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

10:38Ken Coleman:So this is more of a relationship and more of a family question. So my basic question is, how do I get my brother to stop taking advantage of my parents? So context and background is that he is 35 years old, and essentially what his current kind of plan or lifestyle is, he just saves up a bunch of money while he's living at home with them for free, and then he'll go on a trip internationally. And then once he runs out of money, he comes back, and he doesn't have anywhere to go, so he just moves back in with my parents again. But meanwhile, he takes advantage of them and uses their materials for his business.

11:22Ken Coleman:He uses their stuff, and he's also disrespectful all at the same time. I've talked to my parents about this. I mostly talk to my parents about this, so I mostly get their side of the story. But basically, I've tried really hard. Why have they not stopped this then? That's what I've been trying to get them to do.

11:40Dave Ramsey:I'm asking you, what's wrong with your parents?

11:44Ken Coleman:They will not. They love their son too much. They won't set that boundary. No, that's not love.

11:48Dave Ramsey:That's not love.

11:49Ken Coleman:Yeah, that's true.

11:51Dave Ramsey:This is giving a drunk a drink. That's enabling. It's not love.

11:55Ken Coleman:100%. And so that's what I'm wanting help with is I've talked to them about it, and I've been very straightforward and blunt with them, and I've told them, you know, like, if you are not willing to set those boundaries, then it could cost you the relationship. and so I guess they're not listening to me. I'm wondering if I can talk to my brother specifically and if he can coach me on how to help him.

12:18Dave Ramsey:No. Okay. Your brother's a parasite. They don't listen. 100%. Yeah.

12:26Ken Coleman:Wow, he doesn't have any problems.

12:29Dave Ramsey:I know. Your parents are the one that has a problem. Your brother has no problems. Life is good for your brother.

12:36Ken Coleman:I know. Yeah.

12:38Dave Ramsey:But your parents' job is to help him have some problems.

12:42Ken Coleman:Yes, I agree. So I kind of sit in this middle world, and I'm wondering, and it's technically out of my control. Exactly. I'm wondering if there's anything that I can do to kind of help this problem. Well, let me flip this on you. If I met you and I started telling you about something that was really, really bothering me, you could tell I was pretty worked up about it. And then I said to you, but Natalie, I have no control over it. I can't control anything about this. What would you say to me?

13:17Ken Coleman:I mean, I guess technically you're right. So... What would you tell me? You could see I'm all stewed up about it, but I have no control over it. What would you say to me as a good friend or a new acquaintance? What would you say? I guess... I'm not sure. Sure you would. It's kind of frozen. Let it go. That's it. You would just say, hey, you've got to move on. And you said you're sitting in the middle of this. You're not sitting in the middle. You're sitting on the side. You're a spectator. You've actually put yourself emotionally in the middle of this.

13:47Dave Ramsey:You have VIP seats to watch this crap happen. But you're a spectator.

13:53Ken Coleman:Yeah, so that's what I'm hating is I hate watching my parents.

13:57Dave Ramsey:It is really painful to watch people you love do stupid things.

14:01Ken Coleman:Yeah. Let me tell you what I would do on this situation. This is like me walking in the living room and my wife and daughter are watching The Bachelor. I just keep on walking. I don't stop. You know? I already know what that is. Don't get sucked in. Well, I just know how awful that show is and how it makes me feel. And I feel dumber every second that I watch it.

14:21Dave Ramsey:My brain cells just die progressively.

14:23Ken Coleman:But if I sit there and I watch it and I keep griping to Stacey and Josie about it, it's not helping me or them. Because they're not going to stop.

14:34Dave Ramsey:watching.

14:35Ken Coleman:They don't stop.

14:36Dave Ramsey:So, yeah, the only thing I could think of is this. Anytime I'm trying to influence someone, the only thing I can do, there's three possible angles. Your brother's not, is zero chance, okay? I would not bother with him at all. What he needs is a good butt kicking, and you're not in a position to do that, okay? So he needs his butt kicked into the street and into a job and into grown-up land. And he's like Peter Pan. He just never grew up, right? So failure to launch. So now, how do you deal with mom and dad? Number one, I would just tell mom and dad a story about one time that I was doing something and say, you know, I did this, I did this, I did this.

15:17Dave Ramsey:And, you know, when I got out on my own, I felt so much better than when you guys were supporting me. I felt better about myself. And so I don't think my brother feels good about himself because I think y 'all are harming him. And so you could say something. I don't think it's going to do any good, though, because I think your parents are spineless. Yeah. Enablers are the nicest spineless people you will ever meet. When I have been an enabler, it's because I was too freaking chicken to deal with the deal. Instead, I just threw money at it. And that's enabling. I've done that myself. And it's just I'm always ashamed of myself when I do it because you don't help the people involved.

15:56Dave Ramsey:You actually hurt them. And that's where your parents are bringing a great harm to your brother because they've malformed his character in the process. And it's their fault. All he did was just take the path of least resistance. That's all he did. So the second thing I would do is ask yourself, who would they listen to?

16:17Ken Coleman:True.

16:19Dave Ramsey:Brother that they trust? Uncle that they trust? pastor that they trust his old army sergeant that he trusts i don't know who who would that and and talk to that person say would you go talk to them because i can't get through to them and then the third thing i'm gonna do is i'm just gonna pray god mess them up mess this up lord cause a chaos over there let the basement where brother lives flood lord yes break his car lord you know yeah lord lord bring some problems to this situation please god and just pray pray hell down on them and it's just i'm serious because that's that's what's gonna something that's gonna bust here and i around ramsey even when we're working on projects we always say break it before it's broken and i'm just gonna ask god break this before it gets broken because it's gonna get broken it's gonna go sideways and it's gonna be ugly when it does and it'd be better off sooner than lighter.

17:18Dave Ramsey:Yeah.

17:19Ken Coleman:My guess is your parents are afraid of him. You mentioned that he's disrespected.

17:24Dave Ramsey:Yeah.

17:25Ken Coleman:Physically? He hasn't been physical with them, but he has broken stuff in the household before. I'll call the police on him. Yeah. But they're more afraid, not of harm. I think they're afraid that he's going to abandon them. When you see parents that are enabling, And I've seen this so many times. There is a fear that the child is going to abandon them, reject them. And so you're saying, yes, so you've seen this. So I'm only pointing this out because to Dave's point, it's going to take a really special person with real, real authentic leverage in their life to get them to see that this is what's going on.

18:06Dave Ramsey:That they're actually, you know.

18:07Ken Coleman:They're terrified of it.

18:08Dave Ramsey:The best I've ever done with an enabler is to convince the enabler that they're actually doing harm because they think they're doing good. That's right.

18:15Ken Coleman:Well, they think they're avoiding something bad when what they're doing is creating. I can't put them out. He'll be homeless. Right.

18:22Dave Ramsey:Praise God.

18:23Ken Coleman:Right. Yeah.

18:25Dave Ramsey:It reminds me of the prodigal. Don't let them eat. Yeah. Yeah. It's like the Bible and stuff. Yeah.

18:30Ken Coleman:Let them go. And then when they come back, have a nice robe and create a feast. But at some point, the fear of what their life is going to turn out or turn into has got to be bigger than the fear of them being mad at you. And that's a really, by the way, I don't say that flippantly. No. That's a tough choice.

18:49Dave Ramsey:You get to ask that. If you're raising teenagers, you have to ask that question every morning. That's right. I have to explain to them, listen, my job here is not to be, not to make you happy. My job here is not to be your friend. My job here is not to be the cool dad because I didn't sign up for that one either. my job is to raise you into a good adult so you can leave that's my job and then when you leave you can come back when you bring grandbabies this is how the work world works okay and so um but you cannot live in my basement and make grandbabies it doesn't work that way so you need to leave otherwise we don't get grandbabies this is so and i have to train you in how to do that so you have brush your teeth so you have some you have to take your tests and get grades so that you can get a job and make money so you can bring back grandbabies.

19:36Dave Ramsey:Yeah, this is the, there's a goal here.

19:38Ken Coleman:It's a circle of life.

19:40Dave Ramsey:Desired future, right?

20:21Ken Coleman:Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

20:29Dave Ramsey:You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

20:37Ken Coleman:Yeah, and that's why you've always said that having term life insurance from Xander is essential, because it protects your family if the worst happens.

20:44Dave Ramsey:Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long-term disability insurance.

21:00Ken Coleman:Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet.

21:14Dave Ramsey:Now, if your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Xander can help you find the right plan. Whether you're single or married, it's not optional. Well, if you're going to be out of work for a while, then you need to make sure the money's still showing up. And that's why Xander is our go-to. They make it super simple to get the right coverage at the best price, no pressure, no upselling. I've trusted Jeff Xander and Xander Insurance for over 25 years, and so has my family.

21:45Ken Coleman:So don't wait. It's fast, it's easy, and it could make all the difference.

21:48Dave Ramsey:Go to Xander.com or call 800-356-4282. Protect yourself, protect your income, protect your family.

22:08Dave Ramsey:The all-new EveryDollar is here, and it is a game-changer, boys and girls. Watch the premiere on our YouTube channel and see the app in action. By the way, that premiere is pretty incredible. Here are how folks are finding thousands of dollars in margin in just 15 minutes using EveryDollar's new features. So imagine how much you could find to put towards your money goals. Thousands of dollars of margin in 15 minutes. The way we have built this thing out, it's going to walk you right through the Ramsey Plan. From debt to millionaire. That's the process. Baby step all the way out, baby. We're going to guide you, hold your hand, answer your questions, push you, prompt you.

22:50Dave Ramsey:prod you, and all those kinds of wonderful things because we love you. The all-new Every Dollar. Check it out, boys and girls, and check it out on YouTube. All right, Kayla is in Mississippi. Hi, Kayla. How are you?

23:02Ken Coleman:Hey, I'm great.

23:04Dave Ramsey:Good. How can I help?

23:06Ken Coleman:Okay, well, it's kind of a dispute that my husband and I have had for a really long time, and he thinks that our house and our land should be including our net worth. but I don't because I will never, ever, ever sell my house or my land. I mean, no matter what happens, I would not do it. And so he thinks it should be included in that, and so for that reason he has a high net worth for us, I mean really high. And I don't think it's a high because I would never sell it. Okay.

23:39Dave Ramsey:Kayla, I'm sorry you're wrong. Oh, no. Yeah, so I'm sorry you lose the argument, but here's why, okay? Net worth is not about whether you sell it or not. Net worth is simply what something is worth. The definition of net worth is an accounting function. It's a math thing, not a feeling. Okay? And it's not a wish or an intent. It's not what you plan to do with it. None of that really matters. They don't ask that question in accounting. All they want to know is what you own minus what you owe. Assets minus liabilities equals net worth, period. That's your net worth. Now you can say, what's my liquidity, which is your argument.

24:19Dave Ramsey:Your liquidity is the money that you would cash in or use if something came up. And in your case, you would get rid of your husband before you got rid of the land. You made that clear. No, not quite that extreme. Almost. Almost. I mean, we're not sure at this moment, especially since you lost the argument now. But yeah, that's it.

24:39Ken Coleman:Oh, no, that's bad.

24:41Dave Ramsey:What's so special about this land? It must be family land.

24:44Ken Coleman:Well, it's the thing. He wants to retire. He's like, we have this huge net worth, and I want to retire. And I'm like, we have money. Okay, now that net worth does not necessarily mean you can retire.

24:54Dave Ramsey:That's true. Okay? Because what we need to retire is we need net worth that is creating an income. So if you're farming the land, then you would be creating an income with it. But it's just sitting there going up in value. You can't eat that. You're right. Right. You're right about that. That part of the argument, you win. Okay, so your net worth, if your net worth is too off-center on one thing, like dirt in your case, then you can't eat at retirement. That won't work. So what is the rest of your net worth, not counting the land?

25:29Ken Coleman:It's in 401ks and Roth IRAs, and it's$2.7 million or thereabouts.

25:35Dave Ramsey:Well, darling, he can retire.

25:39Ken Coleman:I don't see how because he makes like$200 ,000 a year.

25:42Dave Ramsey:Well, what do you think$2.7 million will create? $2.7 million and 10 % is$270 ,000.

25:53Ken Coleman:That's where I have the disconnect. We've only ever saved, saved, saved, saved, and we've never taken anything out. And so I'm like, really?

25:59Dave Ramsey:We need to check his back for the lash marks.

26:01Ken Coleman:I'm telling you. But you're sweet. I think you're smiling the whole time.

26:06Dave Ramsey:Yeah, you're smiling all the time you kick him out and they were mourning to go to work. Get your butt up, go to work. How much is the land worth? That's hilarious. It's what?

26:13Ken Coleman:I'm sorry, what?

26:14Dave Ramsey:What's the land worth?

26:17Ken Coleman:The house and the land together will probably be around$800 ,000.

26:20Dave Ramsey:Oh, well, that's not even the larger part of your net worth then. Huh, interesting.

26:24Ken Coleman:No.

26:24Dave Ramsey:So how old is your husband?

26:26Ken Coleman:No matter whatever happens, I'm never leaving here.

26:29Dave Ramsey:We got that. Okay, we got that early. Don't question that. So did he, by the way. So the question is this. How old is he?

26:38Ken Coleman:62.

26:40Dave Ramsey:62?

26:41Ken Coleman:62, that's right.

26:43Dave Ramsey:Okay. So sit down with your financial advisor and ask them if—

26:48Ken Coleman:It's him. It's him? He's his financial advisor.

26:50Dave Ramsey:Okay. Yes. Well, maybe you need to get one that will help you guys both look at this and say, because if I were your financial advisor, I could show you how you could invest that money in some decent growth stock mutual funds, which I got a feeling he's already done, and it would create 10 % to 12 % rate of return, and so you would make$200 ,000 without even touching the nest egg. Hmm. Without even touching the 2.7. See, if 2.7 makes 10, that's 270 without touching the 2.7 every year, right?

27:24Ken Coleman:Yes.

27:25Dave Ramsey:Okay. See, that's without touching the nest egg. and um and he's he's 62 and um you know if anything really goes wrong you could sell the farm no i'm kidding i couldn't resist yeah yeah it's too easy it's an underhand pitch it's t-ball

27:44Ken Coleman:never ever ever ever ever no matter what ever nuclear apocalypse guarantee you kayla's on the

27:53Dave Ramsey:You guys have done a wonderful job together because you're fun and you're focused and you don't spend money. You save money. And he's done a wonderful job, if he's been the one managing this, growing it at 62, to have$2.7 plus an$800 ,000. So your net worth is$3.5. Way to go, Mississippi. I love it. I'm proud of you. You did great. Now, if he wants to retire, he can afford to retire. For sure.

28:19Ken Coleman:I don't think he had much choice. I think Caleb made that poor guy save and invest, which is good, which is good. Good for him.

28:26Dave Ramsey:Well, that way they don't have to sell the land.

28:30Ken Coleman:I thought it was going to be some, like, massive track of land worth millions of dollars.

28:35Dave Ramsey:I thought they had 2.7. The land's worth 20 million or something. Yeah, I thought it was 800 grand. It's not even the bigger part.

28:41Ken Coleman:There might be a price you would consider.

28:45Dave Ramsey:But she does make – I'll tell you, the conversation is a good point for everybody listening, though, okay? When you have to have enough of your net worth tied up in income-producing assets to be able to live off of that income. In their case, it's a very simple formula, 2.7, 10%, 270, right? But let's say you had 2.7 and it was in real estate that was generating rents. Are the net rents, net of all the expenses, enough to live on? And are you okay with that? And those of you that are small business people, you need to have assets outside of, and in addition to your small business when you retire.

29:24Dave Ramsey:No, that's my retirement. No, that's not your retirement. That retirement has to be done. Then you're going to put your kids in debt when they try to take it over from you because they've got to buy the old man out because the old man hasn't saved any stinking money. So you need some stinking money. You need to have invested and create income-producing assets that you can live off of at retirement. So one of the guys, I ran through my head, one of the guys we found was worth$12 million when we did the millionaire study for the millionaire next door. Not millionaire next door. That's Tom Stanley's book.

29:55Dave Ramsey:My book, Baby Steps Millionaire. And so that study, one of the guys, he was an unusual millionaire, and that's why I remember him. He bought a track of farmland. He was a farmer in Kansas for cash. And then the next year, he bought another track. and then the next year he bought another track and then the next year he bought another track he had 12 million dollars in dirt oof dirt and if he's not farming it it doesn't create an income it goes up in value probably yeah because it's apparently good dirt right but uh he and he's been doing that but if you've got it all tied up in dirt yeah you know we had a family one time we were coaching in entree leadership they were third generation and they started with like 500 800 ,000 acres in New Mexico.

30:45Dave Ramsey:And it was part of a land grant thing three generations ago. And every generation, they had to sell off blocks of it to pay the estate taxes. And now we're down to the third or the fourth generation, and they're all trying to live off of this land, only it doesn't create an income. But they have this massive net worth, to Kayla's point, which makes a good point, but no income. And they sat and argued is what they did. about what to do next. Because basically the thing, between someone trying to eat and the federal government taking estate taxes every generation, the half a million acres had been disbanded and was gradually eroding for those things because nobody ever bothered to create an income.

31:27Dave Ramsey:You've got to create an income and you've got to do that. So she makes a great point on that. And she was a lot of fun. That's great.

32:01Dave Ramsey:Hold on, folks. Don't panic. buying a home in today's market doesn't have to be complicated, but it does take more than hope and a quick internet search. To get the right home, one that will be a blessing and not a burden, you need a trusted mortgage partner who will listen and serve you, not push more debt. You need the professionals at Churchill Mortgage. I've personally recommended Churchill for over 30 years, and they're the only mortgage company that's Ramsey trusted. Churchill stands out because they operate the Ramsey way with transparency, integrity, and a commitment to doing what's right for the customer, not what's profitable for themselves.

32:40Dave Ramsey:Churchill aligns with Ramsey's values by focusing on education, responsible mortgage lending, and helping people make smart, long-term decisions that enable them to build lasting wealth. Go to churchillmortgage.com today to begin a better mortgage experience. churchillmortgage.com

33:01Ken Coleman:MLS ID 1591 and MLS consumeraccess.org. Equal housing lender.

33:21Dave Ramsey:If you want to help us out, you could. We'd appreciate it. Leave that five-star review. Subscribe. Click the subscribe button. Follow button. Click that button. the share. Do some sharing. Sharing. Share the show. Tell people about it. Just with your mouth or clip out the link and send it to a friend and go listen to these guys. They're a little crazy but they're fun and I'll learn stuff. So there you go. Hey, we appreciate it if you'd spread the word for us. It helps a bunch. We know a bunch of you do that because our numbers are up ridiculously. We appreciate you very much. Andrew is in Washington.

33:56Dave Ramsey:Hi, Andrew. How are you?

33:58Ken Coleman:Hey, what's going on, guys?

34:00Dave Ramsey:Better than we deserve, sir. How can we help?

34:04Ken Coleman:So I just got married in August, and my wife and I are looking at buying our first home. And right now we're putting, you know, doing what you get to say, putting 15 % of our income into retirement. And because a home is an appreciating asset, would it be okay with the exception of the 401k because we get matched? would it be okay to pause contributions to retirement and to put that towards a down payment on house?

34:33Dave Ramsey:Yes, but not because it's an appreciating asset. I assume you're out of debt, everything, at this point.

34:42Ken Coleman:My wife has about$10K in student loan debt, which we're planning to pay off hopefully by the end of the year.

34:49Dave Ramsey:Okay. And do you have an emergency fund of three to six months of expenses?

34:54Ken Coleman:Yes. Okay.

34:55Dave Ramsey:All right. Well, you only got part of the Ramsey message then. So let me kind of fill in the gaps, okay? Baby step one is you save$1 ,000. Anything above$1 ,000 that you have, you apply to consumer debt, and you lean on consumer debt, anything except a mortgage, until you are 100 % debt-free. When you are, then baby step three is you build an emergency fund of three to six months of expenses. Only then do you start investing for retirement. So you would stop investing for retirement today. You would take your emergency fund and pay off your$10 ,000 today. Okay. And then your first goal is to rebuild the emergency fund to three to six months of household expenses.

35:38Dave Ramsey:Then if we want to do a house down payment, we start saving for a house down payment, and I'll give you the nuances to that that kind of weaves back to your question now that I cleaned it up. Okay? All right. So at that point, let's revisit where we are at that point. You're 100 % debt free. You have an emergency fund. And we have not yet restarted the 15 % baby step four going into retirement. You with me now? Yes. Okay. When you're there, and you should be there like by Friday. I mean, I don't know how quick it's going to take you to build that emergency fund back up, but it might be three Fridays from now.

36:12Dave Ramsey:But you're going to get there real fast, okay? I don't know. How much is in your savings? Not counting returns.

36:20Ken Coleman:With retirement?

36:21Dave Ramsey:Not counting retirement.

36:23Ken Coleman:Gotcha. Probably like$15 ,000.

36:25Dave Ramsey:Okay, good. Yeah, so you're debt-free with$5 ,000 in the bank today. Did I understand that right? Okay. Okay. And then you build that to three to six months of expenses. What's your household income?

36:36Ken Coleman:About$120 ,000 a year.

36:38Dave Ramsey:Cool. What do you think your monthly expenses to exist are? Probably in the$2 ,500 to$2 ,500 range. I think that's probably right. So let's call your emergency fund$10 ,000 minimum. Okay. You could call it$15 ,000 if you want to, but for purposes of arguing how. So we've got to put$5 ,000 back into there, and then we've got a$10 ,000 emergency fund, or a little more if you wanted to do that, and we're debt-free. Once you're there, then you have the question of, do I save for a down payment versus putting money into my 401K? Now, people, and that's what we call baby step 3B, because the 15 % going into your 401k is baby step four.

37:20Dave Ramsey:Is this all tracking? Okay. Yes. Okay, good. Now, so at baby step 3b, anything in there is permissible. You could do zero into retirement. Even if there's a match, you could ignore your retirement for up to three years, build a huge down payment and buy a house, then start baby step four. That's one end of the spectrum. The other end of the spectrum is sometimes people put 15 % away, and while they're doing that with no payments, they still save for their down payment. That's the other end of the spectrum. Or you could land in the middle and take your match and then save for your down payment above the match, right, which is kind of the way you were leaning the way you phrased the question.

38:03Dave Ramsey:Yes. Yeah, and that's okay. Any one of those is okay, but just don't do nothing for retirement longer than three years.

38:13Ken Coleman:Okay. Longer than three years. Got it. Yeah.

38:16Dave Ramsey:Yeah, so even if you do 3 % in there, let's get that down payment saved up pretty quick. Now, when you're doing the house, it'd be great. It's probably very hard to do on your first house, and you guys are in your early 20s, aren't you?

38:32Ken Coleman:We're 28.

38:33Dave Ramsey:Oh, mid-20s. Okay, late 20s. Okay, good. So on your first house, it's very difficult to do this, but if you can put down 20%, you avoid what's called PMI, which is private mortgage insurance. Yes. And that's$75 a month per$100 ,000 borrowed. So you start talking about, you know, we're going to do a$400 ,000 mortgage. You suddenly got$300 a month in PMI only. And it's nothing more than foreclosure insurance that protects the mortgage company if they foreclose on you. It benefits you in no way, and they don't charge that to you if you put down 20 % or more because they're not at risk. They think they've got enough equity coverage.

39:20Dave Ramsey:So if you can put down that much, it saves you a ton of money. But sometimes people really want to get a house. They want to get a house. They're moving fast. That's okay. We're fine with that, especially on the first house. And then while you're doing that, no more than a 15-year mortgage, no more than a fourth of your take-home pay on a fixed-rate 15-year mortgage. And that's the whole schmear right there. on your question more than you asked for, but you're tracking and you're really thinking about it. You're being intentional. I think you're going to do great, Andrew. You can tell by the way he's asking the questions.

39:50Ken Coleman:He's very thoughtful. The only thing I would say to you, and you didn't say anything that would make me think you're going to do this, but be careful of the temptation to overbuy that first house, you know, because everybody kind of wants that bigger house, a little bit better. You just got married in August. So while you're saving, also keep some discipline in mind that this is not our forever house. Don't get sucked into buying in a place that's too much of a stretch. I cannot tell you how many calls we take on this show where somebody just overbought and they're like, now what do we do? Because we're three months in and the high has worn off and we are upside down and we just cannot afford this.

40:29Ken Coleman:So be very, very careful on what you buy as a new couple first house.

40:34Dave Ramsey:Yeah. Forever house is code for I just bought more than I should have. Yeah. That's what it's code for. Because there is no forever house. I'm 65. There's no forever house. The only forever house is heaven. Okay. That's it. The one Jesus at the mansion, Jesus is building. That's my forever house. The rest of them, they ain't got a mortgage and there's no property tax on that. So that's it. So you just, you get, you buy what you can afford because you're going to move. You are going to move. The average house sells every 5.5 years in America. I'm sorry, 6.5 years. The average mortgage pays off every 5.5.

41:08Ken Coleman:Except for our friend in Mississippi. We talked to her earlier. She's not moving. She's not moving.

41:12Dave Ramsey:Everybody else. Everybody else is moving. She's bringing the average up. She's bringing the average up. Kayla. Kayla's bringing the average up.

41:18Ken Coleman:That good memory. Kayla. That's right. Everyone else, though. She's bringing the average up. Yeah.

41:23Dave Ramsey:Yeah. But yeah, I mean, Sharon and I have averaged, I think, about 14 years. Per house? Per forever house. Yeah. So if you want to know how long forever is, it's somewhere around 14 years.

41:37Ken Coleman:I asked you, too. I was like, because I loved your other house. Selfishly speaking, it was the greatest place in the world to hang out on a Tennessee evening. Overlook. It was just, selfishly, I didn't want you.

41:47Dave Ramsey:It was up on a big hill, and the sunsets were off the chain.

41:50Ken Coleman:And I didn't want you to move, but you didn't ask me.

41:52Dave Ramsey:Yeah, well, you weren't paying the bills up there. That's right.

41:55Ken Coleman:Well, I said to you, I go, what are you doing? You go, we need a new project. That's what you said.

42:00Dave Ramsey:We're a little bore.

42:01Ken Coleman:I go, man.

42:02Dave Ramsey:You've been there 14 years. It's been forever.

42:04Ken Coleman:He had too many great sunsets, apparently. So that'll tell you, this actually proves your point. You're like, as majestic as that location was, you were rethought of it.

42:14Dave Ramsey:I actually thought I would die in that house when I built it.

42:16Ken Coleman:See?

42:16Dave Ramsey:I actually did. I thought it was my forever house. I never say that because I hate that phrase, but I actually thought we'd own it. But it was a ridiculous property, and there was a chance to get a ridiculous price. Sold to the man with the bigger checkbook. You did. And so there we go.

42:33Ken Coleman:If only you were as strong as Kayla, you would have held firm. And I'd still be up there enjoying those sunsets. That's true. Not to be, though.

42:40Dave Ramsey:You could probably go up there now, but you might get arrested. I knock on the door. Hey, do you mind? Hey, no, don't even knock on the door. Just let him come home and find you on the back porch. Hey, don't worry. I'm checking the sunset out here. He used to own it. I used to come by here all the time. I just wanted to see it one more time before I went to jail.

43:08Ken Coleman:If you ever Googled yourself, here's the two worst things you can find. Photo evidence of your worst haircut and your personal data floating around on some sketchy website. I mean, the bangs were regrettable. But your info being bought, sold, and reposted all over the World Wide Web? Even worse. And trust me, it happens all the time. And that's why I use DeleteMe. You guys, over 20 billion records have been leaked in recent years. And that info gets pulled into these people search sites. So stuff like your name, number, address, even your kids' names is out there for anyone to see. But if you're trying to clean up your personal data yourself, good luck.

43:43Ken Coleman:It can be a part-time job just submitting these opt-out requests. So if you don't want your personal info out there, you should be using DeleteMe too. DeleteMe has real people who track down your data, remove it from these shady sites, and make sure it stays removed. Plus, you get a report from DeleteMe showing exactly what was found and what's been deleted. So take back your privacy with Delete Me. Right now, Ramsey listeners get 20 % off at joindeliteme.com slash Ramsey with code Ramsey at checkout. So do that today. Joindeliteme.com slash Ramsey, code Ramsey.

44:25Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio with Ken Coleman, number one best-selling author and host of The Front Row Seat. As my co-host, I'm Dave Ramsey. Ryan is in Nashville. Hey, Ryan, how are you? Good, Dave, how are you doing? Better than I deserve. What's up?

44:44Ken Coleman:Well, I had a question about retirement and 401ks. I am new into a Roth IRA. I'll be 50 next year, and I can only contribute so much to that. And on my wife's 401k, we're maxing out what she can do a year on that. And then there's a rollover IRA from previous employment that we have. So we've got the three things working for us, but I can only contribute, you know, just that$7 ,000 a year. And I would just like to do what you think other ways for me to try to make my money work for me down the road so I can have more retirement.

45:22Dave Ramsey:Yeah, you can bump it to$8 ,000 at$50 ,000, and you can also do a spousal Roth for your wife as well. Are you doing both of those?

45:30Ken Coleman:So we can do that if she has a 401k plus she has a rollover IRA?

45:35Dave Ramsey:Yes. What's that called? I'm sorry? Just a Roth IRA. She can just do a Roth. She can do one too. She can do a Roth. Yep. Even if she's not working, she could do one, but she's working in this case. So make sure. Is her 401k a Roth?

45:51Ken Coleman:No, I don't believe. Well, yes, it is. It is.

45:53Dave Ramsey:Okay. All right. Because if they match, the portion they match is not Roth, but make sure it's not traditional. Is the rollover IRA, has it been converted to Roth? I don't think it's been converted. It's just a rollover. Okay. If you convert it, it'll make the taxes on the amount come due. What's the amount in there?

46:13Ken Coleman:The amount on the rollover currently is probably about$75 ,000.

46:17Dave Ramsey:Okay. So you would have about$15 ,000 or$20 ,000 in taxes, probably$15 ,000. So if you've got an extra 15 to invest in retirement, I would roll that to a Roth and pay that 15 in taxes and call that investing. Here's why. Because from this point forward, it will grow completely tax-free. Okay. So that paying those taxes now is like investing into a retirement. So if you're looking for more money to throw at something, the first thing is you bump them to eight. You do a spousal. Make sure her 401K is Roth if it's not already. and then take that rollover and talk to your tax person, figure out what your taxes are going to be before you do it.

46:57Dave Ramsey:Make sure you've got that much in extra cash to pay your tax bill next year when April rolls around because you're going to have an extra whatever it is, $15 ,000 or so on that, and then roll that$75 ,000. Because that$75 ,000 in seven years will be$150 ,000, and in seven more years it will be$300 ,000, and in seven more years it will be$600 ,000. and all of that will be tax-free if it's Roth. It won't be the way it is now. It's going to grow and all of it be taxable at ordinary income. So you do want to move that at some point. But if you're looking for extra ways to put money towards retirement, that's the ways you can do it.

47:35Dave Ramsey:Matt's in Tennessee. Hey, Matt, how are you?

47:38Ken Coleman:I'm doing great, guys. I'm so excited to be on the show. Thanks for taking my call.

47:42Dave Ramsey:My pleasure. How can we help?

47:45Ken Coleman:Well, my wife and I have been weighing the decision of making her a stay-at-home mom, and I just want to make sure we're not letting emotion blind us from making a bad decision financially.

48:02Dave Ramsey:Cool. Good for you. How many babies you got? We have two. They're both under three. Awesome. You got your hands full. never a quiet moment at your house yes okay so um yeah that's great um i just kept the grandbabies last week that sharon and i did that are that age and so i know what i'm talking about for just a moment there but i can hand them back when they're broke you can't so um this one's got something wrong with it you don't need to work on this one yeah but the uh anyway the uh what does she make? She makes 95 gross. And what do you make? I make, I'll be on track to make over 150. Okay, cool.

48:46Dave Ramsey:If you want to be really, really sure, an easy way to do it would be just live on your check for three months and bank hers. Yes, sir. We've been doing that. Oh, you have? Okay. I mean, minus daycare. If you've got daycare, you could take daycare out of hers because you won't have that. Yes. But if you just practice, so you've already proven to yourself you can do this.

49:10Ken Coleman:I guess so. But, I mean, I guess we're just a little nervous to take that leap of faith.

49:16Dave Ramsey:It's not a leap of faith. You've proven it. It's a step. It's a step. It's not a leap.

49:25Ken Coleman:Yes, sir.

49:26Dave Ramsey:How much margin do you have? A leap is I have no idea, and I've never even looked at the math. That's a leap. This is true. Yeah, so you're done great, man. So what does she do for a living? She's a nurse auditor for Humana. Is she a nurse by trade? Yes, sir. Okay. I think Ken and I would both recommend that she do enough of something to keep her certs alive while she's at home.

49:51Ken Coleman:Yeah.

49:53Dave Ramsey:We've both talked about that as well. We want to keep her license up to date. Absolutely. Absolutely. And you'll be amazed at what she could pick up as just little side things here or there that make a lot of money. She's got like the perfect career to do what you're talking about doing.

50:11Ken Coleman:I couldn't agree more.

50:12Dave Ramsey:I mean, she could pick up. If y 'all got in a pinch or something, she could pick up weekends in the ER and make almost as much as she's making now. This is true. Be very uncomfortable, and I'm not recommending doing that. You don't have to because you've already proven we can live on your income. So, yeah, just do it, man. Do it. This is why you manage money, to get to live the life you want to live. And you guys want her to be home, and she's doing nothing wrong and everything right by doing that.

50:42Ken Coleman:Yeah, my question is, as Dave was walking you through this, you still seemed unsure. Is that because you're worried about some big giant expense coming out of nowhere from the giant in the sky, or you are too tight on just your income?

50:59Dave Ramsey:No, that's a good question. We're not too tight on my income.

51:04Ken Coleman:What makes me nervous, Ken, is I started this job in June, and it's a phenomenal job. It provides very well. It's given us a great financial bump. I guess it just makes me nervous to solely rely on my job,

51:24Dave Ramsey:having been in it for such a short period of time. What do you do? I'm in medical sales. Oh, dude. You can land backwards on your head and make$150 in that in the next job. If these people lose their minds, you can get another job doing this. Once you've done medical sales, you're so qualified, it's unbelievable. You both have selected excellent careers. You'll be making$250 in three years, dude. Yes, sir. If everything goes well and I stay on plan, I should track to make over$200. Yeah, absolutely. Well, the good thing coming out of a decision like this is you're going to be extra motivated.

52:05Ken Coleman:And I appreciate you sharing the fear, and I didn't need to know. I wanted you to hear yourself say it. And so what you need to do now is go, okay, if this makes me a little nervous, is there any evidence that it should make me nervous? And in this case, the answer is no. And then to Dave's point, you can crush it, man, so go crush it. And here's the other thing. You guys can decide, okay, we're going to stack up a little extra money, just a little rest easy money. We're not saying you have to do that, but you can to kind of ease yourself into this. You guys get to decide how and when you make this transition.

52:38Dave Ramsey:it and everything goes sideways she walks down there and picks up a nursing job i mean if you lost your job she picks up a nursing job y 'all can eat it's okay it's not it's not like it's permanent you keep those certs though keep keep everything up to date

53:38Ken Coleman:We'll see you next time. thousand dollars a year just by shopping at Aldi. And that's not a hack, it's just a smarter habit. So stop overpaying, make Aldi your first stop for groceries, and watch the savings stack up. Find a store near you at aldi.us. That's A-L-D-I dot U-S. Savings based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability, and the market.

54:20Dave Ramsey:Dylan is in Idaho. Hi, Dylan. How are you? Doing well. How are you, Dave? Better than I deserve. What's up?

54:28Ken Coleman:So my wife and I are in a little bit of a pickle. We are trying to get financially smart and get out of debt. we have two vehicles that are financed and we owe more than they're worth, I guess, at least on one of them. The other one we could probably break even with, but we don't quite have

54:51Dave Ramsey:the cash or the capital to then buy something cheaper in cash. Okay. On that one, the one that's break even, what's the payment?

55:03Ken Coleman:120 a month

55:07Dave Ramsey:Okay, for what? 82 years? What kind of car is this? It's a 2014 Volkswagen Jetta And what do you owe on it? 66, I think Okay, I'm sorry, you owe 6600? Right, yep, 6600 Oh, okay. I'm just... God almighty. All right, my math brain was about to explode.

55:31Ken Coleman:Yeah, not$56 ,000. Sorry.

55:33Dave Ramsey:Yeah, no, not quite. Thank God. So$6 ,600 you owe on the$120 a month. And what do you owe on the other car? We owe$14 ,900. And what is it worth?

55:47Ken Coleman:It's worth probably$11 ,000.

55:50Dave Ramsey:Okay. And so what do you guys make?

55:55Ken Coleman:I make about, I guess it kind of varies month to month, but it's usually around$6 ,500,$7 ,000 a month. What do you do? I do line work, and then I also work for a farmer on the weekends.

56:12Dave Ramsey:Okay. And what's your wife do?

56:15Ken Coleman:She's a stay-at-home mom.

56:17Dave Ramsey:Oh, how many kids? Just one, eight months old. Oh, and what did she do before? She was in the medical industry, CNA, medical assistant, lobotomy. Okay. All right. Wow. All right.

56:38Those cars are not killing me because you hardly owe anything on them,

56:45Dave Ramsey:and neither one of them are expensive cars. In other words, like 20 grand sets you free, my man. Sure, yeah. And so I think instead of worrying about selling the cars, I think I just get$20 ,000. So you're making about$70 ,000, or a little better than that, gross, and we need$20 ,000. What are you getting paid on the farm gig on the side?

57:11Ken Coleman:It's$25 ,000 an hour, and if I work consistently every weekend, it's$70 ,000 twice a month.

57:21Dave Ramsey:750 every other month yeah okay good or sorry excuse me every other week yeah yeah that's what about this good so you're getting a lot of hours that's good can you get more with him

57:31Ken Coleman:um i potentially could i um he doesn't run on sundays and so i have three day weekends with my main job and so i do saturdays and mondays with him okay that's good so i guess i could work more hours in the day but as far as getting another

57:49Dave Ramsey:day in like you know so here's where we're going okay the the hole that you're in with the two cars is not huge it's a it's a good sized hole but it's not massive you didn't call me up with 66 000 you call me up with 6 600 okay making 70 plus 25 an hour on the weekends and there's a potential for her to do some remote work while the baby's sleeping at home with a cna a lot of potential

58:16Ken Coleman:for that um and she could have nine months if i heard the numbers right nine months you're paying

58:22Dave Ramsey:off that sixty six hundred yeah if you guys lean in and don't go out to eat and don't go on vacation and sell so much stuff that your kid thinks it's next and so you know you just get you just get real scorched earth on your life and a hundred percent goes towards her car and you get it paid off and then a hundred percent goes towards your car and we get it paid off i mean do you have any money in savings we've got like a thousand right now okay so you got your baby step one going very good don't right and you guys are in your early 20s yep i'm 24 she's 21 yeah perfect okay well you i gotta tell you i'm not thrilled and you're not either with these cars but i talked to a lot of people they got a lot worse than you man yes so i think i think you dig straight out of these and keep them.

59:08Okay.

59:09Dave Ramsey:And let's try to be debt-free. So you need about$2 ,000 a month, and you'd be free in 10 months. So squeezing out of your budget and adding an hour or two to her day, an hour or two to your day here and there, and living on nothing and throwing$2 ,000 a month out of your budget, a detailed budget on every dollar, and I'll give you a year's worth and get you started here with every dollar so you can get in there and the new EveryDollar will coach you up and show you what to do next. But it's going to lead you right through what I'm talking about. Let's get those cars paid off as fast as possible.

59:44Dave Ramsey:I think with the math you're giving me, Dylan, I'm keeping them and I'm going to pay them off.

59:48Ken Coleman:I agree. I love that because he's going to learn something. And by the way, I want to say this about EveryDollar to you, Dylan, and to our entire audience. This new EveryDollar is way, way, way more than a budgeting app. I mean, this is literally coaching you through every one of the baby steps. It is so incredible. Dylan, you're going to love this because you're now in this journey. And if you walk this out, like Dave said, and let every dollar be your coach and guide you through, because that's what this is now, you're going to come out on the other side way ahead of everybody else. And I'm a fan, Dave, of young couples paying off cars and driving them until you have to replace them.

1:00:26Ken Coleman:Yeah, and then pay cash for the new one. That's what I like.

1:00:28Dave Ramsey:The next one. Yeah, because it teaches you to delay gratification. Yeah.

1:00:33Ken Coleman:It's just hard for American couples to do.

1:00:36Dave Ramsey:Yeah, but they, man, they're perfect to do that because they're not, again, they didn't call me up 66 ,000, which most people do.

1:00:45Ken Coleman:Although for a half second, you thought it was there. Oh, I did. I was reaching for the Tums immediately.

1:00:50Dave Ramsey:There's a Volkswagen Jetta out there for 66 ,000 somewhere, I promise you. So, yeah, that's just, man, I felt bad for them. But, I mean, this is doable. This is very doable. Yeah. And and what do you think the average household has?

1:01:05Ken Coleman:Because you said something that we skip over too much. And I'm going to bring the audience back to what you said. The idea of selling. They think it's a one liner, but it's not selling so much stuff. The kid thinks they're next. What do you think an average household in America has in their house worth of stuff that they could sell? Any kind of guess?

1:01:22Dave Ramsey:you know that couple's not been married long yeah they don't have a ton of stuff they're not as much but i mean americans we collect crap so much that we get a storage bin and pay rent on a storage bin to the for the crap we haven't touched in five years i mean we're unbelievable we we we are the biggest bunch of hoarders on the planet so yeah you got enough crap that you could put on uh what is a facebook marketplace or whatever anything just put it out there and get that stuff sold I don't know. But I think the longer you've been married, the bigger the accumulation.

1:01:55Ken Coleman:I bet it's close to two grand.

1:01:57Dave Ramsey:Oh, easy. Easy. Yeah, you can get your baby step one, your$1 ,000, and one weekend of garage selling.

1:02:03Ken Coleman:Yeah.

1:02:04Dave Ramsey:For sure, most of you. Yeah. And then in addition to that, you start popping the other stuff on. But people will buy stuff. I mean, I talked to a lady, God, a couple years back, but eBay was the thing for a long time, right? Everybody's popping stuff on eBay, which is still fine. It's still not a bad place to sell stuff. So the Facebook marketplace is pretty much competing with it. But this woman was going to garage sales and buying children's clothing for a dime and a nickel and a quarter for a shirt. And then reselling it. And then reselling it for$3 on eBay to the tune of like$10 ,000 a month income.

1:02:39Dave Ramsey:You can get out of debt fast with that. I mean, it's just – but you talk about crap we all have. Yeah. You know, and this is all like, you know, this is this clothes. I mean, you think about a four year old, how much they wear out clothing. They don't they don't they grow so fast that they don't they wear it three times and they can't get in it anymore. And you can't imagine. How do you think George Camel has that snappy outfit?

1:03:02Ken Coleman:He's buying middle schoolers kids clothing and he can wear it. He's repurposing it. He's not here to defend himself.

1:03:11Dave Ramsey:That's terrible. It's awful. He'll get me back. That's going to cost you. I know. He'll get me back. That's going to cost you. You broadcast that over the live microphone, Ken. That was not back in the coffee shop.

1:03:22Ken Coleman:He looks good in Oshkosh, Dave. You know, he does.

1:03:25Dave Ramsey:Hey, gently experienced clothing, there is nothing wrong with. A lot of us grew up with experienced clothing. Oh, man.

1:03:32Ken Coleman:Nothing gentle about mine.

1:03:44Thank you.

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1:05:31Dave Ramsey:A couple of years ago, I got tired of hearing all the people say that opportunity in America is dead, and you might as well give up. The little man can't get ahead. The deck is stacked against you. Capitalism didn't work. It's a scam. And I guess that just came from the communist college professors. I don't know, because I don't know where it came from. It didn't come out here in the real world because out here in the real world, people are leaving the cave, killing it and dragging it home every day. I don't hear a lot of whining out here in the real world. It's mainly in think tanks and in social media by people who live in their mother's basement.

1:06:03Dave Ramsey:That's about the only place I hear that capitalism is really dead because it's actually the best time in human history to be alive. It's easier to build wealth now than at any time in history. Your health is better. Your access to information is quicker. your ability to launch into a new thing the training is unbelievably fast everything about it so we did the largest study of millionaires ever done in north america at that time just to find out where millionaires really came from and we found that 89 percent of them that's nine out of ten are not millionaires because of inherited wealth so if your broke brother-in-law doesn't agree with that this is data it's a fact he's what's known as wrong so that's it that's a fact It's a statistical fact.

1:06:51Dave Ramsey:We did a study of people that was over double what it needed to be in size to be statistically significant. We know about research. We have a department that does Ramsey research, and we had an outside firm look over our shoulder because we knew the lefties would go crazy when we discovered that capitalism was alive and well. And so we had to go, no, you're just – I'm sorry you're wrong, darling. I'm sorry. You're wrong, darling. Once again, you don't know. This is where it really happens. So we started also interviewing actual millionaires on the air and have continued that. We call them Baby Steps Millionaires because a lot of them have followed our baby steps to get there.

1:07:32Dave Ramsey:Not all of them, but a lot of them have. And so we get to talk to them occasionally. Jennifer is in Fort Worth, Texas. Jennifer, what is your net worth?

1:07:41Ken Coleman:$1.5 million, which still blows my mind to say out loud.

1:07:45Dave Ramsey:I love it. I'm so glad you said it out loud here. I'm proud of you. So what's the mix on that? How many dollars of retirement, house, that kind of stuff? Give me the breakdown by category.

1:07:57Ken Coleman:The bulk of it is in my husband's 401K. It just rolled over a million dollars. I've got a little bit along the way, but I mostly have been self-employed. So most of our retirement is in his nest egg. We've got$350 ,000 in home equity, and then the rest of it's in non-retirement, you know emergency fund cars savings accounts that kind of thing very cool how old are you we i'm almost 52 my husband just turned 52 so yeah and what we've been at this a minute i know

1:08:27Dave Ramsey:based on what you've are based on what you told me about how it's mixed up i know the answer to the question but i'm gonna ask you anyway how much of this was inherited money not one single penny Zero, precisely.

1:08:39Ken Coleman:Nothing. We grew up dirt poor, and we have been working for a lot of years. And, of course, last month, it was our 10-year anniversary of coming in, doing our debt-free scream live on air with you. Oh, wow.

1:08:52Dave Ramsey:Yeah. And now you're worth$1.5 million. Hmm. I like it.

1:08:55Ken Coleman:I'm like, oh, let me hold on to something.

1:08:58Dave Ramsey:I like it. I like it. I like it. Very cool. So how long have you all been married?

1:09:03Ken Coleman:30 years.

1:09:04Dave Ramsey:Okay. And during that 30 years, what's the range of your income? lowest year to highest year?

1:09:08Ken Coleman:The very first year we were married, we were still college students. So I think we might have managed to eke out$15 ,000 that year. When we got our first grown up jobs, we were about 60. And this year we're rolling over 300 ,000.

1:09:24Dave Ramsey:Cool. And what are your careers?

1:09:26Ken Coleman:My husband's an engineer, which, you know, goes with the territory. And then I'm a psychologist. I've been in private practice for a lot of years, but now I'm a college professor.

1:09:34Dave Ramsey:So, ah, very cool. Very cool. And what was his GPA? Do you know?

1:09:39Ken Coleman:He was right about 3.5.

1:09:42Dave Ramsey:Okay. And what was yours?

1:09:44Ken Coleman:Undergrad was 3.14. My grad was 365.

1:09:48Dave Ramsey:Okay. Perfect. Okay. Good. Good. And what do you drive?

1:09:53Ken Coleman:So my, my husband's in a 20, 2022 RAV4 Toyota. I have the Dave car, which, you know, I love because we have no payments, but it is a nice little sporty car. Lexus UX 200 F Sport 2019 red leather seats.

1:10:12Dave Ramsey:All right.

1:10:13Ken Coleman:It's the bonus for being debt-free.

1:10:16Dave Ramsey:I like it. I like it. Well, you both got decent cars, because a lot of times when I talk to millionaires, I have to tell them to go buy a car. And you guys are in pretty good shape on your cars. Good.

1:10:25Ken Coleman:That was part of our problem is I like new cars and shiny things a little bit too much back in the day. So now we drive them with no payment.

1:10:33Dave Ramsey:Very cool. Very proud of you. Oh, man. What do you tell people if they're out there listening and they're the, you guys are 52, you've been married 30 years, and they're just getting started, so they're 22, 23. Can they still be a millionaire today in America?

1:10:49Ken Coleman:Oh, absolutely.

1:10:51Dave Ramsey:Why?

1:10:51Ken Coleman:The biggest piece of advice that I'm going to tell them as well is don't hide your journey from your kids. One of our biggest goals was to change our family tree. And in fact, we made shirts to that effect when we came 10 years ago. Our kids journeyed alongside us. We did the smart money, smart kids, you know, with the kids. During COVID, we did, you know, the homeschool personal finance material with our older two who were 13 and 15 at that point. I'll never forget my 15-year-old saying credit cards are stupid. She is going to be 21 this week. She's a college student. Our middle one's a college student.

1:11:27Ken Coleman:they are both going nearly 100 % scholarship, they'll be debt-free walking out with their degrees instead of the six-figure student loan that I had. It's important that you know what your priorities are, right? And so we actually don't even own all the house we could afford our house. We still have a bit of a mortgage, but it's like 15 % of our income so that we can, And, you know, travel and enjoy life and help our kids with the rest of their tuition. And our youngest is in a Christian school because those things are our priorities. And being intentional, and you talk about that, I know a lot, is important about why you're doing what you're doing and not just the next shiny thing.

1:12:13Ken Coleman:Which, I mean, that took us a while because my husband and I, neither one are savers.

1:12:17Dave Ramsey:But, I mean, we're showing pictures of you guys on YouTube, like in Hawaii and everywhere else. So it isn't like you lived in a cave and collected lint and only came out on Triple Coupon Thursday.

1:12:26Ken Coleman:The Hawaii trip, every about three years or so, we try to take a super, super nice vacation. And the Hawaii trip was a reschedule. It got canceled initially because of COVID. And then both of our HCA units went out, and then our water heaters exploded. And then we had to have the foundation on the house level. and I just stomped my feet and said, stop taking my Hawaii fund. Because we kept having to raid the vacation fund to fix the house. And then we finally saved up again and we were able to take that trip this last January with the kids and had an amazing...

1:13:01Dave Ramsey:But now you're 52 with a$300 ,000 income and you are worth$1.5 million. I'm so proud of you. Way to go, kiddo. Very cool.

1:13:11Ken Coleman:You know, one of the things you hear in this, and I want to make sure everybody catches it, is there's an unbelievable discipline, but don't miss that what fuels the discipline is a vision for their future life. And it was so fun to see the picture 10 years ago in our old building. Yeah, the old office. Remember that spot so very well. And there they are. Kids are little at that time. They're elementary. And now we get to hear this call on the other side of that. And you heard what I love about what she shared their day was HVACs going out, House Foundation, stuff that would break people who are broke, break them in every way.

1:13:51Ken Coleman:And they weathered it, got on the other side of it, and now they're on their way to crushing. So this is the real story that you don't hear in those clickable articles or in the TikToks and the Instagrams, because there's so much more to this story. So really heartening and really inspiring to hear this call. Yeah.

1:14:09Dave Ramsey:As we did that study of millionaires, the thing she was referencing was the top five career choices of millionaires. The most often that appeared to be millionaires engineer and her husband's engineer. So, uh, very interesting. Um, number two was accountant. Number three was business executive. Number four was teach. Number three was teacher. I'm sorry. Number four is business executive. Number five was a lawyer, medical doctor didn't even make the top five. They were number six because they're notoriously bad with money. And so, uh, but incredible, incredible stuff. Why do we tell you guys all this?

1:14:46Dave Ramsey:So remind you, you can do it. You can do it. You talking to you, you, you got to make choices and then you can win.

1:15:26Dave Ramsey:Big news. You just heard, I'm sure. The Fed cut rates for the first time all year. The 15-year fixed rate mortgages have dropped to the lowest we've seen in 11 months. If you're financially ready, you're out of debt, you have your emergency fund, a good down payment, you're ready to buy. This is a good time to buy. House prices have been holding pretty steady. They've gone up a little, but not like they're going to. If we see these rates drop on down, market heats back up, you're going to see the house prices take off again. Really good time to buy. It's also a great time to sell. So buying or selling a home is possible if you work with a Ramsey trusted real estate agent, and you'll be glad you did it.

1:16:03Dave Ramsey:Pros are handpicked by us to guide you through the market. They're high-octane, high-protein, get-or-done people. Find a local trusted pro, a Ramsey trusted pro, for free at RamseySolutions.com slash agents or click the link in the show notes. Alexis is in Oklahoma. Hi, Alexis. How are you?

1:16:24Ken Coleman:Good, Dave. How are you?

1:16:25Dave Ramsey:Better than I deserve. How can we help?

1:16:26Ken Coleman:Well, my husband and I are about, with credit cards and student loans combined, about$25 ,498.96 in debt. He's the only one currently working. I am a stay-at-home mom to three little ones, and I'm going to school. So things are tight here. And busy. How old are the little ones? uh four two and a half and ten months and why are you going to school i'm going to school to be a teacher just to finish my degree um yeah to be a teacher yeah okay no there's nothing wrong

1:17:09Dave Ramsey:with being a teacher yeah i'm just confused you have three little ones and you're a stay-at-home mom why and you're going to quit doing that and go be a teacher um maybe my grandma she passed

1:17:20Ken Coleman:away from cancer a while ago and she just really wanted to see me graduate so i'm kind of doing it for her that's great for her but you're broke yeah i know and you can still do it later but right now how much does this cost you give us real numbers on this this degree how much is it right now i i'm getting fafsa financial aid and i have a i have a scholarship to where um i get $1 ,500 split each semester. So my semester is probably about$6 ,000, a little bit more each semester. And then after I graduate and I get a teaching position, they'll pay me$4 ,000 for five years. Yeah. And I'm a junior.

1:18:03Okay. So, yeah.

1:18:07Dave Ramsey:But you're going to graduate with no apparent use because you're going to stay home with kids.

1:18:13Ken Coleman:possibly yeah the only reason they're doing this is grandma has nothing to do with your life

1:18:19Dave Ramsey:yeah yeah i know and uh i mean i don't i don't want you to not get the degree but you called

1:18:25Ken Coleman:me up broke and stuck i know and you're going to school for a degree that you're not going to use yeah okay anyway so what's your husband make he makes two thousand four hundred ninety three

1:18:38Dave Ramsey:dollars and 52 cents a month good lord what does he do he's an apprentice for an electrician but

1:18:45Ken Coleman:he's currently taking like the test to become a journeyman so he can make more when um he takes it again november 1st he took it last week and i missed it by two points okay so when he goes

1:18:59Dave Ramsey:to journeyman as soon as he passes his test november the first so another month yes what

1:19:05Ken Coleman:will he be making then right now he makes about 19 uh dollars an hour i i think it'd probably go up two more dollars and then whenever he gets his full this is just as limited i think he could go

1:19:18Dave Ramsey:up to 40 depending on where he worked man his job sucks yeah it's horrible you can make that at target without passing a test if you can fog up a mirror you can make that a target that's the only test they've got. But this is for sure what he wants to do long term, correct?

1:19:40Ken Coleman:Yes, yes. Well, that's part of the process. He has a long term goal. Yeah, no, listen, that's the only way to do it. But he's got to bring in some more income while he's doing that. We're not just going to keep it for$2 ,400. You're starving to death.

1:19:54Dave Ramsey:Yeah.

1:19:55Ken Coleman:And you need to pause this education plan if possible. I don't know if you can even do it right now. You're already committed for the six grand, right? Yeah. Yeah. Okay.

1:20:06Dave Ramsey:As soon as this semester is over, you push pause. Yeah.

1:20:09Ken Coleman:Okay.

1:20:09Dave Ramsey:Until you get your family upright because y 'all are starving to death because you're not working. The time you're spending going to school, you can spend tutoring at 40 bucks an hour and he's got to take some weekend hustles where he's making 30 or 40 bucks an hour because he's getting screwed during his day job until he gets out of this journeyman stuff.

1:20:28Ken Coleman:Yeah, he did that this weekend. He made about$400 extra this weekend.

1:20:32Dave Ramsey:Good. Like every weekend, starting now, ready, set, go. He has three little babies and$25 ,000 in debt, and he's making nothing. You guys are below the poverty level, and it's because of your income choices. It's not because you're lazy, but you have three kids in Oklahoma. You're below the poverty level on his day job. That's how bad his job is.

1:20:53Ken Coleman:Yes, and thankfully, our house is paying And honestly, we don't have a mortgage. How did that happen? My grandfather saw that we were suffering, so he offered to pay off it. But it's like I am slowly paying him whenever we can.

1:21:09Dave Ramsey:Oh, so it's not paid off?

1:21:12Ken Coleman:No. Or it's either that or my inheritance if he passed away before.

1:21:19Okay.

1:21:21Dave Ramsey:Well, he said don't worry about it, so I'm not. um yeah i'll just let the uh payment occur at at death um yeah you guys have an income problem that's your problem and so once you solve your income problem you're going to solve all the other problems and that's where all your stress is coming from is and it's math thing it's not saying you're doing something wrong or you're lazy or anything like that you got three little babies and you're trying to go to school i'd have three little babies and i'd be tutoring and he needs to be working weekends and everything he can get his hands on. And if he doesn't step up into something pretty quick in the trades at$30 an hour, he needs to go a different route.

1:22:02Dave Ramsey:Because, you know,$30 an hour is a minimum to be moving around in the trades right now, not$19 an hour and you get a$0.50 raise if you pass a test. Give me a break. That's asinine in today's world. So, I mean, because you can walk over to FedEx and throw boxes, man, I mean, and make, what, 2022, right?

1:22:22Ken Coleman:Yeah, yeah. I mean, he can definitely be making more. What I don't know in that particular neck of the woods is what is the standard process for moving into that journeyman role. Each state is different. Each local economy is different on that. So I'm not sure.

1:22:38Dave Ramsey:Well, what he's doing is he's running down the union path. Probably. But he could go – he could take the same stuff he's already been doing and go over there and wire houses residentially with a guy across the street that is an electrician. get his electrician's license and make 30 bucks. That's right.

1:22:52Ken Coleman:That's right.

1:22:52Dave Ramsey:And so I'm not going to lay in this union thing for very long if it doesn't start paying off.

1:22:58Ken Coleman:He could be making more than 400 even on a weekend. I mean, he needs to be doing that up in this income. Yeah.

1:23:05Dave Ramsey:And seriously, we need to either get the income up there or pick a different track with the trade that he's in. Yeah. Because there's just not enough money there. And it's not a union thing, non-union thing. It's a math thing. If the union is not paying what everybody else is paying, then the union don't get the deal. It's that simple. And so it's supposed to be there for you, but it doesn't always work that way. So, wow. Wow. Ouch.

1:23:30Ken Coleman:You know, listen, I'm not trying to be controversial, but – and here's another thing. All right, I'm not going to qualify, Dave. You may not even like this, but I'm going to say it. I think you've got to be responsible as a young couple. if you aren't earning the income to be able to provide for three little kids, then that's got to be, you got to be smart about that. And let's hold off on the kids until we can actually take care of them. Because it is, to me, inexcusable to have three little ones and be below the poverty line in the United States. I think there's got to be, and I'm not picking on, I'm just saying, you got to be responsible.

1:24:10Ken Coleman:And that may be a controversial take, But you've got to be able to take care of the people you bring into this world. And think of that ahead of time. Think of that. Not just, hey, let's go. Let's do this. Let's start a family. And then not have a plan to take care of them.

1:24:25Dave Ramsey:Yeah. But the difference is one or two phone calls and the whole thing changes.

1:24:29Ken Coleman:I agree.

1:24:30Dave Ramsey:In terms of income.

1:24:31Ken Coleman:I'm saying get some urgency. If you've done that and you can't take care of them, then nothing else matters.

1:24:37Dave Ramsey:Yeah. Take care of those little ones. Your obligation is not to your employer. your obligation is to your family. Yes. If your employer is not cutting the mustard with their pay scale, time to change. And so I don't care that, you know, if that pisses you off if you're union, then just get pissed off. It pisses you off if you're non-union. It's fine. Just get pissed off. That's fine. But the deal is this. You got job one. Like Ken said, job one.

1:25:19Ken Coleman:What's up, guys? George Camel here. If you've been thinking about making a real difference in your community, this is your moment. People are drowning in money stress right now, and you can be the one who helps them by leading a Financial Peace University class. It's totally free for you, and we hook you up with all the tools and support you need. So if you're ready to help people ditch debt, save money, and actually sleep at night, go to fpu.com slash lead to learn more. That's fpu.com slash lead.

1:26:07Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. I'm Dave Ramsey, your host, Ken Coleman. Ramsey personality, number one bestselling author, is my co-host today. Thank you for being with us. 888-825-5225 is the number. Melissa is in Florida. Hi, Melissa. How are you?

1:26:25Ken Coleman:Hi, good. How are you guys?

1:26:26Dave Ramsey:Better than we deserve. How can we help?

1:26:31Ken Coleman:So, basically, I am in baby's pet four, five, and six. I just recently paid off my last debt. The problem is that I've done step one through three twice now. And the first time I did it, I ended up getting another car loan. And then, of course, I had to restart again. You flunked the class. I did. I did. But you know what? I learned and I moved on.

1:27:01Dave Ramsey:Okay. Glad. That's good.

1:27:03Ken Coleman:I'm in it again. Good. So now I have this fear that I'm going to go back again. So I'm really kind of struggling how to plan my budget to include those things. Because last time we had just paid off a car, it got totaled, rear-ended and totaled. And then we had no car.

1:27:32Dave Ramsey:Why? You didn't have insurance?

1:27:35Ken Coleman:We did, but...

1:27:36Dave Ramsey:Oh, you just didn't like the amount that the insurance gave you and you wanted a better car.

1:27:40Ken Coleman:Yeah, that's true.

1:27:41Dave Ramsey:So it's not the wreck's fault?

1:27:43Ken Coleman:No, it's not.

1:27:45Dave Ramsey:No. Okay.

1:27:45Ken Coleman:No. So the car was worth more to us than the insurance company, and we ended up with not enough to replace what we had. So we made that place.

1:28:00Dave Ramsey:Not true. It was dumb. No, no, no, no, no. You've got to quit telling yourself lies, okay? The insurance company pays market value for a car. If they don't, you should sue them. When a car gets totaled, they write you a check for what the car is worth, which means, by definition, you could go buy that car with that amount of money. That's the definition of market value. And so they did give you enough to buy that car. You just didn't want it.

1:28:26Ken Coleman:Oh, well, yeah. I mean, I couldn't go out and buy that same exact car.

1:28:31Dave Ramsey:Yes, you could. That's market value. If you didn't, you should have sued your insurance company.

1:28:37Ken Coleman:Okay.

1:28:38Dave Ramsey:You understand? They're supposed to give you market value for the car when you total it. That's what the insurance policy is for. You understand?

1:28:45Ken Coleman:Yes, I do understand now.

1:28:47Dave Ramsey:Okay.

1:28:48Ken Coleman:Now that you told me that, I never thought about it that way. I just assumed this is the situation we're in, and I just didn't think of it. What are you so afraid of? This is all mindset stuff. What are you afraid of happening again that you're going to somehow fall back into it? What is the fear?

1:29:09Probably my ability to make decisions.

1:29:14Dave Ramsey:Are you single? No. I thought you said we. Yeah, okay. So where was your husband during all of this?

1:29:21Ken Coleman:We were doing it together.

1:29:23Dave Ramsey:Uh-huh. Okay, so I'm afraid about our ability to make decisions then.

1:29:28Ken Coleman:Yeah, maybe. Okay. I make a bulk of the money choices, so I do include him, of course, but he's more like, oh, you're better at it, you do it. So I have control over everything, I think. Okay.

1:29:46Dave Ramsey:So let me tell you when you will never go back in debt again, when you decide that you will do anything to never go back in debt again. When you decide, I'm going to live on less than I make for the rest of my life, and no matter what happens, no matter what we make, no matter what the circumstance, no matter what the tragedy, no matter what the drama, we are going to live on less than we make. We are never going into debt again. That's a principle-based decision. It's not a math thing because 100 % of the time that you make that decision, your transmission is going to go out next week. And God says, this is a test.

1:30:25Dave Ramsey:Like the emergency broadcast system. You remember that? This is a test. Yeah, and you're going to flunk the test. If you don't have this drone, you know, it's pinky swear spit shake. It's, you know, we're doing a contract here with ourselves for our own good. And you've got to decide that that's more important than a little better car. That's more important than no matter what comes at us, we don't borrow money. That's what Ramsey say. And you've got to get to where you say that. And then you go, okay, something came at us. We can't borrow money because we don't borrow money anymore. So now what are we going to do since this thing came at us and we don't borrow money?

1:31:01Dave Ramsey:How are we going to fix it? Because we don't borrow money. And you've got to get to where that's the way you're responding as a mindset to life as it comes at you, whether it's opportunities or the other ones. is I had a guy bring me a deal the other day that was several hundred million dollars more than I have and he goes well you could just leverage and I'm like dude who do you think you're having lunch with I mean really you've got to be kidding me what planet are you on that you think I'm going to borrow money for any opportunity or any threat there's not anything I want bad enough to do that and when you kind of get that going down inside of you that's the only thing there's no there's no fail safe.

1:31:42Dave Ramsey:There's no amount of cash that'll keep you from borrowing money. Because some opportunity will come along, you'll get greedy. Oh, I got to be in on that. FOMO, right? Oh, I got to get that. That's a sweet deal right there. I don't want to miss out on that. Or you'll feel like you're pressured or I was forced or something bad happened, a totaled a car, and then there we go again.

1:32:05Ken Coleman:Yeah, the tone that I hear from you is you just don't trust yourself. And I just don't know why. And I think there's probably something deeper there, but you've proven it twice now that you could work this process. Now you fell, you mentioned that you fell, you got back up and now here you are back in four, five and six. But the issue is the very nature of your question implies to me that you just don't believe that you have any agency, that you can't do it. And your life says otherwise. Now, I don't know what's going on way back might be worth digging in a little bit. But this idea that I'm going to call Dave and Ken and how do I make sure I don't do this again?

1:32:44Ken Coleman:We don't have any magical answer because for us, we've made this big decision, as our friend John Maxwell said, make the big decisions early and spend the rest of your life managing that decision. So at this point, you got to say, am I serious about this decision? And then do I believe with great conviction that I can manage this decision the rest of my life. Same thing with marriage and saying, I'm not going to get a divorce no matter what, come hell high water, we're going to figure it out. I'm going to be healthy with my weight, whatever it is.

1:33:14Dave Ramsey:Youth ministry, we used to say it. And then I said it to my kids when they were teenagers too, like the time to decide whether you're going to have sex before marriage is not in the back seat. That is completely correct. You got to decide like months before the back seat, because if you don't decide before you get in the back seat, you're going to have sex. A hundred percent chance. Okay. There's a hundred percent chance. Man's been doing that since time began. Okay. If you're not going to, if you're going to say, I'm not having sex before I get married, then you have to decide that and stand on that long before the heat gets turned up.

1:33:44Dave Ramsey:And so you got to decide before the heat gets turned up, I'm not borrowing money. I'm going to live on less than I make. And, uh, and by the way, uh, your husband needs to step up. You're better at this. How about the two of us are better at this than one of us by ourselves? Larry Burkett used to say, if two people just alike get married, one of you is unnecessary. You need to be working together on this and bringing both your strengths and weaknesses to these decisions, and you'll make better decisions. In the multitude of counsel, there's safety.

1:34:47Dave Ramsey:You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain your options, so you never have to invest in anything you don't understand. Head to RamseySolutions.com slash SmartVestor to get connected. Ramsey Solutions is a paid, non-client promoter of participating pros.

1:35:23Ken Coleman:Learn more at RamseySolutions.com slash SmartVestor.

1:35:45Dave Ramsey:Ramsey Show Question of the Day is brought to you by Why Refi? Defaulted private student loans can drag on for years, but Y-Refi helps borrowers explore custom re-financing with a low fixed rate and a payment you can actually manage. Go to YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y.com slash Ramsey. Might not be in all states.

1:36:08Ken Coleman:Today's question comes from Brett in Texas. I've worked for a large fire department for five years. I love my job, but the department is having a lot of issues right now. Our pension is apparently over$1 billion underfunded. The city takes 13 % of my paycheck for my pension, and they do match those funds. I don't have a say in how the money is managed or used. Is a poorly managed pension a good enough reason to consider leaving? I had always dreamed of making my career here, but with the pension and a few smaller issues, I'm left wondering if I'm currently a passenger on a sinking ship or if I should get to the lifeboats while I still have time.

1:36:45Ken Coleman:So, Dave, I have to bring you in here. I think it's enough. My answer would be, yeah, it's enough to leave if you feel like the whole thing is a mess, which it sounds like it is. But does he have the option on the city taking? Can he opt out of that? No. That's what I thought. So he's stuck.

1:37:01Dave Ramsey:It's not the pension going down that bothers me. It's the 13 % of your income that make you put into something that's going down. That concerns me big time. So in order to keep this job, you have to take 13 % of your income into the middle of the floor and burn it every week. Yeah, and hope that it's there. That's what he's saying, right? So no thank you because 13 % of your income invested in a 401k will make you a millionaire. And this won't. So sorry, man. Yeah, you got to go to a different fire department. That one's not run well enough to keep you around. And a billion underfunded? Feels like that should be a news story.

1:37:34Dave Ramsey:That's a lot. Sounds like Illinois or Chicago.

1:37:38Ken Coleman:Do you have any sense of how that happens?

1:37:42Dave Ramsey:Yeah, you do too. Yeah, that's what I thought. Oh, piss poor management? Yeah.

1:37:46Ken Coleman:Well, I think it's almost devious is what I'm getting at.

1:37:49Dave Ramsey:Yeah, there might even be some shady stuff. I don't know if that's a, oh, shucks, or a, we know what we're doing. Oh, wait a minute. He's not in Chicago. He says he's in Texas. Texas, yeah. We're in the crap in Texas or something around that poorly. It just feels like somebody's doing something wrong. That's unusual. That's a major metro area for it to be that far, a billion. I mean, you don't get that in the little suburb. But you're probably just moving to a different fire department. My man, that's the thing. golly yeah wowzer that stinks cindy is with us in california hi cindy how are you hi how are you better than i deserve how can i help you well um me and my husband are at odds

1:38:29Ken Coleman:with some money that we received and we are in babysit four ish we just started putting more money into my Roth IRA, like the one I have at work. And then we're going to max it out yearly. We have 285 ,000 left of this money and we just need to pay off our house. Okay, good. Which is 260 ,000. Great. Great, but he's laughing, mind you. The thing is, is that he wants to invest it because we're really not set up good for retirement, which on some level I agree with. But wouldn't it be best to have the house paid off?

1:39:22Dave Ramsey:How old are you guys?

1:39:25Ken Coleman:I'm 58. He's 56.

1:39:27Dave Ramsey:Okay. And how much do you have in retirement? Um, probably$60 ,000. Wow.

1:39:37Ken Coleman:I guess. Yeah, we're not really, well.

1:39:39Dave Ramsey:What's your household income?

1:39:41Ken Coleman:Well, his is$115 ,000. That's his pension.

1:39:47Dave Ramsey:He has a pension at$58 ,000.

1:39:51Ken Coleman:$56 ,000.

1:39:52Dave Ramsey:And so what's his income? Does it work?

1:39:55Ken Coleman:No.

1:39:56Dave Ramsey:Why?

1:39:57Ken Coleman:because he recently had some extreme medical issues, and he had to repair early. So, and it's...

1:40:10Dave Ramsey:Is he going to make it?

1:40:11Ken Coleman:Yes. With the grace of God, yes. Yes. Yes. Is he going to be able to work in the future? Not really. Why? But, well, because right now we have to wait about a year. It was a double lung transplant.

1:40:34Dave Ramsey:Okay, well, that makes sense.

1:40:37Ken Coleman:That's pretty severe.

1:40:39Dave Ramsey:I said that's pretty severe.

1:40:40Ken Coleman:Yeah, yeah, yeah. So what do you make? About$48 ,000.

1:40:47Dave Ramsey:And how much life insurance do you have on him? um i think i get 100 000 100 000 or 800 100 okay all right so um if he passes away financially you're in really bad shape does the pension survive him do you get it if he dies yes yes

1:41:09Ken Coleman:oh then you're not in really bad shape okay no see and and and i i see like i don't plan to retire anytime soon. Oh, you can't. You know where we live. I mean, it's horrible. California money is like our insurance bills are ridiculous. So, but that's why I wanted to get rid of it. But our house payment is$12.47 a month and it's a 3.1025.

1:41:35Dave Ramsey:What's your house worth?

1:41:37Ken Coleman:$4.60. And we owe to The last statement said 260.

1:41:43Dave Ramsey:Where in California are you?

1:41:46Ken Coleman:I go up north.

1:41:47Dave Ramsey:Oh, okay.

1:41:49Ken Coleman:But we're also in fire country, so that is another huge ginormous deal.

1:41:54Dave Ramsey:Are your family around you? Why are you there?

1:41:56Ken Coleman:Yeah. No, and we are married to the hospital we went to, and so we wanted to originally move. We had different plans, but now we don't.

1:42:07Dave Ramsey:All right, so the answer to your question overall is that you are better off if he lives or if he dies with a house paid off. You're better off going into retirement with a house paid off because there's two things you need going into retirement. A large nest egg. In this case, you have a pension and$60 ,000, and you're going to start putting an old house payment now that you don't have anymore into your 401ks and Roth IRAs. and you're going to start to grow those rapidly from this point forward because you don't have a house payment anymore. But when you go into retirement, you do not need to still be owing$200 ,000 on a house when you've got the ability to pay it off.

1:42:44Dave Ramsey:And the number of millionaires that we have interviewed that said the way we got rich, the way we caught up on our retirement investing was we didn't pay off our house and instead invested the money, and that made us rich. The number of millionaires that said that was precisely zero. No one does that that has money.

1:43:01Ken Coleman:Right.

1:43:02Dave Ramsey:The people that have money get out of debt and use the increased cash flow because they don't have a house payment anymore to build wealth with. And that's what you guys should be doing in the middle of all this. Wow, have you got your hands full.

1:43:14Ken Coleman:Yeah, I don't know what you say there. I hope with his lung, double lung transplant, the hope that on the other side of this, he can do some work. Because, again, it's all about catch up at this point. Yeah, you just need income.

1:43:25Dave Ramsey:Yeah. But with no house payment and her income and his pension. Definitely pay the house off. in his pension, you can go ahead and start making some progress. And then hopefully, as young as he is, he's going to be able to add to, you know, collect his pension and make more doing something. Obviously, he's not going to be doing some extreme physical thing.

1:43:44Ken Coleman:Am I crazy to be a person who goes, look, I don't care how much family is around us. If I'm making a comment like that about how expensive a state is, I'm going, what's three, four hours away where we can dramatically change our living expenses. I get being close to family, and I'm not sure.

1:44:02Dave Ramsey:She said they're married at the hospital, too. I didn't understand that. Well, I mean, the lung transplant, they're tied in. That's their medical community.

1:44:10Ken Coleman:He's got to be there. For a while. For a while.

1:44:12Dave Ramsey:Yeah.

1:44:12Ken Coleman:But in general, I'm going to make changes to my life to reset if I have to. I don't care how close family is to me.

1:44:22Dave Ramsey:No, that's what people have done. And that's why millions and millions and millions of people have moved in America. And I think they all moved to my neighborhood. But yeah, no income tax.

1:44:37Ken Coleman:Do you make them sign a statement of living?

1:44:41Dave Ramsey:Well, I'm trying to get a law passed in Tennessee that you can't vote until you go through a proper voting class on how to vote properly. But nobody's buying off on that. You should do that. I don't think I'm going to get elected.

1:44:52Ken Coleman:Because you're a native Tennessean. I don't think I'm going to get elected. You're one of the few in Nashville. You could do your own course.

1:44:58Dave Ramsey:Yeah. It's just proper voting.

1:45:31Ken Coleman:Hey guys, I'm so excited to tell you that our new 2026 Ramsey Goal Planner is available right now. This isn't just your average planner. It's your personal guide to setting clear goals and building habits that stick. So get ready for all new monthly content from your favorite Ramsey personalities, tactical goal setting trackers, and upgrades that make this our most durable planner yet. Last year, we sold out, so don't miss out. Order your 2026 Ramsey Gold Planner for$49.97 today at RamseySolutions.com. slash store.

1:46:18Dave Ramsey:If you died tomorrow, how would your family keep the lights on or pay the mortgage or afford groceries? If someone in your life depends on your income, you need life insurance. But how do you choose? Well, it's actually simple. Life insurance is one job. It's to replace your income if you die. Term life insurance is the least expensive and the only kind that does only that. The others, like whole life or permanent life, try to add investing. They end up doing everything poorly. That's an understatement. You only need life insurance when someone depends on you financially. So if you're like most people, you need a policy worth 10 to 12 times your income for about 15 to 20-year level term insurance.

1:46:58Dave Ramsey:Level means the premium stays the same. For more info and resources, use the free Term Life Insurance Guide at RamseySolutions.com slash Term Life Guide or click the link in the show notes. Jim's in San Diego. Hi, Jim. How are you?

1:47:14Ken Coleman:Hi, Dave. Honored to speak with you and Ken. You too. Thanks for having me on.

1:47:17Dave Ramsey:Certainly. How can we help?

1:47:19Ken Coleman:So I've got a question for you. My wife and I are very blessed. We are both 30 years old and married a little over a year. We've got about$800 ,000 in non-qualified assets and another$400 ,000 in qualified assets. And we're going to be getting an inheritance of a million dollars. And we're looking to spend it on a little less than a million, but for rounding purposes. is we're looking to spend it on a house and use that million as a down payment and get about either a$600 ,000 loan. I'm uncomfortable with any kind of loans. The last debt I had or that we both had was actually my student loans, which I've paid off at this point.

1:48:01And I'm apprehensive about getting a mortgage, especially a$600 ,000 mortgage.

1:48:05Ken Coleman:And the question is, do we take the$800 ,000 and apply that to the$600 ,000 mortgage and pay off the house in cash of$200 ,000 remaining in brokerages and bank accounts? Or do we use that$800 ,000 in the brokerages and bank accounts and use the dividends to basically liquidate some of the assets every year? What do you make? Both of us combined are about$200 ,000 in salary and with another$120 ,000 to$160 ,000 in bonuses and commissions. Right now we're living well underneath the$200 ,000.

1:48:41Dave Ramsey:But you make$350 ,000, and that's where you got the$800 ,000 is you saved like crazy. Yes. Okay. So you're maniac savers. Way to go. That's cool. And you're risk-averse, so you're avoiding debt and you're saving both. That's pushing you. And you're doing really well with your careers. Way to go, man. Congratulations. Such choices to have to make. Appreciate that. So the house you're living in, what's it worth?

1:49:05Ken Coleman:We're thinking it's going to be old. No, the house you live in today.

1:49:08Dave Ramsey:Where do you live today? Oh, we're renting right now.

1:49:11Ken Coleman:Yeah, what's it worth? It's about$2 ,900 a month as a rent.

1:49:16Dave Ramsey:Yeah, what's the house that you're renting worth?

1:49:20Ken Coleman:Oh, it's an apartment.

1:49:22Dave Ramsey:Oh, okay. So you're renting an apartment that's$2 ,900 a month. Okay. And you've still been able to, with a$36 ,000 a year rent bill, been able to save hundreds of thousands a year. Yes. Pretty incredible. I mean, what could you do if you didn't have a monthly housing cost? Wow. So you're moving from an apartment to a million six, but a million six in San Diego is no palace. It's a nice house, but it's not a palace. Yes, correct. It's not a million six in Abilene. It's a million six in San Diego. But again, it's a nice house. I mean, it's probably the average. I think the median now is about$600 or$700 in San Diego, and the median nationally is$422.

1:50:10Dave Ramsey:Yes. That's a problem. So you're about double or a little over double the median in the area. Hmm. Okay. Very interesting. So, well, the way we look at it is simple. In your situation, I would not buy the house unless I paid cash for it. Okay. And the reason is very simple. there's multiple reasons but there's there's the first one that comes to mind is you'll take the increased cash flow and grow the money back in no time okay okay and because it's just the way you're wired number two um the damage that having a mortgage does to anyone is multiplied when we talk about you because of the way you're wired.

1:51:00Dave Ramsey:If most people felt like they put 300 pounds on their shoulders doing this, you're going to feel like you put a thousand pounds on your shoulders. Yes. And it's going to start affecting everything negatively. Okay. And in ways that are not necessarily directly attributable. Okay. Here's what I mean by that. Okay. One of the things I've discovered in my business career and watching people over these years with their careers in general is people make much more positive career decisions when they're not forced into it to make a payment. And so they don't they don't stay in negative toxic environments.

1:51:43Dave Ramsey:Instead, they move to better environments. And people so people that live debt free end up prospering in their careers more because they can say, take this job and shove it. Gotcha.

1:51:56Ken Coleman:Okay.

1:51:57Dave Ramsey:And you're going to be like the multiples of that because you're like the ultimate I hate debt saving nerd guy, and I love you for that. Thank you. But debt would do more damage to your spirit than other people's is what I'm saying. Because I feel that, yeah.

1:52:13Ken Coleman:Yeah, because of who you are. Both my wife and I are very risk averse on the debt. Yeah, she is, but she's not anywhere near like you.

1:52:22Dave Ramsey:I mean, you're off the chain. You're off the chain. In a good way. I think it's awesome. I am too now, but it took me a while to get there. But, I mean, you know, you're there. And it's caused – look at the cause and effect of that. I mean, you guys made$350 ,000. You live in freaking Southern California, one of the most expensive areas in the world, and you banked$800 ,000 instead of spending it all. I mean, you guys are incredible. That skill set sets you up to be, I mean, you're going to have$10 or$20 million in a decade. It's crazy how much money you're going to have.

1:52:59Ken Coleman:I would just say very simply, trust your gut. It is so obvious to us where you and your wife stand. You more than her, sure. But you will regret this if you take a mortgage out. You could feel it all over you. And you just don't want to feel that. You'll be fine.

1:53:13Dave Ramsey:I think your$350 will turn into$450 in income faster. by not having a mortgage than if you took one out. It's going to affect your income, and people don't think about that.

1:53:22Ken Coleman:I think it'll affect his overall mental health. That's what I mean. He's just not going to do well with that, which is great.

1:53:31Dave Ramsey:I mean, I have no idea. We haven't been able to get any good research, and we've not done the research to tie all the way back for the rest of you folks, not for him, but for all of us. the tie between actual physical illness and debt levels. Yeah, I would love to see that. Because, I mean, what if you could actually figure out that a certain number of heart attacks out of 1 ,000 heart attacks are caused by financial stress? Then we could say that debt actually has a cost, a medical cost, because you have to pay for the hospital when you have a heart attack, right? and you've shortened your lifespan why because you're carrying so much debt and there's hypertension i mean was hypertension number two right now you know it's high blood pressure right up there heart attacks right but so we don't have any actual data to back that up but what if you went through all the heart attacks and you pulled out the debt levels versus those of us that not had a heart attack and had no debt and see what the actual correlations are it's got to be there y 'all common sense tells you it's there and then so then you factor in okay well i'm making i got a mortgage of four percent and i invested it at 4.5 i'm making a spread no not with you not with a heart attack adjustment you're not i would change the math wouldn't it can yeah it really would it would be different but nobody talks about that kind of stuff oh wait a minute the percentage number one cause of divorce in north america today money fights money problems you know who has money fights and money problems?

1:55:03Dave Ramsey:Broke people. More than rich people. Rich people don't fight about money nearly as much as poor people do. Broke people. I mean, Sharon and I about killed each other when we went broke. I mean, she's from the hills of East Tennessee, frying pan throwing. There's an Olympic event. Even the German judge gave her a 9.9. I mean, come on. It's like, God. So yeah, I mean, it's no fun. No fun. So I mean, what if the cost of a lost marriage due to financial stress was factored into your little formula where you thought you were making money with borrowed money. Oh, it would kind of dissipate that, wouldn't it?

1:55:39Dave Ramsey:Oh, yeah. Put the heart attack and the divorce factor on there. Kind of does away with the whole idea that borrowing money is really smart.

1:55:59We'll be right back.

1:56:03Thank you.

1:56:33Dave Ramsey:held its ground.

1:56:35Ken Coleman:That's good.

1:56:36Dave Ramsey:That's fun. All right. Devin is in Ohio. Hi, Devin. How are you?

1:56:42Ken Coleman:Good. Good. How are you guys?

1:56:44Dave Ramsey:Better than we deserve, sir. How can we help?

1:56:47Ken Coleman:So just really have a couple of questions here. I'll just kind of give you a rundown of what I got as far as debt wise and everything else here. So my total debt's about$182 ,000. $138 ,000 of that is in my mortgage for my house. I have 43 acres. It's a nice piece of property. The other debt is my service truck that I use for work. It's$43 ,000. So with that being said, I have some other equipment as well. I got like dozers, excavators, pickup trucks. Those are all paid for in cash. That's going to equivalent to about$95 ,000. if I sold all up. That's what I would have in cash. Also have a rental house that's 100 % paid for and I have about$30 ,000 in savings.

1:57:41Dave Ramsey:Okay and what's the rental house worth?

1:57:45Ken Coleman:Probably lower$200s.

1:57:49Dave Ramsey:What's your house on$43 worth?

1:57:53Ken Coleman:Lower$400s.

1:57:55Dave Ramsey:Okay. Good for you. Well done, sir. What kind of service work do you do in the truck?

1:58:00Ken Coleman:Field mechanic. I traveled for the last four, four and a half years for a stabilization company and found a job closer to home. But basically they're leasing my truck off of me now, so kind of pay upgrade, if you will.

1:58:13Dave Ramsey:Okay. And so you're turning a wrench on what?

1:58:19Ken Coleman:Just different types of equipment, excavators, dozers, you name it, I fix them.

1:58:22Dave Ramsey:Okay, heavy equipment. Okay, cool. Good for you. And thus you've run into some bargains and bought some, and you've got 43 acres to play on it with.

1:58:30Ken Coleman:Always looking for a deal.

1:58:32Dave Ramsey:What's your income?

1:58:35Ken Coleman:Anywhere from$130 ,000 to$145 ,000 a year. All right.

1:58:43Dave Ramsey:And your question's what, sir?

1:58:46Ken Coleman:So basically I have this debt. I would like to get my service truck paid off.

1:58:51Dave Ramsey:Good.

1:58:51Ken Coleman:It's technically in my name, but I'd like to get it switched over to my business name. That way, that is in my business.

1:58:58Dave Ramsey:Yeah, but you're not going to get the loan. You can get the truck turned over, but not the loan.

1:59:02Ken Coleman:Right, correct, yeah.

1:59:04Dave Ramsey:All right, you've got to pay it off. I agree. Okay, what else?

1:59:08Ken Coleman:My next thing is when I sell this equipment and my pickup trucks and stuff that I've paid for cash for over the last five years, should I take that money and pay the rest of my house off or should I invest that money into some more real estate?

1:59:22Dave Ramsey:Yeah. Good question. Okay. Well, if I'm in your shoes, I'm going to sell the$90 ,000 worth of equipment and pay off the truck and pay towards the house. And that gets me down to less than$100 on your home. Agreed? Yeah. Okay. And then I would look at it and say, all right, how old are you?

1:59:48Ken Coleman:24, I'll be 25 Friday.

1:59:50Dave Ramsey:Way to go, dude. That's super impressive. I thought you were going to tell me 34 with these numbers. You've done really well. Well done, young man. Well done. All right. That's impressive.

2:00:08Dave Ramsey:That calms my answer a little bit, okay? Yeah. Because you've got lots of time, okay? and so I don't want to stay in debt and wallow around in it because you're young. I don't mean that. But I would sell the equipment because you're going to run into other equipment. You're always going to be able to buy a piece of equipment for$5 ,000 and turn it for$10 ,000. Yep. You're going to run into that, and you know the equipment because you turn a wrench on it, so you know what it is. But you're going to run into a bargain here or there. So you're always going to do a little what we call horse trading, right?

2:00:41Dave Ramsey:Yep. No horses involved, but you know what I'm talking about. So, yeah. So anyway, the, uh, um, that, and that's going to always be a part of your income because of the way you work. So yeah, I would sell the equipment, pay off your truck, pay down the mortgage. And then I would just begin to say, all right, out of my 130 ,000 with no truck payment, uh, how can I begin to attack that hundred thousand? And when could I be done with it? I mean, you could be done with it in like three years if you watch what you're doing, right? Yeah. And you'd be 100 % debt-free with a paid-for$400 ,000 house, a paid-for rental house of$200 ,000.

2:01:20Dave Ramsey:That's$600 ,000. And then you start your long-term investing in your Roth IRAs and some good growth stock mutual funds. You sit down with a good SmartVestor Pro. And, dude, you're going to be a millionaire by the time you're probably 28.

2:01:35Ken Coleman:That'd be sweet.

2:01:37Dave Ramsey:Yeah, that's where you're headed if you follow just that basic idea there. And then, you know, when you make some extra money, don't blow it. Let's just chunk it on the house. Let's get the house done. Because here's the thing. We were talking about this a minute ago before we picked up with you, that you're going to make different decisions on which clients you want, and you're going to make more money in your business when you don't have a single debt. Your business is going to flourish because you're clean and there's no pressure. You know what I'm talking about when you know that certain customers are not worth, the juice ain't worth the squeeze.

2:02:14Dave Ramsey:Right. You know, some of them are such butts they're not worth working with for any amount of money.

2:02:19Ken Coleman:The way I have it set up right now is I'm technically in the union, so the company that I'm working for pays on my pension and health and all that. I have about$40 ,000 on my pension right now.

2:02:34Dave Ramsey:That's a good start, but I want you to have independent IRAs also.

2:02:38Ken Coleman:Yeah, okay.

2:02:39Dave Ramsey:I want you to have Roth IRAs going in addition to that, not just the union pension. But, son, I mean, sir, you have done an incredible job. I'm very proud of where you are. And here's the other thing that I know – the other reason I know you're going to be successful, not only that you've made the progress you've made to be where you are at 24, but also the way you're asking these questions. You're paying attention. You're being very intentional. Correct. And you're making good – Some of the stuff you suggested before I even started there was just things I was going to suggest.

2:03:12Ken Coleman:Real quick question. How old were you when you got started, Devin, in this work? In the heavy equipment industry, working on it, I went through a four-year apprenticeship program. So I didn't make the money I'm making now the last two years. So I would say the last two years I started making$100 ,000. Yeah, but how old were you when you started the program? Were you 20? Were you 18, 19? Yeah, I was 20, yep. Yeah, and the reason I did that is because, again, this is – you're going to start seeing more and more of these stories in the United States. Young guys that are skipping the college route and going into this kind of a deal, and we're talking about a dude who's not only going to be a millionaire, he's probably going to be a very successful small business person.

2:03:53Dave Ramsey:Already is. Yeah. Well, I'm talking about – Not a millionaire, but he's already a successful small business.

2:03:58Ken Coleman:But I'm talking about where he's got a team.

2:03:59Dave Ramsey:Yeah, he's going to make$130 ,000,$140 ,000,$150 ,000,$160 ,000, and he's 24 years old. and he turns a wrench on heavy equipment. Yeah, that's exactly right. That's a whole lot smarter than spending$250 ,000 to get a degree in left-handed puppetry and then being a barista.

2:04:16Ken Coleman:Kid's 24 years old and he's got a house, a rental property that he owns cash. Yeah. I'm just pointing this out because I'm so tired of the drivel of coming from all the complainers about how no one can win today.

2:04:32Dave Ramsey:Oh, yeah. Capitalism is dead. Well, don't tell Devin, okay?

2:04:35Ken Coleman:This is a poster child.

2:04:36Dave Ramsey:Don't tell Devin you can't get ahead in America. Don't tell Devin all the opportunities used up. Don't tell him that the deck is stacked, that there are systemic problems with the economy. Don't you understand?

2:04:48Ken Coleman:And by the way, he paid his dues. I hope everybody heard that part, too. He wasn't making this kind of money until – so it takes time.

2:04:55Dave Ramsey:Yeah. Some of y 'all need to look up what he's got on his hand. It's called a callus. Y 'all need to look that up. It'll be good for you. Yeah.

2:05:03Ken Coleman:So, wow, that's impressive. It's great. It's a great story. It's not glamorous work either. I don't get it. I mean, our buddy Mike Rowe right now would be doing the happy dance.

2:05:10Dave Ramsey:Mike Rowe would be doing the Trump dance right this second. That's right. But that's it. Yeah. This is Mike's guy. That's right. I agree with him. I agree with him. I love it. It's not for everybody. No. But this idea that, you know, you need to become a teacher because your grandmother said to. No, maybe not. Maybe that's a bad idea. Maybe you need to become a teacher because we need great teachers, and you're going to go into the classroom and actually teach after you get your degree in teaching. There's a reason to become a teacher. Oh, let's think about that for a minute. That puts us our The Ramsey Show in the books.

2:05:43Dave Ramsey:We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:06:04Thank you.