you get out the Every Dollar app or something like that and you say, okay, this is our plan and we're not going to buy anything else ever on debt because we believe the shortest distance between where we are and wealth is no debt.

And so once we pay this debt off, we will never be in debt again.

ever for any reason.

Not a big enough emergency, not a big enough need, not a big enough, I got car fever, nothing unless I pay cash for it.

I'm not doing it.

If you're willing and able, both of you, to commit to that, then yeah, writing a check and paying it all off is not cheating.

The problem is if you don't have that level of commitment, like this pinky swear spit shake contract, right,

that we're never doing it again,

you'll do it again.

And next time you won't have any savings because you will have paid off all your other mistakes with the savings.

And

I don't want you to not change your habits.

So if your habits are permanently changing, you know, you can make a lot of money doing this.

But if they're not permanently changing, it would be a vast mistake because you'll, you know, the recidivism rate is crazy on this stuff.

Yeah, I mean, honestly, we've already done this with the credit cards.

The problem is we didn't get rid of the credit cards, so we just wrecked them back up again.

Ta-da.

I rest my case, counselor.

Yes.

Yeah, so, yeah, so that sort of leans toward trying to pay it off.

You know, well, or, you know, you've for your sake, it doesn't matter to George and me, but for your sake, you two adults have to become convinced that we're never going back.

Yeah, yeah.

And there's going to be pain either way.

To watch that money leave that brokerage account is going to be painful.

To sacrifice for two, three years is going to be painful to pay it off.

Yeah.

And the fact that you did this thing with the credit cards tells you, I, you know, maybe

we get on a strict budget and we aggressively attack the debt and pretend like the brokerage account is not there for five months or six months, and let's prove it to ourselves that we're through.

Yeah, yeah, okay.

How old are you?

53.

Okay.

Oh, it's time.

And you picked up your daughter's student loans that she took out and her name or what?

Yeah, when she got married,

we just sort of just took those over for

them.

Yeah.

Well, I would, you know,

either way, I'm going to be out of debt very, very quickly with a hundred and seventy-five thousand dollar income.

But by quickly, I mean a matter of months.

And so,

you know, but but you guys have to become convinced

you don't have to be in pain

to never go back.

You just have to be committed to never go back.

It's not necessary that

I've got a friend who is a a heroin addict and he went went through rehab, and it changed his life, and he met God, and him and Jesus are best friends.

And man, he stays away from it.

But his kids don't have to go through that to learn the lessons that he's learned.

They can observe someone else and go, I don't want to do what my dad did.

And the dad can look at his kids and go, I don't want you doing what I did.

And so you don't have to go through pain to learn.

It's not necessary.

It's a thorough teacher if you do.

But it's not like you have to

go down the gauntlet and be hit with straps and whips or whatever to prove.

No, you don't have to do that.

That's masochistic.

We don't need to do that.

But you do have to be committed to never going back because otherwise it's pointless.

Yeah.

So

you're going to end up in worse condition.

If you guys agree, we're going to cut up the cards and close all these accounts.

We're going to freeze our credit.

So it's much harder to go back into debt.

Then I would say, all right, let's use these funds.

You know, you might pay some capital gains taxes on the growth, but you're going to clear the decks and be in a different place by Christmas.

And now you've freed up all of those payments to now invest and give more and live life with a little more freedom and peace.

So I think it's beginning to start working down that mortgage at that point.

And you need to start putting your excess savings when you get to baby step four in a retirement account, in a Roth, not in just a brokerage account.

The amount of money you're losing there in taxes is incredible.

Yeah, that brokerage account is for, you've maxed out all retirement options and we have nowhere else to go but non-retirement investing.

Right.

But he's not got that problem with this income.

So, no,

you can get there.

So, yeah, I'm fine.

Temporarily stop all investing, all saving.

And for six months, we're going to go at this thing hard.

We're going to open up an every dollar app.

Both me and mom are going to get on it.

We're going to get the credit cards out, have a plastic surgery party, light a candle.

We're done.

We're not doing this anymore.

And we're 53 years old.

We make too much money to be the stinking broke.

And I'm sitting here with car payments and I make 175 grand.

That's just, God, that's got to be disgusting.

So get disgusted in a reasonable way and permanently change your behavior.

And then you got no problems.

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Jamie's in Newark, New Jersey.

Hi, Jamie.

What's up?

Hey, how's it going, Dave?

Pleasure to speak with you.

You too.

How can we help?

I try to be as brief as possible.

I have a job

on paper.

It looks like the dream job.

I work for a large pharmaceutical, biopharmaceutical company here in New Jersey, one of the top biopharmaceutical companies.

I make good money.

I make $46 an hour.

There's unlimited overtime, pension 401k.

But when I started, we have a union here.

And it's a big campus, so it's a pretty large facilities on site.

And

because it's a union, I had to end up going to a department that I really didn't have a lot of experience in because I was low man on the seniority totem pole.

So I ended up in the power in a place where I don't really have a lot of experience dealing with boilers and components, servicing different components that go to the boilers systems.

And from day one, my manager,

he never took any initiative to make sure that I got fully trained up, pairing me with other team members.

Basically, I have no manager.

All he does is come in in the morning and ask everybody if they want overtime.

And he goes away.

And I've tried to reach out to a lot of my coworkers, a lot of the older senior guys who've been here for years, but the environment is so toxic.

I'm the only minority on the team.

And I feel like

since I've been here for almost two years now, I can tell that they are purposely excluding me from all of the serious jobs.

The jobs that I do, that they leave to me that nobody else wants to do is stuff that i can do in my sleep you know and um i can actually sleep at work the job is i have like i said everything on paper looks good they have a building here with a couch on the third floor a lot of times i'm in that building on the third floor sleeping uh i'm in different buildings uh looking at the computer like i like i actually have time to wait

meantime meantime your soul is rotting

yes sir yeah that's an expensive soul tax

yeah so what are you have you been looking for something

Yes, I have an interview tomorrow for another large pharmaceutical company here in New Jersey, and I know what I don't want.

And I guess I've really answered my own question, but I know you deal with this type of thing on a daily basis.

So I really wanted to get an expert like yours, like you, your opinion, because I know it holds a lot more weight

than probably even my own opinion on this topic.

Very few, very few people are actually happy

doing nothing or being underutilized.

Most people,

your spirit,

your relationships, everything is invigorated by reaching for the stars.

We are designed by our Creator to create and be productive.

And when we're not doing that, it is a soul tax.

It takes a tax on your soul.

And so that's what you're discovering.

And so this idea that if I got paid for doing nothing and sitting around doing nothing is is somehow a wonderful thing, it's not really wonderful at all.

It's really horrible.

I agree.

And so I agree with you that,

but I don't think you have to, you know, you don't have to run out the door.

They're not burning the building down.

They're nobody in danger.

They're not being mean to you.

It could be racial.

It could just be that they're just being union jerks.

You know, and I don't care.

It doesn't matter to me which one it is.

I'm still getting out of there.

I think there's a limited both.

I remember one of my coworkers.

I'd say you're probably right.

That's probably true.

He's made a remark about knuckle draggers.

I hope they hire some more techs and they keep hiring these knuckle draggers.

Yeah, but that's not a racial thing.

That's just a caveman.

Knuckle dragger is just a dumb person that doesn't know anything.

It's just a caveman.

So,

you know, but either way, it doesn't matter.

You've solved the problem.

The riddle is I got to go.

But what I don't have to do is go running out the door and make $20 an hour while I'm making 46 right now so i'm gonna sit here for a minute no pun intended and uh look for a job right instead of sleeping on the couch i'm gonna be looking for a job

right that's what i've been doing today the last couple weeks every day i update my search yeah and and i you know i don't know if you felt if you fell backward into being a boiler guy or if that was what you intended to do What is it you really want to be 10 years from now?

If you could do anything you wanted to do, what would you do?

Validation, equipment validation, and qualification.

Okay, so you enjoy,

and you're good at working with your hands, and you can, in your mind, you can see how things work and how they're put together.

Yes, sir.

Very good.

I like it.

Well, Ken Coleman would like what you're saying.

Mike Rowe would like what you're saying.

I think you can make a lot of money, but you're not going to make a lot of money if you're dragging your knuckles, right?

Exactly.

And so, and you're not going to have, and you're not going to come home energized.

See, I come home from doing this.

I'll do about five and a half hours on the microphone today, different podcasts and different things I've got to do inside the building today.

And I'm 65 freaking years old, and I come home energized.

Because I'm doing stuff that matters, stuff that I care about, and I'm pushing the edge.

I'm having to use every ounce of everything that I am to make sure I help you guys, give you the right answers, all that kind of crap.

And so, yeah, hang on.

We'll send you a copy of Ken Coleman's book, Finding the Work You're Wired to Do.

But, George, life is just better when you're doing something that you have to reach for.

Yeah.

It's just out of reach.

It's funny because it's almost worse when you're paid well to do it because you go, well, I'm an idiot to leave this.

No, you're an idiot to stay.

Because if you're not treated well, you're undervalued.

You're bored.

There's no growth plan.

Like Dave said, eventually your soul is going to pay the price for it.

And so we believe that you can do the work you're wired to do and get paid well to do it.

And naturally, you're going to grow in that area because they're going to see your enthusiasm and your talent and your excellence.

So we're rooting for you, man, to get to that next thing.

It's a pretty crazy world when you just show up and care and work hard all day long, and that makes you stand out.

You don't even have to be that good.

You just got to care, have brushed your teeth, and work hard all day long.

Just showing up in good hygiene goes a long way.

I mean, it's just, it's amazing.

That's what I've done.

That's the world.

What's working for you?

Your hair is great.

Thank you.

But the.

I wanted to say, I wish I could say the same, but it was too soon.

Too soon.

All the hair jokes go all the way around the horn before they stop, huh?

Okay.

I like it.

Seriously, though,

the striving for excellence, the striving to

reach a level you've never reached before, is what gives life to you.

And so anytime someone's just sitting, and listen, things are either growing or they're dying.

There's no in-between.

And so this job, Jamie, that you got is going to get worse.

It's not going to get better.

It's dying.

It's going off the cliff.

They made it clear.

Yeah, it's pretty ridiculous what he's describing.

And I don't think he's being weird.

I think he's probably got a

pretty clear action of what's going on there.

So, yeah, I'm, you know, I set a goal that within six months to a year, I've got a better job making $52, doing something where the people respect me.

I respect them.

And we have to work really, really hard while we're there.

And I come home with a callus on my hands because I've actually been turning a wrench all day, not sleeping on the third floor couch.

Yikes.

That scares me.

That's what's happening in pharmaceutical companies in America.

Well, apparently, the maintenance team in the building at the farm is working on the boys.

The union workers.

Still, it's just the whole thing is, wow.

Hey, you guys, more than a hundred million Americans carry medical debts, and that is so scary.

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In the lobby of Ramsey Solutions on the debt-free stage, Christopher and Brittany are with us.

Hey guys, how are you?

Doing well, Dave.

Welcome, welcome.

Where do y'all live?

We're from Sacramento, California.

Cool.

Welcome to Nashville.

Thank you.

And how much debt have you guys paid off?

Paid off about $412,000.

All right.

How long did that take?

28 months.

28?

All right.

Very good.

And your range of income during that two and a half years?

So we started at $215,000.

We went up to $350,000.

And now we've gone back down to $250,000 so I can be part-time and stay at home with our newest baby.

Love it.

What do y'all do for a living?

I do plumbing.

So I work for a general contractor, plumbing contractor.

I did HVAC too for about 20 years.

Wow, cool.

And I'm a nurse, a nurse educator, and train new nurses.

Gotcha.

What kind of debt was the $412,000?

Everything.

Student loans, kids' braces, personal loans, time shares, phones, taxes, all the things.

Wow.

Everything?

Mortgage two?

Nope.

Still got a mortgage.

We're in California.

We've got a little while, but we're free.

Good for you.

That's our next level.

Now you're free, though.

$41,000.

$412,000 worth of normal.

Yes.

Wow.

How long have y'all been married?

Gosh, what year?

Almost a few years.

Yeah, three and a half years.

We started just before our wedding.

So we had some great data.

So you both brought crap into this.

Yes.

Yeah.

And so you've been married three and a half, and you say, all right, job one, we're cleaning up the mess.

Yes.

Yes.

Not living like this.

Get a fresh start.

Yeah, we had a really hard time with a lot of car problems, deaths in the family, different things.

And it just pushed us to the point where we were like having to borrow our kids' cars while we had one sitting in the driveway needing a transmission.

And so we were just like trying to figure out how do we get out of this and change the world.

We make too much money to be this broke.

Absolutely.

What was the bulk of the 412?

Student loans, probably about 100 or so.

Some old stuff we had from previous marriages, another couple hundred.

So it's

a lot of money.

Was it just like collecting, collecting to where you just went, like, I'm in denial at this point?

Yeah.

It was like, what's another three grand for braces on top of that?

Sure.

Exactly.

It was 0% for braces.

And so we didn't pay outright.

And then when we were able to pay it off, it was just, I mean, trying to call to pay it off, they don't let you call and pay it off.

I don't know if you know, it takes six to seven times to call and

say, we need to get your address.

Convince them to take your money.

Yeah.

It was really rough the last month and a half, I'll tell you.

They like you owing them money.

Who knew?

Who knew?

Wow, very cool, you guys.

Very cool.

So, how did you get connected to the Ramsey stuff?

So, I learned about you back in 2009 when my youngest son was born.

He's 15.

And,

I mean, we've heard we did FBU.

You know, I talked to you on the show before I went to nursing school to talk about, should I go to the Air Force, student loans, what do I do?

And then I became a single mom.

And so, when I did that, you know, I said, okay, I'm going to have to take student loans because I figured I knew better than you did.

You know, we were Dave-ish for a while.

And then 28 months ago when we got our wedding and we both just said, enough is enough.

And so we did a couple more FPUs at home, downloaded every dollar, and we have not done a month without every dollar for the last 29 months.

Wow, that's incredible.

So it's been, you've been aware for like 16 years, but life kept happening.

Yes.

And so when you guys got married, you're like, I know just the guy.

Yes, I did.

We had spreadsheets of all the different debt we had, and it was a long list.

Scary.

No more spreadsheets, I hope.

You've deleted the Excel.

Yes.

So, Christopher, you knew when you were getting married you were getting into this, right?

Oh, yeah.

But I knew she was worth it.

So, eventually worth it.

Correct answer.

Yes.

Not into this, all the debt mess, but into this, I'm going to go hardcore randomly.

We're going to do it together.

Yes.

Yeah.

She worked her butts off.

She worked her butt off to get a lot of the debt done.

A lot of side hustles.

Yeah, I bet.

I bet.

Well, congratulations, you guys.

We're very proud of you.

How's it feel to be free?

Yeah.

It's a relief.

So the main thing is we're just going to focus on not getting back into debt.

And so it's just saving and saving.

If we want to take a nice vacation, then we have, either we have the cash to do it or we're not doing it.

So

we're definitely on the same page on that.

I love it.

I love it.

Well, congratulations.

All right.

When someone says, how do you pay off $412,000 in 28 months?

That's stinking impressive.

What do you tell them the key to getting out of debt is?

Budgeting.

Every dollar for 29 months, you're going to be doing it.

Every dollar.

Making sure every dollar has a name.

We logged our kids in.

They have their own every dollar.

And, you know, make sure that you know where your money's going and make sure that you understand the principles of it so that way you don't ever do it again.

Yeah, and we're teaching them to go through college deaf-free, too, because of you.

Two in college working three jobs each, you know, working their way through college and one about to go, and they've all paid cash for their cars.

And I'm impressed by them and how well they've done.

Wow, very cool.

You really have changed your family tree.

Yeah, we say more is caught than taught.

And they've been watching mom and dad just hustle to get rid of this debt.

It's like, well, there's work ethic right there.

They're catching that for sure.

What was the hardest thing to cut out of the budget or the biggest thing you guys cut to make this happen so quickly?

We were talking about that last night.

So I refused to give up kids' sports for them because it was such a big thing for them.

So we'd actually argue about golf, and instead of doing like a big golf round, we'd do a little golf round.

And we, you know, the grocery budget, I hear people talk about how much they spend.

We're a family of eight, and my budget's $1,200.

So

that's pretty good.

Well, some of the

Great Dane dog food too.

Yes, we have the Great Dane puppies.

Of course.

Everything can eat.

That's what I'm doing.

We have three.

Oh, my goodness.

They eat more than the kids.

Wow.

That's incredible.

Costco.

Very cool, you guys.

Very cool.

So the budget is the deal, and eating, and you must be cooking a lot from scratch.

As much as I can.

Yeah, which helps as a nurse, you know how good that is, right?

The nutritional values and everything else.

Completely different.

So, well, way to go, you guys.

Way to go.

And you brought all of them with you to celebrate.

All right, bring them up.

Let's hear all the names and ages.

Come on up, guys.

Let's have a big celebration here.

The family tree.

Look at this.

The family tree has changed.

Brianna's 19.

We have Peyton's 19.

Memphis is about to be 18.

Jackson's 15.

Ava's 13.

And we have Noah, who's eight months.

Way to go, Noah.

You did it, man.

You joined the clan, buddy.

I love it.

So cute.

Very cool.

All right.

Christopher and Brittany and the gang from Sacramento, California.

$412,000 paid off in just 28 months.

They were working like crazy people, living daily on a budget, eating at home, $215,000 to $350,000 income.

Count it down.

Let's hear a debt-free scream.

Three, two, one.

We're debt-free.

Love it.

And the kids are going to school debt-free, and they're paying for their cars debt-free, and family trees changed.

That's impressive.

And at this age, they saw the sacrifice.

So they're going, yeah, I'd like to avoid that.

Yeah, I think I'll avoid that.

And yet they survived the sacrifice of mom and dad for two years.

A lot of people say, well, you know, I don't want to affect the kids.

Like, maybe it should affect the kids so they don't fall into the traps that we fell into.

Yeah, well, they did it.

I mean, they pulled it off.

And

here's the thing.

What you saw if you're watching them, and if you go back and watch this, you can pull it up on YouTube

or Spotify where you can see the video, either one.

And

what you'll see is you see their body language, and it just says, I've had it.

Not living like this anymore.

They're just very resolute about that.

We're going to do this.

We're not going to go back.

We're never going to be there again.

And life's too short.

And they've got second marriages they're going into.

And they finally just said, okay, that's it.

We're pulling the plug on stupid.

Let's clear the decks.

Yep.

That's a beautiful thing.

And it's never too late.

That's impressive.

Yeah.

And don't tell me if you've got a bunch of kids, you can't do it.

Don't tell me if you live in California, you can't do it.

It just proved you're wrong.

All these things.

It's like, hold my beer, right?

So you can do it.

You can do it.

But it came down to, I mean, you could just tell looking at Brittany, Brittany put in some hours as a nurse.

I mean, and look at these numbers with the income dropping off.

You can see that

the number of hours she was working as a nurse to cause this to happen.

And, oh, by the way, just had a baby.

And, oh, by the way, you know, and, oh, there's every excuse in the world, but none of them mattered.

They still went and paid off $412,000 in just 28 months.

I mean, you blink in 28 months is going to go by.

So the question is, do you still want to be in $400,000 of debt 28 months from now?

Or do you want to just decide that today's day one of a journey of 28 months?

Yeah, but I mean, the matter you get, the deeper you cut.

The more resolute you are, the deeper you cut, and then the faster you get out.

And then the higher the probability is that you make it and you stay out.

The faster you get out,

the deeper you cut, the faster you get out, and the higher the probability is you get out to start with and then stay out.

All of those things fit together and everything we've seen over the last 30 years in doing this, and they've got all of it.

That's this family of winners right here for sure.

Very impressive.

Hey, if you're a business owner or a leader in small business and you've got a question about running your business, about leadership, how to lead the team, manage the money, grow without going crazy, family business questions, I'll take your call personally.

I do a top-rated podcast on small business and leadership called Entree Leadership.

And you can call us.

Here's the number.

You can be part of that show.

844-944-1070.

844-944-1070.

Or you can head over to entree leadership.com/slash ask

and drop us a note there.

We'll call and set you up as a caller on the Entree Leadership podcast.

Ryan is with us.

Ryan is in Charlotte, North Carolina.

Hi, Ryan.

How are you?

Good.

Good afternoon, Dave.

Thanks for taking my call.

Sure.

What's up?

So, question is, is I am being told by my ex-wife that I should cash out my 401k to purchase a home.

And the reason being is when we divorced about eight years ago or so,

she basically took half my 401k and parlayed that into purchasing a home.

Five years later, sold that home for a good profit.

And so now, and then

bought another one.

And so she's saying, hey, you know, you need to get out of stock renting and you should really put some of that money into real estate.

I'm so confused.

Why would anyone ask their ex-wife for financial advice?

Well,

I saw what she had done with uh no, you didn't.

You saw what she said she did.

When she cashed out half of that 401k, she got charged the 10% penalty plus her tax rate.

She borrowed this money at 35% interest.

By the time she flipped this house and made money, she didn't even make money.

She's so full of crap, she's a Christmas turkey.

You know, I could I see that, you know, with the house that was purchased and sold, I mean, you didn't see all the penalties and taxes she paid on the stupid withdrawal from the 401k that negated any profit that she made on the flip.

Yeah, that is true.

Okay, because this woman talks out of both sides of her head.

That's why she's called the ex-wife.

Yeah.

Although she is in a house and I'm still renting, so I gotta.

Yeah, and what she paid for it was a dear price.

Yeah.

And sadly, it's probably so mathematically challenged she doesn't even realize it.

Yeah, that's

it's gonna take her a lifetime just to catch up on retirement now.

Yeah.

So how much do you have in retirement?

Me personally now, about 85.

And what do you make?

130.

And how old are you?

50.

Yeah, okay.

If you cash out your money, they're going to charge you a 10% penalty

plus a 25% tax rate.

It's like saying, Dave, I want want to borrow 35% interest.

I want to borrow money at 35% interest to buy a house.

Please don't do that.

No, I agree.

That does not put your face under the smart column in the dictionary.

Okay, so no, don't do that.

And

be careful who you're listening to for financial advice in the future.

You know, it's like watching some influencer on TikTok and they're on there doing their thing and they look like all they're running is the highlight reel and you see a private jet that they rented and don't don't own.

And, but I can teach you to buy real estate, and I've got a jet that I rented 10 minutes ago.

It's not even your own jet.

Come on, dude.

You know, and then you go buy a $3,400 kit from them, which is where they actually make their money.

So no, just no, no.

Be careful who you're listening to for money advice.

What you want to do is look at people that are understated

and they're driving a Toyota

and they don't have any flash or any bling

and their lives are really solid and steady and predictable and sustainable and happy, high-quality relationships.

These are called mature individuals.

They're not doing anything to impress others.

They're living a life of quality.

And if someone happens to notice, they probably wouldn't even notice.

And these are called millionaires.

And if you can find one of those and actually get them to admit it and then talk to you, they'll teach you the real stuff about money.

It's hard stuff like live on less than you make, save and invest, be generous, live on a plan.

Don't rob your 401k to get into a house, that kind of stuff.

Yeah, common sense.

That's on the...

Don't listen to your ex-wife for financial advice.

Alexi is with us in Sacramento.

Alexi, how are you?

Hi, I'm good.

How are you doing?

Better than I deserve.

What's up?

So I recently discovered your podcast.

I'm a new listener, and I recently started my career.

I graduated college last year.

So I've officially created like a monthly budget paying off my student loans and all of that.

Good for you.

But I was wondering, thank you,

on the best approach and recommendations for all the extra money that I have.

I recently learned about high-yield savings accounts.

So I was just wondering if that's the way to go or where to put my emergency funds or cash that I need like easy access to.

I love it.

You are thinking perfectly.

A high-yield savings account is what we recommend for any short-term savings goals that are happening in the next one to three, four years and your emergency fund.

And that'll help it at least kind of keep up with inflation.

Because right now the rates are about, you know, 3.5%.

And if you want a great one, we got a great partner with Fairwinds.

And so if you go to fairwinds.org slash Ramsey, they have a smart bundle just for our fans that has a checking account and a savings account with a great rate.

Yeah.

So high yield savings is where you would start for something like George said.

For your emergency fund, which should be three to six months of expenses.

And of course, you're staying out of debt completely.

So we're saving up and paying cash for things.

And then beyond your emergency fund, anything you're wanting to do with money in the short term.

Now, when you start thinking long term for retirement, then we're going to move towards mutual funds and some other things.

But yeah, George is right.

This new partner of ours, they've been with us for about a year and a half, and they just became the studio sponsor just about a month ago.

And

we've spent a lot of time with the people behind the scenes.

They're solid people and the product is solid.

It's a good high-yield savings account at Fair Wins Credit Union.

So just look them up.

Fair wins

like the wins are fair.

All right, here we go.

Riley's in Houston.

Hey, Riley, what's up?

Hi, Dave.

I appreciate you taking my call.

Sure.

How can we help?

Yeah, so I have a question in regards to paying off student loan debt.

Currently, I have about $68,000 in total student loan debt.

I do have quite a bit of savings, and I'm just curious on how to tackle this.

Pay it in bulk, which I sort of have a feeling that you're going to say, or reinvest the savings to use the interest to make payments.

Just kind of don't know what route to go.

We would recommend the debt snowball method, which means you're going to knock out the smallest balance first.

So how much do you have in savings?

I have about 95,000.

Dude, pay it all off today.

Why have you waited?

What's holding you back?

Honestly, it's just that mental aspect of not having that much in savings.

You don't.

You have $68,000 in debt that you owe.

So mentally, I would detach and go, I don't actually have 90-something thousand.

I have, you know, 29,000 because I owe.

I signed on the dotted line saying, I'll give you this money back.

And dude, you can be done today and not pay another dime in interest and be free.

Hey, Riley, where'd the 95 come from?

Just saving some work.

Yeah.

And if you have 29 tomorrow and no debt, you could save even more.

And that is recommended rather than trying to invest that.

100%.

The number of millionaires that we've interviewed in all of our research that said I borrowed money on my student loans and made the spread and caused me to be a millionaire is precisely zero.

No one actually does what you're talking about to build wealth in the real world.

It's all theory on TikTok.

Okay.

And this money came at a great time because I was trying to do an application and income-driven application online.

And prior to submitting, I was hoping that I could get into this call and try and just figure it out the route because I I know what my monthly payment would would be at.

But obviously, it'd be in that payment for X amount of years.

I wouldn't do income-driven anything.

I'd get rid of the debt.

All you're doing is kicking the can down the road, dragging this thing out longer.

You've worked hard to save, and that's going to be painful to let go of that.

But man, it's going to set you free when you have those payments back in your life, back in your bank account.

Well, and you got this monkey off your back, and it's in this case, a gorilla on your back.

Yeah, get him off.

And you're going to feel, you're going to feel funny.

You'll feel like you lost 300 pounds.

It's going to be weird.

And you'll stack up that savings again real quick with no payments.

Hey, you guys, Rachel Cruz here.

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

I'm Dave Ramsey, your host.

George George Camille Ramsey personality, number one best-selling author, is my co-host today.

Catherine is with us in Phoenix, Arizona.

Hi, Catherine.

How are you?

Good.

I have a question on a, we have a variable life insurance,

which we know now we should have never had.

But probably eight years ago, we took out to try to save my husband's business that we ended up having to sell it off to somebody else.

And so there's really nothing left in there.

The cash value that's left is like $4,800.

I just didn't know, like, because we've kind of just been hesitating when the people that have had it, they've kind of just said, leave it there.

Oh, I bet.

I don't know.

Who sold this to you?

Who hates you that much?

Actually, it was a close friend that when we first had our first baby, that she told us.

And of course, because she sold it.

So we've just kind of.

business now right

uh yes

they usually they usually last about two years and then they're gone um right yeah so we have like some term life also okay so what does your husband make a year

what 275 and how much term life does he have

the term life is uh about eight hundred thousand okay all right is he healthy and then I have like I have like two fifty

uh Yes, and no, he's 60,

but he has had he has diabetes and has some issues.

Diabetes is a big one when it comes to life insurance.

And you guys have no money.

It sounds like you've been through hard times.

Yes.

Okay.

Yes.

And you don't have any children left at home?

Well, I have the one 16-year-old.

Okay.

I do have a 16-year-old.

So the concern today is if the 60-year-old dies, he leaves a wife

and he makes, what's your household income?

You said about $275,000.

He makes $275,000?

Yes.

And do you work outside the home?

No.

Okay,

and so you lose a $275,000 income if he dies today

and he leaves you $800,000.

Right.

Okay.

Which is just over, you know, two and a half years of income.

If that was invested at 10%, it would make you $80,000.

So you're going to be short about $200,000 based on the way you're currently living.

So if he was young and in good shape, I would tell him to get $2.5 million on him,

including the $800.

So we back that out.

So $1.5 million or so, give or take.

But he's not.

I suspect at $60,000 with the diabetes, it's going to be pretty expensive to get some term insurance.

But the variable life insurance is

not much in coverage, is it?

It's not very big policy, right?

No, it was when we first got it, it was like he had $500,000 and mine was, but where we took out, it was probably, like I said, like eight years ago, it was like $70,000 we had in there.

And we took all that out to try to save the business.

But we put in, it's like $275 a month.

I'm like, yeah, but I'm talking about the death benefit.

If he dies, what do they write a check for?

Oh, that's only $350.

Yeah, yeah.

And $275 a month for $350 even for a diabetic 60-year-old is ridiculous.

So

then that's where we're like, we're just throwing that money away.

I feel like.

Yeah, so you can cancel that.

If you can afford to live on $800,000, if he dies tomorrow.

Okay.

If you instead, another route you could go before you could cancel it, you could go to Xander Insurance, talk to them and see if they can make a market, meaning if they can get a company to cover him and how expensive it will be.

And try to buy a million.

Try to buy a million on him if you can.

I had some when I was in my late 50s and 60s and right around 60 years old, just because SWI Sharon wants it.

I didn't need it, but my wife wanted that instead of another diamond, and so I did that.

But I'm in really good shape and don't have a single, single medical issue.

Um, and so and I don't, I don't, I could lose some weight, but I don't meet the obesity markers.

So, uh, I'm I can get the, I could get the insurance, and so that's that's the things that affect you at that age.

Now, so go to Xander, Xanderinsurance.com or call them and tell them you talk to us on the air.

So that's what I wondered about that.

See if you can get insurance to make you more comfortable.

And then if you can, it's an instantaneous yes to cancel this.

If not, do you want to keep the very, very, very expensive insurance?

I probably don't.

Okay.

I'm probably going to take some of that $275,000 income and start banking it aggressively knowing that I don't have enough insurance.

Okay.

That's what I wanted to know what to do about that.

What were you going to do with the money you cashed out?

Well,

I was wanted to know, like, I mean, because you hear all this stuff about putting stuff into gold.

So I didn't know if that was something or put it.

Where should we put it?

It's only like $4,800.

Well, number one, I'd make sure you're out of debt.

But number two, we don't buy any gold.

Gold has not got a good track record long term as a return on investment.

Instead, I would just buy good growth stock mutual funds with my investing.

But y'all need to be doing a lot more than that, making $275.

$4,800 ain't going to save you.

You know, not in this situation.

So it's just, you know, a smart thing to do is not gold and go to some mutual funds.

But, you know,

you need to be laying out a game plan where you're saving like

a year.

And you do that for five years.

Now you've got a half million dollars on top of that $800,000.

Now we're starting to get there without insurance, without any more insurance

than the original $800,000.

Yeah.

But you got to rebuild after the business failure, rebuild some net worth and some wealth for survival for you and the 16-year-old.

And those are the routes to go.

So, guys, just to recap:

the life insurance world is polluted with bad products.

There's really only one all the people that are not in the insurance business, all of us that are financial people that run numbers and are math people, all the financial people say to buy term life insurance.

The best deal on term life insurance is 15 to 20 year level term.

It's a level premium, and you should have

10 to 12 times your income on you if you have a family counting on you for your income.

So if you make $100,000, you need somewhere around $1 million,

a million two, something like that.

And then if that 34-year-old wife of yours with three little kids is left behind and you don't have that $100,000 coming home, she could take that million, invest it.

It'll create $100,000 in income perpetually.

until the kids are grown and gone and you can invest in, you know, we have replaced you.

So if you don't want to get too much, you have to sleep with one eye open.

But if you're 34 and in good shape, term life insurance is like the cost of a pizza.

It's ridiculously inexpensive to make sure your family's taken care of.

Ridiculously.

And I just read a letter to our staff meeting this morning, a 52-year-old that had life insurance on her.

And they had just paid off a million dollars in debt four years ago.

And they were on vacation.

She had an aneurysm and was gone in six minutes and left another million behind in life insurance now because they've done the stuff that we teach over and over.

So it's just not very expensive if you go and do it right.

But this investing inside of a life insurance policy like these stupid variable life and whole life policies are an absolute ripoff.

Never do that.

Many of you listen to the Ramsey show because you're sick and tired of getting nowhere with your money.

You work too hard to live paycheck to paycheck with no money in the bank.

But here's the deal: just listening to the show won't change that.

If you want different results, you have to do something different.

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And you can too, but you got to have a game plan.

And that begins with our get started assessment.

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If you've had it with money stress and are ready to take control of your money for good, go to ramseysolutions.com/slash start now.

Well, as you've heard, the Fed has cut rates for the first time all year.

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

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Time to do a real estate deal, boys and girls.

I love it.

Caleb's in Dallas.

Hey, Caleb, what's up?

All right.

Thanks, Dave, for taking my call.

Sure.

Hey, George.

Hey.

So

I'm on baby set two.

I've got roughly $65,000 in debt.

I make

somewhere between $80,000 and $85,000 a year.

And my wife, she's in college at the moment, going to get her nursing degree.

When will she be finished?

She will be finished this time next year.

Oh, good.

Okay.

So she

actually, it's a good thing.

She was very blessed to be able to take advantage of her dad's GI bill.

And

we also have, I believe it's called chapter 11, 32, maybe.

Since we live in Texas, she's able to get money every month.

That's income on top of.

Wow.

So she's going to school debt-free and getting paid.

Right.

Yep.

So my question is, I've got

a thrift incentive plan at work.

It's not a traditional retirement plan, but it is after tax.

I am required to put in a minimum of 2% in order to receive profit sharing.

Historically, the last three years,

first year that I was able to receive it,

it was

10%, the next year was 12%, and then last year was 15%

of employee salary.

I'm just wondering, should I continue to contribute that 2% in order to get that profit sharing?

Because

we're on track this year to get 15% again.

Normally, I wouldn't.

Those numbers are a bit ridiculous, so I probably would.

Right.

Matter of fact, they're the most ridiculous numbers I think I've ever heard, in a good way.

Right.

I'm very blessed to be where I work, and I thought I was astounded by the I've never seen a retirement plan that works as well as this one does.

I haven't either.

And I've been doing this a long time.

But that's, I mean, you put in two, you get 15.

That's kind of crazy.

Crazy good.

And so,

I mean, if you put in two and you're going to get three, I just pass for now.

But I mean, and all you people that get matched 3% on your 401k,

I wouldn't do it.

I would stop your 401k temporarily and work your baby step two.

We always have said that for decades, and it's worked to get people out of debt.

But that 2% is not enough to bother with one way or another.

And the 2% for 15 trade is probably probably a pretty good trade.

What are you thinking, George?

Yeah, man.

Are you aggressively looking to get out of this debt?

Make an 80 to 85?

How much can you throw at this thing per year or per month?

So

I am

the

first thing is I'm on track right now to get out of debt now.

And

since this past month has passed, a year and eight months,

that's what I've calculated.

That's without a nurse's income.

Right, exactly.

That'll speed up a year from now.

That'll, it'll just, you know, really inject some life into your business.

So she ought to be done a little over a year pretty quick, or, you know, as soon as she gets that going.

Now, what is she making income-wise from this program?

So, chapter 32,

the VA benefits, I think it depends on

how often she's in class.

But when she is in class full-time, she's it's like

$1,200 to $1,500 a month.

So why would she not be in full class full-time?

Well,

some

of this program doesn't, like the summertime, for instance, she doesn't have classes all day.

She only has classes of, you know, two to four hours out of the day.

Versus right now, since she's full-fledged in the program, she is

she's getting full-time student hours.

Gotcha.

Okay, so you've got another $15,000 or so coming in income from her while she's in school.

Right.

Yes, sir.

Yeah.

So you're making about $100,000 and you've got $65,000 in debt.

Yeah, you need to be debt-free.

Yeah, the year in eight months sounds really good.

And if she passes her boards right quick and lands

in a paying position right quick, then...

Yeah, I think you're going to be in really good shape, and it'll be sooner than a year in eight months.

I like everything you're doing, Caleb.

Sounds like you've got it dialed in.

Keep it up.

Keep it up.

I'm glad you're paying attention.

George, you know, it keeps coming back to you.

If you pay attention, you win.

Yeah, if you know your numbers, what's the matter?

Those stupid interview questions we get sometimes, it's like, what's the largest problem Americans have with money?

They want us to say student loans or credit card debt.

And my answer is always, not paying attention.

Living in law land.

Indigenous.

They're just wandering along like Gomer Pyle on volume.

You know, and they just wake up at retirement.

Shazam, I'm broke.

you know oh my god none of you people know what that is look it up on youtube okay anyway christine uh christiana is with us in uh chicago hi christiana hi guys thanks for taking my call sure um so i have a question about baby steps six and seven so my husband and i aren't are fortunately there yeah um yeah it's exciting so my question is about the order of steps six and seven.

So why

do you recommend paying off the mortgage when the mortgage rate is like, let's say 6.3%,

but the market returns your money at 10% and then with compound interest, you know,

because your math formula is very naive.

Okay.

You left out risk.

Okay.

And you left out the fact that you're psychologically, relationally, and spiritually carrying around debt around your shoulders, and it affects your health, your relationships, your career choices, and everything else.

And so what we have found is that the people that build wealth the fastest are the ones with a paid-off house.

Okay.

Because they're free.

Okay.

And nobody making them do anything.

And so suddenly they start making better choices instead of trying to maximize their wealth building off the back of a mortgage spread.

You left off risk.

100% of the foreclosures occur on a home with a mortgage.

We did research.

It was easy to do that research.

Didn't take a big research team.

Fairly quick.

But George,

it took me a while, Christiana, to get to where, as a math nerd, I understood that the math formula that you're using, and I back then was using the same math formula, I couldn't figure out what was wrong with it.

And I finally figured out that the more debt you carry, the more risk you carry.

And the more risk you carry, you have to mathematically adjust for risk if you're going to use a sophisticated mathematical formula on something.

And so I figured out that my math formula, and Christiana, your math formula that you're using now is the same one,

leaves out risk.

And when you math adjust for risk,

what you perceive to be a spread that you're making is neutralized.

Yeah.

Well, and what we find is, you know, someone loses a job tomorrow, there's risk there.

Now you still got to make that mortgage payment.

And so it just opens you up.

And on top of that, you know, it's not apples to apples when you look at a mortgage payment with 6% versus what you could make in the market.

And by the way, if it's outside of retirement, you're paying taxes on that versus the mortgage.

There's a fixed savings plan right there.

But you're paying down that interest.

Stress-related health problems are the number one killer in America.

Hypertension, heart attack, so on.

It's the number one killer.

And they've gone up as the debt load in America has gone up.

And so the statistics keep getting worse.

And so people say, well, nutrition's worse and there's more obesity.

Very true.

But also there's more stress.

And it's just strange, you know, when we say financial peace,

two words that don't go together, like airline service,

what would it feel like to have your house paid off?

Goes beyond the math.

It's hard to quantify on paper, but no one regrets it.

Nobody goes, man, I I wish I had a mortgage again.

That was fun.

I'll do that to make a spread.

Hey guys, George Camill here.

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Kyle and Anne-Marie are on the debt-free stage in the lobby of Ramsey Solutions.

Hey guys, what's up?

Hey, Dave.

Good to have y'all.

Welcome.

Where do y'all live?

Macon, Georgia.

Macon, Georgia.

All right, just down the road.

Well, welcome to Nashville.

And how much debt have you two paid off?

About $140,000.

Way to go, guys.

And how long did that take?

18 months.

Whoa, quick.

And the range of income during that year and a half?

About $150,000 to $160,000.

Cool.

What do y'all do for a living?

So I'm a software developer for a local credit union.

And I'm a pre-K teacher.

Awesome.

Very cool.

What kind of debt was this $140,000?

Man, a little bit of everything.

We had two cars.

We had a HELOC.

Some credit cards.

Student loan debt.

Student loans.

What was the most of it?

Student loans.

Yeah.

How much of the 140 was student loans?

About 90.

Okay.

How old are you two?

36 and 35.

So those student loans have been around a while?

Mine have been around for about three years.

Hers, maybe a little longer?

Yeah, mine about 10.

Okay.

All right.

Yeah, they've been around a while.

How long have y'all been married?

Four years.

Okay, okay.

So you brought them into the marriage then?

Yes, we did.

Now I'm getting a picture.

And then 18 months, yeah, out of four years.

So after you've been married a little while, you look up and went, something's got to give?

Yeah, we just kind of got to the end of a month and realized, where is it all at?

Like, we have all this money and we don't know where it's at.

We have good paying jobs.

Why are we not building our savings account?

It doesn't make any sense.

Why are we broke?

It just comes in and goes out.

It comes in and goes out.

This is not a fun life.

Then how'd you get connected to Ramsey?

So I just started looking up just different, you know, financial, what's the best way to, you know, help pay some stuff off.

And Ramsey came up, and I just got plugged in immediately and got every dollar set up and just started going at it.

And we sat down.

It took us about three months to get the budget really intact.

It takes it about three.

That's about right.

As soon as we did,

we were just rolling, rolling, rolling.

What did you figure out

once you got that budget dialed in?

Where was the problem?

So I mean, it was definitely just the amount of payments that we had in every different category.

I mean, we had, what, $1,800, $2,000 in payments of just stuff that we needed.

We needed a strategy to do that.

And definitely eating out too.

Yeah.

It was like, we don't need to be going out this much.

We can just eat at home.

And

parties with parents and stuff, and going out to eat with family was really big for me.

And we just had to tell them, hey, let's just do it at the house and have a potluck just until we're done with this journey.

And they supported us in it.

So it was definitely worth it.

Very good.

Very cool.

So, I mean, you guys leaned in hard.

We did.

Did you sell something?

This is

crazy first.

So, yeah.

So

July

23 or 24, no, it was 23.

July 23, we bought a van and put it on payments because we were like, we can afford this.

It's payments.

It's not a big deal.

And then in October, when we finally started sticking it, we were like, man, this is crazy.

You know, we actually need to figure something out.

And so actually, July of 24, so one year later, exactly, we ended up selling the van for break-even.

Oh, wow.

And we actually lost about $15,000 in that, which we called our stupid tax.

Oh.

Yeah.

Because that's what the insurance paid out before we bought the van.

And we should have just bought a car in cash, but we weren't that deep in with y'all yet.

Gotcha.

Gotcha.

See, why?

This will be a great down payment.

We can get a nice car now.

Oh, my goodness.

That's the American way.

Wow.

Well, good for you guys.

What do you tell people the key to getting out of debt, paying off $140,000 in 18 months, making $150,000?

Definitely being on the same page.

Yes.

Being on the same page with each other and making sure that that budget is key above all else.

What was the biggest budget fight?

Like I said, wanting to give presents.

You presents and going out to eat with family and friends.

So you're on my team.

You're the spender.

Yeah, probably.

I'm definitely the nerd.

Okay.

Well, software engineer, of course.

What am I thinking?

Yeah, no question.

Oh, man.

Amazing, amazing, amazing.

Well done, you guys.

So,

wow, what do you tell people the key to getting out of debt is then?

I mean, just sticking to the budget real quick.

The budget, the budget, and being on the same team.

That's what I just said.

We don't live out of the bank account.

We live out of the budget.

So even if there's $2,000 in the bank account, we don't have $2,000.

We have whatever's left on that line item.

And that's what we've explained to people.

We're like, that budget keeps you on track.

So you're not looking at what you have in that account at all.

You're looking at this is what I'm allowed to spend.

This is what I'm free to spend.

That I chose, that I was going to spend.

I'm the boss of me.

Yes, and I'm the boss of that money, and it doesn't need to direct me.

Amazon Prime is not my boss.

Oh, yes.

Wow.

What's next for you guys?

You're in your mid-30s.

No debt?

So we actually,

we just listed our house this weekend.

Whoa.

And we actually are going to be selling it and moving up because we have a child on the way, which is number three.

And so we're just trying to move up into our next house.

And after that, it's just figuring out where we want to go on vacation.

We want to go relax a little bit too.

Yeah.

That's a good new problem to have.

Yeah.

Where are we going to go on vacation?

How are we going to pay off this debt?

Yeah.

I'm really proud of you guys.

Way to go.

Thank you.

Very good work.

Very good work.

So, who was bragging on you?

Who was cheering you on?

So, both of our parents were very, very helpful in the entire process and understanding of it all.

There were times where we had to tell them no to going out and stuff, but they were very understanding and helpful in the entire thing, and they are here.

My handyman dad, it was like, oh, we can pay you in grandchildren kisses if you'll do this for us versus us having to bring somebody.

That worked out very well.

I have not been bribed with that yet.

I hope my kids are not listening now.

So that's good though.

I love it.

Well congratulations you guys.

Very, very, very well done.

Thank you.

Were there people telling you you were weird?

Well, everyone had his job, of course.

Oh, yeah.

So because I work at a bank, well, I work at the credit union.

But, I mean, yeah, I mean, there's always talk going around of, oh, we have this new credit card offering.

And I'm just like, I'm good.

I'm all right.

I'm all right.

I think I'm set on that.

Yeah.

I had enough of that.

I'm pretty sure we're done with those things.

Yeah.

Well, congratulations, you guys.

Very, very well done.

And yeah, onward and upward.

The third baby on the way.

The house goes on the market.

Here we go.

Game on.

How's it feel to be completely free?

$140,000 off your back.

It's a blessing.

Yeah, it is.

It was all God guiding us the entire way, but it is such a freeing feeling for sure.

Yes.

What was the hardest thing about the whole process?

I mean, for me, it was just really just making sure that

every time we sat down to budget, that we were on the same page.

That was really the biggest one.

Towards the end, actually, I was the one that was like, come on, let's just cut those last subscriptions just for a month.

He hates ads.

And I was like, dude, we got to let this go.

We can do it for that last month and then celebrate.

So we watched ads for a few months.

Brutal.

Right.

To think the car was first world problem.

We watched ads like when we were kids.

Yeah.

You'll tell your kids one day, these are the sacrifices we made.

We watched ads for three months.

Yeah, that's great.

Very cool.

Well, congratulations, you guys.

We're very proud of you.

You bring the kiddos with you?

We did.

Let's bring them up here and introduce them.

Ages and names.

So Daniel is three.

24 hours ago, he decided decided to jump off of a playground and fracture his shin.

So, why not?

Daniel, yeah, he was being super brave.

We got Bella.

She's one.

All right, sweet Bella.

So cute.

Yeah, fun, yeah.

All right, you guys.

Kyle and Anne-Marie, these kids don't even know what their parents have done to change their whole family tree.

$140,000 paid off in 18 months, making $150,000 to $160,000.

Count it down.

Let's hear a debt-free scream

three two one

we're debt free

that's how it's done Daniel yelled from his little stroller down there because he couldn't get up because of his bum leg but he was yelling we're dead free

Oh good time to be dead free when you have an emergency like that and you just cash flow it changes an emergency into an inconvenience inconvenience.

But wow.

Pretty cool.

Hey, that's a powerful couple right there.

What they pulled off in that short period of time and right after getting married too.

Yeah.

I mean, they sat down, pushed through all the relational stuff, made it all happen.

Very cool.

Very cool.

Proud of you guys.

Our scripture of the day, Proverbs 22, 1, a good name is to be chosen rather than great riches, and favor is better than silver or gold.

Philip Fisher said, the stock market is filled with individuals who know the price of everything and the value of nothing.

Ooh, wee.

Ryan is in Minneapolis.

Hey, Ryan, how are you?

I'm good.

How are you?

Better than I deserve.

What's up?

Thank you for taking my call.

My wife and I are currently in baby step three and we'll be finished with that by the end of the year.

We receive an annual bonus in March.

It'll be roughly $15,000 take-home.

Would it be better for us to take that $15,000 to fully fund our Roth IRA or to spread our contributions out throughout the year and use the bonus between steps four, five, and 6.

It doesn't matter much.

Either one will be fine.

The difference mathematically is what you might earn.

If you do the 15 all-in-a-lump sum in March, what would you have earned in March versus 1/12th of the month all the way around?

And so, you know, like say the average might be what you would earn on $8,000 or $10,000 of that $15,000.

So it might be

$1,000 difference.

It might be $800 difference on a 10% or 12% year.

Unless we had a crystal ball, we won't know for sure what the math is on that.

But in general, the sooner you get money into the market, the better off you're going to be long-term.

Right.

But it's not, I mean, the difference, it's not like you're going to have millions of dollars more because you did 15 lump sum versus 15 1/12th of the time all the way around the horn, right?

Right.

But basically, for instance, in my case, okay, I fully fund my 401k for the whole year in January.

Okay.

I dump the whole thing in there, okay?

Because I can.

I own the company, and I can just bonus myself whatever I need to and make sure I got enough to do that, right?

So I just load the stinking thing up, and then I've got that, I don't know, let's call it $20,000 or $30,000 or whatever it is.

It's working the entire year rather than 1 12th working the entire year, 2 12ths working part of the year, 3 12ths working part of the year, 4 12ths working part of the year, and so on.

You follow me?

So the difference is what I would make on 30 grand, 27 grand, 28 grand, 24 grand, 23 grand, 22, and so on, all the way around the horn.

And so it's,

George is right, a lump sum up on the front end is going to average more than doing it monthly.

The second thing to enter into the conversation, because it's a good question,

is

you want to be sure if the steady monthly thing keeps you doing it because you're on autopilot versus jumping on and off the wagon with lump sums

and you're not as predictable with it, sustainable with it that way, you'd be better off sticking with the one that keeps you doing it.

And so

I set up stuff early in my life once I started understanding these principles to trick myself into having discipline.

like automatic 401ks or automatic draft on my checking account for Roth IRAs or those kinds of things back in the old days.

So I automatically had debt.

I went so far as I, in the old days, when I started this stuff, there was no internet, of course, and so there was no auto, there was very little auto draft on utilities and that kind of stuff.

You used to have to write a check and send your electric bill through the mail, okay?

And as soon as they set it up where they would take auto draft, I put all my utilities on auto draft so that I never missed a discount.

And to and that's been, God, that's 25 or 30 years I've been doing that.

So anything I can do to have autopilot automatic discipline.

Yeah, I like that mentality because if you're investing 15% of your income forever, you've got to learn to live on.

15% less than you would have.

And so it's sort of like that money was never there.

And that's a good way to live because it keeps you in check.

So I think that long-term discipline is key.

But for this year, if you just wanted to fund them and be done with them and move on, that's it.

If for 10 years you've always gotten a d uh a bonus in March of 15 grand and you want to just label that, that's going to go towards our retirement and we're going to do less through the rest of the year, fine.

I don't know, you know, but whatever you do, trick yourself into being consistent.

And

when given the opportunity, a lump sum early in the year will outperform a steady monthly investment because it's been in there longer.

There's a fancy word for that.

It's been in there longer.

Dollar cost averaging.

Well, that's what you're not doing.

Yeah.

Is dollar cost averaging when you put it all in there.

Yeah.

You're missing out on that.

RJ is with us in Fort Worth.

Hey, RJ, how are you?

Hey, Dave, how's it going?

Better than I deserve.

How can we help?

Hey, so my question is: see, honestly, I'm in babysep two, and I have like $12,000 in debt.

CDL school is $3,000.

I don't know if I should go ahead and like

go back and

CDL school

to get your CDL.

Okay.

Just three grand to do that.

CDL.

So I currently have my CDLB, but in order to increase my income, I need a CDLA.

So should I go into more debt and like $3,000 more to go, like, to make more money, or should I wait?

And so I pay off my debt completely.

And then once I'm done with babysitter two, should I go ahead and like, you know, cash flow at three grand?

It's like a sweet.

I'm currently a super driver, Super Incorporation of America.

So you're not driving now?

Yeah, yeah.

I'm currently using my CDLB.

I'm currently making money with my CDLB.

Okay, what are you making doing that?

About

$54,000 a year.

And what would you,

would you stay with the same company or change jobs?

No,

I definitely change jobs.

I go to a higher-paying company, I'll probably make at least $70,000, maybe $80,000 to $100,000, $70,000 to $100,000.

There's no limit.

How quickly could you save up $3,000 making what you make now?

Maybe like

three, four months, maybe, if I really put mine to it.

Yeah.

And what I'd do is work six extra jobs and sell so much stuff the kids think they're next and scrape up three grand in cash in about a month.

But no, I'm not going to borrow money to go do it.

Dude, the secret to getting out of debt is to stop borrowing.

That's the first step.

You've got to quit looking to debt to be your answer, to be your savior every time you want to go do something.

You got to say, that's not an option anymore.

I'm going to take debt off the table.

It's not an option.

Now, how am I going to do this?

Well, it's a good thing to do.

I mean, if you can spend three grand and up your income 25 grand, I think you ought to do that.

That sounds pretty good.

And so what that means is I'm going to be working my tail end off, man.

I'm going to be working like all the time.

I can go get me three grand.

Because, I mean,

that's where money comes from is work.

And so go get you some.

That's what I would do.

And I'd be busting it, it, man.

And at the workplace, I'd be asking for overtime.

I'd be asking workplace to pay for it and let them, you know, maybe they keep you on at 70 grand with a CDL, right?

And so, yeah,

there's nothing wrong with that.

But that's, and there is a shortage of drivers right now.

So that's not a bad thing at all to go get that,

you know, get that license to be able to move some stuff around.

Yeah,

I'm definitely going to go get the money, but no, RJ, I'm not going to.

I've never told someone in 30 years to go into debt

on this show.

Guess we're not starting today.

Yeah.

But if I were in your shoes, I'd be wanting that three grand.

I'd be wanting it really, really bad.

Yeah, there's some good ROI on there.

I'd go get some.

I mean, what do we got we can sell?

What about that motorcycle, that four-wheeler that's out in the backyard?

Oh, why don't, yeah, well, go sell it.

Get your three grand.

You're getting ready to borrow money.

You know, you're sitting on some junk back there somewhere probably that'll pay this thing.

So just figure out what you can do.

And once I took debt off the table, George, I started seeing all kinds of creative options.

Your imagination runs wild when it doesn't involve a lender.

Yeah, when I can stay, you know, once I do anything to stay away from a bank or I can't do the thing, well, I want to do the thing, so I'm going to go find a way, but it's not going to be with a bank.

Yeah.

I just punched some numbers here.

I'm like, if you can go make 25 an hour driving for Amazon Flex, just drive packages after work, that's 120 hours.

Okay.

Now I know what it's going to take to go get that license.

120 hours of extra side hustling.

So that's.

Five hours a day for 20 days.

There you go.

Ding.

So there's the math on it.

I might be tired.

Oh.

Well, you might be.

He sounds like a young guy.

I know.

He's got energy.

He wasn't a whiner, but I mean, I've talked to a few people that whined.

It's okay.

You might miss the next series on Netflix.

You're not going to die from hard work.

Right before you die from hard work, you pass out.

It's okay.

That's how the Lord intended it.

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

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.