Build Wealth Faster by Understanding Opportunity Cost

13:38Dave Ramsey:Let me try one more time, okay? This guy doesn't pay people, and he lies about it. That's not going to change based on any action you take. This is a guy. This is what he does. He's a liar and a thief. That's who he is. The best thing you can do with liars and thieves is to distance yourself from them so that you don't get lied to and stolen from.

14:07Ken Coleman:Agreed.

14:08Dave Ramsey:So I'm afraid, sir, you've lost your money because you didn't keep your finger on the pulse. And that's on you. It's also on him because he's a snake. But, dude, you need to get a job yesterday and quit trying to figure out a way to get this snake to not be a snake. He's a snake.

14:26Ken Coleman:Yeah, I just think you're afraid of something. That's why you're doing this moral stuff and throwing these words around. That's all that is is you justifying your lack of inaction. And you've just been two lessons you've got to learn here. You have not been paying attention to what's going on. It costs yourself a lot of money. Number two, you're afraid to step out. You think this guy's the only guy that's going to pay you, and you're in one of the most sought-after trades there are right now. And there's a massive need.

14:52Dave Ramsey:There's a line around the block of people hiring master electricians. There's such a shortage of people in the trades. So you can go get something tomorrow, and you should have yesterday.

15:06Ken Coleman:He offered to transfer the titles on some trucks and trailers to me. Do you think I'd just take that and run? Yes, yes, yes. Yes, like instantly. That's the best case scenario? Yeah, yeah.

15:17Dave Ramsey:I won't file a wage claim if you give me a truck and a trailer worth what you owe me. That's right. A hundred percent. And I won't file a wage claim on you with the state. Yeah, he needs to do that. And that's redemption for his thievery. Okay? Yeah, take them. And then, hey, maybe you set up shop for yourself then. If you've got a truck and a trailer, let's go, baby. Yeah. Yeah, that is the plan. That's a guy I can trust. The guy in my mirror, right? Very true. But now you're going to have to have someone help you with the books because you don't pay attention to them much.

15:55Ken Coleman:Very accurate.

15:56Dave Ramsey:Sorry, Tom. You walked right into it, buddy. I love you, man. But yeah, you can be a good electrician and a bad businessman. So be careful if you're setting yourself up in business that you learn the business skills too.

16:10Dave Ramsey:Wow. Ouch.

16:15Dave Ramsey:you know what that is that's a guy who works his butt off that's right he works hard and most of everything he's gotten he's outworked everybody else yeah and he thought he could outwork this and and folks when you get in a situation like this what you can't do and Tom's a nice guy and he's an honest guy and a good guy we're picking at him a little bit having some fun but we've all done things like he's done what he did is he took his personal character of high work ethic, high honor, high integrity, and tried to superimpose that back on the guy who's a snake. Because he thinks other people are going to be like he is.

16:52Dave Ramsey:And, you know, what that'll leave is a scar.

16:56Ken Coleman:Yeah, it already has. Here's the great news. Until the very end of that call, we thought he was getting nothing. And so the lesson here is, and again, not picking on Tom, but there's fear. We didn't have time to break it down, But for him holding on, and I'm going to tell you, fear of the unknown just holds so many of us up, us all caps. I've done it. When we don't know what's next, right, whether he goes out on his own or he's got to get out on the street, you will put up with things that you would not normally put up with. And I'm telling you, for everybody listening and watching, there's a lesson here.

17:32Ken Coleman:He's terrified of something. Maybe just change. And that's normal, by the way. It doesn't make Tom a weirdo. That's all of it. So learn the lesson there that when we have that fear, the fact that he called us today is good. Get some insight from other people, Dave, because what will happen is you get into this loop that I can't— The rumination. The rumination. Thank you. That's the word. And it's really dangerous. It can hold back a lot of progress.

17:56Dave Ramsey:So I spoke at a church yesterday, and between services, go out and talk to people and all this stuff. And a guy came up, and he's like, how do you get over the fear of running your own business? And I said, I'll let you know.

18:08Ken Coleman:Yeah. Yeah, great statement. Right?

18:11Dave Ramsey:I mean, the editor, John Johnson of Ebony Magazine, said the entrepreneur is the only person who can go from sheer terror to sheer exhilaration and back every 24 hours. That's right. And so, yeah, I got me a truck and I got me a trailer, and I have the skill, but now good, it's scary as good. It is scary, and I want to acknowledge that, right? So, yeah, you're right, too. That's very good. Well, I tell you, that's a good guy. A couple of lessons, though. If you listen to this show, you can learn things. That's the idea. It's not just entertaining, although Ken is quite entertaining. Thank you very much.

18:47Dave Ramsey:But the two takeaways is, one, you've got to pay attention to what's going on. Yes. In detail. Yeah. Because no one else is managing you but you. That's right. And then two is, don't try to make a snake into a rabbit. They're just snakes.

19:01Ken Coleman:Yeah.

19:01Dave Ramsey:And so just because you might be a good person doesn't mean you can expect that of other people. You can't always expect other people to react the way you are going to react, to do what you would do in that situation. Because let me just tell you, if Tom was in charge of the payroll, the first day he couldn't make a check, a payroll check, he would have been sweating and terrified and would have sat down and told the guy. Day one. That's right. He wouldn't have lied to him. He wouldn't have hid it from him.

19:40Thank you.

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21:42Dave Ramsey:Ever wanted to see the person who's calling in to ask a question? Be in the room when we answer it? Well, now is your chance. The Ramsey Show is going back on tour. You can experience live Q &A, crowd debates, local debt-free screams, even raw confessions. Yep, we're going to be in Charlotte doing one show. We're going to do one in Denver, one in Phoenix, and one in Anaheim all in April. There's around 300 seats a night. Last year we sold out in 72 hours. Grab your tickets right now at RamseySolutions.com slash events or click the link in the show notes if you're listening on podcast or YouTube.

22:18Dave Ramsey:Ken, which of those are you going to be in? All four, Dave.

22:21Ken Coleman:Oh, wow. They got me in the anchor spot. So I'm trying to keep things somewhat controlled and on the rails. You're trying to keep Deloney and Rachel on the rails?

22:29Dave Ramsey:It's hard work. That'll be a lot. It's hard work. That's a lot to ask of one man. I'm excited. It's going to be fun. Ethan's in Salt Lake City. Hey, Ethan, what's up?

22:40Ken Coleman:Hey, Dave. I'm so glad it's you on the air. I've been listening to you for a little bit, and I'm like, you know what? I need a good butt-chewing from Dave, and I was hoping it was you today. I'm just going to leave the studio. I've never heard anybody ask for it that plainly. Careful what you ask for. No, I need it. So a little bit of what's going on. I mean, I got a really great job. I mean, I make six figures. I made about 140 last year. Good. What are you doing? Honestly, I've been really blessed. Industrial refrigeration.

23:15Dave Ramsey:Good for you. Well done. Okay.

23:17Ken Coleman:So, yeah, really good trade. Work for my dad. He takes care of me. But recently bought a house from my dad. But they moved, and he took a hit on selling the house to us but gave us$100 ,000 gifts as a down payment. And that also left us with$150K in equity. And I was like, I mean, this was a step up in life. Might as well take it. And the payments, they were like, oh, it'll be tight, but you should be able to do it. And my first mortgage payment come out, and we're getting ready to have a kid. and I just paid outright for the kid, and I watched my checking account go, and I was like, oh.

24:04Dave Ramsey:How much is your mortgage payment, sir? So it's$3 ,250 and about$3 ,700 total with utilities. Okay. Mortgage payment's not your problem. It's your truck payment. How much is it?

24:20Ken Coleman:So I actually don't have a truck. My company pays for truck and gas and everything. I got a car for my wife because the other vehicle we had broke down.

24:32Dave Ramsey:How much is your vehicle for your wife's payment, sir? $514. Okay. What other debt do you have?

24:43Ken Coleman:So recently also found what I thought was a good investment on some mineral rights in Idaho. And so bought that. That's about$400 a month. And that's$4 ,000 total there. And then I thought I was a big boy with a big boy job and saw a bike, pedal bike, but it's the Ferrari of the pedal bike world.

25:13Dave Ramsey:Okay, so you just keep going about buying and buying and buying and buying. So have you figured out that's the problem? I guess you have.

25:22Ken Coleman:Yeah.

25:22Dave Ramsey:Yeah, so sell the pedal bike and sell the mineral rights and get yourself on a budget and stay out of restaurants and quit buying crap. Is that going to work? Yeah, that's what I've been doing. Yeah, so what will the Ferrari bike bring?

25:40Ken Coleman:So it's actually pretty good return. I'm trying to sell it for 9K, which is about$5 ,000 under what it should sell for. but that's what I owe on it.

25:53Dave Ramsey:Okay, you can get rid of it. Okay, what about the mineral rights?

25:58So it is a lease to own, so I'm paying the guy.

26:04Ken Coleman:I could reach out to him and see if I can cancel our contract. Yeah, let's do that. I don't know what that entails. Yeah, just say,

26:12Dave Ramsey:what do I need to do to be out of this because I can't afford it? I bought a house, I got a kid on the way and I'm broke. and i can't i gotta i gotta i gotta get i gotta have some relief here what do i do to get out of this just quit paying you i lose the rights sure done you can have it i'll give them back to you i'll sign them back today that's probably what it is so um you know you just got to work through everything like that and so what you do is just figure out the last time something made sense and go back to that point and undo everything since then that's what i'm doing yeah before i bought

26:44Ken Coleman:the house.

26:45Dave Ramsey:Yeah, the house is probably a bit much, but I don't think it's really your problem. I think it's all the other crap. And you don't have a plan. You're not living on a plan. You just look and see how much is in the checking account, and that tells you if you're okay or not. That's not a budget. You need a budget. You need to get on every dollar. I'll give you a free trial on it and get you started. You and your wife sit down tonight, give every dollar a name. You make freaking$140K, stay out of restaurants, don't go on vacation, get rid of the Ferrari bike and the mental rights, and let's get this thing to balance.

27:13Dave Ramsey:I think you can do it. Yeah. That's a pretty light butt, Julian. That's not bad. Yeah.

27:22Ken Coleman:Just realistically, I've been on the edge of this because we really like her car. It's really reliable for her and the kids.

27:29Dave Ramsey:You probably need to sell it, too. You think you need to sell it? Yeah, probably.

27:35Ken Coleman:I think if I get rid of everything. What if you didn't have any payments but a house payment?

27:38Dave Ramsey:I think your life would be pretty good. Oh, it would be amazing. Okay. I think your budget would balance, and all of a sudden you wouldn't have been calling Dave. So, you know, but you keep buying crap and just going, it's going to be okay. It's not going to be okay. You got yourself into a mess.

27:54Ken Coleman:Yeah, paycheck to paycheck. Does anything about that feel good to you?

27:58Dave Ramsey:Does this work? I mean, you could get her a$10 ,000 car. People don't die in$10 ,000 cars. I own a couple of them.

28:05Ken Coleman:How old are the kids? my son's four my daughter's two and baby three is any day my point is those littles don't need the nicest minivan or the latest suv they don't care they're just going to throw goldfish on the

28:20Dave Ramsey:carpet anyway and grind them in with their grimy little feet we hear this all the time it's a

28:26Ken Coleman:rationalization you're not the only person that ever does it well i've got two kids i got a third on the way got to go get a car i can't afford nobody cares get you get you an old worn out

28:35Dave Ramsey:minivan that just gets you from here to there until you've got a little money piled up and then pay cash for her a little better car. But you guys, you know, you just been acting like you're in Congress and spending money. You got to stop it. And you know what to do. You already knew what to do before you called. And that's why you set the call up the way you did, which was kind of humorous and fun, by the way. But, um, but really, I mean, look in the mirror, you and your wife go grown up time, three little babies and stupid butt stuff has to stop. And you know, this has grown, This is what the kids got.

29:06Dave Ramsey:Adulting. Yeah. Yeah. We're adulting.

29:08Ken Coleman:Okay, Dave, question for you. I haven't asked you this in a while. What is going on in the mind of a human, because we've all done this, where there's this awesome feeling about getting the Ferrari of pedal bikes. And you know deep down that you can't afford it, but you still do it anyway. What's going on?

29:26Dave Ramsey:They're not looking. No one looks at whether they can afford it. What happens is when you do not have an overall plan, like a budget, okay? and a detailed game plan of this is what we're going to do with our money on purpose it could be a ferrari bike i don't care i mean you can buy whatever is in your detail plan when you say can i afford this couch and you look at it as a part of your overall life plan and the numbers then you can tell if you can afford the couch when you're just walking through the furniture store and you're disconnected from all those other numbers then you go of course i can afford the couch it's only you know whatever it's i can of course i can afford a nine thousand dollar battery bicycle thingy whatever but it's the ferrari tesla of bicycles but yeah probably catches on fire but the um but i mean but but you what it amounts to is i can afford that boat i can afford that yeah when you don't look at it as a part of a whole yeah and you look at it as a standalone thing, then you go, I make$140 ,000 a year.

30:32Dave Ramsey:I can afford a$10 ,000 thing. That would be true if you don't look at it as a part of the overall picture. But when you plug it into the overall picture, it screams insanity. And same thing with your car purchase, same thing with your house purchase, all these things. And you just go, yeah, if I didn't have anything else to think about except this one couch, sure. But lots of times, but we never do that. And so it's It's compartmentalizing rather than looking holistically causes us to be insane.

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32:54Dave Ramsey:Patrick's in New York City. Hey, Patrick, what's up?

32:58Ken Coleman:Good afternoon, gentlemen. Thank you for taking my call. Sure. I'm 66 years old, in relatively good health, still working. I own my own business. I have a net worth of$9.5 million, and I want to make sure it's in the right place, and by the grace of God, and a lot of years following Dave Ramsey from a bunch of different shipyards throughout the U.S., the discipline paid off.

33:22Dave Ramsey:Man, you're amazing. $10 million net worth? Dude, I'm proud of you. Yes, sir. Wow.

33:28Ken Coleman:And just to be clear, I've never lived high on mahogany. I'm first-generation Irish Catholic out of the Bronx, so I'm not impressed by, I heard you say Ferrari before and that sort of thing. I live very simply, and I'm very content.

33:43Dave Ramsey:Good for you. Good for you. How can we help you, sir? You're amazing.

33:48Ken Coleman:Right now, I have approximately$580 ,000 in cash in the bank. I have another$3.9 million in CDs with various maturity dates. 401ks from my corporate life and my earlier days working for people. I have approximately$3 million. I have approximately$1.4 million in properties. There's no mortgages, and they generate about$8 ,500 a month gross before any taxes and that sort of thing. I own three vehicles that are less than a year old. They're all paid for, and my Dave Ramsey emergency cash fund in the proverbial cookie has about$30 ,000 in cash in it.

34:32Dave Ramsey:Well, plus$580 in checking. Yes, sir. And$3.9 in CDs. Okay. Wow. Way to go, man. So how can I help again?

34:42Ken Coleman:And I'm still working. Should I move that cash at roughly$580 ,000 in cash? Should I bring that into—I don't really need it. I'm not trying to sound highfalutin. Should I move that into CD? Should I put that in some other investment? I have two adult children that are self-sufficient, and obviously, please God, when my time comes, all of that will be done. I do have a will, but I do not have a revocable living trust in will. You don't need one.

35:15Dave Ramsey:Okay, I do not have that much of a percentage of my net worth in cash, in CDs in cash. Instead of doing that, you don't need that 3.9. You're not even using the income off of that 3.9 or that 580 for that matter. and those could easily be put into something very simple, very low-key into some mutual funds and make you about three times more money. Okay, and so if you got$4 million and it earns you 3%, what is that,$120 ,000 a year? Did I do that right? Yes, sir. Okay, and if it doesn't earn you 3 % but it earns you 10%, that'd be like$360 ,000 a year. So that money sitting in CDs cost you a quarter million dollars last year.

36:11Good Lord.

36:13Dave Ramsey:It should have been invested well. And so it's something to think about. I mean, and here's the thing. If you got it in good mutual funds and the stock market doesn't earn what it always earns, like last year it was like ridiculous. It was crazy. I mean, we made like 26 % of our money last year, but that's not real. This year we're down 5%. year to date okay but we have a little war going on and a couple of other things and so but the overall market let me look right i just pulled it up a minute ago it's uh no it's down two percent year to date so you would have lost a little bit since january 1 after having made ridiculous money last year but the average is you're going to make way more than you would on a cd and i that's why I don't park that kind of money in cash unless I'm using it for something like retained earnings here at the company.

37:07Dave Ramsey:We've got a substantial cash position with that. But in terms of my personal investment portfolio, a very small percentage is actually sitting in cash. If I'm parking money, like I've got some money right now, as an example, parked in an S &P 500 fund, so just a mutual fund, and I'm going to be buying some real estate with it later. but instead of leaving it in a cd and waiting to buy real estate i'm leaving it in there earning three times more on average than i would have made on a cd while i'm waiting now right now that money's lost two percent since the first year but i'm really not worried about it it's two percent doesn't matter one way or the other because i'm probably not going to touch it next few months and by then you know i'm sure the market will be back up so anyway all that to say you've done an incredible job i'm so proud of you if you leave it exactly the way it is you're not doing anything wrong but could you turn the knob a couple of clicks and make another two or three hundred thousand dollars a year on this money probably by sitting down with a smart vesture pro and learning about some places to park that instead of cds and instead of in in cash cash

38:15Ken Coleman:equivalents patrick's gonna lose a little sleep tonight off of that revelation that you gave him but he's done so well i mean this is by the way hasn't done anything wrong this is the baby steps millionaire right here living on less than 10 million. I know. Unbelievable. Right at 10 million.

38:31Dave Ramsey:Way to go, man. I'm just so proud of it. It's great. But this is like you did a 99 or 98 % great job and all we're doing is just clicking it on that 2%. So, so nobody's criticizing you, Patrick. You got it, man. If you leave it exactly the way it is, you are a stud. Yeah. I'm so proud of you. Very, very well done. So folks, here's the thing you want to think about. And this is the concept we're teaching right here. It's called opportunity cost on your money. When you take a block of money and you put it in one thing, by definition, it cannot be in the other thing. It loses the opportunity to be in the other thing.

39:10Dave Ramsey:And so if you take a hundred thousand dollars and you buy a car, you not only bought a car, but you lost the opportunity to invest that $100 ,000. That's what opportunity cost means. So let's say you had that$100 ,000 invested last year, you would have made$25 ,000 on it last year. And instead, you bought a car for$100 ,000 that is now worth$40 ,000. and so you traded 100 for 40 instead of 100 for 100 and a quarter that's the opportunity cost now it's okay to buy a car and they all go down in value okay i've got cars and they all go to mine all go down in value there's no exception to that but anytime you're looking at something going i'm going i not only am you were talking a while ago about making a purchase decision when you're buying the ferrari of bikes what else could i have done with that money What's the other option?

40:10Dave Ramsey:What opportunity did I miss out on? And so if you've got a million dollars invested or sitting in a coffee can in your backyard in cash and it didn't make a dime or it could have been in a gross stock mutual fund last year and would have made$250 ,000, you lost the opportunity by doing the coffee can to do the$250 ,000. Yeah.

40:35Ken Coleman:It's a great illustration.

40:36Dave Ramsey:And I actually did have a guy call in one time that had money buried in a coffee can. How much was it? It was not that much. It was like a half a million. But I'm like, dude, do you not understand that cash in a steel coffee can, the old metal coffee cans, it's going to rust. And then bugs are going to get in there. The cash is going to actually get destroyed. So when your relatives dig it up, it's going to be like this little green powder. That's all that's going to be left. and that's what you traded your half million for because you're a paranoid freak. And so, oh, my God, literally buried it in the backyard.

41:12Dave Ramsey:No kidding. I mean, whew. I actually know a few. I know a few people that their relatives will be out there with the old metal detector looking through the backyard when the old man kicks it because we know he's crazy and he buried the money back there. But you miss the opportunity. That's what you need to think about. and it's always a good thing to say, gosh, if I buy a$100 ,000 Mercedes and 20 years later, what would that$100 ,000 be worth? And 20 years later, what's that Mercedes worth? And that's the opportunity you miss by going and wondering. You miss the opportunity to drive the Mercedes, by the way, if you put it all in investments and have no life.

41:50Dave Ramsey:Yeah. So you ought to get a good car too. That's okay. Yeah. But just think about, try not to think about the idea of the purchase or the investment as a only this. It's if I do this, what am I else could I not do? What opportunity am I missing? And so I guess, you know, in modern lingo, we might call it FOMO. Yeah, that's exactly right. The FOMO of finance is opportunity cost. And that's what we're talking about with him. If he had that 3.9 million invested instead of sitting in CDs, he missed the opportunity to make another quarter million dollars.

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43:35Dave Ramsey:welcome back to the ramsey show in the fairwinds credit union studio ken coleman ramsey personality number one best-selling author is my co-host today the number is triple eight eight two five five two two five and she's in chicago hi angie how are you i'm fine how are you better than i deserve. What's up?

43:57Ken Coleman:Well, I just wanted to give some advice. My husband and I are retired. He's 65 and I'm 70. And our home is paid for and so are both of our vehicles. But we have a lot of credit card debt and it's kind of choking us so that it's hard to make groceries even. So I'm just looking for some direction.

44:18Dave Ramsey:How much credit card?

44:20Ken Coleman:We go for it part time. It's probably$35, $40 ,000. Okay.

44:25Dave Ramsey:And you both work part-time and you're collecting Social Security?

44:29Ken Coleman:Yes. And he gets a small disability pension from the military and I have a small

44:35Dave Ramsey:pension from... So when I pile all of that together, what's your monthly income?

44:40Ken Coleman:About$3 ,000.

44:44Dave Ramsey:Both of you are on Social Security and both of you are working and both of you have a pension and you only got$3 ,000 coming in? Right.

44:50Ken Coleman:It's a very small pension.

44:53Dave Ramsey:Very small Social Security. Yeah.

44:58Ken Coleman:He gets$1 ,625 and I get$1 ,250.

45:02Dave Ramsey:Total. Right. Does that include your jobs?

45:08Ken Coleman:The jobs, I get it$400 a month and he gets paid by the job. He does trailer repair. but very okay and and what are your cars worth um my car is probably worth five thousand dollars he's got a truck it's probably worth fifteen thousand dollars what's your home worth about $300 ,000. Okay. Okay.

45:39Dave Ramsey:And how is your health and his health?

45:44Ken Coleman:Good. We're both so far good.

45:46Dave Ramsey:Good.

45:47Ken Coleman:And I have about$13 ,000 in an IRA.

45:51Dave Ramsey:Good for you. Okay. All right. Well, two things come to mind immediately. One is you can't do this backward and expect it to work. You don't pay the credit cards first and then figure out how to eat. You eat first, keep the lights on first, keep the homeowner's insurance paid first, keep gas in the car first. Then with what's left, you pay what you can on the credit cards. Credit cards are not first in line. They're last in line after you survive. Okay. So it's not like after we pay our credit cards, we have the money for groceries. No, it's after we buy groceries, we earn the money for credit cards.

46:34Dave Ramsey:You see the difference? Yeah. So that's the first thing we adjust. The second thing we adjust is I mean, you're only 65 and 70. Get a job. Well, we both are working. Part-time, making nothing.

46:48Ken Coleman:Right.

46:49Dave Ramsey:$400? I mean, you're starving to death. You're too broke to retire.

46:59Ken Coleman:Well, that's true.

47:01Dave Ramsey:Yeah. I mean, what if you guys went to work for a year, like full-time jobs, and made$30 ,000 or$40 ,000 each, and you paid off all these credit cards? Right. Yeah.

47:14Ken Coleman:Yeah. I thought of that.

47:16Dave Ramsey:That wasn't what you—you didn't think you was going to hear that today, did you?

47:19Ken Coleman:It's not what we wanted to say. It's just a lot physically, physically honest.

47:24Dave Ramsey:I'm not telling you to wait tables, but I mean, I'm talking to an intelligent lady that can carry on a conversation. There's a lot of customer service stuff you can do. It's not physically draining.

47:35Ken Coleman:Here's the question I have. I'm listening to your stats, Angie, and I don't think I've ever been on a call like this where I've heard somebody who has a paid-for house, paid-for cars, and you have$35 ,000 to$40 ,000 of credit card debt. So what is the cause of that? It's just accumulated over time. There's just always been a lot more expense than we had income, and it just kind of accumulated. And then when we couldn't buy groceries and we put it on a card, or when I needed$1 ,500 worth of car repairs and didn't have$1 ,500 on me, I put it on a credit card, things like that. Yeah.

48:15Dave Ramsey:Well, we're going to have to spend enough more years in the workforce to reverse the trend, to get your incomes up and enough of a nest egg, a little bit of a nest egg built to where it doesn't leak again down into this. But cut up the credit cards and let's go crazy and get them paid off. I, you know, I'm not asking you to sell your house. But before I keep this credit card debt around five years, I would sell the house. and instead if it's me i'm going i'm gonna roll up my sleeves and go do something and just get rid of this mess it's just lingering and you guys are walking around acting like you're retired and you're broke and and the good news is you've still got your health and in today's world 65 years old is not that old i am and i work so um you know and at least they claim i work

49:11Ken Coleman:I think we could call it work.

49:13Dave Ramsey:I show up pretty regularly, you know. So, you know, yeah, you can do that. You can go do something. I don't know what your past career was, but go pick up a job doing that as a consultant or anything. And him, too. Again, you don't have to go swing a hammer. No. And you don't have to do something, you know, carry a waitress tray of 800 pounds or something. I'm not asking you to do that. But I think there's something you guys could do to generate a few thousand dollars a month and a few thousand dollars a month to make this credit card debt go away. Yeah. Because it needs to go away forever. This is not a sustainable situation.

49:52Dave Ramsey:So first thing is reprioritize and take care of you, what we call the four walls of your house, food, shelter, clothing, transportation, and utilities, before you pay any bills. You eat first. Then you pay bills. You don't pay bills and then hope you can eat. Then secondly, we've got to get your income up to be able to address this overall issue. Or we've got to start selling stuff to cover it. And I don't think that's viable here. I don't think your house is crazy. I mean, if you're living in a million-dollar house or something, I'd probably have you move down in-house and clean up this mess.

50:25Dave Ramsey:But your house is not out of control. Your cars are not out of control. Thank God they're paid for. But your problem is you just do not have enough sustainable income to live on. And that's what caused the credit card leakage to your part. That's right.

50:40Ken Coleman:There was a margin issue. So here's why baby steps two and three are so important. You've got to get that debt paid off. But then you've got to have that three to six months of emergency fund so that you aren't tempted to solve the problem with a credit card. There just was no margin for you to be able to have a rainy day fund. It's really important at the advanced age here to have a really well-funded. I know. Hey, look, man, I'm not far behind, all right? I'm trying to catch you. But, I mean, it's really true, though, because if you have limited income at that age and a car goes out for$1 ,500 and you don't have an emergency fund.

51:17Ken Coleman:You fix it.

51:19Dave Ramsey:That's what they do. Yeah, yeah. So that's the things that we would tell you to do, kiddo. And hang on. We're going to set you up with a free offering on EveryDollar, the app. and that helps you put your budget together. And you and your husband sit down and look at the numbers and the numbers are going to tell you, eat first, pay bills last. That's a short-term fix. Your long-term fix is create income to clear off these credit cards and chop them all up. Light a candle tonight and have a plastic surgery party.

52:01We'll be right back.

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53:54Dave Ramsey:Bethany is in Ashland, Kentucky. Hi, Bethany. How are you?

53:59Ken Coleman:I am so thankful you took my call. I'm doing well, Dave. How are you guys?

54:03Dave Ramsey:Better than I deserve. What's up?

54:07Ken Coleman:So my husband and I are ready to sell everything and change our entire lives. We need your help.

54:13Dave Ramsey:Okay.

54:16Ken Coleman:We started out with$750 ,000 in debt when we first started our journey and we met you. And we got that down to$450 ,000. Well, actually$439 ,900 now.

54:30Dave Ramsey:Way to go. That's a bunch.

54:33Ken Coleman:It is. It's crazy. And we are just, we have this unique situation where we bought a house on 125 acres in Kentucky. It's a beautiful farmland, but we've always known we would want to build our house one day. The house that's on it is not our ideal home. And I know your principle is, if you don't love it, you know, maybe you can consider selling it. And so that's kind of where we are. The house we bought was for$190 ,000. It was a steal. The house and acreage? Yes, sir. That includes the$125 ,000.

55:11Dave Ramsey:So the house and the 125 acres was$190 ,000.

55:15Ken Coleman:Yes, sir.

55:15Dave Ramsey:I got you. I'm catching up. What is the$439 ,000 in debt?

55:22Ken Coleman:$250 ,000 is what is left of my husband's medical school student loans.

55:27Dave Ramsey:So your husband's a doc?

55:30Ken Coleman:He is, and he's a great doc.

55:32Dave Ramsey:Great. What's he make?

55:34Ken Coleman:Um, currently he makes$325 annually,$16 ,000 a month is his base salary.

55:42Dave Ramsey:Okay. And, um, you have$250 in medical, and I assume you have this mortgage or something owed on the land. Is that right?

55:52Ken Coleman:It is$162 ,000 outstanding. So is that the two debts?

55:56Dave Ramsey:That's it, isn't it? That's the whole thing, isn't it?

55:59Ken Coleman:No, sir. It's$19 ,500 for a car. It's actually a 10-day payoff. I just called today, and the 10-day payoff is$19.5 on our Honda Odyssey. We have five boys, ages six and under. And so is that your only three debts? $8 ,400 left on a sawmill for a total of$439 ,900.

56:21Dave Ramsey:And all of this was purchased before you decided to get out of debt?

56:29Ken Coleman:um i'd like to say that but we got married in 2016 and that's when we moved from ohio to kentucky and bought a house because the land was a steal and we we had not yet been convinced okay from the time you started getting out of debt did you buy a honda odyssey and a sawmill no not since we've got this um okay not since we've got this okay so you're not you're

56:54Dave Ramsey:You're not falling off the wagon. You're just plowing through past mistakes.

56:59Ken Coleman:Yes, sir. We want to get out of this stuff, and we're ready to sell everything. You make$325 ,000.

57:04Dave Ramsey:You've already paid off$300 ,000. I don't know why. I mean, and your mortgage is a portion of this. Mortgage is baby step six. So, I mean, I think you can be debt free with that great income. You should not have any personal overhead to amount to anything. You pay off the sawmill in the Odyssey pretty quick, and then let's tear into the medical debt, and you should be done in a couple more years, shouldn't you?

57:30Ken Coleman:Well, sir, I love that, but my husband and I have been discussing this, and we think that we could get$450 easy out of our house if we sold it today.

57:41Dave Ramsey:Okay, then where are you going to live?

57:43Ken Coleman:And sold everything, because we can sell the house for$450 if we put the offer for$500. We can sell the sawmill for$30K. We can sell the dozer for$30K. We can sell our car for$19.5 and buy a beater. And then we're like, where are we going to live with five boys? Do we rent? Do we buy something for about$100 to$150 with whatever equity, whatever what, after we sell everything, you know what I mean, all the assets? I mean, I'm talking full liquidation. Go Dave Ramsey. Like, we are done. Well,

58:17Dave Ramsey:you know, full Dave Ramsey is not necessarily full liquidation, okay? That's, you know, we're going to liquidate with wisdom and to accomplish the goals. And accomplish the goal you want to accomplish. But for sure, I'm selling a bulldozer and a sawmill, no question about that, in a heartbeat. And if you want to move, if you don't like the property and you want to move, well, sure, you could move down. And that's not as a temporary measure. but then you're sitting there with$325 ,000 income and zero debt, the first thing you're going to do is start stacking cash to buy another piece of real estate, right?

58:50Dave Ramsey:Right. Yeah, and that's okay. But just think through where you're going to live and what you're going to do. Let's not do this impulsively. I want to have a strategy. You know, okay, my desired future is to be debt-free. What must be true for me to get there? Well, I could sell everything. Where would I live in the meantime? Okay, what would I drive in the meantime? You've got to solve for that. If you solve for that and you're okay with the answer to those questions, then do it. But it's not the only way out. You have a fabulously large income, and you live in an area with zero cost of living.

59:26Ken Coleman:Yeah, I've got a question. If we could just eliminate the debt, some generous person comes along and pays off the debt, would you want to stay on that property and build a really nice house where you are now? No, sir. That's the downfall about the property. There's no other house seat to build on.

59:44Dave Ramsey:Okay, then sell it.

59:45Ken Coleman:See, that to me is the ultimate on should you sell the house.

59:48Dave Ramsey:Yeah, it's not because of debt. It's because you're not going to stay there anyway. Yeah, so do it. So sell it.

59:53Ken Coleman:Right. We are rich. I love it. Listen, listen, I rented for two years.

59:58Dave Ramsey:You love it, but you're not going to stay there.

1:00:00Ken Coleman:Right. No, I think she loves the strategy. Yeah, we want to build a house for sure. My husband and I have a dream of building a business that's multi-generational impact where our boys grow up into, and it could be a family thing. Okay, so that land and this house don't figure into the equation, true or false? That's true. Then sell it. Then sell it.

1:00:22Dave Ramsey:But that's different than, it doesn't fit into the equation for your future. It's different than I'm selling everything, including every stinking thing I love, and I'm going to cry when I sell it just to get out of debt. That's a different answer. And so you're not doing that. You're selling stuff you're going to sell anyway because you're not staying there. If you win at the end of the game, you're not on that property. And so sell it now and advance the piece around the board. That's what you're saying. And, yes, definitely sell the sawmill. I don't know whether you sell a stupid car or not.

1:01:00Dave Ramsey:Again, you've got a$325 ,000 income. You ought to be paying that car off in a couple of months and keep it since you've got a tribe of youngins to run around in a hotess with, right? So I don't care. You make enough money for that to not be my problem. But, yeah, you get rid of the mortgage and the sawmill and whatever and the medical debt hanging around your neck. And you rent something for two years and you buy a big old piece of ground somewhere for cash. And then you start talking about how we can build a house on that ground. And you work your way back out of this. And it's a five-year plan.

1:01:34Dave Ramsey:And three of those years are probably going to be somewhat uncomfortable. We'll call them the adventure years. Yeah.

1:01:41Ken Coleman:But with all those boys, five boys under that age group, they're going to tear it up anyway. So just go rent, let them have some land, you know, get a ranch with plenty of rooms. And I love this idea of now you've got this doctor who's got a huge upside, zero debt. You're actually really fortunate to be in this situation, to have this land.

1:02:02Dave Ramsey:Considering the mess you made, yeah. So, yeah, I'm with you. Okay. It took me a minute to catch up. I just want to make sure you're not only doing this. And I do want people to get out of debt, and I do want you to sacrifice to get out of debt. And I do want you to do this, but I want you to do it with a plan and with a strategy, not just, you know, Dave Ramsey said. That's not a strategy. That's right. Okay, a strategy is I want to be debt-free for my family so that I get control of my largest wealth-building tool, which is my income, so that I can invest and change my family tree and create a generational business.

1:02:38Dave Ramsey:That's exactly right. You work through your so-thats. That's why you're doing it. And, yeah, I just want to get there as fast as I can. She's saying, well, do it. Sell it. And it's over. Pull the plug on it. And, by the way, go ahead and put the sawmill and the bulldozer under the stupid column. and put a check there.

1:03:27Thank you.

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1:05:15Dave Ramsey:Are you sick and tired of working so hard and have nothing to show for it? I feel like a rat in a wheel, Dave. Run, run, run, run, run, run, run, run, run, run, get nowhere. Well, that's normal. Normal's broke. You don't want to be normal. You want to have a different plan than that. You don't have to live that way. Our Every Dollar Budget app will help you find the extra money in the margin to start to clean up the mess and then to build wealth and increase your generosity. Yeah, he gives you a personalized plan to beat death and become wealthy. In 15 minutes, you're going to find thousands of dollars in hidden margin.

1:05:48Dave Ramsey:We know how to do it. We're going to show you how. And then you're going to have like us in your pocket walking around, like me telling you what to do, the other Ramsey personalities telling you what to do the whole time. Start every dollar for free in the App Store or Google Play. Amber's in Kansas City. Hi, Amber. How are you? I'm good.

1:06:05Ken Coleman:How are you?

1:06:06Dave Ramsey:Better than I deserve. What's up?

1:06:11Ken Coleman:Apologize. I'm highly emotional. I am in the process of getting divorced, and I am terrified I'm going to lose my home. I own this home with my daughter prior to getting married. I had$100 ,000 inheritance put down as a down payment, so my mortgage was$118 ,000 total. And after that, and I met my husband and he got the mortgage in his name only, but my name's on the deed too. And I found out that accidentally he had ran up a bunch of debt.

1:06:56Dave Ramsey:On the house?

1:06:58Ken Coleman:Against the house and in loans and credit cards. and the situation became very dangerous. So I got a contact order and the judge ordered that he pay for X amount of dollars for so long and he purposely did not pay, which got everything behind.

1:07:22Dave Ramsey:So what did the judge say then? The only way we used that as a means to get him to sign a divorce,

1:07:34Ken Coleman:Like settlement?

1:07:35Dave Ramsey:Oh, so you let him off so he would go away.

1:07:38Ken Coleman:No, I didn't have a choice.

1:07:40Dave Ramsey:Yeah, you had a choice. You just chose to let him off so that he went away. I don't blame you, but that's what you chose. Okay, so how much is owed on the house now?

1:07:55Ken Coleman:$214 ,000.

1:07:56Dave Ramsey:Right. And what do you make a year, hon?

1:07:59Ken Coleman:um last year i made about 47 000 gross okay all right i won my own business out of the home and i have somebody that's willing to help co-sign no and we get you've already got a

1:08:15Dave Ramsey:mess you don't need to make it worse um what's the house worth three hundred and fifteen thousand Great. Okay. What other debts did you take on to get rid of said deadbeat?

1:08:30Ken Coleman:Just what he put in on his house.

1:08:33Dave Ramsey:So$214 ,000. About, yeah, about$100 ,000 because the mortgage was$118 ,000 before he came around. Yeah, but I mean, you've got a$214 ,000 debt now on a$300 ,000 house. You make$47 ,000 a year. All right. How's your business doing? Is it growing?

1:08:50Ken Coleman:Yes.

1:08:52Dave Ramsey:How long has he been gone?

1:08:56Ken Coleman:He had to move out in July. Okay.

1:09:00Dave Ramsey:And you're safe now, right?

1:09:06No.

1:09:08Dave Ramsey:Why aren't you safe now?

1:09:13Ken Coleman:Because he still comes on the property. He's highly intelligent. He shut down my cameras.

1:09:21Dave Ramsey:Shut down your what? Did you call the police?

1:09:26Ken Coleman:They won't do anything.

1:09:28Dave Ramsey:You have a no contact order. Of course they'll do something.

1:09:31Ken Coleman:You can't prove when somebody shuts down your cameras. You can't prove it.

1:09:40Dave Ramsey:What is your business?

1:09:44Ken Coleman:I run a dog daycare and boarding business, and I make a lot of money compared to doing social work, which is what I did before. And this is what I'm meant to do because I've asked God.

1:10:00Dave Ramsey:Okay, kiddo, listen, stop a second, okay? You can't breathe because you're terrified. So we have to solve for making sure that the abuser goes away or goes to jail. Otherwise, you have to go away and reset your life somewhere else so that you can breathe again.

1:10:25Ken Coleman:This is not sustainable.

1:10:26Dave Ramsey:No one can live in this stress. I know, but it's a process because he was drugging me and raping me,

1:10:35Ken Coleman:and so I have stuff turned over to the police.

1:10:38Dave Ramsey:But that was all before July. He's been gone since July, and the only thing since then has cut down cameras, right?

1:10:45Ken Coleman:Yes.

1:10:46Dave Ramsey:Okay. So here's the thing.

1:10:48Ken Coleman:I can't move because if I move it, the same things will happen. So running from it isn't the answer.

1:10:54Dave Ramsey:Why would the same thing happen?

1:10:57Ken Coleman:Because he messes with the technology. Like the other day he started with, apparently you can get an app for a sound bar.

1:11:06Dave Ramsey:Okay, just a second. And he's been messing with that. Wait a minute, wait, wait, wait, wait, wait. Now we're starting to sound. Okay. Now, okay, so you need to contact your attorney. You need to contact the police and you need to contact your pastor and you need to get some people in your corner. It sounds to me like just in the few moments I've had with you that I'm talking to a terrified lady who is dealing with extreme trauma. That's what it sounds like to me. It sounds like my little sister has been through hell and now you're looking over your shoulder at every shadow. And I really don't blame you for that because you've been through extreme stuff, kiddo.

1:11:45Dave Ramsey:but it sounds like you're probably going to have to go start a fresh life somewhere else. The good news is you know how to care for animals, and you can restart a business somewhere else while you work another regular job to get that started and take your$100 ,000 out of this house and move cities and go somewhere else, and let's just start fresh. You need a lot of distance between you and all of these events and this moron. Do you agree with that? yes but and he's not he's not all powerful he cannot find you when you just simply leave

1:12:24Dave Ramsey:he's not all powerful he's just a moron

1:12:30Ken Coleman:he works in it he's highly intelligent you've told me that three times i don't think he's

1:12:35Dave Ramsey:highly intelligent. I think he's a bully and an abuser and a twerp. He's trash. I don't care if he's highly intelligent. He's not that intelligent. He's got you believing he's omnipotent, but he's not omnipotent. I'm not impressed. You need to leave and go get you a life, kiddo, somewhere. You've got to do something different. This is not working. And, you know, staying there saying he's highly intelligent and he keeps coming on your property and nobody can do anything about it is not a solution to your problem. That exasperates the problem. So we have to throw some dynamite in this situation and something has to change.

1:13:22Dave Ramsey:And I don't give a crap if he thinks he's highly intelligent. I kind of doubt it, actually. I think he's got you believing a bunch of stuff that's simply not true. He has completely got you what we call buffaloed. But I don't blame you. You've been traumatized by the jerk. But I'm telling you, if I'm you, if I – oh, wait a minute. Where are we going? Where are we going? Okay. So, hey, Amber, do you not have family in the area?

1:13:51Ken Coleman:No, they live a couple hours away.

1:13:54Dave Ramsey:Good. Go be with family this week. Mm-hmm. Pack your suitcase, get your kids, call your clients and tell them you can't keep dogs this week and leave. You need some distance between you and this. Does that sound like something smart to you? You're going to have to take some action steps. Okay, because your dad and your brothers need to know this so they can beat the hell out of this guy. Somebody needs to stand up to this guy, okay? And it's not you. Somebody needs to get between you and this moron, and you've got to get some distance between yourself. So you need to check yourself into a domestic violence shelter, or you need to go be with your family tonight, right now.

1:14:40Dave Ramsey:Get off the phone, go pack your suitcase, and go do that right now. You've got to put somebody in between you in this mess where you can start to get your perspective back. But you have some options. They're not pretty, but you have some options.

1:15:21Dave Ramsey:The Ramsey Show Question of the Day is sponsored by YReFi. If your private student loans are in default, it's a mess. But Y-Refi can help you clean it up. Y-Refi helps borrowers refinance with low fixed rate payments and a clear plan forward. So you can clean things up and get back to making real progress. Go to Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states.

1:15:48Ken Coleman:Today's question comes from Declan or Declan. Let me say that right. I think it's Declan in California. I'm 20 years old, run my own business, and I'm on track to earn$250 ,000 this year. The income isn't consistent yet, but it's growing. I have$100 ,000 in savings, and my only debt is$20 ,000 on my current car, which is worth about$25 ,000. I'd like to buy a used C8 Corvette for$50 ,000. I could pay cash, but I was thinking about financing part of it to keep liquidity in my business and build credit. My business relies heavily on personal brand and social media. Image and perception matter in a car like this could help with credibility and marketing.

1:16:24Ken Coleman:I don't want to make a decision that looks successful but is dumb financially. Is buying this car a reasonable move if I can afford it? Okay, so we have a lot in that question. Well, first of all, we want you to follow the baby steps, right? So you've got$100 ,000 in savings, and your only debt is$20 ,000 on the current car. So we need to pay that off or sell it. And at that point, then you're looking at the used Corvette for$50 ,000. The question, Dave, I bring you in here, I know our formula on assets like a car, which is not actually an asset, depreciates. If it's in his business and he can pay cash and it's for his business, is that a viable option there?

1:17:09Ken Coleman:Again, assuming he's got the cash.

1:17:11Dave Ramsey:No, I wouldn't buy it for that. But if you make$250 ,000 a year, can you drive a$50 ,000 paid for car?

1:17:18Ken Coleman:Yeah.

1:17:18Dave Ramsey:If you pay cash for it, yeah, you can do that. It's that simple. But all this other crap about I'm going to look successful or whatever. Here's a good way to look successful. Be successful. Yeah. It feels like some rash now. Quit worrying about how you look. Instagram is not the real world. even if you are making your 250K on YouTube or Instagram as an influencer at 20 years old. That scares me. But, yeah, if your income is steady at 250 and above, you really think you're going to be making that, can you afford to drive a$50 ,000 car? The answer is yes, if you pay cash for it. Right. And so, yeah, I would sell my current car and I would buy the Corvette for cash.

1:18:03Dave Ramsey:But I wouldn't do anything about, I wouldn't run all this credibility and marketing and all that BS through your head. I'd just go, I want a Corvette. I've got the money, and it's not a big percentage of my overall world. And that's, you know, our rule of thumb is if you can pay cash for it, it's not brand new. And all of the things that you own with wheels and motors are less than half your annual income because they all go down in value. Then, you know, it's okay to purchase that. and don't buy a new one unless you have a net worth in excess of a million dollars. Those are our three contact rules on vehicles of any kind, cars, boats, pop-up campers, whatever else, right?

1:18:48And so I was in a city, I'll just say, in Ohio last week working.

1:19:00Dave Ramsey:We were out there traveling. And we went by, I guess that city they make, or maybe the manufacturer or something of RVs is there. I've never seen so many thousands, thousands of RVs parked all across the side of this hillside. Wow. It just blew my mind. I thought, that is a lot of rust. Yes. That is a lot.

1:19:30Ken Coleman:Yeah.

1:19:30Dave Ramsey:Because every one of those stinking things is probably$100 ,000. Oh, yeah. And more. And there's thousands of them. Where are those things going? It just blew my mind. I felt like a country boy going to town. I'm like, what are they doing with those things? But it's crazy. You know, it's funny. They're making money on the financing of all of those.

1:19:49Ken Coleman:That's where the money's at.

1:19:50Dave Ramsey:I guess. Because, man, they're sitting out there in a field rotting down, looked like to me. Oh, my gosh. Really? I'm sure they're being shipped to China or something. I don't know. Wow. Crazy. Yeah. So, Declan, in business, when you do anything for appearances, you can write that down under the dumb column. We don't do stuff for, we do things that give return on investment in business. And trying to appear to be something is never a return on investment. Just be the thing, and then people will figure out that you is the thing.

1:20:29Ken Coleman:Yeah, like if you're basing all your success on the car that you put in social media, TikToks or Instagrams, you don't have to spend cash on that. I'd go rent a car like that. That's where you start rationalizing. A number of these guys that are music artists

1:20:43Dave Ramsey:and they rent a jet for the day to do their video and it never leaves the ground.

1:20:49Ken Coleman:That's exactly right.

1:20:50Dave Ramsey:Like they had a jet.

1:20:51Ken Coleman:Such an illusion. So play the game and that's a fraction of the cost.

1:20:56Dave Ramsey:Yeah. Wow. Julie is in Houston. Hey, Julie, what's up?

1:21:00Ken Coleman:Hey, we're big fans. Thanks so much for taking my call today.

1:21:04Dave Ramsey:Thank you. How can we help?

1:21:06Ken Coleman:Well, okay, I have a question about a specific long-term care option. So it's an indexed universal life insurance policy. No, it sucks. That's it. Okay. And a long – okay. So here's the back story is. So my husband and I are nearly 60. We're pretty healthy. We're still – I'm still working. Husband's semi-retired. What's your next day? We have in college. We have about$2 million in mutual funds. We have no debt.

1:21:39Dave Ramsey:Whoever's trying to sell this to you, stay away from them.

1:21:43Ken Coleman:Okay. So we're getting a little money from an inheritance, about$100 ,000. So that's been our question is for 50, for two$50 ,000 premiums, we could buy this thing, you know, which, of course, if we do get sick, has six years of a really good payout. Or we could just put it in with the rest of your investments.

1:22:10Dave Ramsey:If I were if I had three million dollars, let me tell you, I'm 65. OK, net worth of hundreds of millions. I am not, I'd have zero long-term care insurance. I want to buy long-term care insurance for people. I want people that have a million dollar or less net worth to buy long-term care insurance because a nursing home stay is a hundred, a hundred and a quarter a year right now. And the average time is 2.9 years. Yep. So you got a$300 ,000 exposure is what you got on average. You can self-insure that with$2 million. Yeah.

1:22:43Ken Coleman:Okay. Okay.

1:22:44Dave Ramsey:Just to self-insure it. I would not. I would just, if he has to go to the nursing home, and by the way, he will before you on average. Seventy-five percent of the ladies outlive their husbands.

1:22:55Ken Coleman:Yeah, well.

1:22:56Dave Ramsey:That's the average.

1:22:58Ken Coleman:He'll be a beast in a nursing home, so hopefully he won't make. Yeah, well. Hopefully he won't get there.

1:23:02Dave Ramsey:Or maybe it's long enough that the$2 million is$10 million, and you just hire somebody to live at the house and take care of him.

1:23:08Ken Coleman:Yeah, okay. That's kind of what we were wondering. I mean, it sounded good, but. It doesn't. It isn't good.

1:23:14Dave Ramsey:It's a piece of crap. It's whole life, life insurance that you're prepaying up front. And then supposedly the cash value will cover your long-term care insurance. You'd been much better off to just invest the money and let the interest off the money by your own long-term care insurance. But even better yet, in your situation, you guys can self-insure through it. Yeah.

1:23:35Ken Coleman:Okay.

1:23:36Dave Ramsey:But long-term care insurance is excellent if you're over 60 and your net worth is under a million, million and a half.

1:23:42Ken Coleman:Oh, interesting. Okay.

1:23:43Dave Ramsey:Okay. Okay. But never, never, never, never, never use life insurance as an investment. 100 % of the time those policies suck. And this one sucks particularly bad. Index Universal Life is one of the worst products on the market today. And it's only sold by those goobers that sell it. Everyone else in the financial world looks at it and laughs at these morons like they are the payday lender of the middle class. So, again, if this is your financial planner pitching this, you need a new financial planner. I don't know who's pitching this to you. Or if Charlie over at the church, then you just need to distance Charlie to no business with Charlie at the church.

1:24:24Dave Ramsey:If this is what the crappy pedals is. Hope I wasn't unclear. Just be careful of Charlie.

1:24:30Ken Coleman:He's not all smiles and handshakes, folks. By the way, my favorite line of that is, he would be a real bear at the nursing home. She knows. I got to get a nurse for my husband. He would terrorize them. A large nurse ratchet.

1:25:17Dave Ramsey:welcome back to the ramsey show in the fair winds credit union studios i'm dave ramsey your host ken coleman ramsey personality and number one best-selling author is my co-host today naomi is with us in los angeles hi naomi how are you i'm good how you doing sir better than i deserve. What's up?

1:25:38Ken Coleman:Well, first of all, I want to thank you for taking my call. I have$112 ,000 in debt. I have four credit cards, and I also have a car loan and a personal loan, some student loans. The student loans right now are deferred. I currently have, totally, I have actually three jobs. I have two jobs that make me about$90 ,000 a year, and then I have another job, which I'm a waitress and I make about$12 ,000 a year and that's cash paid.

1:26:10Dave Ramsey:Okay. So that's like$102 ,000 is your income and you have$112 ,000 in debt. Agreed?

1:26:18Ken Coleman:Yes. Okay.

1:26:19Dave Ramsey:How old are you?

1:26:21Ken Coleman:I'm 40.

1:26:22Dave Ramsey:Okay. Are you single?

1:26:25Ken Coleman:I'm a single mother. Yes. I have two.

1:26:27Dave Ramsey:How old are your babies?

1:26:29Ken Coleman:One of them is 18, and the other one is 7.

1:26:33Dave Ramsey:Okay. All right. 18-year-old adding some income to this equation?

1:26:40Ken Coleman:He's starting to. When? He has a part-time job, and he's seeking a full-time job. Yeah.

1:26:51Dave Ramsey:Time to be a man, my son. Yes. Yeah, because his princess warrior single mom mother has helped him get all the way to 18, and now he needs to not be a burden but instead be a blessing. Okay, that's one thing. Okay, cool. All right, so it sounds to me like that you've been raising two kids on your own in the Los Angeles market, and this is a very tough road, and you work your tail end off, and you feel stuck.

1:27:19Ken Coleman:That's correct. I currently have, by Friday I'm going to have$9 ,000 in cash, which I'm trying to pay a credit card off, and I have my emergency fund of$1 ,000 in euro money.

1:27:35Dave Ramsey:Euro? Why is it in euros? I was stationed in Europe, and so I brought back some money that I had myself. So you were in the military?

1:27:49Ken Coleman:Yes, I am.

1:27:50Dave Ramsey:Oh, you are now?

1:27:52Ken Coleman:Yes.

1:27:53Dave Ramsey:Okay. Thank you for your service. Okay. I would convert the euros to dollars immediately. We're not playing foreign currency. We're just trying to have$1 ,000. Okay.

1:28:04Ken Coleman:That's correct.

1:28:05Dave Ramsey:And then I'm going to list all of your debts, smallest to largest, and I take it your credit cards are probably your smallest debts, correct?

1:28:13Ken Coleman:That is correct.

1:28:14Dave Ramsey:Yeah, so list them smallest to largest. We're going to pay minimum payments on everything. cut up the credit cards, and get in attack mode. How much do you owe on the car?

1:28:24Ken Coleman:On the car, I owe$30 ,000.

1:28:26Dave Ramsey:That's a lot. Okay. And the student loans, are they on hardship deferral?

1:28:34Ken Coleman:They're on deferral.

1:28:35Dave Ramsey:Good.

1:28:37Ken Coleman:They're$30 ,000 on that.

1:28:38Dave Ramsey:That's where they need to be right now. Okay. So that's 60 of your 112 is those two things. And then you've got a personal loan. And what is that, just at the bank or credit union or to an individual?

1:28:51Ken Coleman:It was through a credit union.

1:28:53Dave Ramsey:Okay. All right. Ouch. And how much is it?

1:28:59Ken Coleman:That one is, I believe, 24K.

1:29:04Dave Ramsey:Okay. All right. So here's what I would do if I were in your shoes. It sounds like you've kind of got this on the run a little bit. And number one, 18-year-old starts bringing some money to the table, and he at least carries his own weight, no pun intended. Okay, number two, we're going to list our debts smallest to largest and attack them in that order after we've converted the 1 ,000 euros into$1 ,000. Okay, and that's probably going to give you a little extra to throw on the other things. So we're going to list the debts smallest to largest, attack them in that order. We're going to get on an every dollar budget.

1:29:40Dave Ramsey:Every dollar needs to behave. What you have tried to do and have successfully, somewhat successfully done, is survive. And while you were surviving, you just thought, I can work hard enough and be real careful and everything will work out. And it didn't. You work hard. You work like a crazy person. You're a hero. You took care of your kids. You're amazing. I'm so proud of you. So are you getting child support on the seven-year-old? No. Why?

1:30:14Ken Coleman:He makes about$150 ,000 to$170 ,000, and he pays zero for child support. Why?

1:30:27Ken Coleman:I don't know. Well, I think you should drop by the JAG office and say,

1:30:32Dave Ramsey:Gentlemen, I need some help. I think JAG will help him pay. They're really good at it, by the way.

1:30:43Ken Coleman:Okay.

1:30:44Dave Ramsey:Like Tamara.

1:30:47Ken Coleman:Yes.

1:30:47Dave Ramsey:Yeah. Give him all of his information. Say seven years. He's never paid a Diamond Child support. And, you know, that's what JAG's for. They're for you. They're going to help you out. They'll take care of this. It'll be amazing how efficient they are at it. Because in the military, they do it all the time. So you guys, you know, take care of you, and you should be taken care of. All right. So that'll help, too. and I want you on that every dollar budget because I want every dollar to behave. I want you to pretend like I hired you and I'm paying you$100 ,000 a year and your job is to get these bills paid.

1:31:23Dave Ramsey:And you would be very detailed if I told you that, right?

1:31:27Ken Coleman:That is correct.

1:31:28Dave Ramsey:Yeah. And so I'm going to give you every dollar and get you signed up for it because it's going to guide you on what to do and it's going to help you lay out every dollar as an assignment for the whole month. And I just want to commend you, Ken. I mean, to fight what she has fought for all these years, you know, as a single mom working her way through this, it gets lonely and you get tired. Yeah.

1:31:53Ken Coleman:Well, you got three jobs and that doesn't even count the waitressing job. So you get three and a half. So you're not going to be stopped if you've got a plan. But two things I want to circle back to. You need to take this deadbeat to the law and make his life so miserable he starts coughing up money. Don't get weary on that. Take that warrior mindset to that. The second thing is, if you have any equity in that car, do you have any equity at all in the car or are you upside down? I should have equity. How much? It's a Toyota. I don't know. All right. Here's what I want you to do. Okay. Look it up.

1:32:29Ken Coleman:Because that$9 ,000, if you've got some equity, pay that car off. I mean, sell the car, rather, excuse me. Sell the car, take what's left over that$9 ,000, and get yourself a functional car. Because that car payment of yours is pretty big, I'm guessing. What's your monthly car payment? $740. Ma 'am, that's a$85 ,000 raise, essentially. Sell the car and use that cash to get a functional car.

1:32:59Dave Ramsey:It's just paying down the credit cards. I agree with Ken.

1:33:01Ken Coleman:I just want to get you some more breathing room quickly.

1:33:05Dave Ramsey:So let's pretend that the$30 ,000 debt and the car is worth$35 ,000. If you can sell it, get that$5 ,000 in your hand plus this$9 ,000 and buy you a$15 ,000 paid-for car, that's a nice car. Yeah. And now you've got no car payments? Zoom, zoom. We just kick this thing into high gear. Yeah. Because that car is$750. Jeez. Wow. Yeah, that's a good catch, Ken. I walked right by that. I missed it.

1:34:07Ken Coleman:When people hear my story of paying off debt, they say things like, dang, that must have been so hard. I could never do that. And I tell them, sure you can. It's a short-term sacrifice for a long-term gain. But do you know what's really hard? Working your whole life and never having anything to show for it. Never having the long-term gain. Just feeling broke and stressed and maxed all the time. And sadly, that's the hard that most people choose. Listen, you're capable of transforming your situation and living a life of freedom, but you need the right tools to do it, like our Every Dollar Budget app.

1:34:41Ken Coleman:In minutes, it'll build you a step-by-step plan that's tailored to your money situation. And every day, it finds ways you can free up extra money in your budget so you can get rid of your debt and actually build wealth. So make the choice today. Short-term sacrifice, long-term gain. Choose the tool to help you get it done fast. Download the EveryDollar app and start for free today.

1:35:12Dave Ramsey:One of the best things you can do for your finances is to have a really good tax pro in your corner that you can trust. They'll help advise you on the best moves to make your situation for your small business or whatever. Yeah, save some big money on taxes. And if you've had big life changes in the past year, yeah, you need to think about that as well. A divorce, a death, a new big job, something big happened, good or negative, you need a tax pro in your corner, and especially if you're running something complicated or a small business. RamseySolutions.com slash tax pro to find CPAs and enrolled agents that have been vetted by the Ramsey team and are Ramsey trusted.

1:35:53Dave Ramsey:David is in Mobile, Alabama. Hi, David. How are you?

1:35:56Ken Coleman:Hey, Dave and Ken. Thanks so much for taking my call.

1:35:59Dave Ramsey:Sure. What's up?

1:36:00Ken Coleman:Well, first of all, 15 years ago, I was in a bad place. Lots of debt, more than I care to admit. But thanks to you and your team, over the past 15 years, my wife and I are now in Baby Step 7. I've been on the debt-free stage. I've been on the cruise, been to your place. And we're Baby Steps Millionaires. Way to go. I'm proud of you. For all you guys have done. Good for you, man. Along the way, we've raised our kids to be Ramsey kids, I guess. And so my oldest son, he's been married now for about a year. He and his now wife have been through the high school curriculum. They went through Financial Peace University during their marriage counseling.

1:36:44Ken Coleman:No debt, cash flow college, vehicles, everything, no debt. and they've just gotten approved for their first mortgage to buy a home, a very reasonable house, and they've got$30 ,000 to put down. And the mortgage lender kind of threw us a curveball the other day, and she told them if they would take$5 ,000 and put it in an account and use that to secure a$5 ,000 note and pay it for six months, that would give them some credit and potentially lower their rate by up to 1%.

1:37:23Dave Ramsey:You're being overcharged. Okay. If you go to Churchill Mortgage and they do manual underwriting, there will not be a difference in the rate.

1:37:32Ken Coleman:Okay, well, we're actually waiting on Churchill's proposal to come back now.

1:37:37Dave Ramsey:Yeah, they can do manual underwriting, no credit required. You're saying the kid has absolutely no credit at all? Zero credit. Perfect. Yeah. Okay. So has he had a job?

1:37:48Ken Coleman:He does, yeah. They both have a job for a year now. Both have good jobs. She's a school teacher. He's an engineer.

1:37:54Dave Ramsey:They've been paying rent during that time?

1:37:56Ken Coleman:They have, yeah.

1:37:57Dave Ramsey:And they have$30 ,000 to put down? Yes. There's no rate difference whatsoever? Great. So the mortgage lender that you have is incorrect for whatever reason. I'm going to be gentle.

1:38:11Ken Coleman:Okay.

1:38:12Dave Ramsey:All right.

1:38:12Ken Coleman:Well, that's good to hear. Like I said, she has applied at Churchill, and she's waiting on that information to come back. But that kind of threw me a curveball when I heard that. Yeah.

1:38:21Dave Ramsey:Hang on. I'll have Christian pick up, and we'll make sure our team holds their hand and connects them into Churchill, because I don't want them to do this other deal. I want them to get a good manual underwriting mortgage loan. We do it all the time and have for decades with no credit at all. There is no interest rate difference. And so this lady, at a minimum, just does not know how to do it. And so you need to get away from her. It's that simple. So, Ken, George Camel and Whitney bought their first house that way. John Deloney bought his house that way. Lots of other people, thousands and thousands and thousands of others.

1:39:01Dave Ramsey:But a lot of mortgage companies don't know how to do it. And I don't know what kind of hook or crook this lady is trying to pull here. But it's scary. They don't want to do it either. They don't want to screw with it. But, yeah. And so what manual underwriting is before – see, I got my real estate license in 1978. Before there was a FICO score, the banks actually used to do an analysis of the individual in detail to figure out if they could pay the freaking bill. It's called underwriting. And so they would send out, when I would write a contract in 1978, 1982, they would mail out a VOD, a verification of deposit, to the local bank.

1:39:48Dave Ramsey:And the bank would verify that the$30 ,000 is in the bank. They would mail out a VOE, snail mail, a verification of employment to their employer. And he would send back, this is how much they make, this is how long they've been working here. And they would mail out to any creditors, a landlord, and get a record on how they actually paid their rent. That's called underwriting a loan. And you're doing an analysis of the person's life to see if the indications are that they can pay the bill. You have their income. You have their track record with their rent. You have their down payment verified. You do all of those things.

1:40:23Dave Ramsey:And that's how loans used to be written. And then along comes FICO. And FICO is like a monkey can make this loan. it's like they look at the number and go you got the loaner you don't have the loan right and so it's the mortgage business has been dumbed down to where people like this lady is telling this guy to go get a stinking secured loan with her company so she can create a credit score so she can go who got the loan right it's exactly what has happened here yeah and so it's just dumb but uh this is the ridiculous thing of FICO and so FICO has got way too much power it's not that accurate to start with and so uh but Churchill Mortgage and a few other mortgage companies know actually know how to do manual underwriting which doesn't matter if you don't have a FICO score this kid does not have a FICO score because you can't have a FICO score if you don't borrow money it's the only way you can get a FICO score a FICO score measures how much money you borrowed how you paid it back, what type of money you borrowed and how quickly and all that kind of stuff it's an I love debt score so if you don't love debt and you haven't borrowed any money and you don't have any open accounts for a year your FICO score will just disappear I haven't had one for 30 something years and so apparently I'm not here I'm not real, I'm a hologram because I don't have a FICO score.

1:41:50Dave Ramsey:What? Yeah, what? Look at me. I pay cash for stuff. It's crazy. And so that's, you go to a mortgage company like a Churchill mortgage that can do manual underwriting if you have no credit, zero credit. Now, if you got bad credit, that's a different problem. Like you haven't paid your bills on time for two months or two years. You got a different issue then. Yeah. But zero credit is a wonderful place to be, and you get the exact same rate as someone that's stupid enough to have an 800 FICO score, which means you paid the bank sometime or another$100 ,000 in interest because you've been paying and paying and paying and paying and paying, playing their game, playing an I love debt score game.

1:42:34Dave Ramsey:Ding, ding, ding, ding, ding, ding. And that's what people get into. So this kid is second generation and doesn't have a FICO score. That's so cool. It's cool.

1:42:42Ken Coleman:Well, I mean, again, dad starts paying attention to the Ramsey ways. And when you're raised up in that, some of that sticks, right? He's a millionaire. He's a millionaire. So the son gets it. But see, this is the whole thing. You mentioned the word game. It is a game. These banks, they understand what they're doing. They need you paying interest. That's where they make their money. So it's a game. So we're going to create this system that everybody needs to play ball by.

1:43:09Dave Ramsey:Diana's in San Francisco. Hi, Diana. How are you?

1:43:13Ken Coleman:Oh, I'm doing great. Thank you for taking my call. I think you guys are terrific.

1:43:19Dave Ramsey:Thank you. How can we help today?

1:43:23Ken Coleman:I'm 79 years old. I have no debt except for my house. I owe$125 ,000 at less than 3%. I have$96 ,000. I've heard you speak of stock market and mutual funds. and I understand the four ways you put in. I'm wanting to know, actually, if I can do something like that with what little I have. But my initial question is gold, silver, and you have coin, you have solids, you have paper. How are you feeling about gold, silver?

1:44:11Dave Ramsey:I buy my investments, Diana, based on track record. And the track record on gold over the last 50 years is it's earned about 3 % a year. Average. Meanwhile, it takes you on a roller coaster ride that makes you want to throw up. But the average is out about 3%. So I don't own any gold except some cufflinks. That's the only gold I've got. Or silver. And so I think I'd probably sit right where you are. If you want to move a little bit of that into some mutual funds, you could. but be very calm and very careful and learn a lot about it before you do it.

1:45:06Ken Coleman:hey guys I've got big news the Ramsey show is going on tour and this is your chance to be more than just a listener. You get to be part of the show. So hear questions, ask live, and experience the kind of momentum that only comes from being in the room. We'll be in Charlotte, Denver, Phoenix, and Anaheim with a limited number of seats in each city. So last fall, we completely sold out in 72 hours. So do not wait. Get your tickets at ramsaysolutions.com slash events or by clicking the link in the show notes.

1:45:51Dave Ramsey:Good friend of ours just dropped by to talk about his book, Restored. Chris Brown is a pastor, author, speaker, radio personality, church leadership expert. He planted a church here in Columbia, Tennessee, just south of here, just a few years back. I spoke over there yesterday, thousands of people coming out. It's an incredible young church exploding. It's kind of like, Ken, it's kind of like going to a youth conference. A lot of young people. I mean, it's a lot of fun. The praise and worship is a blast. It's a lot of fun. Anything but boring. And Chris and Holly have been friends of ours for 20 years.

1:46:22Dave Ramsey:Chris was on our speaking team here for a while. So me and Ken and Chris have shared the stage many, many times and shared airplane seats, for that matter, a lot of hours flying around all over the place and working together. But the book is Restored, Transforming the Sting of Your Past into Purpose for Today. And Chris, Ken and I, of course, know your story. We've heard you tell the story many times from stage and heard you walk through what God has done in your life. But was there a specific event in your life that made you want to tell this story now?

1:46:57Ken Coleman:Actually, it was a story from being at Ramsey Solutions. It was a story of my first time I ever spoke at Catalyst, that conference back in 2015. It was probably my first big event. And we had a time where we got in a boardroom and we dissected the talk in front of the board. And I was super stressed out about it. And we dissected it. And I was talking a little bit about my past, but I was not peeling off the layers and I was not vulnerable. And someone spoke up in the room. I won't mention anybody, but his initials are DR. Yes, right. Sounds familiar. He spoke up and he said, hey, Chris, people are going to see you on that stage, and they're going to perceive something like a silver spoon kind of guy who's always had it right, and you need to be more vulnerable.

1:47:45Ken Coleman:And I was scared to kind of pick that scab of a traumatic childhood and some really bad things that have happened in my life. And it was at that moment I realized that I need to be more vulnerable and more honest about my past and to steward it. Of course, we are all like big, huge fans of stewardship and love to raise the banner of stewardship all over the place. But one thing that we need to steward, all of us and those of you listening in, is we need to steward our past and steward what's happened in our past so that we can have purpose today with that pain. Yeah, you know our audience well, Chris.

1:48:19Ken Coleman:You know some of the emotions. You know the stories all too well. Well, inevitably, there are a lot of people right now watching and listening to you, and they're in some deep pain. Yeah. You know, maybe some relationship stuff that is causing them to make financial decisions that are causing more pain, whatever it is. Yeah. To the person who is in the middle of it feels almost like it's unbearable. What would you say to them? Yeah, and actually, a lot of the book, I kept this audience in mind because being on this show, call after call of mistakes, of shame, of regret, of guilt, of money mistakes, relational mistakes.

1:48:55Ken Coleman:I would say the goal is that we would take our pain and it would turn into somebody else's hope. I want someone to read this story and read the things that have happened in my life. It's the same thing with you with your bankruptcy. We hear what happened when you came out of the bankruptcy, and it gives people hope of, you know what, if he can get out of that hole, then I can get out of the hole that I'm in. And so I think Proverbs 13, 12 says, hope deferred makes the heart sick, but a longing fulfilled is a tree of life. And so the goal is to, just like the mission statement here, is to inject hope into people's life.

1:49:24Ken Coleman:And if you're listening in today and you've made some mistakes, I love this line when you're speaking and you said, who here has ever made a mistake in your life? And then everyone goes, you know, raise their hand. You know what that makes you? and you say, 13. You know, we've all made mistakes with money. And so that would be my prayer is that everybody listening in would say, hey, yeah, I have made a mistake. I can own it, but I want to steward it and maximize it for future. I want to inject hope into someone else's life.

1:49:49Dave Ramsey:And sometimes the mistake you made and sometimes it was a mistake other people made. I mean, the trauma in your childhood is not your fault. Yeah, yeah. That's the situation around parents that were screwed up and family situation that was dysfunctional and all that kind of thing. And it leaves you without food or it leaves you without shelter or it leaves you without comfort. And that's not that you're a victim of that, but it's still something, it's still a part of your story and it still has value.

1:50:17Ken Coleman:Yeah. Yeah. Well, you meant you use the word victim and of course you guys have all heard it before. We can have a victim's mentality or a victor's mentality. The sting is going to be there in your past regardless. So it's, what are you going to do with it? Are you going to suck the nutrients out of it and make sure that you use it and maximize it and leverage it. For me, I'm a believer. I'm a faith-filled person. So for me, it's leveraging it for the kingdom, leveraging it for eternal impact. But man, all of us who have made mistakes, those of you who have made mistakes with money, take what you've learned, the principles you've learned, and then help your neighbor, help somebody in your class, help somebody in the workplace.

1:50:49Ken Coleman:And that's what the whole book's about, is to leverage whatever's happened in your path. You can't change it, whether it's happened to you or you did it to yourself, and maximize that for the kingdom or maximize that for a maximum impact here on this earth?

1:51:02Dave Ramsey:The book is Restored, Transforming the Sting of Your Past into Purpose for Today. Chris Brown is our guest, local pastor, friend of ours, and a member of our team in the past, and we've gotten to work together all these years. So one of the things that people ask all the time, since we're people of faith, and they ask you the same thing as a pastor, I'm sure, is, okay, if I'm in the middle of this stink, Maybe I caused some of it. Maybe some of it was brought on me by other people. Either way, I'm in the stink. Where's God in the stink?

1:51:34Ken Coleman:Yeah. You know, the world, the Bible says, and I believe it's in Matthew chapter 7. I believe it says, there will be troubles in this world. But Jesus says, but I have come, take heart, I have overcome the world. And so we do have to know that there is evil. There is darkness in this world. So things are going to happen to you. And we have a responsibility to be the light in the darkness. if you've heard it before, a thermostat or a thermometer, we are to bring the light and we are to stay close to Jesus. Whatever you're struggling with today, and you just need to know that Jesus is right there with you.

1:52:06Ken Coleman:That's been huge for me, to know that my hope is not just in wishful thinking, but my hope is rooted in the promises of Christ, a hopeful expectation of a better tomorrow based on the promises and the character of Jesus. It's just a big difference between that and hopeful thinking. Yeah.

1:52:22Dave Ramsey:I've run into so many people that verified the same experience I had 30-something years ago at the darkest of moments. Like, I see absolutely no way out, and I have this strange peace anyway. Yeah. It's like, this does not even make sense that I have less anxiety, and I have no idea how I'm going to get out of this. Yeah. And what it's going to look like. But here I sit at the bottom with a baby and a marriage hanging on by a thread bankrupt, and I have no idea what all this is going to happen, of course. But I remember distinctly sitting there having this peace that passes understanding. Yes, yes.

1:53:02Dave Ramsey:And it's strange. And I think that's God just showing up and going, you're going to be okay. And even if your brain doesn't tell you that, it just soaks through the rest of your body, and the rest of your body goes, for some reason, I think I'm going to be okay. Yeah, yeah.

1:53:15Ken Coleman:Chris, I know you write about this in the book, and your story is very powerful. I'm very excited about our audience checking this out. But one of the things that we humans have to face in the process of healing is dealing with shame. Shame is such a powerful emotion, even years later. How did you unlearn shame, if I could word it that way? Or what would your response be to someone who's just kind of wallowing in some shame? Yeah, I think shame is just, I think it's a gap between your expectations and what actually is reality. So I think for all of us, we just need to understand that we are going to make mistakes.

1:53:47Ken Coleman:So when you make one, you're not shocked. It's not if you're gonna make a mistake, it's when and how big is it gonna be because we are fallen humans. Romans 3.23 says that, that all of us have fallen short of the glory of God. And so for me, that fell off me when I'm like, don't be surprised when you make a mistake. Also, the fact that we learn from our mistakes and that really helps us in the future and it builds our character. So that fell off of me really, really fast that way. And then anytime that you're helping other people, It helps reduce the shame because now you've leveraged something out of it.

1:54:20Ken Coleman:The Bible says in Proverbs 11, 25, those who refresh others themselves are refreshed. And so for me, I've used even my bankruptcy that happened in the recession in 2007, 2008. I've used that to take biblical principles that I've learned from Dave and learned from Ramsey Solutions. And I've tried to just maximize everything I learned that I've clawed and clawed out of bankruptcy to be successful with money again and try to try to restore that shame. So the refreshment now just trumps the shame. Yeah, it's good.

1:54:51Dave Ramsey:Pastor Chris Brown, we're proud of you. Thank you. We love you. Glad you're glad you stopped by again today. You're welcome. Anytime. The book is Restored, Transforming the Sting of Your Past into Purpose for Today. Be sure you check it out.

1:55:19Thank you.

1:55:42Thank you.

1:55:43Dave Ramsey:Hey guys, Dave Ramsey here. Every day on this show we help people work through real money problems and figure out what to do next. Now you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:56:30Dave Ramsey:Our scripture of the day, Proverbs 16, 8. Better is a little with righteousness than great revenues with injustice. Albert Einstein said, try not to be a man of success, but rather try to become a man of value. Ooh, there you go. Felicia's in Chicago. Hi, Felicia. How are you?

1:56:49Ken Coleman:I am so well, Dave. It is a beautiful day and I'm on this side of the grass, so I am praising the Lord.

1:56:56Dave Ramsey:I love it. I love it. How can we help?

1:56:59Ken Coleman:All righty. So I am a 23-year-old blue-collar homeowner from the Midwest. I'm in a pretty, I'll say, uniquely blessed financial situation that I can't really find many resources on just how to navigate. So from age 18 to now, really, I guess I made a lot of really dumb financial decisions. I wrapped up about$15 ,000 in credit card debt, bought a brand new car in 2021, got underwater in payments. And I even took out a debt consolidation loan from those credit cards. You did all the stuff. I did all the stuff, yeah. You know, they say you make up for the mistakes you make in your early 20s and your later 20s.

1:57:50Ken Coleman:I'm doing it now. But I kept using the cards on top of paying my mortgage. And at worst, I was over, I want to say, just over$25 ,000 in consumer debt. So in November 2025, my mom passed away from cancer and left my sisters and me, the beneficiaries of her life insurance policy. And I used that money to completely wipe out all of my debt. Including your house? No, I still have my mortgage. I'm sorry.

1:58:28Dave Ramsey:Okay. So you're debt-free except the mortgage and you make what a year?

1:58:32Ken Coleman:Yes. I make just about a little over$80 ,000 a year.

1:58:37Dave Ramsey:Good for you. Okay. Your question's what?

1:58:39Ken Coleman:Thank you. So I guess my question is that just how should someone who just escaped debt manage money responsibly when they've never had a savings before? I just saved my first$2 ,000 and I kind of feel like a little kid and your mom just gave you a$10 bill it's like restful hands and all that

1:59:07Dave Ramsey:first and foremost I would use the story that is your life as my motivation in other words if I misbehave with money again that is bringing shame to the legacy that my mom left me.

1:59:29Ken Coleman:Sure. I don't want to disappoint her if I'm you. Right. I never thought of it like that. That is a fantastic way of looking at that.

1:59:38Dave Ramsey:So when you look at it and say, I've got to do this because mom got me cleaned up this time, there's not going to be another one of those if I screw up again. And so I need to honor that memory cherish that gift and the way to say thank you for it is to be a grown-up going forward now then once we say that we say okay how do we do anything well well it starts with a plan i mean if you want to get in the car and leave chicago and you say i want to go to florida you don't just start driving you actually load a map call on your gps and it starts to give you a step-by-step first when you leave Chicago you're going to go to Rockford and then you're going or whatever and then you're going to go to and then you're going to go to and then you're going to go to and if you keep doing and then you're going to go to you'll look up and you're in Florida and so if the if Florida is wealth what are the steps what are the what does the what's the map look like to wealth from where you are and uh you know and so we're going to lay out a game plan, that's a budget.

2:00:49Dave Ramsey:And we're going to give you every dollar and give you a trial run on it where you start, where you take this app and you download it and you take your income. And I want you to tell every dollar of your income what to do as if it was your job to manage money for you incorporated. Okay. It's your job now to be an adult, not a child and manage money responsibly for you incorporated and you have to report to your boss. You have to look and turns out your boss happens to be in your mirror. Okay. So your job is to manage money for you because you make too stinking much money and you got this wonderful one-time get out of jail free card and you can't screw this up.

2:01:37Dave Ramsey:So I've got to make this money behave. As you said, I've got to be responsible and I love your attitude. I think you're awesome. And I think you're going to be able to do it. I talk to some people sometimes and I can't tell if they're going to do it or not. I think you're actually going to do it.

2:01:51Ken Coleman:I appreciate that. Thank you so much. And listen, let's get gazelle intense in the baby steps. You know them well. So you are on your way to fulfilling baby step three, right? So what's the target? Is it three months expenses? Is it six months? What are you going to do? Write down a number. Write down a number and just... Chunking money out of your income to get there. That's right. And then once you get done with that, now it's 15 % of that income, and we're going to start investing for your future. And at 23, you're going to be a multimillionaire.

2:02:21Dave Ramsey:If you save 15 % of your income with an$80 ,000 income, you're going to have$10 to$20 million when you get to 65.

2:02:29Ken Coleman:Oh, that is so hopeful. Oh, my goodness. That's the gift your mother gave you if you're a grown-up. If you're a child, you'll be broke and living on social insecurity. Mm-hmm.

2:02:43Dave Ramsey:So choose well. All right, yes.

2:02:47Ken Coleman:I sure will. Oh, that is fantastic.

2:02:50Dave Ramsey:You got it, kiddo. I'm proud of you. You can do this. Mm-hmm. So lay out a written game plan and then use the money that you find in the budget to walk right up those baby steps, as Ken indicated. That is perfect for you. And we're going to do it all in mom's memory, all to honor the free get-out-of-jail-free card that she gave me. and I get a clean slate. I get grace. I get the chance to start over. I get a do-over. Remember playing football in the backyard? You get a do-over. Oh, love do-overs. You know, that's what this is. She got a do-over, man. She gets another shot. That's so cool. Ben is in Austin, Texas.

2:03:26Dave Ramsey:Hey, Ben, what's up? Doing good. How are you, gentlemen? Better than we deserve. What's up?

2:03:32Ken Coleman:All right. I am... Things are going well financially. A few years ago, wife moved out. We're going through separation. comes with lots of lawyer fees. To help me out at one point, a friend gave me a loan for$26 ,000. Good Lord. The backup, this has been the most expensive thing in my life. That was originally backed up against my 401k. And he said, look, you know what? You come March, go ahead and if we need to, we'll do that. I'm typically net cash positive unless a bunch of legal stuff comes up and then all the positives that I was goes out the window. So, here's my question. Cash out 401k and pay that off, or I've been finding some personal loans through you when that's upgraded, so 570s and other things that will end up costing me an extra$5 ,000 over the term to hold.

2:04:27Ken Coleman:So if I cash out my 401k, I'm going to be$20 ,000. $110 ,000.

2:04:32Dave Ramsey:Are you past the divorce now?

2:04:35Ken Coleman:No, sir. We're still in the thick of it.

2:04:37Dave Ramsey:Okay, so how are you going to cover the future legal fees?

2:04:42Ken Coleman:That's part of the issue. I am currently...

2:04:47Dave Ramsey:So this guy loans you$26 ,000, and he wants it back before the drama is over?

2:04:54Ken Coleman:You know, when he lent it, it was... The deal was he would have it back by March? Yes, sir. What made you think you were going to have$26 ,000 by March? You know, honestly, sir, at the beginning of it, well, a couple things. One, I thought I was going to be net positive enough to pay off most of it. Net positive on what? Well, so, sir, typically I'm making net positive$2 ,000 a month. Oh, you're talking about your income.

2:05:23Dave Ramsey:You were going to make enough income to pay him back by March. When did he make the loan?

2:05:26Ken Coleman:Yes, sir. September of last year.

2:05:30Dave Ramsey:Well, honey, you're not going to make$26 ,000 from September to March at$2 ,000 a month.

2:05:37Ken Coleman:Absolutely. So initially the plan was I wasn't going to be able to pay off the full 26 by then, but I was going to pay off a lot of it. So, and to be honest, sir, I was, I need to pay the lawyer and that was, that was where I was at. So how are you going to pay the next lawyer?

2:05:58Dave Ramsey:Yeah, this is a mess, dude. All right. So I would borrow money to keep from cashing out your 401k. because it's less interest to pay your friend off. And you guys got to slow down and do a little math here before you do these deals, son. 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.