Big Incomes Don’t Cancel Out Bad Decisions

23:12Dave Ramsey:Oh, wait, there it is. It's going out to eat. There it is. You can't complain about feeling that way if you haven't actually done a budget. Try it. Worst thing can happen is you hate it. Because where you are sucks. So you might as well change where you are. It's the old political thing to say, are you better off than you were four years ago? Try that with a budget. Are you better off than you were 90 days ago when you had no clue what was happening with your money? No, you're still sitting there like a hamster in a wheel. Run, run, run, run, run, run, run, run, run, run, run, get nowhere. Kim is in Charlotte, North Carolina.

23:42Dave Ramsey:Hi, Kim. How are you? Hi, good. How are you? Better than I deserve. How can we help? Yeah. So just my question is, my husband and I were missionaries, and we came back to the States to give birth. and wound up having a medical emergency while we were out of state. So we had a state insurance, and we were visiting my husband's family. We wound up giving birth to my son early, and he was in the NICU for a month. I was in the hospital two weeks leading up to that. And because we were out of state, even though we had emergency insurance from my coverage, it was still denied for everything. and so right now we're facing somewhere between$400 ,000 and$500 ,000 in medical debt.

24:29And we're in the snowball staging right now.

24:31Dave Ramsey:Whoa, whoa, whoa, stop, stop, stop. I'm getting out of debt. Just stop a second. I've got to catch back up. Yeah. So you had a baby that was in NICU, and you were a missionary overseas, but you came back to the States, and you were under whose insurance? Your husband's? A state, just a normal state insurance. state yes and because it was out of state they wouldn't cover anything yeah um you know we had the emergency insurance what state what state is the insurance in um it was a florida insurance why did you not go to florida to do the medical care we were um we were visiting my husband's family um who is from it lives in a different state so we were traveling and there was a problem with the baby and they took the baby and put it in NICU.

25:23Yeah.

25:24Dave Ramsey:So it was an emergency and you didn't have the option to go to Florida. Correct. I got you. Okay. And Florida's state insurance does not have that as a contingency for an emergency to save the life of a child. It does. Yeah. It does. For whatever reason, they're still denying all the coverage of it. We've appealed multiple times. Well, I think you need to get some professional representation in on that. Okay, yeah. Because I'm not going to set up two missionary kids with a kid in NICU to take care of a half million dollars worth of medical. Yeah. Because I'm guessing you're poor as church mice.

26:06Yeah.

26:08Dave Ramsey:I mean, I never met rich missionaries, okay? Yeah. That's very true. I just hadn't run into them. So you're probably not sitting on a half million in your mutual fund, I'm guessing. No, not at all. So I think you've got to solve this by throwing this back onto the Florida system. And so what you need to do is you need to get in touch with your state senators and state representatives and with the governor's office in Florida and start hassling your politicians. Okay. you remember the story where uh that jesus told of the woman who would not be denied she just kept knocking on the door knocking on the door knocking on the door knocking on the door yeah that's you yeah because you don't have a half million dollars and you're not going to see a half million dollars anytime soon so you've got to solve this through uh political pressure and or legal pressure, maybe an attorney, because if they pick up what they're supposed to pick up here, it's going to change your whole life.

27:16Dave Ramsey:Agreed? Yeah. Oh, for sure. For sure. It definitely works. Have you talked to the administration at the hospital? They don't even do it. Yeah. So they said that once the third, because I guess there's a rule with insurance companies that once you get three denials, it's like there's no possibility of getting it covered. so that they won't let us apply for the financial aid until we get that third denial from the insurance. Yeah, you're not going to get a third denial. You're going to get it covered. Yeah, exactly. That's why I've been really scared. Yeah, you have to. Yeah, I've been really scared to go through that third one.

27:49Don't worry about it.

27:49Dave Ramsey:You don't have anything for them to take. Yeah. So you're okay. Okay. They don't repo babies, so you're okay. How is your baby? How are they doing? He's doing amazing now, and the Lord definitely healed him. Good. while he was in the NICU and surprised all the doctors on how quickly he recovered. So he was definitely a little miracle. Are you all out of the hospital or everything now? Is it all behind you? Yeah. Everything but the bill? Everything but the bill. Yeah. So you're not in – are you in North Carolina still? Yeah, we're in North Carolina now. We're about to launch back out to our country in a week that we serve in over in Southeast Asia.

28:31Dave Ramsey:Okay. All right. You have a new hobby. Yeah. It's the state of Florida. Okay. Really, I want you to become an expert on hassling politicians and insurance commissioners and getting an attorney. Are you serving with a missionary organization? Yes, we are. Okay. Talk to the senior people in that organization and see if they have anybody on staff that does legal work. and see if you can get an on-staff attorney to start hassling Florida. Okay, yeah. I know we don't have that, so it would definitely be all on us. Let me try one more time, okay? You're serving with a missionary organization. How many people serve in the mission field with this organization?

29:23Around 300.

29:25Dave Ramsey:Okay. Okay. Probably some of the host churches, the support churches then, have an attorney who's hanging around that church, goes to church there, who would love to help a young missionary couple get rid of a half-million-dollar problem. Yeah, that's definitely a great idea. Yeah. And so let's talk to some of the senior pastors, the church board members, whatever we want to call the leadership, the deacons, the leadership team of those particular churches and say, hey, got a young missionary couple serving in Southeast Asia. We got a NICU problem. We need some of the big boys to come in and help here.

30:04Dave Ramsey:We need a little legal SWAT team. And I think you can put, but that's your job is put all that together rather than sit and watch this thing deteriorate before your eyes. And, oh, it's third denial. And the third denial is the final denial and nothing can happen after that. Oh, bull. Channel your inner Dave. Bull. Persistence. Be resourceful. Cause problems. That's what Dave's been doing for 30 years. George. It's worked out. George. It's a spiritual gift. Leave me alone. Squeaky wheel gets the grease is all I'm saying. And Dave's been squeaky. You got to get squeaky to get this done. You just called me squeaky.

30:42Dave Ramsey:You did. You've been called worse today. I'm going to be honest. You've been reading the comments again, haven't you? George, I told you. Quit reading the comments. It's the only enjoyment I get out of life, Dave. Man. The trolls. You know I don't try to please the masses because I'm well aware the M is silent. This is The Ramsey Show.

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32:41Dave Ramsey:The Ramsey Show question of the day is brought to you by Why Refi? Feeling stuck with defaulted private student loans? Why Refi can reduce your payments, help you regain control of your money, to get you out of default and get you paid off. They'll show you how to do it. The first step is to go to getting unstuck is to visit the website. Go to yrefy.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states. Today's question comes from Justin in Minnesota. Many people think that for a person to become wealthy, other people must lose wealth because it's a limited pie that is sliced up unequally.

33:20I think wealth can be created through innovation, for example, and therefore not limited. What is your opinion of this?

33:28Dave Ramsey:Well, Justin, you would be correct. This is a great philosophical. The pie theory is someone that is ignorant of basic economics. The size of the economy shrinks. That's called recession. Grows. Grows too fast and too much. It's called inflation. The economy is constantly growing in size. The number of dollars moving around the economy today is way different than it was in 1776, darling. So this idea that we've simply been swapping at the size of the slices of the pie around since 1776, we would all still be living in log cabins shooting muskets. That's dumb, okay? Obviously, the economy, the size of it changes.

34:16Dave Ramsey:So you don't, if someone that believes that by taking, by getting money that someone else is being taken from automatically is a fixed pie theory, and it just shows ignorance of economics. It's that simple. A good way to explain, I love Rabbi Lappin's picture. It's one of my favorites of all times on this. He said, the economy, and he's an Orthodox Jewish rabbi, wrote a wonderful book called Thou Shall Prosper about prosperity. He said, and he addresses this exact issue. He says, the economy is not a pie where if you get a bigger slice, someone else gets a smaller slice. The economy is more like a candle.

34:54When you light it, it doesn't take away from yours.

34:58Dave Ramsey:It just adds light. And so the economy, because money moves just exactly like that, you can show several examples on how money actually grows. So Justin, you're right. Innovation isn't a good example of that. And so money is literally created. And no one is the lesser for it. Now, if there were only two people on the planet, when George took some of my money, I would have less, he would have more. If we both placed a bet and I was right and Dave gives me his money, he lost, I win. That's where that would make sense. Exactly. But the stock market is different. If an Apple share goes up in value because the company is worth more and they make great products.

35:43Nobody lost in that scenario.

35:44Dave Ramsey:It's because they sold more of those little iPhone thingies. Hello. And that's where why Apple has, you know, more money than Egypt, literally. And so it's pretty crazy. Yeah, but that's it. And so it's economies are created. And you can also another place to look at that. Egypt made it come to mind, but not picking on Egypt. That's just a joke, but it's also happens to be statistically true. But if you go to a country that is underdeveloped, that has a weak economy, what is the difference in that in what we call a developed country where it has a strong and booming economy? It's not that one of them was issued a larger pie by God.

36:31Dave Ramsey:It's that the booming economy grew by innovation, by industriousness, by service, by whatever it is they're doing, and it causes the dollars or the currency. And the GDP will expand. The GDP, the gross domestic product, which is the total of all goods and services sold in an economy. And so, and that's why some of these comparisons by some of these wealthy quality people are Or people like they're arguing back during Obamacare, they're arguing about, well, Norway has free health care. Well, Norway's economy is the size of Atlanta's. It's not even in the same ballpark. It's like tricycles go slower than motorcycles too, honey.

37:18Dave Ramsey:So, I mean, it's like no kidding. It's a different thing. They don't even belong in the same sentence. Again, just shows the sheer freaking ignorance of people on basic economic stuff. Well, Norway has free health care. Well, so does Murfreesboro, Tennessee. I mean, no, it doesn't. But, I mean, good God. That doesn't even show up, y 'all. I mean, come on. So it's the same kind of thing that goes on. But it always comes back to the underlying emotion is hope versus hopelessness, is scarcity mentality versus abundance mentality. The people that, Justin, that are coming at you with this, they have Eeyore as their spirit animal.

38:03Dave Ramsey:It's like, oh, it's bad. It's always going to be bad. It's always been bad. the little man can't get ahead because the big guy's taking all the pie and there's perpetual freaking whining it's unbelievable instead of getting up throwing your shoulders back leave the cave kill something drag it home shut up so it's basically i'm broke because other people are rich because i refuse to actually look at the real problem which is the guy in my mirror You know, it's like I'm going to blame Dunkin' Donuts because I have a belly because I can't stay away from their donuts. It's not Dunkin' Donuts' fault.

38:41Dave Ramsey:It's Dave's fault. He eats too many freaking donuts. That's Dave's fault. You know, there's a reason I don't look like Mr. Universe, and it's not Dunkin' Donuts' fault. Depends what universe. Well, that's true, but Krispy Kreme either, by the way. So we'll just be a multiple. It's their fault for making addictive products. You know, it's their fault. They made an addictive product. All that sugar just made me want to stand over there every time the hot light comes on. Oh, my God. Am I a victim of this? No. Okay. So me too, boys and girls, me too. But you need to decide who you're going to blame in this because it's the difference between scarcity mentality and abundance mentality.

39:18Dave Ramsey:It's the difference between fixed pie and candles. It's the difference between hopelessness and hope. It's the difference between victor and victim. and all of these things line up and those things make you are the things that are going to make you successful or not successful not the fact that someone got yours so you can't get it out of the little fixed pie i think i need a cheesecake now i think i'm getting hungry thinking about all this oh there's a lot of food in this all these analogies the the extension of this is should billionaires exist i've seen this come about well billionaires just should not exist dave apparently once you hit 999 million that's it you're fine you're a good person once you hit billionaire apparently you become a terrible awful human being is it true i thought it was millionaire but um i mean i've heard everything yeah it's like wealth is evil no it's not people are stupid wealth is not evil well money is just like a brick you can build a hospital with it or you can throw it to a window the brick doesn't care but when you put it in the hands of a human being you discover whether that human being is a moron or not you discover whether they're a jerk or not.

40:28Dave Ramsey:You discover whether they're a sweet, giving, generous person or not. When you hand people money, it doesn't cause them to become something. It reveals who they already are. Well, money ruined my children. No, darling, your children were already idiots. You handed them money and proved it. It just lit some, that fire, added some gasoline on it. That's not. I mean, it's not it. That's just ridiculous. So this idea that, you know, somehow wealth is evil. Well, I mean, the Bible says that money is the root of all evil. See, that's what happens if you get your theology off a TikTok. The Bible does not say that.

41:06It says the love of money is the root

41:10Dave Ramsey:of all evil, which is an indication not of anything about money or amounts of money. It's an indication of the character of the individual that touched it. So if you're going to practice dadgum Christian doctrine, actually learn it before you open your mouth. God, this stuff is so aggravating to me. And so this idea that somehow someone has done something wrong in America because they went and helped a lot of people and made a lot of money in the process. No one was pissed off when I sold a$12 book called Financial Peace out of the back of my car and I sold 10 of them and I was starving to death.

41:42Dave Ramsey:When I sold 10 million of them, somehow people got pissed off. Now you're greedy, Dave. Now I'm greedy and I take advantage of poor people. Oh my God. See, this is the problem. If you ever read comments, if you read the comments after articles, you know why some species kill their young. So, oh my gosh. Open phones here. That wraps that little rant up. Sorry to wind you up. I just wound him up and I let him loose. You shouldn't have given me caffeine and a good subject. And a good subject. There we go. I'll get you a donut for the next hour. Oh, I'll feel so much better.

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44:19Dave Ramsey:Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. We help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey Personality, is my co-host today. Thank you for joining us, America. The phone number is 888-825-5225. Patrick is in Boston. Hey, Patrick, how are you? i'm doing great sir it's a pleasure to speak with you you too what's up well sir uh two years ago i got divorced and um the house was kind of left in limbo uh didn't sell it i couldn't buy my ex-wife out of the house she couldn't buy me out so the deal was that i basically stay in the house um until either i sell it or our son comes of age and And I'm kind of stuck between whether I should sell the house now because it does have some equity in it, or if I stay in the house, I owe her half of the proceeds of the sale, and I'm just not sure whether I want to be giving her all of those, all that equity that I'm putting into the house at this point.

45:32Dave Ramsey:Yeah, every repair you do, she gets half of. Every payment you pay, she gets half of. This is not a good deal for you. yeah and it's something i've been thinking about for a little while um and there's plenty of equity in the house uh to to give her right now i would sell it though all right the sooner you sell the less damage you're doing by paying more of her share that or refinance it and buy her out can you refinance and get a mortgage and pay out her half uh it's possible i you know since rates went up. I haven't really looked into that very deeply, but that's certainly a possibility. Do you want to stay there?

46:12Dave Ramsey:Yeah. What's the, do you want the house? Uh, to be honest, no, I don't want to stay here. I'm not from new England originally, and I would like to leave. So that's also something I've been thinking about, but that's fairly easy. Then it becomes a no brainer. I would do it as soon as possible. And if you want, you need a guy you can trust, a gal you can trust, you can go to Ramsey solutions.com slash agent. and those are the folks in your area who we trust, who we vet, to help you with these transactions. Ron is in Indianapolis. Hey, Ron, welcome to the Ramsey Show. Hi, Dave. Thanks for taking my call.

46:45Sure. What's up? A quick background. I'm 74 years old, active, refused to quit working. I've got about four streams of income coming in, but I'm late to the party. I do have a paid-for rental house. I've got$38 ,000 in a HELOC on my primary residence, and I've only got$22 ,000 in my IRA. I've got about$1 ,800 in savings. So I have$4 ,100 in a credit card. Besides the HELOC, the credit card will be paid off in September. What do you make? I make between$58 ,000 and$6 ,000 a month.

47:31Dave Ramsey:Okay. All right. Well, I would plow through the credit card and the HELOC and build your emergency fund of three to six months of expenses and then start investing for retirement. Okay. So that was one of my questions. I should pay off the HELOC and not do investing and HELOC? No. You should get rid of the HELOC and the credit card first as fast as you can. I mean, really, really, really fast. like living on beans and rice fast well i'm hoping i'll have that paid off by september the credit card and then i'm i'm hoping to uh i was thinking i should build my emergency fund after the heloc's done after the heloc what's the balance on the heloc's just 20 grand wasn't it 38 38 600 yeah and you're making you know you're making 70 or 80 000 a year i would knock that thing out like it was a credit card.

48:23Dave Ramsey:Okay. And then you'd be 100 % debt-free, house and everything, right? Yes. Yeah. And then you build your emergency fund and then you start investing into retirement. That's exactly what I would do in that situation. And time is of the essence. Yeah. I mean, you're 74. I want to see you retire with dignity one day when you can't work. I know you're choosing to work right now, which is cool. But one day, you know, you might not be able to, and I want to see you with no payments. Yeah. That HELOC being gone is a big deal here. It's George is in San Diego. Hey, George, welcome to the Ramsey Show. Hey, how you doing?

48:56Hey, how can we help? Hey, so I'm just looking over my finances the other day, and let me see a speaker. And me and my wife, we just got to a point where we're making$100 ,000 a year after taxes. And we have no money really to do anything. It feels like we only have a couple of bills, a couple of hard costs, and then all of our fixed costs, like living, gas, groceries, et cetera, pretty much take up everything. And I'm wondering, how do I look at this? How do I look at this? Because what I think of, we're making$100 ,000, about$8 ,000 a month when you average it all up. And we're still not able – it feels like we're still kind of living paycheck to paycheck.

49:47Like, is that normal, or what should I be looking at here?

49:52Dave Ramsey:Well, you've got an idea in your head, but you're not doing a written plan. If you worked for a company and your job was to manage the division of your company that brought in$100 ,000 a year, and part of your job was you had a P &L responsibility, meaning you had to budget that division, they would fire you because you haven't written a thing down. this is all in your head and so you need a detailed written budget that you and your spouse both agree to and then you need to stick to it then you'll figure out where the money's going and figure out what the problem is there's no outside forces here that are conspiring against you.

50:38Dave Ramsey:So how much is your house payment? Well, right now, so we just moved out of the place we were currently living at a couple of weeks ago. We're staying at my wife's mom's for three months. Why? And right now, because we got put in a weird situation. We rented from a sublease landlord, and then three months. Okay, so what are you going to do for housing? Well, for right now, we're staying here. We're paying$500 a month. I know, but you're not going to stay there long. No, we want to be out of here three months maximum. Okay, what are you going to do at the end of three months? Right now, we're searching pretty much every day on Zillow.

51:20For a purchase or a rental? Two children and a dog. Rental.

51:24Dave Ramsey:Okay, and what do you think your rental is going to run? Right now, I mean, for what we're looking for, I mean, everything that we see is going to be in the$3 ,500 at a bare minimum to$4 ,000 range. You can't do that on$8 ,000. That's half of your take-home pay. You cannot have a rent payment that's half of your take-home pay. It's not sustainable. What's a healthy percentage? 25%. Two grand. I don't think you could. Yeah. So we were paying, we were paying 25. Uh, we had a one bedroom, 600 square foot, you know, here's the thing. Here's the thing. You have a hundred thousand dollars to work with.

52:09Dave Ramsey:The math doesn't change just because you live in an expensive area. You, you know, you still are constrained by that. You still are going to be broke your whole life and struggling and stressed out if you take a rental payment that's 50 % of your take-home pay. You've got to get it down towards that 25 % mark. If you can't, then that means you can't afford to live in the area you're looking in. You need to move further out, increase the income. George, go to everydollar.com, list out that income, list out every single expense, and you'll figure out real quick where it's all going and what you need to do.

52:42It's not sustainable.

52:44Dave Ramsey:You don't get a pass on math because you live in San Diego. This is The Ramsey Show.

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54:14Dave Ramsey:George Camel Ramsey personality is my co-host today. Bill is with us in San Diego. Hi, Bill. How are you? Bill? Hello, Bill. Hey, how are you? How can we help? I'm good. How are you? Good. How can we help today, sir? All right. So, uh, my wife and I combined, we make about five to$600 ,000 a year, but, uh, we still somehow are unable to save as much as I believe we should save. So, um, you know, so that's my problem. I mean, our monthly expenses are about$30 ,000 a month and, uh, you know, then add taxes to that. So we pretty much even out every year. And I believe when we make five to$600 ,000 a year, we should be able to save one.

55:05Dave Ramsey:I would agree. I think the$30 ,000 a month expense is your clue. How much of that is debt payments? Well, it's on two properties. One is primary residence and one is an investment property. And the debt payments on the mortgage are added to about$12 ,000 a month. Yeah. Why do you need$18 ,000 a month to run your household?

55:35Well, about$8 ,000 to$9 ,000 go to charity for a good cause. And then the rest, like I would say, about$10 ,000 is for groceries, utilities, for the car payment, and a little bit for, you know, towards...

55:58Dave Ramsey:Why do you have car payments when you make$600 ,000 a year? Say that again? Why would you have a car payment when you make$600 ,000 a year? Well, one of the cars is paid off, or the other one is a lease, so we make about$750 a month for that one. We have a bigger family, five people, so it's a relatively bigger SUV. Well, which you could have written a check and purchased and should have instead of leasing and renting your car for$700 a month. Okay. So, yeah, you're giving away$100 ,000 a year in that$30 ,000 a month budget. You said$8 ,000 to$10 ,000. So there's where$100 ,000 of it goes, right?

56:46Dave Ramsey:Yeah, easy. Yeah. It could be more than that,$100 ,000 to$120 ,000, yeah. Mm-hmm. Okay. And, you know, and you've got a car payment. Yes. Which we would not have.

57:04Dave Ramsey:And what do you guys do for a living? I own a business, and my wife works with a company. She makes about$100 ,000, and the rest is my income, and I own a service-based business. Okay. All right. But the way you're discussing this, the language you're using is very general. It's not precise about the numbers, which tells me you're kind of just throwing this over there and just shocked that it disappeared. So if I woke up in your shoes, you've got a level of disgust. So this is not OK is what you're saying. We make this kind of money. We shouldn't have no money. We should know a car payment. When we make 600 grand, we should have just bought the car.

57:57Dave Ramsey:Then what I would do is simply do a detailed budget with your spouse and come into agreement of what we want to give, what we want to save, and what we want to spend and what we want to spend it on. And every month before the month begins, every dollar has an assignment exactly. But it kind of feels like, Bill, I went through a period of time in my life where I thought I could out-earn my stupidity, my lack of organization, my lack of detail, and you can't. If you had a person working in your business that was managing a section of your business as poorly as you are managing your finances, you would fire them.

58:42Dave Ramsey:For incompetence. And so you got to kind of treat it that way from an emotional standpoint and do a detailed budget. And it's funny, Dave, as people make more, especially people who are good at making money, like Bill's good at making money, you're good at making money. You think you can just solve the problem by, well, I'll just make more money. As long as we don't overdraft, we're doing OK. But when you do that budget, you realize if this was a business, you go, we are wasting a lot of money in this business. We could be doing a lot better if we cut the spending, get out of this debt. We might need to sell this investment property.

59:12It's not a blessing right now. Might need to downshift some of our giving a little bit until we get back on track. So that's the kinds of things you, the levers you'd be pulling if this was a business. You need to treat your household the same way.

59:22Dave Ramsey:Yeah, every, you know, you need to detail it out and then stick to it. And both of you, you and your wife have an agreement. You're both looking at it. You're not bringing it in, slapping it down on the table and declaring, I have done a budget. You people will live on it. That won't work. No, you get your wife involved in the disgust. It's not okay that we make this much money and we have no money. It's not okay that we make this much money and we don't invest. So generosity is awesome. Investing is amazing. Enjoying money, yes, you should. All three things. but very very very very very very intentional and right now you're not intentional you're kind of throwing a bale of dollars over the fence and then coming back to see what's left later and after the family devours it and so um it may be you downshift your giving your giving is pretty heavy i'm not against generosity in any form i tell folks to do it all the time but if you're doing zero investing and you're giving 20 percent you may need to adjust that at least temporarily but I think you got some lifestyle issues and I think you guys just kind of walk around do whatever you want because you make enough money and I think if you'll just actually pay attention and say no we're not doing that no that's crazy that that's a that's a we're spending what on that yeah yeah and you start actually telling the money what to do you'll very naturally tighten this up a little bit.

1:00:55Dave Ramsey:Dane is in Houston, Texas. Hi, Dane. How are you? Hey, I'm doing good, Mr. Randy. How about yourself? Better than I deserve. What's up? All right. So me and my wife, I'm the only one that works out of the family. We've got two kids. The only debt we have is our house. We owe about$141 ,000 on it. And we were going to continue paying towards the house and paying it off sooner, but we were wondering should we sell the house and move farther in wind away from galveston bay so our insurance ain't so expensive my flood insurance is about three thousand a year homeowners with fires about two thousand and my windstorms around fifteen hundred should we sell the house what that we have a two point seven percent interest on and move farther in for a more expensive house with a higher interest rate or stay well in a sense you have a high interest rate now because you have a hurricane tax.

1:01:52Dave Ramsey:That's true. In a sense, because of the location of the property. Yes, sir. You know, it's causing you pain, which causes you to ask the question. I mean, the only thing wrong with moving is that you're not going to get the same rate next time. Well, whoop-dee-doop-dee, when rates come down, you can refinance. We marry the house, we date the rate. So rates are temporary. Yes, sir. And if you're going to pay this thing off in the next few years, if it's at$140 and you go, we're going to aggressively get this thing down to zero in the next five years, the interest rate's not going to matter that much.

1:02:29Right. Yeah, we planned on paying the house off that we're in now within the next five to ten years.

1:02:34Dave Ramsey:Yeah, and if you bought one at a similar price range, you could do the same thing, but you didn't have all the insurance costs. Right. So I wouldn't go just upgrade a house and get a way more expensive house and get a way bigger mortgage just to get out of this tax and insurance situation. It's not necessary. Yeah, buy a similar price range. If your payment goes up a little, so what? But I'd buy a similar price range and make the move. Here's the way. The best way to handle this sometimes is look out 10 years, 20 years, and say, where do I want to be? Okay, if you have this house paid for 20 years from now, what is that insurance cost going to do?

1:03:11Dave Ramsey:It's going to go up every year. Yes, sir. Or it's even going to be worse. It's going to be like Florida. it's going to be hard to get at all. Right. And the house is going to go on up in value. There's no question about that. But you live in this constant, you're in a storm zone is what it amounts to. So 10 years from now, if you move inland and you pay it off, you're going to have more normal taxes, more normal insurance, and you're going to see appreciation just as well. So where do you want to live 10 years from today with a paid-for house? That'll answer your question. This is The Ramsey Show.

1:04:04Thank you for joining us, America.

1:04:16Dave Ramsey:George Camel, Ramsey personality, number one bestselling author of the book Breaking Free from Broke, is my co-host today. Stacey's in Houston. Hi, Stacey. How are you? Hi, Dave. How are you doing? Better than I deserve. What's up? It's good. So I just had a question. We are in Baby Step 2 right now. I just came across your website and your YouTube channel and everything. And so we are in Baby Step 2. however I had a huge question about my vehicle I have my husband he owns his work car but we are paying on my vehicle and we're wondering just based off of everything that I've seen with your videos we're wondering if we should get rid of that car like if we should yeah somehow get rid of the one that I have well welcome to the tribe hi yeah so it's been tight around there and it's not been fun lately, huh?

1:05:15No, it has not been fun. Definitely not. Uh, we've, I feel like we've been married for five years now going to six. Um, and we always struggled with money. And so actually, uh, we did download your every dollar app and through that app, we have noticed that the big mistake that we're making is that we're spending more than what he makes. And so we were actually able to see how much money he actually makes in a month and it's like well you know we're broke because we want to be broke so we're really tying everything down we're both on board and so um i feel like this is the best way that i can you're both on board i heard that right

1:05:56Dave Ramsey:yes definitely yes we are you started out with i download the thing and then you went to later on in the conversation we did the app together so it does sound like you're both on board i'm good with that okay so i'm proud of you that's a big you are making some big i mean because what happened was is you went oh this sucks and then you started then you when he put it all on the app the the numbers start talking to you and you went oh that's wrong and that's wrong and we got to fix that and that's wrong and look at this car no wonder we can't breathe and so it's the numbers start talking to you and here's the great news you're listening so i predict amazing things for your all's next 12 months.

1:06:35Dave Ramsey:It's going to be very, very hard, but for the first time in your lives, you're going to be on a path towards not only not being broke but being wealthy. I'm real proud of you guys. We want to help you guys any way we can. So what do you owe on the car? So right now we owe$28 ,355. Have you looked up what it's worth? It is worth, no, I have not actually. Okay. Go to kellybluebookkbb.com. It's probably the most accurate. You can also look at Edmunds for car values. Those are two good places to get values. They put out two types of values on there. Trade-in, which is wholesale, what a dealer would give you for it, which obviously they're going to make a profit on that number.

1:07:20Dave Ramsey:And then private sale, which is if you put it in traders or something like that or Craigslist or whatever, and you sold it yourself to an individual to individual, and that's more of a closer to a retail number. The third number is retail, which you can't get because you're not a dealer. But you're probably private sale numbers, what you're looking at. What kind of car is it? What is it? It's a 2023 Volkswagen Tiguan, small SUV. Okay. All right. Nice car. All right. And what's your household income? It is, well, it kind of depends. Right now he's making about, I mean, worst case, a week it's$1 ,881, but it's looking more like$2 ,394.

1:08:13His hours are different.

1:08:15Dave Ramsey:So if he gets OT, he gets a couple grand a week? Yes, he does. Okay. So we're talking about six figures. So he's making$70 ,000,$80 ,000 a year depending on overtime? Yes. I mean, up to$100 ,000, but probably not getting$2 ,000 every week. Okay. Okay. That's take-home, though, isn't it? Yes, this is take-home. Okay. That's good news. What other debt do you have? So we have, let's see. So we have one credit card that has$867 ,000 on it. We have a loan, our AC busted. We had to redo the unit, and right now the balance is$2015. 15. We owe my dad$10 ,630, the car payment, and the house. Okay. That'll do it.

1:08:59Dave Ramsey:If I woke up in your shoes, like, yes, I would sell this car. Right. You're right. It's the one thing on the list that just screams at me in your numbers, like it did at you when you wrote it down, right? Yes, sir. That's one of the only things you can sort of undo in this mess. Yeah, the rest of it, You're going to have to claw through and live on beans and rice, rice and beans. You've heard that already on the website. It didn't take you long to get to that number. And scorched earth, we don't eat out unless we're working in that restaurant. We don't see the inside of it. We're not going on vacation.

1:09:32Dave Ramsey:He's picking up all the OT he can. You're selling so much stuff the kids think they're next, and you're going to get this mess cleaned up. Yeah. And here's the beautiful part with the numbers you just gave me. If he can get more overtime rather than less and you sell this car, you're debt-free in a year. Yeah, actually, I was going down the numbers, and we went at it like a gazelle running from the hunter. I mean, we put God above everything else as well, and that really spoke to us, and we've been, you know, studying the Proverbs scripture that you mentioned in the video with the baby steps, and so we're looking at paying two of these loans, or two of these debts, we're paying these off by the beginning of November.

1:10:17Dave Ramsey:Yeah. So, yeah, this is great. And then the loan that we have with my dad, and, you know, everything is great there with the family, but we do need to pay this back, obviously. Yeah. He says to take our time, but we need to get it out of our chest. No, I want it out of my life. It's weighing on you more than that. Because you've already breathed in the air of what it's going to feel like to have no payments. You can already get your head around those emotions right now, and now you want it. I can hear it. You're doing great. You're going to kill it. This is awesome. Yeah, sell the car. Yeah, because the car, listen, you get you another car later, whatever you want.

1:10:51Dave Ramsey:But if you'll drive like no one else and you'll live like no one else later, you can live like no one else and you'll get to drive like no one else. That's right. Stacey, I'm going to send you a copy of my book, Breaking Free from Broke. It comes with three months of every dollar premium, so you can connect it to your bank. You can track all of your expenses with smart tracking. It'll make it real easy for you guys to do this journey. And I hope the book's an encouragement to you. But you guys are already there. I mean, the fact, the way she's talking, this debt might as well already be paid off.

1:11:15Dave Ramsey:it is so interesting George that over the 30 plus years of doing this that I talked to somebody making$200 ,000 a year and they got$40 ,000 worth of debt they don't think they can do it and I talked to somebody with$100 ,000 worth of debt that makes$60 ,000 a year and they think they can do it and they actually do and they're the ones that actually do it and so she's got her numbers are excellent but what's much better than her numbers are her is her language it's it's revealing her heart and where they are. We are doing this. She's been diving in. She's studying the stuff already. I mean, she's brand new to Ramsey stuff, and she's already spouting that like she knows it all.

1:11:51Well, there's two pieces that were encouraging. Number one, she looked in that financial mirror. They actually did the budget and they went, oh crap, we're spending more than we make. That makes sense. That's how we got here. We got to do something about that. And the other one was the language of just belief that it wasn't someone else's fault. It's not all their fault, but it's their responsibility to pick up the pieces and clean up this mess. And she had the willingness to go, yeah, this is on us.

1:12:12Dave Ramsey:Yeah, that's a good point, George. What are you going to do when you have an oh crap moment? What is your first response? Is it to blame others, to get angry, to whine? Or do you go, all right, let's get the budget out. Let's see what we're working with here. And she finally got to that point. Most people never get there. Or it takes 20 years of marriage. Sometimes when you have a moment like that, you freeze from just fear or being stuck or whatever. And other people, they go into attack mode. She's like, I got to find this out. I got to work this. I got to get this. Get it. And this is what you said to do.

1:12:48Dave Ramsey:Do we need to do this? And all she wanted was one little clarification on the car, but she's already game on, you know? She found that like little kernel of hope and just hung on to it and it's starting to grow and she's seeing this light at the end of the tunnel. That's the best part. Yeah. So Proverbs says, when desire comes, it is the tree of life. Yeah. Wow. It's powerful. Not much stopping you there. Once you get that desire, it's powerful. It'll carry you. What are you going to do when you have an oh crap moment? What's your next step? Start gathering information, fix the problem. Gather information, fix the problem.

1:13:28Dave Ramsey:I don't care what the moment, what area of your life the moment is in. It could be money. It could be something else. What are you going to do? I've got to gather information. I've got to fix the problem because the information I had before brought me to this oh crap moment. I've got to stop using that same information. This is The Ramsey Show.

1:14:20Dave Ramsey:George Camel, Ramsey Personality, is my co-host. Gordon is in Seattle, Washington. Hi, Gordon. Welcome to the Ramsey Show. Hi, Dave. Yeah, thank you for taking my call, and I appreciate all that you teach. Thank you. Just wanted to give you advice on some problems. Well, not problems, but decisions I'm going to make. So I'm on step two, getting ready to liquidate my after-tax investment account, clean out my savings besides the$1 ,000 baby emergency fund to attack some personal loans. My question to you is, would it be worth it to take a loan out of my 401k just to clear out all the personal loans since the interest on the 401k loan is essentially paid to myself?

1:15:16No.

1:15:18Dave Ramsey:How much debt do you have? Personal loans, about$22 ,000, and then steering loans, about$30 ,000. Okay, and how much are all these after-tax investments going to create when you liquidate them? Only about$6 ,000 and another$6 ,000 or$7 ,000 in savings. Okay. So it brings your debt down to$40 ,000 if you do that. From$52 ,000, yeah. So you've got$40 ,000 in debt. What's your household income? Right around$155 ,000 before tax. Good, okay. All right. The problem with a 401k loan is several fold. One is, yes, you do pay yourself back the interest, but you unplug that portion of the investment from the mutual funds that would have been earning you 12 this year, maybe even more percent.

1:16:09Dave Ramsey:So maybe you would have made 15, but you paid yourself five instead. Bad idea, number one. And number two, when you leave the company, and you will leave the company, when you die, when you get a better job, or when they fire you, you will leave the company. Okay? And if that loan is still in place at that time, it becomes due in full. If you do not pay it off in 60 days, it's considered an early withdrawal with all the taxes and penalties. So that leaves you very, very vulnerable. It's a really bad loan. And you've still got$40 ,000 to pay off regardless of what we do, making$155 ,000, which you ought to do in, what, like a year?

1:16:59Yes, if I really don't.

1:17:01Dave Ramsey:Yeah, if you get on beans and rice, rice and beans, and you tear into it, it sounds like you've studied our stuff and you're cleaning out everything, you're leaving$1 ,000, you're going to stop adding to the 401K. Yes, I would do that. But we never tell people to borrow on a 401k ever. I don't even offer the borrowing option to our team. Couldn't do it if you wanted to here, which is good. Stop people from doing stupid. It's not available. It's just not available. Just because I'm not going to participate in you doing something stupid. It's that simple. So the – but no, that's the problems with it is you're going to get – you just leave yourself very, very vulnerable as opposed to a regular loan, so to speak.

1:17:37Dave Ramsey:I mean, if you went and got just another loan at the bank for$40 ,000 and paid off and cleaned them up, but you've got one big loan instead at 5%, you know, that would be okay because you don't have all these other problems. You didn't unplug an investment that might have made you 12 or 15, and you didn't leave yourself open to penalties and taxes in the event you leave that particular position. So, because, I mean, pretend somebody came along and offered you double income. You got to think about not taking that because you got these stupid handcuffs that you've created. Yeah, that's what people do.

1:18:12Dave Ramsey:They go, oh, I was going to take that better job, but then I had borrowed on my 401 and I was going to get hammered. So, yeah, that's what you don't want to do, Gordon. This is gone in less than a year. I mean, if you make$155 ,000 after taxes, let's call it$110 ,000, you can live off$60 ,000 and pay off$50 ,000 in a year. And so it's gone. Yeah, it's a$40 ,000 debt. And you're probably going to add to your income, and you're probably going to find some other stuff to sell. Maybe it's 14 months. Maybe it's 15 months. Maybe it's nine months. I don't know, but it's somewhere in that range. It's not a five-year issue.

1:18:44Dave Ramsey:Yeah. And I wouldn't put all of this other stuff at risk for that. And so, no, I've never told anybody to do that. And, folks, it's a good idea. Aside from Gordon's question, let's just sidebar a second, George. the thing that we have figured out at ramsey that a lot of people in the financial world are now acknowledging because we've made such a big footprint in the space but but most of the people when i was growing up in the financial world we thought all this was a math problem it's all about the math well hey the interest is higher here why wouldn't i do this with lower interest all i gotta do is fix the math and i'm gonna be okay and what i've discovered in 35 years are doing this is it's not a math problem.

1:19:25Dave Ramsey:It's a me problem. It's 80 % personal finances, 80 % behavior and 20 % head knowledge. Now, why does that matter? Well, if you fix the math and you don't fix the behavior, you're going to be right back in the soup. That's why debt consolidation doesn't work. That's why we call it a con because you move all your debt from one place over to another into one big loan. In this case, he's using a 401k to do it. Now, in his case, it doesn't apply because he is actually changing. He has changed what he's doing. He's cleaning out these savings accounts. He's thinking about this. He's doing a budget. You can hear Gordon's really focused, right?

1:20:04Dave Ramsey:So this particular part of the discussion does not apply to Gordon, okay? Because I think he's beyond that. He's willing to make the sacrifices. But a lot of people that have called me over the years have wanted to do a debt consolidation. I want to move my debt over here. First thing is, out of the abundance of the heart, the mouth speaks, the Bible says, and they say, I paid off my debt. With the debt consolidation. No, you didn't. You moved it. You put it in the junk drawer. You didn't pay it off. But what that tells me is, is you took the pressure off of yourself, and it's now okay, because I paid it off.

1:20:37Dave Ramsey:No, you didn't. You moved it, and you still got the problem in your mirror. This person is still not handling money. this person is still spending money like they're in congress they're not on a written plan this person in the mirror is still impulsive this person in the mirror is still not working with their spouse they're still not thinking long term they're still doing a bunch of other stupid stuff and so the debt's going to grow back and we know from the debt consolidation industry that 88 percent of you that's nine out of ten that take out a debt consolidation loan your debt grows back after you move it.

1:21:13Dave Ramsey:So you end up with twice as much debt because you don't change the behaviors, habits, character issues that caused it in the first place. Yeah. And these are, these are all shortcuts at the end of the day. And it feels like you did something when you take a shortcut, but the problem is, like you said, you're going to be right back where you started. When people do these 401k loans or the HELOC or whatever the move is, they actually end up in the same place they were a year from now. Yeah. Because the same person, and you've got to transform if you want to see different results. Yeah. And so, you know, the same thing happens with your marriage.

1:21:44Dave Ramsey:Okay. How many times do you know somebody? And I know people, because again, you go through enough life, you see this, but I know people who are in a marriage and they have a certain set of behavior problems in their relationship. They get divorced and go marry a new person with the exact same set of issues and they didn't fix their own issues so they do they just do it again because they thought that they thought the problem was that person and it wasn't it was the issues that were not addressed the core things you go with you and so yeah you the problem is you take you with you when you do all this stuff and me too i'm the same thing so the the beautiful thing that happened when sharon and i went broke was we didn't have a choice we had to change we didn't have any food electricity was cut off we had to change we had to address the ridiculousness of our decision making paradigms our our ridiculous set of assumptions our stupid intellectualizing rationalizing ridiculous financial concepts with my intellect that absolutely caused me to lose everything because i'm an idiot you know i had to face all that i didn't have a choice you ran out shortcuts there was not i was everything was gone i just left with this mirror you know and i'm stuck with me and i'm like god you you are a problem and but the beautiful thing about something that dramatic and traumatic is you you come away from it change you don't have a choice when you guys are just kind of everything's okay and nothing's smacking the crap out of you to get your attention you don't have to face it.

1:23:25Dave Ramsey:And so our job here is to keep you from having those extreme experiences and instead letting you choose to face it rather than all your choices are taken away. Be the preventative medicine. That's how this whole thing works, guys. That's why this Ramsey stuff works, is we have figured out the guy in your mirror, the gal in your mirror is the problem. That's the bad news. The good news is they're the solution. This is The Ramsey Show.

1:24:22We'll see you next time. Hey guys, Rachel Cruz here with a big announcement. The Ramsey Show Live is going on tour. This is your chance to no longer just listen on your daily commute, but be in the room where life change happens. We're removing the wall between caller and audience so you can take part in money confessions, hot takes, and more. Plus, you'll hear live callers get answers to their pressing questions. I'll be in Chicago on September 30th alongside George Camel and Ken Coleman. Then George, Jade Warshaw, and Dr. John Deloney will be in Orlando on October 2nd. Tickets start at$39 and are limited to just 300 seats in each city.

1:25:01So don't wait. Especially if you want one of the 50 VIP tickets that includes a meet and greet, the best seats in the house, and more. It'll be a night full of hope, community, and the kind of energy you can only get in person. Get your tickets today at RamseySolutions.com slash TheRamseyShowLive. or just click the link in the show notes.

1:25:24Dave Ramsey:Brought to you by the EveryDollar app. Start budgeting for free today.

1:25:41Dave Ramsey: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. George Camel Ramsey personality is my co-host today. Open phones at 888-825-5225. That's 888-825-5225. Caleb is with us in Milwaukee, Wisconsin. Hi, Caleb. How are you? Better than a sinner like myself deserves, Dave. How about yourself? About the same, brother. What's up? Well, my wife and I are 25 years old. We've been married for three years now, owned a home for the last year, and we are$581 ,000 in debt. Including the house?

1:26:33Dave Ramsey:Including the house. How much of that's house? $360 ,000. Okay. And so you've got$170 ,000 in personal? $220 ,000,$581 ,000 total,$360 ,000 on the house, $160 ,000 in federal student loans,$34 ,000 on two cars, and$27 ,000 in a personal loan from our plastic surgery that we did with our credit cards. Okay. What do you guys make? What's your household income? This year, we're at$176 ,000 in salary before a bonus for me, so she makes$83 ,000. I make about$93 ,000. What are your careers? She's a physical therapist, and I'm a regulatory compliance person in clinical research. Gotcha. Okay. You're 25 years old, and you've got almost a$200 ,000 household income.

1:27:24Yeah. I've been pushing hard to get us Roth and eligible before we turn 30. That's a goal of mine.

1:27:29Dave Ramsey:Yeah. Don't know that you need to worry about that, considering the dadgum mess you've made, but yeah. Yeah, I've definitely made a big one. Yeah. So how can we help? Well, I have an offer right now to buy my truck out for$4 ,000 over what I owe on it. Should I apply that$4 ,000 to a couple of the small federal student loans that we have at 0 % interest or throw it at the$27 ,000 personal loan at 13 %? What are you going to drive after your truck's gone? We have a little$3 ,000 beater car. One car? We have two cars. I'm sorry, three cars we owe on to. Okay. So we have a third little beater car that I can get around time with.

1:28:08Okay. That works. And then your next -

1:28:12Dave Ramsey:So what's he apply to the surplus to, George? Well, we go to your next smallest debt. So when you look at the balances of everything, if you split everything out, individual cards, individual student loans, what is the next smallest balance? We have a couple of federal student loans that are worth$1 ,000. Knock them out. There's a couple of those. Okay. Okay. Interest rate is not your problem. Lack of systems and processes and efficient use of your money is your problem. Okay. Okay. So we're going to get on a budget. We're going to live on beans and rice, rice and beans. You're going to act like you're a college student again and live on nothing.

1:28:45Dave Ramsey:We're not going out to eat. We're not going on vacation. We're going to take this fabulous income you have and clean up this fabulous mess you've made. Are you guys investing right now at all? Well, that's another question that I have. I would like to take advantage of the match that my new company has? No, you're broke. Don't take advantage of a match? You're broke. Okay. You're deeply in debt. You need to clean up this mess. You can't serve two masters. You can't, house divided against itself will fall. When you're trying to invest out of the one hand and pay off debt out of the other hand, neither one are done well.

1:29:25Okay.

1:29:25Dave Ramsey:You'll be in debt for 20 years while you invested 3%. Neither are going to get you very far. You need to get really, really, really angry and scared about this debt. And then the two of you looking at it going, yelling at it, you're going down, right? I mean, you got to, you got to get that kind of thing going and we're going to slice and dice to nothing. And the bad news is you got a lot of debt in a big mess. The good news is you're both very bright people and you, the, both of you have studied and learned processes and systems in your academic life and have applied them in your career life.

1:30:04Dave Ramsey:So systems that are predict, create predictable outcomes are your life. So if you will apply the system that we put in place to get you out of debt so that you become very, very wealthy within a decade, you will be able to use this fabulous income you have and clean up this mess in a lightning speed. You'll be amazed at how fast you clean it up. With that being said, Dave, who can I look to to find a financial mentor? Because both of our sets of parents are not good with money. You don't need a mentor. You need a budget. Okay. We got the plan. We're the mentors. You're not dumb. You got all the resources.

1:30:41Dave Ramsey:You're not dumb. You're just trying to figure, you just need a system. Okay. Apply this. We're going to show you the baby steps. You're new to all this Ramsey stuff apparently, right? Yeah. I got the$1 ,000 done. Then we're going to work off the debt snowball, listing our debts smallest to largest, pay minimum payments on everything, stop all investing, take lifestyle down to scorched earth, and squeeze every stinking dime out of your life and throw it at that smallest debt until it's gone. When that one's gone, get the next one. When that one's gone, get the next one. And what happens is your behavior gets more and more intense because hope is increased each time you have these traction points.

1:31:18Dave Ramsey:And you're going to get just so fired up and singularly focused that you won't even feel like you're sacrificing, but your friends are going to think you've joined a cult. Understood. That's how this works. It's a behavior mechanism. We're managing behavior because you've got the mathematics in front of you. You can see, I can see$200 ,000 income, including bonuses, and I can see$200 ,000 in debt with the car gone. Okay? Yep. Not counting the house. How fast am I going to do that? Well, I'm going to do that in about 14 to 18 months. And we're not even 27 yet. Debt-free. And if you're debt-free making$200, you know how much you can invest then, dude?

1:31:58Dave Ramsey:Dad gum. A lot. I mean, debt-free, but the house, you know, I mean, the math on that, you're going to be so stinking wealthy, it's unbelievable. but I got to get the impediment out of the way. I got to get the blockage cleared before we can get the patient healthy so that he can run the dadgum triathlon. Okay, that's what we're after here. And I'm going to send you a copy of my book, Breaking Free from Broke, Caleb. I wrote it with you in mind. The 25-year-old who's going, I feel like the system's rigged against me. I make all this money. I don't know where it's going, and I feel like it's everyone else's problem.

1:32:29And if the next president could fix it and inflation could calm down, and then I go, hold on, let's hold up the mirror and let's look at Caleb. What can Caleb do with his$200 ,000 income that he's giving away to lenders every month?

1:32:40Dave Ramsey:There we go. George is going to be your mentor. There we go. There we go. I will do it. And in fact, Caleb, get in touch with our team. Because you're old, George. Yes. Well, I'm going to put Caleb on my YouTube channel and show everyone that it can be done. Okay. Follow up with him. Follow up with him. So we'll get your email, Caleb, and I'll send you a copy of my book, Breaking Free from Broke. And if you're willing to let me be your mentor in front of a few hundred thousand folks, we can help a lot of people and show them by doing an actual budget what it's going to take for Caleb to get out of this mess.

1:33:04Dave Ramsey:You're going to be like the before and after on the biggest loser. You might lose a George Camel in the process. That's not much. Really? I mean, that's just like not eating donuts for three days. Not even impressive. Dave could lose that tomorrow. Hey! You could. That's all I'm saying. He's got the discipline. Golly. Wow. All right. Hang on, Caleb. I think George is your mentor. I'm not sure. He's not so sure. I'm just wondering what I've signed you up for here, buddy. Well, the Calebs out there, they fell for all the money traps. They went down the path. Everyone told him to go down, take out all the student loans you can get, get a nice car payment.

1:33:37You work too hard. You deserve it. Get a big mortgage. I mean, he's the poster child for what's happened with the American dream. It's turned into the American nightmare. It's land of the free, home of the broke out there.

1:33:46Dave Ramsey:And then what do I do? Who do I turn to? Neither one of my parents knew anything about it. My best, my high school counselor told me to go$160 ,000 in debt. My friends are all broke. They don't know. There we go. We'll show you the way, man. Hang on the line. We'll help you out. George, the youngest mentor. It's your next mentor. I like that. The youngest mentor. It's your new book. This is The Ramsey Show.

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1:35:06Dave Ramsey:George Campbell, Ramsey Personality, is my co-host today. Thank you for joining us. If you're thinking about buying a home or selling a home in this weird real estate market, you definitely need a high-quality, high-octane real estate agent in your corner. If you want to know who we have vetted, who we coach and spend time with to make sure they do it the Ramsey way and that they are real high producers, like not somebody just got their license last week but happens to be your friend. Oh, yuck. No, let's get an absolute pro that sells 30 to 300 houses a year. Go to Ramsey Trusted Real Estate Agents.

1:35:47Dave Ramsey:Ramseysolutions.com slash agent is how you'll find for free the Ramsey Trusted Agents in your area, and then you can select from among them who best to help you with your next real estate transaction. Kim is with us. Kim is in Cincinnati. Whoops, whoops, whoops, whoops, whoops. What am I doing? Where is she? There's Kim. Kim is in Cincinnati. Hi, Kim. How are you? Good afternoon. Thank you for taking my call. Dave, this one's mainly for you. You have adult children. My husband and I are, it's that time where we kind of need to update our will, potentially change some things to payable on death, etc.

1:36:27We have two young adult growing children. And one party thinks that to sleep everything to the children, they'll be fine. They'll know how to handle it. They'll make a decision. One is a little concerned that that might be a little too much. number one and number two um even though they're living you know pretty frugal lives if they're not doing some of the basic steps to that we took to get us where we are um i just don't know if that would be in their best interest so kind of wanted to and then you you had a call a couple months ago it was either with man or john where it was about um you know parents trying to control adult children.

1:37:11That is not the case. I actually want to set them up for the best case scenario and have this be a blessing to them. So I wanted to know your thoughts. More money in anyone's life

1:37:26Dave Ramsey:causes them to be more of what they are, good and bad. Disorganized person becomes chaotic and completely disorganized. a generous person becomes generous a and it's very visible a an angry person becomes more angry a depressed person becomes more depressed a kind person and gentle person becomes kinder and more gentle a uh and so on and so on i just didn't yes thank you but i just didn't know plopping a couple million into a 30-year-old's hands. There's nothing wrong with that if they have the character to carry it is what I'm saying. But if they're exhibiting problems, if they're prone to overspending, and you plop a couple million in their hands, they're going to overspend.

1:38:25Sure. Yeah, it's not so much that, but just for example, like they're not even putting very, very low percent into retirement for themselves.

1:38:34Dave Ramsey:Why? So, because that's what they're choosing to do. I don't, and they've seen us, and they saw how we had nothing for several, several years, and how finally our behavior has finally paid off. I mean, it's, we never thought we would get to where we were, but by following the steps and working hard and having time. Whatever it is that they're doing right, they will do more of it. Whatever it is that they're doing wrong, they will do more of it when you leave them money. And so if they're doing more wrong than right, you are not blessing them by leaving them a couple million dollars because you're going to cause them to magnify the bad behavior.

1:39:16Dave Ramsey:If it's minor bad behavior, if your husband thinks that, oh, leaving them a couple million dollars, they'll suddenly become smart and they were dumb. No, they won't. They'll become dumber. No, that isn't the case. They're very, I mean, they have good heads on their shoulders. How old are they right now? 30. 29 and 30. And you guys are? I think it's mid-50s. Okay. And you're not going to die tomorrow, right? No, but if we would both die, you know, we need to change some things so that it doesn't all go through a will and all that. We want to have some payable on death accounts. We've explained to them, you know, that the Roth doesn't, they can keep that and that can be transferable on death versus a traditional, how they would have to pull that out.

1:40:00I believe it's within 10 years and be taxed on that. things like that. They know the basics. They don't know our total net worth. Um, but like I said, just example, I think, and I don't, I, I don't expect everybody to do the side hustles and to work as many hours as I do. But when like the basic thing of not even putting 10 or 15 % back for yourself, those little things, because I have learned and I have exhibited how that can change your life.

1:40:28Dave Ramsey:And made you a multi-millionaire. Yes. Yeah. Okay. So is that the, that you brought that up twice. Is that the only thing they're doing that you think is irresponsible? Yeah, pretty much because, um, I don't like even their emergency funds, they don't even have them in a high yield savings account, just little things like that. And I feel like I've said all I can say without, you know, Oh, you're probably, yeah, you probably have. Yeah. Right. So their emergency The LLC fund is where? Just in a regular savings account. And let me preface, too, they both have no debt other than their very modest homes.

1:41:04Okay. So they're following the basic principles that way. It's just they're missing the chance for compounding and for growth by not just being a little bit more disciplined.

1:41:16Dave Ramsey:Both of them? Yes, sir. In different ways, but yes, sir. Mm-hmm. Hmm. And I don't want to sound like if we sit down and say, okay, we'd like to have a talk, that it sounds like I'm trying to control their everyday life and budget, or it'd be a threat. We're not leaving you everything if you don't change your ways, because I just don't think I will be able to deliver that well in a way that they're going to interpret. This is really, I mean, I know they know that I care and we love them. We're very close, but I don't want to do anything. So I obviously want to leave a larger portion to charity than my husband does.

1:41:58And also we have it set up where now that a portion...

1:42:03Dave Ramsey:Is there any strain between you and their married partners, the in-laws? Well, I don't think so. We've always asked them to communicate openly with us so that things, you know, don't go unsaid and then grow and cause hurt. And we have grands, and then I don't know how much to specify goes to the grands versus the parents. Okay, so are you asking me what I would do? I think just because you have adult children, if you think I'm kind of on the right track, do you feel like that my hesitation is? I think your concerns are valid, but not enough of a concern. I didn't hear anything here that gave me such pause that I would not leave the kids the money.

1:42:51Oh, I'm not saying not leave them money. I'm not. I'm saying all of it. All of it.

1:42:55Dave Ramsey:I don't need to, I don't need to leave it to charity. Well, we're going to leave part of it to charity anyway. Okay. Yeah. Do whatever you want to do. That's fine. I don't have any desire to do that. The, in terms of in your situation, I don't hear anything that says that they have invalidated their right to manage millions of dollars. It's not optimal what they're doing, but it's not misbehavior. Yeah, I mean, they're at the 90, 95 percent implementation, and the other 5 percent is driving you crazy, is what I'm hearing, because the 5 percent matters, and it's done you good, and I appreciate that.

1:43:33Dave Ramsey:I'm glad for you. And if they live a long life, they could inherit this at 60. So we just don't know. There's too many variables here. And it won't be a million, then it will be several million if it goes that long because of compounding. So I think for today I'm going to set the wheel up and leave the vast majority of it to the kids. If you want to earmark some for charity, that's fine. But they haven't invalidated their right to manage money in anything you told me. And I don't see any kind of confrontational thing being, I'm with you, I agree with you on that, Kim, that it probably wouldn't be profitable to try to have a talk about all that.

1:44:18Dave Ramsey:I think I simply would just leave it to him. I'm going to side with your husband on this. But you do whatever you want to do. It's your money. It's okay. They're not entitled to it morally, ethically, or legally. It's whatever you choose to do. This is the Ramsey Show.

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1:45:29Dave Ramsey:George Campbell, Ramsey personality, is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Luke and Kate are with us. Hey, guys. How are you? Good. How are you? Better than we deserve. Welcome to Nashville. Where do you guys live? We're from Asheville, North Carolina. Oh, love Asheville. What a great town. Very cool. Well, welcome all the way over. And how much debt have you paid off? $176 ,000. All right. How long did that take? 24 months. Whoa. And your range of income during that time? We started at 165, and then when my husband Luke finished school, we ended at about 275.

1:46:07Dave Ramsey:Cool. Cool. What do you guys do for a living? I'm a technical product manager. And I'm a physician's assistant with an allergy and immunology practice. Oh. A PA school, huh? Okay. Good for you. Great career choices. Amazing. Very well done. Wonderful income. What kind of debt was the 176? PA school? It was all student loans. So I had about$130 for myself, and then she had about$45. Wow, okay. So you're coming out of school. You say, okay, the income's getting ready to jack. We already make$165, but we're getting ready to jack this, but we got a mess. What made you decide to do all this stuff 24 months ago and get real serious about it?

1:46:45Well, it was kind of the shocking revelation that, hey, I got to find a job to pay all this back. I mean, I think I decided to go to PA school, and I didn't really know what the numbers were going to look like at the end. And so when we got to the end, it was like, holy cow. And, you know, the amount put a lot of weight on our shoulders. It was hard to, you know, kind of do the things that we wanted to do without feeling guilty.

1:47:13Dave Ramsey:Yeah. So we wanted to get out of that situation. Okay. Very cool. Is there anything in particular happened 24 months ago that said game on? We, uh, we're about to have our first daughter. Oh, all right. Bringing a kid into the world, you, uh, want to kind of go in with a fresh slate and give them the best opportunity they can have. Yeah. They, they, uh, that's like a tuning fork. It causes everything to get into and you go, Oh, wait a minute. Adult time. Game on. Yeah. Very cool. And how'd you find us? Uh, I actually used to work with someone who, um, claimed her and her husband's success was because of Dave Ramsey.

1:47:48And I was like, who's this Dave Ramsey person? So I went home and bought your book, read it in 24 hours, and then went to my husband and said, you have to read this book. It makes so much sense, and we should think about kind of getting on the debt-free journey.

1:48:03Dave Ramsey:Wow. And so you read, both of you read Total Money Makeover. So when she comes with you a book, and you just finished school, and she's handing you a book. I mean, what do you say? I mean, like, yeah. Enough books. Well, so we didn't get the book when I finished school. We were kind of listeners, but maybe Dave Light for several years. Entertainment value. Yeah. We really enjoyed the show, but we decided to take it serious when we got out of school completely. When the baby's on the way and she reads the book, hands it to you, you're like, yes, ma 'am. Yes, ma 'am. Yep. Wow. Very cool. Good for y 'all.

1:48:38Dave Ramsey:How old is the baby now? She's a little under two, and we're expecting our second in the next month. Yay! Two little girls. Yes, thank you. Fun, fun, fun. Good for y 'all. What a cool journey. Yeah, very good. Most people it takes, we found the average is 20 years to pay off their student loans. And you guys just buckled down. You have this great income. You said, we're going to knock it out in two. Was that a specific goal or did you have a longer time horizon and you beat it? I think we knew our income was extraordinary for the location that we lived in and just kind of our professions. and we wanted to take advantage of the opportunities that we were given and get it done as quickly as possible so we can invest for the future.

1:49:17We were actually able to do it a little bit quicker than we expected. Kate was laid off from a tech company at one point, and she was provided a generous severance package. And rather than using that to do other things, we just put all that towards our debt,

1:49:32Dave Ramsey:and she had a job within a week or two after the... Wow. Yeah, a severance package turns into a signing bonus for the next job. That was very helpful. Yeah, it's all free money then. Game on. It took a lot of discipline, though. Instead of vacations and upgrading the car, you went, oh, we've got to pay off these student loans. Yep. Good for y 'all. How's it feel? So good. Amazing. Huge weight lifted off our shoulders. Was it worth it? Absolutely. All right. What do you tell people the secret to getting out of debt is? Perseverance and determination. And it's not just about the journey, or it's not just about the destination, It's about the journey, how you get there.

1:50:08And your character changes as a part of it and lasts a little bit longer than just paying off the debt. So it's really rewarding. There's a piece of this where you overcame$176 ,000 in debt in two years. And so now it's like, what can't we overcome in life, not even finances? And there's something about the debt-free journey that's inspiring, and it usually begets more transformation. And you guys are a perfect example of that. Yeah. We definitely feel that way. We try to tell all of our friends and family to listen to the show. And also Smart Money Happy Hour for my friends who aren't as big of fans of just listening to straight financial content.

1:50:47Thank you. There we go. Something for everyone.

1:50:49Dave Ramsey:George, just to very note, you're not straight financial content. We're a gateway drug. Just note that. We're a gateway drug to the Ramsey Show. That's right. That's right. That's so fun. Well, thank you guys for being here and telling your story. People have said there were drugs involved, and I always wondered. Sometimes a mocktail. Oh, way to go, you guys. We're so proud of you. Thank you. Excellent. I mean, what an incredible situation. How old are you two? 33, and my wife turned 30 today. Oh, happy birthday. All right. Thank you. Thank you. That's very cool. Dave's going to sing to you on air.

1:51:21Dave Ramsey:Not a chance. They'll do talk radio for a reason. But this is great. I mean, what an incredible, this incredible income and no payments, you're going to be able to do anything you want to do from this point. Man, absolutely awesome. Very, very well done. What's the next thing you guys are going to do? What's the fun thing, the expensive thing? Well, it's stork mode until we have the baby. And then I think we're just going to continue to invest money appropriately. And that way we're ready for whatever comes next. You'll be ready. Yeah, definitely. Well done. We've got the Live and Give box for you.

1:51:56Dave Ramsey:That includes the Baby Steps Millionaire's book. You'll be there in a minute if you're not already there. Total Money Makeover book that started the whole thing for you guys. and a Financial Peace University membership. You can use those or you can give them away. You can do whatever you want. They're our gift to you to say thanks for coming all the way over from Asheville, North Carolina to do your debt-free scream. You two are inspiring. Very well done, heroes. Excellent job. You took control of your life. You could have done a lot of stupid butt things with this. Instead, you really dialed in, hammered it home, and changed your family tree for these two kiddos.

1:52:29Dave Ramsey:Very, very well done. Good stuff. Good stuff. All right, it's Luke and Kate, Asheville, North Carolina,$176 ,000 paid off in 24 months, making$165 ,000 to$275 ,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Yeah. Woof, woof, woof, woof, woof, woof, woof, woof. Man, oh man, oh man. That's excellent. Very good stuff. Those are two great career fields, too. The opposite of what we were talking about earlier. I'm going to be broke and live my passion. Both of them have, I mean, PA is a great track in the medical world. That's a great track to get on. And the physician's assistant process.

1:53:20And product manager and the technical space. I mean, it's just, you can see.

1:53:24Dave Ramsey:Definitely ROI. Proof's in the pudding here. They make$2.75 and no payments in the world. At$30 and$34. It's just mind-boggling how much more you can give, how much more you can invest after 24 months of sacrifice. You know, I haven't added it up, but if you invested$100 ,000 a year, how fast would you be a millionaire? Probably six and a half, roughly. Yeah. I'm guessing. I mean, 10 years would be a million dollars if you had no compounding interest benefit. You stuck it in a mattress. Yeah, you put it in a fruit jar, you'd have that. But that's how fast these guys are going to be millionaires when they're 37 or less, something like that.

1:54:05Dave Ramsey:And that's if they live on$175 ,000 a year. That'll do. You know, I mean, really. With no payments. You see the power of this. That puts you in an incredible, incredible situation. So beautifully done, guys. That was fabulously done. Very good. That's inspiring. This is what happens. So, you know, it's funny. You can live your life that way. And you've got to admit, that's not normal. That's weird. They're weird people in such a great way. Or you can go be normal. But who the flip wants to be normal? Oh, my God. That's horrible. Nobody wants to be normal. You shouldn't ever be normal. One out of three people making six figures paycheck to paycheck.

1:54:45Normal sucks. We get those calls. Make$200 ,000. We're broke. Normal's awful.

1:54:51Dave Ramsey:This is the Ramsey Show.

1:55:00Thank you.

1:55:34Dave Ramsey:Our scripture of the day, 1 Peter 4.10. Each of you should use whatever gift you have received to serve others as faithful stewards of God's grace in its various forms. Steve Martin said, Thankfully, perseverance is a great substitute for talent. There we go. Emily is with us in Tucson. Hi, Emily. Welcome to the Ramsey Show. Hi, thank you so much for having me. I am blessed to be here. Thank you. Good to have you. How can we help? So a very long story short, I have been unemployed now for over a month. I have been applying like crazy for jobs around my area. Nobody's calling me back. I've had a few interviews and they decided to go with other people for positions, which is great for them.

1:56:23Like I'm blessed for them. The problem is that I am now behind on my card payment and credit card payments, and I feel like my hope is gone. I'm struggling to hold on to the hope that God will get me through this.

1:56:42Dave Ramsey:Scary. I'm sorry. Thank you. Okay. The first thing we need to do is you've got to get the wolf away from the door. and by that I mean the immediate needs need to be covered. Okay? You can do that with DoorDash. You can do that by applying at Walmart or Target and you'll get hired today and go down there and make$20 an hour and start working your tail end off. And you can make enough to pay for food, lights and water and your car payment. If your credit cards get behind, it's not the end of the world, but I want you to take care of a place to live water and electric and food and transportation.

1:57:27Okay.

1:57:28Dave Ramsey:And you can make that much money at a not great job, but you just go get it real quick. Okay. We're not doing that for long. That's not your permanent assignment, but it's to get this immediate pressure off. Okay. Okay. So, and you can get those jobs by the end of the day. Yes, sir. Yeah. Go to five pizza places, Target, Costco, Walmart, whatever, and tell them you can start work tomorrow. And they're paying$20 an hour right now, all of them. And they'll start you almost immediately. Okay? Yes, sir. So wash your face, put your makeup on, brush your teeth, smile, go down there and be your best Emily, and land you a whole bunch of stuff by the end of tomorrow.

1:58:15Dave Ramsey:I want you to have three jobs. Okay. And that'll help because you can get$1 ,000 a week coming in doing that stuff. Now, that's not your permanent solution, but that gets this terror off your doorstep because this is terrifying. It is. You know, a lot of my friends have, you know, husbands and family that they can rely on, and it's just me. Well, you're enough. You're enough. You can do it. you're enough you're sharp enough you can do it I trust you I think you can okay and again so that's the first step now if you've got a thousand dollars a month coming in I mean a thousand dollars a week coming in and you are working 40 hours at miscellaneous jobs that you don't want to do for the rest of your life now we got to start talking about a career job now the job that you lost what were you making?

1:59:13I was making 20 an hour. I'm sorry I'm not great at math so I'm not sure how much that was. Okay what were you doing? About 40 grand. About 40 grand. I was a front desk receptionist. And why did you lose the job? The job was dissolved. Okay okay and you're how old? I will be 30 in November.

1:59:36Dave Ramsey:Okay and do you have a degree? Unfortunately, I do not. That's okay. So for 10 years of your life, you've been a front desk receptionist? No, I've, the first six years of me working in the, just working in the field, I worked in daycare. I've been a call center supervisor, and I've also worked property management. So I've kind of been all over the place. Okay. So what I want you to do also, So, first thing is get some money coming in to get rid of this terror. You got that part, right? Yes. Okay, then I want you to start thinking about what 40-year-old Emily is going to be doing that pays$80 ,000 a year or more.

2:00:24Dave Ramsey:What is it you're going to be doing that gives you a great life that you love doing? Now, I'm going to send you some tools of Ken Coleman's to help you do that. The Find the Work You're Wired To-Do book has in it the Get Clear assessment that will help you get clear on your gifts, talents, passions, and what to aim those at in a career. Does that make sense? Yes, sir. This is my gift to you. It costs you nothing, okay? Thank you so much. the assessment and then you sit with that, sit with some friends, sit with a parent if you have functional parents and say, this is what this report's telling me.

2:01:07Dave Ramsey:Does that line up with what you know about me? Then I want you to start laying out a strategy that says, I want to be X. I want a new dream. I'm going to be one of those things. And if that means you've got to go take a class or get a certificate or whatever to go be one of those things, I don't care. Go take a class while you're working these other things. And then I'm also going to send you Ken's book, the proximity principle, because you've just been running around applying at places, trying to get a J O B. You weren't really trying to go do something big with your life. You were just trying to get some money coming in.

2:01:46Dave Ramsey:So you weren't hungry. Right. And you weren't, you, you weren't, uh, thinking about where you just ran in there, heard they were hiring and ran in there and filled out an application. You and 15 ,000 other people filled out the same application. And the proximity principle teaches you how to go get a job that you love in a career field that is directed by you and taking you to a place that's going to be different. So you're going to be a very fulfilled, wealthy 40-year-old if you do what I'm teaching you to do. Thank you so much. I just want to be a blessing to others. I don't want to keep droning.

2:02:26I want to be able to be a blessing someday to somebody.

2:02:29Dave Ramsey:Well, that's the interesting thing about the marketplace is when you do a really good job helping people, they give you certificates of appreciation with president's faces on them. When you are a blessing to people in the capitalistic system that we have, you make money. And there is nothing wrong with that. It's a great trade that we have out here. So it turns out that if I sell somebody a book for $26 or whatever we sell these books for these days, and it helps them get out of thousands of dollars in debt and makes them into a millionaire, they were blessed and I got 26 bucks. Do that a couple million times, it'll work out for you.

2:03:13Dave Ramsey:You know, help a couple million people. I got several million dollars as a result. It worked out. And they all got help too. See, isn't it a wonderful trade? You get to be a blessing. And the natural result is you get blessed. So you're going to be fine. And you're going to be fine. It doesn't have to be that you somehow diminish in order for you to be of good, be doing good. Yeah. And one other thing, Emily, if the car is worth a whole bunch, let's say it's, you know, you got a$10 ,000 loan, but the car's worth 20, it'd be wise to just sell that thing, get out from under the payment, and go buy you a cheaper car because you need some breathing room right now.

2:03:53Dave Ramsey:Yeah, if you've got some room in it. Yeah, depending on the situation. If you're underwater, it's not going to make sense. Yeah, that's exactly right. But man, I want to just get you some margin. Go get some income coming in right now from any old body. It doesn't matter. But a quote 40-hour-a-week day job making the same thing you make at Target, you know, there's no future in that. So let's go figure out what we're going to be and go that direction. You hang on, Christian will pick up. We'll get you, uh, get you those books out and we'll start helping you. And if you need some more help, you call us back.

2:04:24Dave Ramsey:We're here to help you. You're going to be fine. You got the right spirit, the right heart. Um, but don't just throw your application in a pile of jobs that nobody wants, but you'll take anyway, cause you're scared. That's not your best life. it's not your best destiny. You're worth more than that. Thanks for calling in, Emily. You holler if you need some help. We're here for you. We think you're awesome. You're going to be okay. That puts us our 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.

2:05:38We'll see you next time.