Normal Is Comfortable, but Comfort Doesn’t Build Wealth

Speaker 1 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships.

Speaker 1 I'm Dave Ramsey, your host, Jay Bashaw. Ramsey Personality is my co-host today.
Open phones here at 888-825-5225.

Speaker 1 The call is free, and some say the advice is worth exactly what you pay for it. Vinny starts this hour in New York City.
Hi, Vinny. How are you?

Speaker 2 Hey, how are you? Pretty good.

Speaker 1 Good. How can we help?

Speaker 2 So I'm looking to get advice. I have a small business.
I have about

Speaker 2 $95,000 in debt in our business. And

Speaker 2 we make good money in sales, but every time I feel like I make money, all of my profit just goes to my credit cards. And I never see anything.

Speaker 2 And it's just very frustrating because I make two steps forward, one step back, if that makes sense. So I'm trying to see what I can do to get my debt down.

Speaker 2 I also have a

Speaker 2 small debt to my personal

Speaker 2 because I'm also looking, I want to buy a house next year as well.

Speaker 2 So that's what I need help with.

Speaker 1 Okay.

Speaker 1 Well, bad news, you're not going to buy a house next year because you're going to be getting out of debt.

Speaker 1 You can't do both of these things.

Speaker 1 Right.

Speaker 1 So you financed the start of your business on credit cards?

Speaker 2 No,

Speaker 2 no, so we've been in business.

Speaker 1 You said you had business debt, and then you said credit cards were taking all your money. That's where I got that.

Speaker 2 Well, so we have business debt because

Speaker 2 we purchased i made some you know terrible financial decisions as far as buying a truck at the wrong time purchasing a newer truck instead of an older truck um

Speaker 2 and one of the one of the biggest i'm sorry oh go ahead keep going

Speaker 2 one of the biggest debts is in february i had to spend 30 000 on a pickup truck um because in February I had an accident and I had a clean snow and I had no choice but to purchase another truck to complete the snow for their commercial properties.

Speaker 1 You didn't have insurance?

Speaker 2 I have insurance. They fixed my other truck.

Speaker 2 But now I have two trucks when I didn't even budget for that or plan for that.

Speaker 3 Are you still actively taking out debt or have you decided I'm done? Like, have you changed your philosophy around debt?

Speaker 2 Yeah, right now I'm I'm done. I

Speaker 2 right now I try to make

Speaker 2 the lowest amount of expenses.

Speaker 2 For instance, I don't even go out into dinner anymore. I try to cook.

Speaker 1 Let's go back to the business. Let's go back to the business a second.

Speaker 1 In your business,

Speaker 1 what do you do? What is your business?

Speaker 2 We do landscaping and construction. Okay.

Speaker 1 All right. And now you have two trucks and you only need one.

Speaker 2 Yeah, exactly. Pretty much.

Speaker 1 Yeah, not pretty much. Absolutely.
You were doing it on one, and then you stupidly went and bought another one to plow three streets while the other one was being fixed. Okay.

Speaker 1 So, how much do you owe on the stupid truck?

Speaker 1 $30,000. Okay.
Sell it.

Speaker 1 Sell it? Okay. Yeah.
Let's get rid of that debt. I guess rid of a third of your debt, dude.
Yeah. And you didn't need it.

Speaker 1 Right. You panicked.
Right. Okay.
Next time you panic, debt is not your answer.

Speaker 1 That's what she meant by, are you through with debt? Every time you have a problem in business, if you go borrow money, you'll be out of business in about 20 minutes. Right.
That's the path you're on.

Speaker 1 Okay, and how much credit card debt have you got?

Speaker 2 I have

Speaker 2 six.

Speaker 2 I have about another 30.

Speaker 1 Okay, and what's the other 30?

Speaker 2 So I have, it's a couple of credit cards. I have one credit card at 16.

Speaker 1 Yeah.

Speaker 2 And then I have

Speaker 2 another credit card that is

Speaker 2 $6,000.

Speaker 2 And then I have another one that's about $8.

Speaker 1 Okay, that's $30,000 and $30,000 on a truck, but you told me $95, so what's the other $35?

Speaker 2 So the other $35 is I have

Speaker 2 the first truck that I had, I still owe $15,000 on that.

Speaker 1 Okay.

Speaker 2 And then I owe my dad $12,500.

Speaker 1 Okay. All right, good.
Okay. So and what did you, what was your profit in the year 2024? Net profit that you paid taxes on?

Speaker 2 My net profit was around $40,000.

Speaker 1 Okay.

Speaker 1 And you live in New York City?

Speaker 2 In Connecticut, but it's

Speaker 1 in their city. Yeah.
Yep.

Speaker 1 Extremely expensive.

Speaker 1 You're not making any money. Right.

Speaker 1 You're starving to death.

Speaker 2 Yeah.

Speaker 1 I mean, if you had a job making $40,000 and no debt, we would tell you, look for a job.

Speaker 1 So is the business growing?

Speaker 2 The business is growing.

Speaker 2 You know, last year in sales in 24, we did it on 200,000.

Speaker 2 In 23, we did 100,000 so it definitely is growing.

Speaker 1 Okay. Well, if you can double it again, you can get there, right? So

Speaker 1 if you sold the truck and doubled it again and lived on beans and rice at home,

Speaker 1 you can plow your way through this, no pun intended.

Speaker 3 Are you single?

Speaker 2 I am, yes.

Speaker 1 Okay. All right.
Yeah, and

Speaker 1 if you're not working on your construction stuff, you're working doing something else. You work all the time.
You're broke.

Speaker 1 So

Speaker 1 pick up a side gig working for somebody else if you can't stay busy with your construction landscaping stuff.

Speaker 1 Okay.

Speaker 1 So

Speaker 1 that's the trick, man. I mean, you've got to get some income coming in to offset this because it takes more than $40,000 a year to eat in Connecticut.
Right.

Speaker 1 And so there's nothing left. That's why it feels like the credit cards are killing you.
However, it's actually the stupid second truck that's killing you. Yeah.
How many employees have you got?

Speaker 2 I have four employees.

Speaker 1 Full-time?

Speaker 2 Yeah.

Speaker 1 Okay. You got to get more work in there.
You got four people working creating 200 grand. You got to get more work going.
You got to get this to 400 grand to make these numbers work.

Speaker 1 But it sounds like you're on that track. That's a positive part of the story.
The business is actually growing.

Speaker 1 If you can maintain your margins by carefully managing the business and managing the accounting of the business and quit borrowing money every time something goes sideways, like you borrow money from your dad, you borrow money on a credit card, you borrow money to buy a truck, you borrow money to buy another truck.

Speaker 1 It's got to stop. You're killing yourself.

Speaker 1 So if you stop that, what Jade said is exactly right. You stop that and you divorce yourself from debt is my provider to I am my provider.

Speaker 1 I am going to get up, leave the cave, kill something, and drag it home to the tune of 400 grand. Because see, you'd go to 80.
If you kept your margins, you'd go to 80.

Speaker 1 No.

Speaker 1 Yeah, yeah, you'd go to 80. If you made 40 on 200, you'd go to 80 on 400.
Yeah. And so keep your margins right there.
And at 80, you live on 40, 40, and you sell the truck, you're almost out of debt.

Speaker 1 Sell the $30,000 truck, you got 60 left, you throw 40 at the 60, you're almost out of debt in a year.

Speaker 1 But that's kicking it, man. And it's all gone to debt.
No lifestyle, no weekends. I don't want to hear about happy hour.
Happy hour is I'm happy I'm working more.

Speaker 1 Okay? That's where you are right now. That's the business you got to get in is making money and throwing it all at the debt and then reverse the stupidity.

Speaker 1 I've done dumber things than you've done, Vinny, but you're right. I mean, you've got a couple things on the dumb list there.
So you got some stupid tax being paid.

Speaker 1 You don't spend $30,000 to plow four driveways.

Speaker 1 Nope, not on this planet. You give the work to one of your buddies and you pay him to do it that's got a snowplow because your truck's in the shop.
Yeah. And you just miss that revenue right now.

Speaker 1 That kind of stuff instead of buying a $30,000 truck. No more panicking.

Speaker 1 And even if you do panic, dad is not going to answer it. This is the Ramsey show.

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Speaker 1 If you're a business owner or you know one, you know one thing about business. It's hard.

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Speaker 1 Yeah, when you work for yourself, that guy's a slave driver.

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So, pre-order at ramseysolutions.com/slash store. Matthew is in Austin, Texas.

Speaker 1 Hey, Matthew, what's up?

Speaker 2 Hey, Mr. Rimsey.
Hey, Jay, thank you for taking my call.

Speaker 1 Sure. How can we help?

Speaker 2 Well, my fiancé and I are getting married in October.

Speaker 1 Yeah.

Speaker 2 Yes, it's exciting.

Speaker 2 So I've been using y'all's resources online, so I have a good picture of how to set the budget.

Speaker 2 But my question today is: how do we approach and ask our parents how much, if any, they're willing to contribute to this wedding?

Speaker 3 Ah, how long have you been engaged?

Speaker 2 We got engaged in February.

Speaker 3 Okay, so

Speaker 3 they know what's coming up.

Speaker 3 Have they said to you, hey, we have some money set aside?

Speaker 2 Not specifically.

Speaker 2 Her parents, we kind of started the planning process and both her and our parents were kind of like, don't assume like you're on your own.

Speaker 1 Oh, okay.

Speaker 2 Her parents offered to pay for her dress.

Speaker 1 Okay, great.

Speaker 2 And it seemed like they want to help with the venue.

Speaker 1 Okay. My parents, they haven't told me specifically, you know, amounts or what specific expenses they would want to help.

Speaker 1 So

Speaker 1 the same thing.

Speaker 2 I'm 23, and she is going to be 22 in about two weeks.

Speaker 1 Okay.

Speaker 3 So if I were in your shoes and I was in your shoes when I got married, I would have, I would go to my parents and say, here's the date. You said that you were going to help with the rehearsal dinner.

Speaker 3 What does that look like? And what does that mean for you?

Speaker 1 I'm trying to lay out the budget. Help me plug into it what you want me to plug into it.

Speaker 3 And then she goes to her parents. That way, if there's any

Speaker 3 feelings, like they don't have to deal with having some expectation from the in-law, if that makes sense.

Speaker 1 Yeah. It'd be fine if you went with her to her parents, but don't talk.

Speaker 3 Yeah, exactly.

Speaker 1 And it'd be fine if she goes with you to your parents, but she shuts up. Uh-huh.

Speaker 3 But it's not something where it's like, we're inviting both of our parents to dinner and we're figuring this out because I feel like there could be a level of pressure.

Speaker 1 No, no, I wouldn't put them together. Yeah, definitely not.
Definitely. That's a nightmare right there.

Speaker 1 Well, actually, you could get them beaten. If they're competitive, no, I'm kidding.
Into a bidding war? A bidding war? I love that.

Speaker 1 No, no.

Speaker 1 I would just say, mom and dad, I need clarification. Uh-huh.
Just because

Speaker 1 I'm guessing the way you phrase these sentences that between you and your fiancé, you would be the nerd, she would be the free spirit. Does that sound right?

Speaker 1 100%. You're the detailed nerd.

Speaker 1 So

Speaker 1 it's easy if you just say to your mom and dad, hey,

Speaker 1 you know how I'm detailed and you know how I'm nerd out about this stuff. It'll help me a lot to feel to have peace about the planning if I just know what to plug in here.

Speaker 1 Do you just tell us what you want to plug in?

Speaker 1 And I need to know. I need to know.

Speaker 1 And then she can say the same thing to her parents and say, you know, Matthew's a big planner and it just helps us to have peace and less stress, less anxiety if we know the amount.

Speaker 3 Yeah, and not only the amount, but you know how these things are. People need deposits and they need, they need the money well before the fact.

Speaker 3 So make sure that you also reiterate that because you need to understand if it's going to be a situation where you're fronting the money and then they're giving it to you as a gift on the back end or if they have the money today,

Speaker 3 right, to put those deposits.

Speaker 3 So just make sure you get clarity on the timeline and make sure they know, hey, if you said that you're paying for the venue, I'm just letting you know that they need a deposit in the next three weeks here.

Speaker 3 That way, because sometimes they're not thinking of it in the same way that you're thinking of it. They're thinking of it October, right? And so just that clarification is going to help everybody.

Speaker 3 Yeah.

Speaker 1 But I think it's in person,

Speaker 1 calm. You don't have an attitude or a voice tone of entitlement or expectation.
It's simply a question of clarification. Yes, sir.
That's all you're looking for. Honestly, we could,

Speaker 2 I ran the numbers. We can cash flow this ourselves.

Speaker 1 That's not the issue. The issue is we need clarification of what you're not cash flowing because you've got to put together a budget.

Speaker 3 Unless,

Speaker 3 unless, let me throw this out there: if you have some indicator, and you didn't say it, but if you have some indicator that taking this gift comes with something and you don't want the something that it comes with, yeah, then you do have the ability to.

Speaker 3 Uh-huh, or if you invite all my friends, or if you, you know, that sort of thing. If you don't want that and you can cash flow it, that's also fine.
It's up to you and your wife to be.

Speaker 1 Yeah, we

Speaker 1 took the more

Speaker 1 back in the day, the bride's parents paid for stuff, paid for the wedding. Okay, so we took the more traditional approach with Rachel and Denise and sat down,

Speaker 1 proactive the other way, sat down with their fiancés, Winston and Bill, and said, okay, here's the amount at the top line. Now you guys have got to figure out how to buy everything within that number.

Speaker 1 And here's some budget items you need to look at. Okay, reception is the most expensive thing.
Dress is not. Flowers can be if you lose your freaking mind

Speaker 1 and so on. So you get, you're going to discover this as you actually start putting the thing together.
And so you do a line by line by line, itemized budget for the wedding,

Speaker 1 a zero-based budget, just like if you're spending every dollar on paper before the month begins. It's project management.
It's a project. It just has a lot of emotions.

Speaker 1 And usually involved are a couple of human projects. But,

Speaker 3 you know. And people's definition of word.

Speaker 3 Let me just say, people's definitions of words are different, and it's worth always clarifying because I know with my wedding, my parents said, We'll pay for the venue.

Speaker 3 In their mind, that was the backyard. They said, We'll pay for the food, and they thought that was barbecue.
You know what I'm saying?

Speaker 1 Like, so stop by the barbecue trailer. It's like on Father of the Bride, Steve Martin envisions.

Speaker 3 Yeah, so you have to make sure, hey, this is what I have in mind. What do you have in mind? Definitions matter.

Speaker 1 Our girls grew up on Father of the Bride, so we had Franck.

Speaker 3 Oh, yeah, Franc.

Speaker 1 Yes, that's so funny.

Speaker 1 yeah that was just it was classic and uh we're like uh yeah and you're writing the check just like uh i'm not dealing with franc you're dealing with him here's one check you're done it's going in a wedding account got your names on it it's a gift i'm done i'm not going to tell you you have to do anything except don't come back to me for more that's it that's all you did and if you spend less than that you got a down payment for a house there you have it

Speaker 1 you can do that none of them did yeah they just they just it just had we just had a huge party and it was wonderful oh yeah my

Speaker 1 I love a big party, especially if you can afford it.

Speaker 1 So that's the thing. So a good rule of thumb, too, guys.
The average wedding in America today is a little over $30,000.

Speaker 1 That's an average, which means up to half of them are less and up to half of them are more. The average household income in America is about $70,000.
So maximum wedding budget would be 50%

Speaker 1 of your household income if you are paying for it all. And for that matter, moms and dads, if you're providing it for the bride of

Speaker 1 your daughter, who's the bride, it would still be the maximum of half your annual income and you're paying cash. That's a good parameter.

Speaker 1 And so other than that, you know, is it too much? Like I went to a guy's wedding, his kids' wedding, it was like, I mean, they dropped like a hundred grand on this thing.

Speaker 1 It was a parte. That's a parte.
It was serious. But, you know, he makes about several tens of millions of dollars a year.

Speaker 1 So it really was a nothing expenditure for him, but it was way different than the typical thing. And I'm kind of walking around going,

Speaker 1 you just burned all this in one day.

Speaker 1 But for him, it was like buying a biscuit. It's a biscuit.
There you go.

Speaker 1 It's a ratio thing. So that's the trick.
Look at the ratios. I mean, if you make $40,000 a year and you want to spend $40,000 on a wedding, the answer is no.

Speaker 1 That's stupid. You're out of control.

Speaker 1 You are going to be in the backyard with the barbecue.

Speaker 1 Just telling you.

Speaker 1 Not that there's anything wrong with that. No, nothing wrong with it at all.
Just make sure we have clarification. That's all we want.
That was a good point. Really good point.

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Speaker 1 Mama said, if you ain't got nothing nice to say, don't say nothing at all. Yeah, so move on, troll.
But other than that, yeah, I mean, the rest of you, if you're loving this, thank you.

Speaker 1 It's very helpful to us. Very helpful.
We appreciate it. Rita is with us in Phoenix.
Hi, Rita. How are you?

Speaker 2 Hi, Rita. Hi, Rita.
Hi, Dave. I'm sorry.
I'm nervous.

Speaker 1 That's okay. We're good.
How can we help?

Speaker 2 Thank you. Well, I'm 63.
My husband is 60. We've been married 36 years.
And most of our marriage has been full of debt.

Speaker 2 Right now, we have about $44,000 in credit card debt. We have an $800 truck payment.
$200,000 between the two of us in student loans.

Speaker 2 And I just feel we have no retirement whatsoever except our home

Speaker 2 you know and and so

Speaker 1 help me with how you have two hundred thousand in student loans at 64 years old

Speaker 2 oh we're late boomers

Speaker 1 yeah

Speaker 1 well who's the doctor

Speaker 2 I know my husband felt the need to go and get two master's degrees he's a teacher and I'm a teacher

Speaker 2 and so we we got a late start probably in our mid 50s And I taught, you know, I'm teaching wonderful.

Speaker 1 So one of them was not in math?

Speaker 2 No, I know.

Speaker 1 No.

Speaker 1 Wow.

Speaker 3 So what are your incomes between the two of you with these degrees and these careers?

Speaker 2 So between the both of us, I added it up. Take-home only is $5,635 a month.

Speaker 1 Okay. Wait a minute.
You make $60,000. You make $30,000 a piece and he has two master's degrees?

Speaker 2 Well, yes. In teaching, it helped him make more money, but

Speaker 2 our debt just seems to be.

Speaker 1 No, no, no, no, no, no, wait a minute. You don't make anything.

Speaker 1 Teachers that have two master's degrees should each be making $60.

Speaker 1 What are you doing? Are y'all working in a preschool?

Speaker 2 No, he's teaching high school, and I'm teaching middle school.

Speaker 3 So that was your take-home.

Speaker 1 What is it before that?

Speaker 3 Are you taking a bunch out of your check?

Speaker 1 Oh,

Speaker 2 well, for the credit card debt,

Speaker 2 I don't even know how much it's taking out of that.

Speaker 1 It's doing it automatically? Oh, you're paying the truck payment and the credit card debt, and you're putting money in retirement, and you got all this other stuff.

Speaker 1 And you're getting a tax refund, too, probably.

Speaker 1 Right. Okay, so you might be making $120,000.

Speaker 1 So what do you owe on the truck?

Speaker 2 Oh, goodness. About $34,000, which is about what it's worth.

Speaker 1 Oh, yeah. Sell that today.
Sell it.

Speaker 2 That's the problem. I don't think my husband's willing to sell it.

Speaker 1 Then I don't think I can help you.

Speaker 3 Does he know that you have,

Speaker 3 does he feel that you guys have a financial problem?

Speaker 2 I've kind of hidden it from him, so that's my fault.

Speaker 2 That's my fault. So

Speaker 3 if you told him today, hey, we have $44,000 in credit card debt and $200,000 in student loans, that would be a light bulb moment for him. He doesn't know that?

Speaker 2 It would. And if I may let him go.

Speaker 1 He picked up the truck. He drives it.
He didn't think that Santa Claus brought it. And he picked up the two master's degrees.
He didn't think Santa Claus brought those.

Speaker 3 Very true.

Speaker 3 Okay.

Speaker 1 He may not know the exact numbers, but he knows

Speaker 1 he has made a mess, and he knows it.

Speaker 2 And I feel like I've allowed him to, because when his dad died, he gave him $100,000.

Speaker 1 Listen,

Speaker 1 you're both complicit because you're married, right?

Speaker 3 You're both in on this. It's just whatever the level of denial is or the level of, you know what I'm saying? So you're both in on it.

Speaker 3 You know, we can go back and forth on who, who did what and who knows what, but you're both in on it. So I would say.

Speaker 1 And both of you are required to fix it. Yes.
And if he does not want to buckle down and clean up the mess, that by and large, he is responsible for.

Speaker 1 It was his choice to buy a truck. It was his choice to go to school and get degrees that have not been monetized.

Speaker 1 These were his choices. And so now at 60 years old, he gets to be a man

Speaker 1 and own his choices and go, my family is in jeopardy. I've got to sell my truck.

Speaker 1 Your family is in jeopardy. He has to sell his truck, by the way.
This is not an option.

Speaker 2 This is why he won't sell his truck because when his father died,

Speaker 2 he inherited a cabin in Colorado that's free and clear. It's worth about $500,000.

Speaker 2 He doesn't want to sell the cabin because it's emotional. You know, his dad's memory is tied to it.

Speaker 1 What's that got to do with the truck?

Speaker 2 Yeah, you're right. You're right.

Speaker 3 I mean, you linked it. I'm asking that as a real question.
Is there a link?

Speaker 1 Oh,

Speaker 2 he feels that once we sell the cabin someday

Speaker 2 that he'll be able to pay the truck off.

Speaker 1 Okay,

Speaker 1 you got a choice. Friday, one of them goes up for sale.
You decide. Okay.

Speaker 3 It sounded like the cabin had way more sentimental value.

Speaker 2 When I look at this, I go, okay, the truck, you're not even upside down you get rid of that today do you have any money saved anywhere liquid we have we have thirty thousand dollars in our checking account but I don't I don't want to pay anything off with that because that's my security nest over the summer when he doesn't get paid

Speaker 1 okay oh you're but you guys make enough throughout the year yeah work in the summer and I don't know where it goes.

Speaker 1 Work in the summer when you don't get paid. That's what other teachers do.

Speaker 3 Two homeworks. First homework is you got to have a budget.
If you don't know where your money, when you said that, I said, okay, they don't have a budget. There's no plan for the money.

Speaker 3 So you're downloading every dollar tonight. Second homework is when you go to open up every dollar tonight because you've already downloaded it.
You sit with your husband and say, we have a crisis.

Speaker 3 And I don't know if you know it, but here's what it is. And you start laying out those numbers and say, I have a solution.
And you've got to open up the lines of communication tonight.

Speaker 1 There's a couple of things we can do. We can either sell your truck and buckle down and get on beans and rice and both take extra jobs, or we can talk about selling the cabin now.

Speaker 1 We cannot stay on the trajectory making the stupid butt decisions we've been making for the last decade and have anything but alpo for retirement. You've got to say this out loud.

Speaker 3 Yeah, you do.

Speaker 1 Okay.

Speaker 1 I'm scared for you, honey.

Speaker 1 I want you to go win, but I'm scared for you because every time we bring up something, there's a reason to not do it. You've got about five things you've been doing wrong.

Speaker 1 You've got to reverse all of those in dramatic fashion and then slam on the accelerator in the other direction.

Speaker 1 Okay? Number one, you're not disclosing and working together on every detail of your budget and your future.

Speaker 1 You're treating him like he's a little boy and his feelings are hurt when his daddy died and so he can't make a grown man decision. Sorry, you get to be a man when you're 60.
No way around it.

Speaker 1 You got to deal with it. Okay.
Number one. So you got to be on the budget.
You got to be on the same page. Number two, you guys are going to have to chop something with a freaking machete

Speaker 1 because you have a mess because you've been spending money like you're in Congress around there. And you've got to stop it.
You've got to chop some stuff. And this car is one of them.

Speaker 1 But the car really points to the cabin.

Speaker 1 If I woke up in your shoes and I was him and I had to come Jesus meeting and I decided I was going to be a grown man, the decision I made to go get two master's degrees that I couldn't afford to do was the day I made the decision to sell sell the daddy's cabin.

Speaker 1 You didn't mean to sue it, but that's the day, that's exactly what happened. You lost the cabin when you went and got two master's degrees that didn't monetize.
That's what you did.

Speaker 1 You traded the two because it's a balance sheet thing. You got over here, you got a $500,000 asset.
Over here, you got $200,000 debt.

Speaker 1 And the sooner you fix that, the sooner you can get in gear and start saving and actually retire and not eat Alpo. That's right.

Speaker 3 And Rita, you need to run actual numbers because what's going to make this compelling, not just to you, but to your husband, is to say, hey, here's what we have.

Speaker 3 You know, teachers, they set aside, you know, you have to pay into the pension. Here's what we have.
If we continue to go at this rate, here's what our retirement will look like.

Speaker 3 Dollar-wise, here's what we'll be bringing in. And that's going to shed some light when we compare that with what we owe on our mortgage and what we have to pay.

Speaker 3 Like, real numbers are going to make this a very compelling argument for you guys to do what Dave said and go in the opposite direction.

Speaker 1 So, 36 years,

Speaker 1 you've been taking care of him, and now it's time for him to step up and say, I'm going to be a man and we're going to make grown-up decisions together because we have made a mess.

Speaker 1 By and large, he has made a mess. That's what it is.
You're trying to take care of him. You're trying for him not to have any hurt feelings.
Toughies,

Speaker 1 you signed up for this trip. He did.
And he gets to take it. I'm sorry.
This is the Ramsey Show.

Speaker 1 Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John.
Why don't people want to take care of their family?

Speaker 1 They think they're not going to die or something.

Speaker 5 Well, I used to be one of those guys. I didn't even think about it.
And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids.

Speaker 5 And I immediately went and got term life insurance.

Speaker 1 That's a gut punch.

Speaker 5 For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.
Me too. They don't know what to do next.

Speaker 1 You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow.

Speaker 1 She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow. That's exactly these are the two options.

Speaker 1 It's saying I love you to your family. Term life insurance.
Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years.

Speaker 1 They're the only people I trust. Go to zander.com or call 800-356-4282.

Speaker 1 The Ramsey Show question of the day is brought to you by YReFi.

Speaker 1 Are defaulted private student loans keeping you up at night? Well, YReFi can help you lower your payments and your interest rate gets you out of default.

Speaker 1 Visit YReFi.com slash Ramsey and start resting easier. That's the letter Y,

Speaker 1 R-E-F-Y.com slash Ramsey. Might not be in all states.

Speaker 3 All right, today's question comes from Nora in Wisconsin. He says, my mother purchased a Gerber life insurance insurance policy for my son and daughter when they were babies.

Speaker 3 My mom has since passed away, so I called before my son's 18th birthday to inquire about cashing out. The representative said if we wait until he turns 21, it would be worth $30,000.

Speaker 3 Fast forward, and my son is now 21, so I called again to inquire about my son cashing out so he could use the 30,000 for a house down payment.

Speaker 3 This time, a representative informed me that he had an upon death policy and he can only cash out for the money that's been paid in, which is 2,200, not 30,000.

Speaker 3 Needless to say, I am in the process of closing the accounts for both of my kids. I will still give them the amounts their policies are worth, but what a letdown.

Speaker 3 Tell people to avoid this trap at all costs. And we do.
We do tell people to

Speaker 3 avoid these traps. Gerber life insurance is probably one of the worst ones out there.

Speaker 1 It's humorous. It's so bad.
It's really bad. He bought life insurance.

Speaker 1 His sweet mom, who's passed, bought life insurance from a baby food company.

Speaker 3 Yeah.

Speaker 1 I mean, just think about that. When you say it out loud, it tells you there's a problem, right? Absolutely.
So,

Speaker 1 yeah, what a rip. And then they lied to him, too, which absolutely they do.
I mean, they just lie.

Speaker 1 All these people in this business, because what the guy meant to say was, he forgot to say it correctly, was that the death benefit would go up at 21 because he becomes an adult.

Speaker 1 But the death benefit is not worth anywhere near what they paid for it. The poor lady, if she had put that money, oh, she did.
She put it in a fruit jar.

Speaker 3 That's, yeah.

Speaker 1 She put it in a cookie jar and it laid there for 21 years. And you got your money back with absolutely no interest.
And so what that means is,

Speaker 1 that it should have been close to $20,000.

Speaker 1 If it was in just a maybe

Speaker 1 a decent mutual mutual fund, not even a good one.

Speaker 1 Yeah, you would have had, oh my gosh.

Speaker 3 Yeah, that's painful. Yeah.

Speaker 1 And, you know, here's the sad thing, too, that sweet Nora, his mother that passed away, I think that was her name, right? Did he call her that?

Speaker 3 Yeah, the mom's name was Nora.

Speaker 1 Yeah. Sweet Nora thought she was doing something sweet for her grandbabies, which every grandparent wants to do.

Speaker 1 And these freaking people at Gerber completely predatorily fed on her grandmotherly love and ripped her off.

Speaker 3 Well, when you're in, if I remember.

Speaker 1 I hope I wasn't unclear about how I feel about this.

Speaker 3 When you're in the delivery room of all the papers that they give to you, they give you the Gerber life insurance policy in the room when you're having the baby. You know,

Speaker 1 we ought to just talk to some hospitals about how they're, that's malpractice. It is.

Speaker 3 I remember saying that. I thought, man,

Speaker 3 it's great to want to invest for your kids and invest for the future, but they give you the worst possible thing.

Speaker 3 If they, I would rather them give you a paper that that says, hey, from here on out, if you just put $100 a month when your kid is, you know, 30, you know, they'll have almost $400,000. Like anything.

Speaker 3 I don't care. You could put it in an index fund and have that.
Do you see what I'm saying?

Speaker 1 Yeah, you fall off of, no, Nora's who asked the question. I'm sorry.
It was not the mother, Nora. My mother, she said.
Yeah, that's right. That's right.
I'm sorry. I'm sorry about that, Nora.
Okay.

Speaker 1 Just now I looked down at the email and saw it, but it's so aggravating. Yeah, it is.
But it's kind of like this, guys. Look, if you, people call and ask us about like reverse reverse mortgages.

Speaker 1 Okay, where do you hear about reverse mortgages? Now, think with me, okay?

Speaker 1 The advertisement before the reverse mortgage is a walk-in bathtub.

Speaker 1 The advertisement after the reverse mortgage is a snuggie.

Speaker 1 This is where you're picking up your financial products.

Speaker 1 I mean, right there.

Speaker 1 And who's advertising it? Actors that are done. That's right.
Actors that are way done. Yeah, I'm on the right.

Speaker 1 I mean, when you reach the end of your career, that the agent calls and says you can do a reverse mortgage commercial and you go, Yeah, baby, sign me up. We know where your career is.

Speaker 1 Okay, it's gone down the tubes. It's in the uh, it's in the snuggy toilet.
That's what I'm saying. But yeah, it's the same thing, guys.
Just think about where you're learning about this.

Speaker 1 Here's another one. Okay, let's just think about this.
Okay, how many cash advance

Speaker 1 places

Speaker 1 do you see in the rich end of town?

Speaker 3 They're not there, Dave.

Speaker 1 Okay, there's a clue, right?

Speaker 1 How many title pond places do you see in the rich end of town? Okay,

Speaker 1 there's a clue, right?

Speaker 1 Think about this. Oh, yeah.

Speaker 1 Did you know that something like 78% of the lotto tickets are sold in the poor zip codes

Speaker 1 in town?

Speaker 1 And have you listened to the lotto commercials? They're not appealing to the highest common denominator of humanity.

Speaker 1 Pretty much Daryl and his other brother, Daryl, are their target market. I mean, think about it, guys.
Yeah.

Speaker 1 These are people that can't afford to go to Vegas and lose money, okay? So

Speaker 1 you take some clues from the proximity

Speaker 1 of the marketing on this, and it will help you, too. I'm sorry you got ripped off, Nora, and I thank you for giving us the opportunity to completely trash Gerber again.

Speaker 1 We do it pretty regularly, but whole life life life insurance, insurance that has a cash value insurance, insurance that has a cash value buildup, has a savings program in it, 100% of the time is a bad product.

Speaker 1 There's not a good one. There's some that stink less than others, but that's true of humans.
Okay? So

Speaker 1 it's just both of them stink. They're all bad.
Do your investing, not with an insurance company.

Speaker 3 And by the way, even if

Speaker 3 she had had the 30,000, that's still a crappy rate of return.

Speaker 1 No, that would be,

Speaker 1 you know, it's only

Speaker 1 2,200. It's like $100 a year.
Until $21,000. $100 a year.
That would have been, yeah, that would have come out probably about $30K, about $25K, probably. But anyway, it's not putting a lot in.

Speaker 1 $100 a year, not a month.

Speaker 1 But yeah, still.

Speaker 3 Oh, yeah, a year.

Speaker 1 It's not, it is $8.33 a month. So you put that in the calculator.

Speaker 3 Yeah, I was thinking a month, yeah.

Speaker 1 But anyway, the

Speaker 1 wow, ouch. I'm sorry.
I hate that. So what do you do if you have kids? Well, they might get juvenile diabetes and be uninsurable when they're older.
Yeah, they might.

Speaker 1 You know what the percentages is on that? Almost zero. Yeah, so let's talk about that.
They might get childhood cancer, too, and be uninsurable. But you know what the probabilities are on that?

Speaker 1 Almost zero. Okay, percentage-wise.
And so you don't buy life insurance on someone whose income you aren't trying to replace. And children do not have an income.

Speaker 1 From a financial perspective, they're a liability, not an asset. They're not creating money.
They're drinking it. And so,

Speaker 1 you know, and eating it and whatever. Yeah.
And all that. So, but

Speaker 1 you're not mad at the kids. Send them to the salt mines.
No, that wasn't what I said. No, what I said was, is they're wonderful, perfect little things that are to be taken care of and it costs money.

Speaker 1 They don't make money. So you don't insure something that doesn't make money.
It's that simple. And

Speaker 1 yeah.

Speaker 3 Yeah, I like the way to think of it is if somebody's dependent on your income, that's

Speaker 1 when you get life insurance. And you get insurance only due your investments somewhere else.
That's right. 100%

Speaker 1 of the time.

Speaker 3 So we may as well go through it. So if you're working, if you're the working adult for me, 10 to 12 times my income

Speaker 3 on me. And then if you have a spouse that stays at home, what do you say, like four times the amount or up to

Speaker 1 well? What I always just say is, you know, let's say Sharon was a full-time mom. If she had passed away when I had little kids at home, I would have had to hire Mary Poppins.

Speaker 3 That's right. And that's a lot of money.

Speaker 1 Mary Poppins, I mean, we're talking

Speaker 1 cook food,

Speaker 1 do homework,

Speaker 1 drive kids around, all that. In today's world, that's 50 grand.

Speaker 3 Yeah, that's a huge amount of children.

Speaker 1 So you need five, six hundred grand on a stay-at-home mom because that's the economic value that she brings to the table

Speaker 1 in that example.

Speaker 1 But if you're working and you make $100,000, $100,000, you need a million two. Yeah, definitely.
A million two invested at

Speaker 1 10, 12%

Speaker 1 will replace the 100K without touching the million two. It'll create a hundred K a year in income for the remaining spouse.
That's right.

Speaker 3 And our friends at Xander are the ones you want to go to to get that locked in and in place. Really, today, don't wait on that.
Insurance is not a baby step, life insurance is not.

Speaker 1 Good point. George brought that up recently.
Yeah, very good.

Speaker 1 This is the Ramsey Show.

Speaker 1 Let me tell you, the gods are going to cut you down. It's Holy Week in Jerusalem, and the city is restless.
The people of Israel welcome Jesus as king, his followers ready for revolution.

Speaker 1 But instead of taking the throne, Jesus turns the tables.

Speaker 7 Woe to you, scribes and Pharisees! How will you escape being condemned to hell?

Speaker 1 Experience Holy Week like never before. What have you done? Now in theaters, the chosen Last supper.
Get your tickets now.

Speaker 1 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work

Speaker 1 that they love, and create actual amazing relationships. Jade Washaw, Ramsey Personality Number One Best Selling Author, is my co-host today.
The phone number here is 888-825-5225.

Speaker 1 Thomas is in Honolulu. Hi, Thomas.
How are you?

Speaker 2 Hi, hi, Mr. Ramsey and Miss Washa.

Speaker 2 So I'm currently

Speaker 2 unemployed. I

Speaker 2 recently got terminated

Speaker 2 from

Speaker 2 construction services company,

Speaker 2 Hilti North America.

Speaker 2 Also

Speaker 2 have had some

Speaker 2 extensive experience in sales and customer service, some operational stuff as well.

Speaker 2 Recently, last year actually, I graduated the University of Hawaii at Manoa with a Bachelor of Science in Biology degree.

Speaker 2 25 years old, got roughly

Speaker 2 around $13,000

Speaker 2 in savings right now. I just paid off my rent for the upcoming month.

Speaker 2 I'm actually just not sure where to go from here. I've been applying to

Speaker 2 some sales positions and and some operations positions but I haven't been

Speaker 2 getting as much interviews whatnot

Speaker 1 why'd you get fired Thomas

Speaker 2 yes so my current my previous position they they said it was due to negligence

Speaker 2 actually I so locked up the store in my role at Hill T was part of the account manager development program.

Speaker 2 Basically, we would run the store, do

Speaker 2 send out packages, receive packages, inventory, sales, and whatnot. But the store is the role.
And then

Speaker 2 we've always had issues with the door

Speaker 2 to go in and out.

Speaker 2 Some people, they've gotten locked out. We had a call locksmith, whatnot.
But

Speaker 2 one evening, after I locked up, an hour after it,

Speaker 2 after I left, the door popped open.

Speaker 2 And then i i got um told it was it was negligence um i i didn't secure the entrance but i do think that they were kind of uh hoping to kind of cut me because the previous two employees in my position they got uh terminated and the last one before that he you just quit without any two weeks notice i think they're trying to maybe get like a fresh start there or something

Speaker 3 okay so you've been applying for sales positions. Is it that you're not, are you even getting in the room for an interview or you're not even receiving interview callbacks?

Speaker 2 So I've had some sparse,

Speaker 2 I've had two interviews so far,

Speaker 2 account executive role and then a project management

Speaker 2 role, but it seems

Speaker 2 for me,

Speaker 2 I realize

Speaker 2 with my age and then

Speaker 1 whatnot.

Speaker 2 I'm 25 years old.

Speaker 1 what's wrong with that i put a lot of

Speaker 2 i feel like um over here anyways a lot of the applicants um they seem to be a little older so i i i kind of put a lot of uh pressure on it and i feel like i'm not um performing as as well as i expand and maybe should be in the it's possible yeah i i'll tell you right now i think you you might do well with some coaching or you might do well with a little bit uh of help in that area are you limited to honolulu or are you looking elsewhere

Speaker 2 I am yes, so I am open to moving to the mainland, but right now with my current living situation, it's just me and my

Speaker 2 younger brother actually.

Speaker 1 Have you got

Speaker 1 some kind of

Speaker 1 a limitation or

Speaker 1 a slight disability or anything you're facing?

Speaker 2 No, no.

Speaker 1 Okay.

Speaker 1 All right, good. Okay.

Speaker 1 You just sound really, really nervous on the air, which can that would, I would be nervous too if I wasn't used to being on the radio or on the podcast.

Speaker 1 So I understand that, but I'm just trying to check and see what's going on because your voice cadence,

Speaker 1 it sounds like you're scared to death, and maybe that's all it is. Okay, that's fair.
I'm not picking on you.

Speaker 1 I'm just trying to find out what you're dealing with, why you're not landing these positions. Okay, if I'm in your shoes, I want to step back.

Speaker 1 two or three steps from this and say, okay, where do I want to be when I'm 30? Where do I want to be when I'm 40? What do I want to be doing? And what are the steps to get there?

Speaker 1 And why do I want to be doing that?

Speaker 1 And it's not necessarily to go back to school, but it sounds like a lot of your jobs, you just fell backward into them.

Speaker 1 Just whatever landed at your feet, you took it because you were hungry and you wanted to eat. By the way, that's not a bad thing as a temporary measure.
Take a job so you can eat.

Speaker 1 That's an okay thing. But

Speaker 1 I doubt when you were getting a four-year degree in biology, your dream was to manage the warehouse and try to lock the door that's broken.

Speaker 2 No, no, no.

Speaker 1 That was not like you weren't sitting around dreaming of doing that when you're 25 years old. So you fell backward into that job, is what I'm saying.
It just came at your feet and you took it.

Speaker 1 Some of the sales things you took, it's the first thing that came up. You may or may not like sales.
You may or may not be good at sales. I don't know.

Speaker 1 But it feels like that just whatever rolls in front of you, you pick it up and go with it. And again, to eat, you do a lot of things on the short term.

Speaker 1 But I want you to start doing some thought about where I want to be five years from now and 15 years from now. And I'm going to send you Ken Coleman's book, Find the Work You're Wired to Do.

Speaker 1 It has the get clear assessment built into it. It's my gift to you.
And then I'm also going to send you his book, The Proximity Principle.

Speaker 1 The Get Clear Assessment takes about 20 minutes to take, and it will point out to you what some of your strengths are, your passions are, and it'll help you point in a direction that is a good long-term career path, not just a job.

Speaker 1 Because you got to get out of the business long-term of a job. Short-term, take a job.
Take three jobs. I don't care.
Short term is anything. Go make some money, right?

Speaker 1 But long term, I don't want to be stuck in something where their biggest crisis of the week is a door that won't lock. Oh my God.
Really? Let's move on. Thank God you got fired.

Speaker 1 And so you get to go do something with your life that matters now. Yeah.
And yeah, so I'm going to lean into that.

Speaker 1 And I may take some jobs while I'm working towards my career, but get in an apprentice program.

Speaker 1 It could be something in the trades. You could go that way.

Speaker 1 Could be something in technology. It could go that way.
It could be you wake up that biology itch and scratch it that was there. I don't know.
But I'll send you those two books as my gift, Thomas. And

Speaker 1 so while you're looking for a job, I also want you working on your career.

Speaker 3 Yes. And

Speaker 3 do your best to prep for these interviews as best as you can.

Speaker 3 You know, role play these interviews, go over these interview questions and get good at really being prepared for them so that you can answer them like in a concise way and really get across.

Speaker 1 If the place is open to the public, go walk it. That's right.
And feel the air. That's right.
And get on their website and read everything about them.

Speaker 1 Read the history of the founder of the organization. If you're going to go to work for Amazon, know about Bezos.
Know how he started in his garage. Know all that.

Speaker 1 If you're going to go to work for Dell, know he started in his garage, right?

Speaker 1 And so, you know, and so what does Michael Dell do? How does he think? Because that does run down through that organization even to this day. That's so true.

Speaker 3 Yeah. Preparation, remember this, preparation is a gift you give yourself.
That's some of the best advice I've ever gotten. And in an interview situation, it's very well.

Speaker 1 And what will happen is you'll chill out and then your vocal cords will

Speaker 1 sound confident, not freaked out. That's right.
And that'll help you with that whole process. This is the Ramsey Show.

Speaker 3 Hey, what's up, guys? It's Jade Warshaw. And look, if there's anybody who knows student loan debt is a problem, it's me.

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Speaker 1 Jade Washall, Ramsey Personalities, my co-host.

Speaker 1 Drew's in Fort Worth, Texas. Hey, Drew, how are you?

Speaker 2 Any better? I'd be you, Dave.

Speaker 1 That's cute. How can I help?

Speaker 2 Oh, well, I was calling in to let you know I'm a millionaire.

Speaker 1 Thanks to you. Woo-hoo-hoo! Baby Steps Millionaire.
What's your net worth?

Speaker 2 So right now we're sitting just at $2 million.

Speaker 2 What's interesting about it it is we hit our first million just before we turn 40. And then seven years later, we just turned 47.
And like you say, it doubles every seven years.

Speaker 2 We just hit $2 million.

Speaker 1 Wow. I love it.
Give me a little breakdown on the mix. How much of that's real estate, retirement, and so on?

Speaker 2 Yeah, so we recently hit $1 million in our retirement thanks to the guidance of your Smart Vestor Pro. So a big shout out to Chris and Tyler out there.

Speaker 2 It was awesome. When we saw that seven figures on there, I'll tell you, that was so inspiring and exciting.

Speaker 1 That's sweet.

Speaker 2 We also have about $750 in our home equity, another $150K

Speaker 2 in our college savings, and then remaining hundreds in like cash and cars and things like that.

Speaker 1 Got it. Well done, sir.
Well done. How much of this did you inherit?

Speaker 2 Well, interesting enough, so my grandmother passed away about seven years ago, and she gave the grandkids just $1,000 with a message of saying hey live life you know have great experiences and today would have been her 106th birthday so this is an experience that uh i'll never forget wow how fun is that very cool good for her that's great man that's amazing so so she was like 99

Speaker 2 yep 99 and a half

Speaker 2 she was the matriarch of our family um and uh my daughter is named after her she's the fifth adelaide um named after her grandmother.

Speaker 1 That's sweet, Adelaide the fifth.

Speaker 3 That's sweet. So, what was your income during this time?

Speaker 1 Um, highest to lowest, or lowest to highest.

Speaker 2 So, our adult income, you know, range from 45K to 220, is about what we make right now.

Speaker 2 Um, but I'd say probably since we started the baby step process, you know, 15 years ago, it's probably averaged about 160 to 170.

Speaker 1 What do y'all do?

Speaker 2 Uh, I am in medical device sales leadership, and my wife is the COO of this household.

Speaker 1 Love that. Love that.

Speaker 1 I love it. Very cool.
And so you got a four-year degree?

Speaker 2 Yes.

Speaker 2 I graduated in three and a half years from Miami University in just business marketing.

Speaker 1 Okay. Very good.
All right. Good.
Marketing degree. And, of course, you're in sales now.
That's good. What was your GPA?

Speaker 2 So I'm sure you could relate to this. I graduated with a 3.07.
I was dying to get that 3.1.

Speaker 1 Look at at you.

Speaker 2 But I unfortunately fell a little short.

Speaker 1 Well, you were over three, so that's the one that killed me. Good for you, man.
Excellent. Excellent.
What do you drive?

Speaker 2 So in Texas, you're required to have either a pickup or a Jeep. So I went with a 2018 Jeep Wrangler Sport.

Speaker 3 Love it. I love that you went with the Jeep.
That would have been my choice, too.

Speaker 1 I like it. What about your wife?

Speaker 2 Well, we just upgraded her car.

Speaker 2 She had been driving our last, the last thing we ever took debt out was in 2009 when we bought her a traverse but uh now living here in texas she wanted a convertible so we upgraded to a 219 um buick cascada convertible oh that's fun that's nice yeah that's very cool that's my two million dollar net worth car

Speaker 1 yeah living the dream i like it put the top down i like it good job y'all so what i have a question what role did budgeting play in this

Speaker 2 Oh,

Speaker 2 it played everything. I mean, I tell all the people because we do financial peace and lead that.

Speaker 2 We're leading a class right now. And I tell everyone, when you start, it's amazing.
You immediately get a raise.

Speaker 2 The advice I give people all the time is dream big, but act small.

Speaker 2 So, like, yeah,

Speaker 2 my wife and I, we always have these conversations about, you know, what we want our future to look like.

Speaker 2 And it's just exciting to kind of see, like, what goals are we going to have? What do we want to do? It keeps us motivated. But dreams, you know, without action is just a wish.

Speaker 2 So, you know, if we if we want to do these small things, your future is determined based on these small little decisions every single day.

Speaker 2 And the budget, you know, keeps us on pace with what those small decisions are so that we could reach those goals.

Speaker 3 You're right. Yeah, the budget's the map to get you to all your money goals.
That's so important.

Speaker 1 Very cool.

Speaker 1 That's good advice.

Speaker 1 I was going to ask you what you tell youngsters, and that's younger than you. You're a youngster, but younger than you.
You're a young millionaire, young two millionaire for sure.

Speaker 1 Very well done, dude. Well done.
Proud of you. How's it feel?

Speaker 2 It's so freeing. I mean, the journey worth $2 million, but to be completely honest and stuff,

Speaker 2 it isn't such a, it's not always a smooth ride, right? No.

Speaker 2 The last year, I mean, I've gone through a couple different layoffs in medical device. Sometimes you have that with startup companies or different things.
There's been some layoffs.

Speaker 2 And through the entire time, like, we weren't stressed.

Speaker 2 We knew we we had the emergency fund we knew we had our budgeting we knew we had all this stuff in there and we're just constantly at peace um you know with where we're at today and where we're going to be tomorrow yeah that's great well done sir very proud of you thanks for calling in and sharing your dream with us because you're living it you are living the dream i like it i like it so what do you say dream big act small

Speaker 1 yep and

Speaker 1 i would say if you're going to dream big you better work big got to work big because if you don't work big, it's not coming. The work goes with the dream.

Speaker 1 Because otherwise, you get called a dreamer, which is a negative thing, right?

Speaker 1 You don't want your daughter dating a dreamer. They'll live in your basement.

Speaker 1 So, no, we want people that get stuff done. They leave the cave, kill something, and drag it home.
Obviously, Drew is one of those.

Speaker 1 You know, Jade, I think I'm just visualizing out of the 30 or 40 million people that are going to consume this particular moment on this show,

Speaker 1 that there's a couple things Drew's family understood that the typical person walking around doesn't understand. Number one, 89% of America's millionaires are first generation rich.

Speaker 1 They did not become millionaires because of an inheritance.

Speaker 1 That is good news for all of us who didn't have a rich uncle or rich parents.

Speaker 1 All we've got to do is leave the cave, kill something, and drag it home. And you remember a couple of principles.

Speaker 1 Principle number one is the power of compound interest will make you wealthy and that's what happened to Drew it's also making him double wealthy fast so what that means is a hundred dollars a month invested from age 25 to age 65 is 1 million one hundred and seventy six thousand

Speaker 1 so you're a millionaire that doesn't count buying a house that would even take you up higher you'd do even better and that doesn't count the fact that you're probably going to put a lot more than a hundred dollars in in your 401k your roth Roth IRAs and stuff as you go along with matching, but $100

Speaker 1 a month gets you there.

Speaker 1 That's principle number one.

Speaker 1 Piece of knowledge number one was that 89% of America's millionaires are not millionaires because of inherited wealth. We get that from the largest study of millionaires ever done in North America.

Speaker 1 airtight research that Ramsey Research did. It's in the book

Speaker 1 Baby Steps Millionaires, my latest number number one bestseller. And

Speaker 1 that book has the white paper of all the research in the back for those of you that are interested. But

Speaker 1 so Drew is a baby steps millionaire. And that's the third piece of information is he followed the baby steps.
That's right. And baby step one?

Speaker 3 Yeah, baby step one, you are saving $1,000, $1,000 saved. After that, baby step two, you're paying off all of your consumer debt.
That's everything except your mortgage.

Speaker 3 Baby step three, you're walking in and you're saving up three to six months of expenses. After you've done that, now at baby step four, where you're investing 15% of your income.

Speaker 3 Baby step five, we're putting away for kids' college. Baby step six, we're moving on to pay off the house.
Finally, baby step seven, living and giving like no one else.

Speaker 1 And there you have it. And typically, to get all the way through six, meaning house is paid off, takes people between seven and ten years from today, ready, set, go.

Speaker 1 They typically are out of debt, consumer debt and everything.

Speaker 1 If they lean in using the debt snowball and beans and rice, rice and beans, quit spending money that they don't have, sell stuff, sell so much stuff the kids think they're next.

Speaker 1 They're out of debt in 24 to 30 months, to two and a half years. And then about seven years later, the house is paid off, or at the seven-year mark, rather, the house is paid off.

Speaker 1 And that's right where Drew is.

Speaker 1 You know, he's got there at 40, and now it's going to double about every seven years for him.

Speaker 3 Yeah. And it's not a magic act.
You know, a lot of people think this just magically happens, but it's not magic. It's very intentional.
It's very intense. And if you do that, you can make it happen.

Speaker 1 Absolutely. That's the moral of Drew's story right there.
This is the Ramsey Show.

Speaker 1 Hey, technology has changed a lot in the last 30 years. Now the hot topic is AI.
And I understand that it might seem intimidating.

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Speaker 1 Starting April 21st, we'll be in Louisville, then on to Durham, Atlanta, Phoenix, Fort Worth, and Kansas City. Grab your tickets at ramseysolutions.com slash tour before they're gone.

Speaker 1 We do our show on the glass Monday through Friday, meaning there's a window and you get to watch the monkeys in their cage here. That would be me.

Speaker 1 And used to have a little sign up that said, don't feed the monkeys. And George Camille took he took exception to that sign.

Speaker 1 So we had to take it down because he was afraid that he was being called a monkey. But that's not cool.
So anyway,

Speaker 1 I'm the self-proclaimed monkey here. So just I'll take credit for that.
Anyway, we're on the glass and you can stop by and hang out.

Speaker 1 Watch the show happen from 1 to 4 Central Time, Monday through Friday. Two of us will be in here all the time, and we're in here to help you.

Speaker 1 And also just outside the glass in the lobby with all the folks, there's usually 50 to 200 folks sitting around watching the show. There's free homemade cookies.
There's free coffee.

Speaker 1 And there's a debt-free stage. And standing on the debt-free stage is Josh and Rebecca to do a debt-free screen.
Hey, guys, how are you? Good. How you doing, Dave? Welcome, welcome.

Speaker 1 Where do y'all live?

Speaker 6 Zebula, North Carolina, a little small town just east of Raleigh.

Speaker 1 Okay, fun. Welcome to Nashville.
And how much debt have you two paid off?

Speaker 6 $203,400.

Speaker 1 I love it. How long did that take?

Speaker 6 63 months, right at 5.3 years.

Speaker 1 I like it. Good for you.
And your range of income during that five years?

Speaker 6 About 105 to 165, cool.

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

Speaker 3 I work in retail merchandising.

Speaker 6 And I'm a systems analyst at a transportation company.

Speaker 1 Great, very cool. So five years, $203,000.
Was that your house? Yes, Paul's a house, thankfully. You paid off your house.
Yes. Only now.
You're looking at weird people. I know.
100% dead-free.

Speaker 1 How old are you two weirdos?

Speaker 8 I'm 30. Wow.

Speaker 1 29.

Speaker 1 Wow. With a paid-for house in Raleigh, North Carolina.
Especially weird.

Speaker 1 What's the house worth?

Speaker 6 Right at $360.

Speaker 1 Wow. How fun.

Speaker 1 And how much have you guys already got in your NIST egg?

Speaker 1 Roughly $250,000. All right.
So you're halfway to, a little over halfway to being a millionaire. And you're not even 30 years old and barely 30 years old.
Yes. Excellent.
Excellent, guys. Way to go.

Speaker 1 Thank you. Wow, wow, wow, wow, wow.
So you start this and you're not even 25 years old. How long have y'all been married?

Speaker 1 Five and a half years. Okay.
So boom, right out the gate. Here we go.
Yes. Game on.
So tell us a story. How in the world do you get this smart this young?

Speaker 6 I'm very thankful to say very little of it has to do with us.

Speaker 6 So we both were raised with parents and even grandparents that modeled biblical biblical principles for how to handle money from a very early age.

Speaker 6 So they modeled giving, they modeled investing, they modeled living on less than you make, living on a budget, and just generally managing God's resources well.

Speaker 6 And I'll give you a short story that illustrates what I mean. So I grew up with a dad that I've always called the boring version of Dave Ramsey.

Speaker 6 He has a little more hair, but you're a lot more fun to listen to.

Speaker 6 And I remember one story in particular. He went to a yard sale and haggled with this poor

Speaker 6 elderly lady for a nutcracker. She had the nutcracker marked at 50 cents.
And he walked up and the nutcracker had a chipped tooth, so he got that thing for a quarter.

Speaker 1 Well, there you go. That's how you do it.
I love it.

Speaker 1 That's fun.

Speaker 6 And then, if I can say it, so and then college, this is where the Ramsey organization comes in. So I,

Speaker 6 at college, found your videos. I'd never heard of you before college.
And FPU made made such a big impact on me, even though I hadn't actually taken the course.

Speaker 6 As soon as I graduated, our church started offering it. And I think I took it three times because I liked it so much.
And then Rebecca attended the last one. And we also led a couple of small groups.

Speaker 6 And so FPU was a big part of that. So our story is a success story, not so much because we're fantastic or amazing, but because the people around us are fantastic and amazing.

Speaker 6 And you, Dave, and the entire organization are certainly a big part of that. And we cannot say thank you enough.

Speaker 1 Well, thank you.

Speaker 1 You had the option of doing stupid, and you chose wise.

Speaker 1 So I'm still going to blame you for your success. Well done, Hero.
Good job, because not everybody gets a good pattern and follows it.

Speaker 3 No, that's right.

Speaker 3 Like Dave said, you have a choice, and you guys chose right. And I love that you were both immediately on board.
So you never really had the consumer debt.

Speaker 3 You just both got in, locked in, and said, we're going to do this. Did it feel like a sacrifice? Or was it just kind of, hey, this is just part of our budget.
We don't really feel it.

Speaker 3 Tell us how it felt paying off the debt of the house.

Speaker 8 I know for me, I know paying off the house was a big thing for Josh. Like, let's try to pay it off early.
For me, I came into it.

Speaker 8 I like to say I got married and got into debt for the first time ever because he had bought the house just a couple months before we got married.

Speaker 8 It was able to see just the weight and the stress that was taken off of Josh once the house was paid off. And now we just have a lot more freedom as a result of that.

Speaker 1 What's the first big thing you're going to do to celebrate? Buy a car.

Speaker 1 Good.

Speaker 6 Rebecca totaled, well, actually, a deer totaled our only half-decent car last Thursday.

Speaker 1 Oh, wow.

Speaker 6 So we lost our only decent car. And so I looked up the Kelly Blue Book value of our two remaining vehicles, an old truck, my grandfather's truck, and the first car she ever bought.

Speaker 6 And it's like $4,900 between two vehicles.

Speaker 1 Yeah, you need to upgrade. We need something a little bit more reliable.

Speaker 1 Both of you do, yeah, instead of deer fodder. Yeah, I like it.
So, what are you going to get?

Speaker 8 I have no idea. I am not a car person, so I'm leaving that up to him.

Speaker 3 I just want a better car.

Speaker 1 Okay, you just want something that's a little nicer. Yes, not doesn't take much to upgrade that.
No, it doesn't really.

Speaker 1 You're going to get a little insurance check, and you're going to put a little money with it and

Speaker 1 try to get a little better place. A little better thing.

Speaker 6 We're going to get anything that allows us to have enough confidence such that we're not praying on the way to Ramsey Solutions.

Speaker 1 I hear that. Oh, my gosh.

Speaker 1 Way to go, you guys. I'm very proud of you.
How's it feel to not have a payment in the world?

Speaker 1 Wonderful. It feels great.
It feels amazing.

Speaker 1 What do you tell people the key to getting out of debt is you paid off your house by the time you're 30?

Speaker 6 So I've been very blessed to get to know a 99-year-old World War II combat veteran over the past few years. He was my grandfather's best friend.

Speaker 6 And he told me once, once you become emotionally invested in something, it becomes virtually impossible to change your mind.

Speaker 6 And so I think the key to getting out of debt is simply becoming emotionally invested in it, allowing the stuff to drop from your head to your heart.

Speaker 6 You know, rain that falls on grass doesn't actually do anything. It's the water that soaks down to the roots that causes life change.

Speaker 1 Yeah. Wow.
Very true. That's very true.

Speaker 3 Very, very true and well put.

Speaker 1 Exactly. Yeah.
It's

Speaker 1 you become what you think about, you know. The Bible says as a man thinketh in his heart, so is he.

Speaker 1 So that's the deal.

Speaker 1 And it's the power of focus, the power of intentionality, all that is a biblical principle. You're exactly right.
So very well done, sir. Proud of you guys.
And lady,

Speaker 1 you guys are awesome. This is great.
We'll pray you get home. Thank you.
So you can get a new car. So you can both get a new car.
Yeah.

Speaker 1 Because now without any house payment or anything else, now you've got the ability to save and pay cash for that. And

Speaker 1 you probably don't realize what the next three years is going to look like,

Speaker 1 how how much freedom you've really set yourself up to be because you've only really known one way while you were married.

Speaker 1 But now you've got a whole new version of YouTube to learn about, and it's going to be pretty incredible. So way to go.
You guys are heroes. Man, you're amazing.

Speaker 1 So, you know, every time someone tells us that there's a Gen Z problem or a millennial problem, I tell them, no, there's not.

Speaker 1 I got excellent versions of both on this stage every week coming in here and showing us how it can be done. And so you guys give us hope for the future, us old people.
So, good job, guys. Well done.

Speaker 1 Josh and Rebecca, Raleigh, North Carolina, 203,000 paid off in 63 months, making 105 to 165.

Speaker 1 House and everything at 30 years old. Count it down.
Let's hear a debt-free scream. Three, two,

Speaker 1 one.

Speaker 1 We're debt-free.

Speaker 1 Well done.

Speaker 1 Well done, you guys. Man, that's beautiful right there.
They'll be able to do anything. I mean, you take a couple of hundred thousand dollars a year of income, which is what they're approaching,

Speaker 1 and no payments of any kind.

Speaker 1 They're not even, they're 30 years old. It can be so much money.
So much

Speaker 1 money.

Speaker 1 Unbelievable.

Speaker 3 Wow. That's inspiring.
I'm inspired.

Speaker 1 Very cool.

Speaker 1 This is the Ramsey Chef.

Speaker 1 You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage.

Speaker 1 To protect your biggest assets, I recommend using Ramsey Trusted Pros.

Speaker 1 Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted providers have been coached and vetted to serve you like we would find what you need at ramseysolutions.com slash insurance

Speaker 1 jade washall ramsey personalities my co-host mike is in idaho hey mike welcome to the ramsey show

Speaker 2 oh how's it going guys better than we deserve what's up

Speaker 2 all right so um

Speaker 2 I think I accidentally started a business and I need a little help here.

Speaker 3 Explain.

Speaker 2 All right. So

Speaker 2 I'm a high school photography teacher and I teach yearbook and journalism and all that kind of stuff.

Speaker 2 I started taking senior photos and sports team photos and designing banners. And essentially I started doing it simply to

Speaker 2 essentially pay for my classes. In Idaho, we really don't have a lot of money for things.

Speaker 2 And I wanted my students to actually, you know, have cameras to take a photography class, which I think is super helpful.

Speaker 3 Anyway, so

Speaker 1 yeah, yeah, so

Speaker 2 yeah, right.

Speaker 2 So anyway, I've taken all that money and I just donate it to my classroom. I hire some of my students in order to get them experience.

Speaker 2 My problem, I suppose, is a good problem here, but word's really gotten out that I'm doing pretty well with this stuff. I'm starting to get booked up with a lot of different senior photo sessions.

Speaker 2 Great.

Speaker 2 A lot of different teams are contacting me to get their photos. And right now, I'm looking at like $400 to $800 a month I'm bringing in for my program that I'm donating.

Speaker 2 Because I'm making actually a lot more money than I originally thought I was going to, I want to make sure I'm protecting myself. And

Speaker 2 I'm very ignorant when it comes to business.

Speaker 2 I still want to donate a lot of this money, but down the road, I would really like to maybe start compensating myself with all the hours that I put into this.

Speaker 2 Do I need to file for an LLC or I guess what are my next steps here?

Speaker 1 No, you don't need an LLC. You just need to make a decision.

Speaker 3 Yeah, how much you have to decide what you're doing.

Speaker 1 You used to give 100% of your proceeds to

Speaker 1 the classroom and now you're not going to.

Speaker 2 Correct. Again, I'm not sure yet.
I'm not sure which route I want to take, but I suppose that would be my next step to decide.

Speaker 2 If I wanted to start compensating myself, what would be my next steps?

Speaker 3 Just making that decision. Is anybody else, I mean, this is for your class in your classroom.

Speaker 3 Is anybody else dependent on this money that they're going, oh man, we were expecting that money from Mike that needs to be involved?

Speaker 1 Yeah. And at that point,

Speaker 3 at that point, it's you figuring out, okay, what percentage of, is it 50%, is it 80% that I want to give away versus keep? And what's your intent with the money? Is it that you're getting out of debt?

Speaker 3 Is this just to help build up savings? And kind of have a clear picture for all of that. And then you just push play.

Speaker 1 Yeah.

Speaker 1 Exactly. Sounds good.
Yeah.

Speaker 1 And then I would open a separate checking account for your business. Okay.
You can open it in your social security number. It doesn't require a tax ID and it doesn't

Speaker 1 require an LLC. Okay.

Speaker 1 The only reason you would need an LLC is if you get big enough, the business is big enough or your personal wealth is big enough that you have a target on your butt and somebody wants to sue you.

Speaker 1 Right now, you're a broke photography teacher. Nobody wants to sue you.

Speaker 2 Correct. You're not going to get any money from me anyway.

Speaker 1 Exactly. So, I mean, what are you going to do?

Speaker 1 Drop a camera on their toe? I mean, I mean, you know, there's not a lot of potential liability here. Okay.

Speaker 1 So

Speaker 1 I'm not worried about it if I'm you. So you would open it under what's called a sole proprietorship.
And so your checking account would be

Speaker 1 Mike So-and-so DBA doing business as Mike's Photography. or whatever you call it.
Okay. Okay.

Speaker 1 And then all the money that you make doing that goes into that account. All expenses come out of that account and all contributions come out of that account.

Speaker 3 And keep some money aside for taxes because you're going to, you know.

Speaker 1 You're going to have taxes on the net profit. And the other thing with taxes is, is there

Speaker 1 some kind of a nonprofit associated with your school that you can donate this money to that ends up in your classroom?

Speaker 2 Yeah, so we all have our own accounts for each one of our programs here.

Speaker 1 Is that a tax-deductible account? Could I make a contribution to it and get a tax deduction?

Speaker 1 Yes, sir. Okay, then you're making a contribution to that account.
You take a tax deduction for your contributions. You take a tax deduction for your expenses.
What's left is taxable profit.

Speaker 2 Okay.

Speaker 1 And you would set aside a fourth of that, and you file quarterly estimates on your income taxes for your taxable profit. But that just depends on how much of it you're not going to donate.

Speaker 1 As long as you're donating everything net of expenses, you have zero taxes.

Speaker 1 Okay. But once you decide.
And

Speaker 2 right now, every single dime's going to it. So

Speaker 2 am I okay right now, at least

Speaker 1 with every single dime going to this? You're fine. But I mean, if you're doing $800 a month, that's $10,000 a year.

Speaker 2 Correct.

Speaker 1 That's

Speaker 1 pretty generous to a single classroom.

Speaker 2 Well, again,

Speaker 2 we don't have a whole lot here.

Speaker 1 Yeah, but I mean,

Speaker 1 how many times have you got to buy all this stuff? One time.

Speaker 2 Correct. Well, cameras break down and all that kind of stuff, and new equipment comes out, and they keep filling my classrooms full of more and more kids, and I need more resources, I guess.

Speaker 1 It's well, you also know in the technology world or the camera world that's a bottomless pit.

Speaker 1 Right. I mean, you'll have to.
I've got several million dollars in various kinds of cameras inside this building, and I'm constantly having to look at people and go, no, I think we've got enough.

Speaker 1 Because the people that are on the backside of those cameras love buying more.

Speaker 1 That's true. Yeah, you'll have to draw a line there.

Speaker 1 Yeah. So, yeah,

Speaker 1 you get your gadget people and gadget people just always want more gadgets. That's life.
And so, yeah, you want to do that. Very generous of you, Mike.
Very, very. Pretty cool.

Speaker 1 That's like

Speaker 1 the cool teacher.

Speaker 3 He is the cool teacher. I'll give the cool teacher a piece of advice, though, because we didn't talk about it.

Speaker 3 But if, Mike, if you have debt, you do need to take some of this to put towards towards getting out of debt just saying absolutely you know absolutely split the difference i i'd probably go as much as half or more yeah yeah but um this guy's just very generous and he loves what he does he loves taking he loves photography he loves kids and that clearly shows because people keep coming to him that is a huge ingredient when you're building your business i think is clearly having a passion for it having a love for it because people can sense that yep and you're better at it because of it yeah that's exactly how it works.

Speaker 1 So, very well done, Mike. You're the cool teacher, man.
We dubbed you that for the week. Good stuff.
Open phones here at 888-825-5225. Anthony is in Cleveland.
Hi, Anthony. What's up?

Speaker 2 Hi, how are you doing, Dave?

Speaker 1 Great. How can we help?

Speaker 2 So I'm 20.

Speaker 2 I rent right now, but I'm looking to buy a home. I only made 30,000, though.

Speaker 2 What's your advice on being so young and not making a lot of money trying to buy a house?

Speaker 1 I wouldn't buy a house. You're 20 and you don't make a lot of money.

Speaker 1 I would go make some money.

Speaker 1 It's okay to rent. Rent as cheap as you can rent, and let's work on the career side of the equation.
Let's get the income way up. Start stacking cash.

Speaker 2 Yeah.

Speaker 2 I feel like I'm bad at budgeting my money. And like

Speaker 2 when it comes to

Speaker 2 rent and all my bills and actually budgeting, I don't know where my money's going.

Speaker 1 Well, do you have debts?

Speaker 2 I learned about you in high school.

Speaker 2 Yes, I got $17,000 in a no, $16,000 in a car.

Speaker 1 Well, that's where a lot of it's going. $1,600.
Wait a minute, wait a minute. You owe $16,000 on a car?

Speaker 1 Yes. And you make $30,000?

Speaker 2 $1,600 in credit cards.

Speaker 1 Yeah, that means when you took our class in high school, you flunked it.

Speaker 3 Yeah, that's where the money's going.

Speaker 1 Sell the car.

Speaker 3 Yeah, you got to. And you got to decide today that you're not borrowing money because I can tell you, as long as you're taking out debt,

Speaker 3 buying a house is going to become further and further and further and further away from you as a goal.

Speaker 3 So if you want to lasso that and pull it closer, you need to stop borrowing money, especially, especially things like credit cards and car payments.

Speaker 1 Yeah, that's the deal. So, yeah, you, you,

Speaker 1 listen, folks, when you owe more than half your annual income on a car, the car owns you. You don't own the car.

Speaker 1 You can't breathe. All you think about is making car payments.
It's all you can think about. The thing's got you handcuffed and it's dragging you around the parking lot.

Speaker 1 It is no fun at all. That thing's eating you alive, dude.
So, yeah, Wade, don't even talk about buying a house.

Speaker 1 And let's get our income up, get the car gone, get the car debt gone, get all debt gone, and lean into that budgeting stuff. So you'll be okay.

Speaker 1 Keep at it, dude. Keep at it.

Speaker 1 This is the Ramsey Show.