More Debt Always Equals More Risk

25:43Dave Ramsey:And both you and your husband are in agreement on it. That would be the only way you keep doing this. And I kind of don't think that's what's going on here. I kind of think you all fell backwards into this. And it's just weird and your husband's calling it is weird. Yeah. Yeah. And then it turned into two or three times and now it's ten times a year. How many times is it really? Is it that many? So the first year that our first son was born, yes, It was, she in fact flew 10 times out here. It's slowed down a lot more. Obviously, we're only halfway through the year. So she's probably been out here, you know, like four or five times.

26:20And I think, too, the counter to that is my husband's parents, they live three hours up the road. They're able to come visit. Yeah, but that's not how it works.

26:29Dave Ramsey:That's not how this works. It's not a tit for tat. It's not a... Because your parents are grown-ups. If they live next door, it doesn't matter. Yeah. It's not your job to keep it balanced and equal. Your parents are choosing to live where they live. Daniel's in-laws live in Kansas City. We live 30 minutes from Daniel. He doesn't pay for their airline tickets. Gotcha. And doesn't feel any need to, by the way. And so, you know, it's just unusual. Now, if you guys want to do it, but I kind of think that the way you're describing it, your sentence structures and everything is leaving me with you are unsettled with this.

27:09Dave Ramsey:You're uncomfortable with this. And your husband calling it out makes you double uncomfortable. Yeah, I think you hit the nail on the head. And if you're uncomfortable, that's what's bothering me. If you call me up and went, I want to do this as an act of generosity. It gives me great joy. And this is awesome. I would go, yeah, you got the money. Go ahead. That's fine. It's not a big deal. But there's something rattling around with you that this doesn't feel right. And your husband just said, oh, the emperor has no clothes. That's exactly right. And he's sensing his wife is not whole on this deal.

27:41And he doesn't want to go along with something that you're feeling uncomfortable with.

27:45Dave Ramsey:Yeah, that you're feeling forced into. There's a little guilt tripping of some kind going on. Yeah. So I think we restructure it. Let's have it just a reset. Jump on the phone and go, Mom, we're looking at this and we're working on some stuff in our budget. And so we're not going to be able to fund your airline tickets anymore. Yeah. We love you. And we hope you can come as much as you want to come. You're more than welcome. We're not trying to run you off. But we've got some other stuff we're trying to do for the kids, college funds and some other stuff with this money. And gosh, I hope it doesn't cause you too much trouble.

28:12Dave Ramsey:But if you're ever hungry or anything, let us know. We'll get you some food. But we're probably just going to have a reset on this. And just tell your husband that they're probably going to sell their house and to say, hey, we're moving to Charleston. That has happened before. are so um one time we had a a team member many many years ago over 20 something years ago that misbehaved and um we several of the leaders we were together and we're like and every we went around the room we're like okay i had a bad feeling about that guy and that guy's been kind of weird there was something weird about that there's something weird about that eight months ago i was thinking to myself that was weird something weird about that and one of the other guys one of the other leaders spoke up and said okay we have a new rule at ramsey if everyone feels like something if you if anyone feels like something is weird it's probably because it's weird so let's just say if you know if i get a weird vibe off this guy i should probably just go that's weird i get a weird vibe and then if if seven of your colleagues say no they're great Then I can walk away from it.

29:23Dave Ramsey:But usually if you feel like something's weird, it's because it's weird. There's something weird. That's right. That was the point. Can I celebrate your marriage? Because your husband had the courage to say, I sent something not well in your soul, and I love you enough to put it on the table and say, we don't have to keep doing this. Yes. And good for him. And he was gentle about it. Good for him. He's like, you can even call Ramsey and they'll settle the debate is what our call screener says. Yeah. Right. So we get to blow the whistle and put on the striped shirt and be the referees. But, yeah, he's a good – I like her husband.

29:56Dave Ramsey:He's a good dude. Okay, good stuff. So, yeah, if something doesn't feel right, guys, it's generally because it's not right. That's the point. And it's good to have wise counsel to bounce that off of. Yeah, yeah. A multitude of counsel, there's safety. But, yeah, it's a good decision-making tool to trust your instincts. that's god's spirit inside of you troubling your waters troubling your your stomach you know and uh it's not it's not actually you have a physical physiological reaction to something uh around the subject of money there's a reason yeah it's not random your body as you say your body's talking to you or god's spirit is using your body to talk to you or whatever it is however you want to get at it but that's this i had a feeling well yeah yeah there's a reason you did Yeah.

30:46Dave Ramsey:It's because you you and you know, you're you're you're taking in all the data and some of it is just below the surface and you don't even realize you're taking it in. It's like sometimes when you read someone's body language and they go, so what's wrong? Nothing. Well, no, something's wrong. Not that. Here's what I do in my own life. I did this the other day. When you start feeling like something doesn't feel right, write it down so you can look at it. And that has a way of clarifying it. Oh, that's not that big of a deal. Or, oh my gosh, my body's right. When I wrote this down, it really looks...

31:21Get that out of your body and onto a piece of paper where you can examine it.

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32:46Dave Ramsey:If you're tired of living paycheck to paycheck and feeling like you can't get ahead, join one of our free EveryDollar trainings. There are new trainings every week this month, and they're all hosted by one of our Ramsey personalities. We're going to show you how to stick to a budget and even find about$9 ,560 of margin. That's the average. Almost$10 ,000. Change in position just as soon as you start working this plan. We can show you this lost money. Yeah, using every dollar. You get out of debt, start building wealth, increase your generosity. You can ask questions during the live Q &A, so it kind of turns it into like this show, but better because you can actually get through.

33:25Dave Ramsey:Sign up for free at RamseySolutions.com slash webinar. Jennifer is in Tampa, Florida. Hi, Jennifer. Welcome to the Ramsey Show. Hello. Thank you for taking my call. Sure. What's up? I love the EveryDollar app. Well, thank you. Love it. Appreciate the endorsement. Very cool. How can we help today? I have a question. My husband, us as a family, we would like to buy a boat, but my husband feels guilty because he feels like he's taken away from our future. Well, you would be, but you'd also have a boat. So that's the trade-off, right? I know. I say buy the boat. So A, can you pay cash? Yes. Okay. B, how much is the boat?

34:12$55 ,000.

34:13Dave Ramsey:And what's your household income? We're about$175 ,000. Okay. And what are your two cars worth? We just owe$5 ,000 on a car. No, I said what are they worth? Oh, I think it's probably worth around$35 ,000. One car? His truck, yes. What is the other car? Other car is business. Doesn't matter. How much is the value of the car? The car is probably worth$20 ,000. And you own it? Yes, sir. Okay. All right. So the reason I'm adding these three things together is, yes, I would still buy the boat. I'm confused as to why you have enough cash to pay$55 ,000 for a boat and still owe$5 ,000 on a car. Why would that happen?

35:04I know. I say pay it off, but he's like the interest rate is so low it doesn't matter.

35:09Dave Ramsey:No one ever got rich with low interest rates on a car payment. That's absolute bogus bull crap. On a stick. So write a check and pay off the car today and then buy the boat. That's what I would do, and I wouldn't feel guilty at all. Now, here's the thing. You're paying cash. The rule of thumb is this. A, can you pay cash, and B, all things that you own with motors or wheels added together There should not be more than half your annual income, and this does not violate that. Got it. Okay. All right. Because you've got too much invested in things that go down in value. Boats go down in value 100%.

35:47Okay.

35:48Dave Ramsey:Right. Cars go down in value 100%. Sea-doos, snowmobiles, lawn tractors, big tractors, little tractors, green tractors, and red tractors go down in value. that's a children's book by dave ramsey i'm just saying i'm just trying to make sure i got all the tractors covered because the number of times i've talked to someone with fifteen thousand dollars owed on their john deere riding mower makes me want to throw up okay so it's a riding mower so yeah you don't borrow money on that and have owe more on your john deere riding mower than you do on your wife's car so but rednecks might do that sometimes so i'm just saying hey that is a good children's book called it goes down in value by dave ramsey yeah the red tractor and green yes i would do this now are both of you want to buy a boat and he just feels guilty um well he really wants to buy a boat and i really want him to be happy so yes we both don't make you happy boats make you sad no friends with boats make you really happy Yeah.

36:55I know. He loves fishing, and that's where his heart is.

37:00Dave Ramsey:I do have another question, if you don't mind. Okay. We have money sitting in the money market right now, and I don't know if that's our best way to invest our money. I hear a brokerage account. No. Should we transfer that over? No. Brokerage accounts are often used for people buying and selling stocks, and we don't want to get into that business. But I would buy some mutual funds instead of have money sitting in a savings account. You're going to make a lot more money. So my extra money above emergency funds and above money I've got to set aside to purchase something within the near term like a boat, the extra money I have would go into good growth stock mutual funds.

37:47Dave Ramsey:So like the last two years, I made 23%, 25%. The average, though, is only about 11%. But it's a whole lot more than 4%. Yes. So, yeah, get with a Ramsey Smart. Go to RamseySolutions.com and get with one of our SmartVestor pros and don't miss out on these stock market run-ups because that way you're getting the advantage of all the stuff going on in the economy that's positive. And the media is so hell-bent on not printing anything positive that people forgot to look up and go, oh, the Dow set another record. Oh, the Dow set another record. Oh, the S &P set another record. Oh, the stock market's at an all-time high right now at this moment.

38:31Dave Ramsey:So, yeah, and it's been doing that for a while. So, yeah, you don't need$200 ,000 sitting in there 3 % and calling that investing. It's not. It's saving. And you don't want to save more than an emergency fund are more than near-term purchases like Christmases and boats. And I'll tell you, I got a friend named Dave with an awesome boat and a couple of Sea-Doo's, and I'm a happy guy. You don't have one. You don't have a boat. Yeah, they break. Just everything that – the more stuff you own, the more repairmen you have to know. And boats are – yeah, boats are expensive. I fish a lot, and I've got a pedal kayak, so I feel like I can get my workout in and my fishing in at the same time.

39:12Dave Ramsey:You know, you can go down to the Ace Hardware and buy a little stainless steel screw that's an inch long for a penny and a half, two pennies. But if you buy it and it says on it for boats, it's$4. Why is that? And if it says it's for an airplane, it's$62. So it's the same stinking screw, by the way. So if it says marine on it or aircraft on it, the price changes. But it's still a little stainless steel Phillips head screw. That's still what it is. I'm sure if you use that screw and somebody repairs your boat, you violate the whole warranty, the whole thing goes to... Yeah, well, it'll probably sink.

39:46Dave Ramsey:That boat will probably sink. That's probably not. So but anyway, yeah, you're going to spend money on everything that you own. So the more stuff you own, houses, boats, whatever, the more repairmen you have to know. So these things come with a cost. They take up your mind space to maintain them. And they take up your and you're yeah, yeah. And they take up your wallet space to maintain them. So there's nothing wrong with that. Just make sure you can afford all of that, not just the purchase, because the purchase is just the beginning. Right. And you certainly can't justify it based on the per pound,$55 ,000 divided into the number of pounds of fish you catch in a year would not be a good purchase price on the fish.

40:30I tried to do that once with fish and poles and all the gear.

40:34Dave Ramsey:Devastating. Yeah, I didn't work. Do it with hunting gear, too. You can't do it. You can't kill enough of a year or enough rabbits. I'm going to disagree with you on that. The spreadsheet I made for my wife clearly shows that in 2035, I'll have netted out. You will have broken even on hunting gear after 42 years. After 42 years. And by then, of course, it won't even work. So you have to have another one. That's the way it works. So, yeah, good rule of thumb then. Let's put that back out there. If it's got wheels or a motor, it goes down in value. Add all that together and don't have more than half your annual income invested in things that go down in value.

41:10Dave Ramsey:It's very difficult to prosper doing that. and don't use the word invest in front of something that goes down in value. I invested in a boat. No, that makes you look stupid. And stop making stupid financial decisions based on, quote, I have a good interest rate. I'm so sick of that. It just means I'm paying the bank less of my money every month to make them wealthier. That's just dumb, especially when you have$55 ,000 in an account right there. Yeah, you pay cash for it. Just pay off the car. Pay off the car by the nightfall. I'm not big on husbands and wives making deals, but that's a good deal.

41:48Tell them, go buy the boat, but you've got to pay the car off today. That'd be a good move. It probably would be a terrible move, but I would do that in my house.

41:55Dave Ramsey:Yeah, I'm not big on making deals like that because that will come back to haunt you. It will. It will. There'll be another one come around. There'll be something else come around. Yeah, but you remember that time I did that deal with you? Now's your turn to make a deal. No, this is the smart thing for us to do is to buy a boat. We can afford it. The smart thing for us to do is to pay off the car. And let's get going. And that's smart. It's not smart to keep a car financed. There is no scenario. None.

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44:14Dave Ramsey:Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Dr. John Deloney, Ramsey personality, number one bestselling author, host of the Dr. John Deloney Show on Ramsey Networks, is my co-host today. Rachel's with us in Salt Lake City. Hi, Rachel. How are you? Good. How are you? Better than I deserve. What's up? So I'm wondering how we can apply the baby steps and get my husband through college. What's he taking? So he's going into software engineering. Okay. And why would he be in college for that?

45:08I thought that was the best. It's the last place I would go to learn software engineering. Really?

45:14Dave Ramsey:Yeah, really. I've got a whole bunch of them, like 300 of them that work here. I have 300 of them that work here. They went to code school. Okay. They didn't go get a four-year degree. The number of them that have four-year information systems degree is almost zero. Now, a few people that do cybersecurity stuff at a real high level go get a four-year degree. But to be a software engineer, you don't need a four-year degree. Matter of fact, a lot of what you take is a waste. so why is he doing that the best thing i've heard in a long time what she said she's crying in a long time okay it's good why are you crying hon oh i'm just like super scared out of my mind what are you scared about my husband is trying very hard to support our family we have three kids and I have no education to warrant more than minimum wage.

46:08Disagree with you wholeheartedly on that assessment.

46:12Dave Ramsey:Education does not give you anything to warrant anything. All it does is give you tools to do a job. But this idea that you've got the idea that a degree is a ticket into a club that you're not worthy to belong to called success, and that's not true. There's very little correlation to that. Uh, that's the old thing from the fifties and sixties where they sold everybody to go into college loan debt, because if you don't get a degree, you're never going to be anything and not true. So, um, what is he doing now? He's attending university. That's it. So he's in school full time. Yes. And doesn't work.

46:57Yes.

46:58Dave Ramsey:How are y 'all eating? um we have access to a 529 account that has$30 ,000 in it for us to use towards education yeah and that's how he's paying for his tuition how are you buying food a food stamps yeah you're not scared about yeah geez man you're scared because your husband's not working Why did he quit his job? Yeah. What was he doing before he quit? He was working at a customer service representative. All right, let me just, I'm going to be as bold as I can. I worked a full-time job as a dean of students. I also was an adjunct professor at two different universities, and I ran around with police officers in the middle of the night.

47:53I was a full-time doctoral student. Why? Because I had a family to provide for, and I had dreams of things being different in the future. And that meant I couldn't just cash out on my responsibility to take care of my family. He can't either.

48:09Dave Ramsey:You don't get to put your kids, the three kids, on food stamps so you can go get a degree. Wrong answer. No, he needs to go to work, and he needs to stay up all night doing his assignments at his coding school. You have$30 ,000. That will cover the cost. He can go to code school while he works a full-time job. Or two full-time jobs. Or three. You are right to be terrified because your husband's cashed out on your family right now, you and the three little kids. And I would tell him that if he was sitting right in front of me. Okay. Extremely irresponsible. How do I tell him that when... Play this clip back to him.

48:46Have him call us. Dude, you're irresponsible. There you go. I just said it for him. Here's how it has to start, honey. You have to sit down and say, I'm scared to death. It's not.

48:58Dave Ramsey:But listen, it's not a dream. He's living. It's a nightmare. Okay. Your primary focus on this planet is not to self-actualize and feel good. And I want to live my dream. I want to live my passions. Well, cry me a whambulance. Wah. Seriously, you go get a job and you feed your freaking kids first. First, before we talk about your dreams, and then you work 16 hours a day and make sure everybody's taken care of. And then in the middle of the night, I wrote the book Financial Peace from 10 p.m. to 2 a.m. is when that book was written. And that's when I wrote my dissertation at 10 p.m. till 2 a.m. till your face falls asleep on the keyboard.

49:48Dave Ramsey:Yeah, and I had little babies upstairs asleep and a wife upstairs asleep, and I would get three or four hours of sleep, and I would get up the next morning and go to, oh, work while I was building my dream of financial peace. So, no, this is a bad plan, darling. It's a bad plan. There's so much wrong with your plan that it's unbelievable. I think the problem is it's not her plan. I know. I mean, his plan. I'm sorry, his plan. So, okay, look, number one, let's just start with the fact you don't need a four-year degree to be a software engineer. Boop, right there. Okay. That's just shortcut. Hey, it's a short in the on-ramp.

50:27And you've got a 529 with 30 grand in it. You paid for it. There you go.

50:31Dave Ramsey:Yeah. Yeah. Bethel, is that the people? Bethel Tech's got programs. Bethel Tech has programs for the – I don't know if they're still an advertiser. They advertised with us for a while, but they're good people. I've got with them. Yeah. They do a good job teaching coding. We've sent people from Ramsey there to be taught coding. And so you can become a software engineer. You start out Dev1. You keep working your certs, and you get to Dev2, Dev3. Dev3s will make a couple hundred grand right now, okay? Maybe a little more. And if you want to move all the way into cybersecurity, you probably get up to a half million.

51:03Dave Ramsey:But that's a different level. But you can go out and get a software degree that's much more than better. I mean, software, go to code school and write enough code to make a whole lot more than you would as a customer service rep. But you don't cash out on your family. To do it. To do it. You do that and. And that's just part of being a... I just want to live my dream. You want to smack your dream. You turn it into a nightmare for everybody else. Oh, God. And then your crying wife has to call us and say, help, please. Yeah. Yeah, yeah, yeah. That's how you tell him. You play this back. It won't be pleasant for him.

51:42Dave Ramsey:It's okay. We're in the business of telling people the truth because we love them. And we want you to win. We want you to succeed. We want him to succeed. We want you to succeed. Let's lean on this too. Just because you don't have a degree doesn't mean. You don't have to make minimum wage. That's absolute bullcrap. You don't have to make minimum wage. It's not true. Bullcrap. And it may be that you've got to get a minimum wage job to get money in the door right this second. But you're looking all the time after that job. And you're going to find yourself. I tell you, listen, minimum wage is seven and a quarter.

52:10Dave Ramsey:Target, if you just show up and breathe and bathe, will pay you$20. Okay? That's the qualifications to work at Target. I don't think that's right. Bathe and breathe. That's it. You make$20 an hour. And minimum wage is seven and a quarter. So, no, you're not minimum wage.

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53:57Dave Ramsey:Paul is in Los Angeles. Hey, Paul, how are you? Hi, Dave. Thanks for taking my call. I'm a big fan of yours. Well, thank you. How can we help? Well, I'm going to be inheriting about$685 ,000. And I have a debt of$162 ,000 for my mortgage at 2.9 % fixed. And I also have a$23 ,000 mortgage. It's horrible. It's 8.09%. and I owe$13 ,000 on my car, 2.9 % fixed. And I also need to put maybe up to about$100 ,000 in my home on repairs, not, you know, gingerbread stuff, things that it really needs. So my question is, do I pay off all those debts or some of them? Oh, my goal is with the money, I want to buy real estate, become a landlord again.

54:55So my question is, do I pay off all those debts before I buy property and then use the property to pay off the debts? Or do I pay off all the debts or some of them and then go and buy a property, which means I would buy a lesser value property if I pay off all the debts?

55:11Dave Ramsey:Yeah. Well, I mean, you started the conversation, you're a big fan. So that means you've listened to the show. Right. And 100 % of the time, you know I'm going to move away from debt, right? Right. And the reason I do that is that I have learned that several wonderful things happen when I am out of debt. One is the quality of my life goes way up. The peace in my life goes way up. The quality of my relationships are increased because the stress is down everywhere in my life. Very few people get to tell you what to do when you don't have a mortgage. It just changes everything. Well, to you, I paid off$50 ,000 of credit cards.

55:55Dave Ramsey:You're making progress. And, you know, the reason you did that is the freedom that goes with it. And then, of course, the mathematical side of the equation is that when you don't have any debt, you have money. Because all the money you're paying a stupid bank now is yours. And so I have used that money once I was debt-free to build up an account and buy a piece of real estate with it. And then build up an account and buy a piece of real estate with it. And I've got an LOI right now out on a big commercial property that I'm going to develop if it goes all through. And so I got it under contract, tied up while we're doing the due diligence on the property right now.

56:35Dave Ramsey:But it'll all be cash. And then when I have another piece of real estate that I paid cash for that's making money, I make that much more money. And then I make much more money. And it snowballs in the positive direction. And so all of that to say, the math and the peace and the spiritual aspects and the relational aspects all lead me to tell everyone to live this wonderful life that I've had the privilege of choosing to live, which is not having any payments owed to a single person. I owe no man nothing but a debt of love. And so that's how I live, and it's a great life. So I highly recommend it to everybody.

57:15Dave Ramsey:So what would I do if I woke up in your shoes? Well, I'd write, check, pay off everything. You know what the interest rate on my mortgage is? Zero. I don't have one. So I beat your mortgage. So pay it all off and then pay cash for, with the money that's left, a nice little rental property somewhere to get started. Or save up some more money and add to it so you can buy a little better rental property. I don't care. I'm with you. I like real estate, but I pay cash for it. And I've grown my real estate portfolio this time much slower. and it's a little bit hard to get, you know, I've done detailed in-depth research, and 100 % of the foreclosures occur on a house with a mortgage.

58:00Is there any, Dave, is there any formula that exists that says once you pay off one house and you save up and pay the second one with cash, how the diminishing time it takes to buy the third or the fourth, is there any formula for that? It would just be a spreadsheet.

58:16Dave Ramsey:you're just running those cash flows out because it would depend on the properties and i guess how expensive a place you're buying yeah yeah and and what the returns are you know how well you rent it how good a job you do manage it and all that stuff but basically i mean once you if you're buying houses and you're going to start that way okay um you know if once you've got about five houses think about the cash flow on five properties with no mortgages you can buy about a house a year out of that you know after that so you'll make enough on those if you just don't consume the rent money the rent money all goes into kitty to buy the next one right and when you got six you can do it even faster when you got seven you can do it even if you got 10 of them you can do it real fast and so if you'll be patient the first decade you get into this the decades two and three and four can a little snowball on you in a positive in a positive snowball yeah good it gets bigger every time the snowball rolls over every time i got more properties i've got more cash coming in every month and I can buy another one faster and another one faster and another one faster.

59:12Dave Ramsey:Every time it rolls over, picks up more snow. That's what we're talking about. And so, um, but the, you know, having the patience when you want to be doing real estate and everybody on Tic Tac is telling you, you can get rich financing it up to your eyeballs. Um, and you know, some goober on Instagram has rented a jet and says that that's my jet. And I did it. It's, It's not even his. Right. He just pointed at it and rented it, rented a Bentley for the day and doesn't even own one. And just, you know, to do a photo shoot to say, I sell real estate courses. And you buy that crap, then you're going to go broke.

59:49Dave Ramsey:I mean, I did. And everybody that does that stuff goes broke. And so the only guy making money on all that is the guy with the rented Bentley. He's selling you a$3 ,000 course for the weekend to buy real estate. And nothing down. When the bank gets rich on you. Yeah, exactly. And you just 100 % of the time, more debt equals more risk. Less debt equals less risk and increased cash flow. So you want a sustainable quality of life, wonderful, peaceful. I mean, we have horrible things that we go through with some of our rental properties from time to time, but none of them are associated with paying a payment.

1:00:30Dave Ramsey:Right. It's all just the stuff you deal with when you're dealing with people doing stupid human tricks. But it's just part of the process. Olivia is in Orlando. Hi, Olivia. How are you? How are you guys? Better than we deserve. What's up? All right. So I'm not sure where to start exactly. I have I'm trying I'm on the rice and beans diet now. I can't suggest I'm doing working on the right stuff. I literally just started this last week, so I'm new to budgeting and everything. I've gotten all my debt and everything. I want to do the snowball, the debt snowball, but I have a couple questions about where I should start.

1:01:10Dave Ramsey:Okay. So I know that you guys, so the debt snowball is to start with the highest balance regardless of interest rate. Lowest balance. Lowest balance. I mean, lowest balance regardless of interest rate, sorry. and I have a couple things that are in collections. So are you paying on them? No, I don't even know how. They're just sitting there. No, they're just sitting there. You're not paying on them. Yes. Don't put those in your debt snowball. Okay. Wait till you get the stuff you're paying on paid off. Then you're going to have a lot more money because you don't have any payments at that point and you can call them up and offer them a lump sum settlement.

1:01:54Okay.

1:01:55Dave Ramsey:And get it in writing. Okay. But don't set those up on payments and don't pay on them at all until you get this other stuff cleaned up. Next question, right quick.

1:02:08What do I do about my car?

1:02:09Dave Ramsey:How much do you owe on it? About$6 ,783 is my payout. What do you make? Let's see. monthly i make i take home about twenty two hundred it depends on the pay week because my hours differ how old are you 23 26 26 okay what are you doing yeah what do you do for a living a medical assistant okay you need to look for a job yeah you're starving today yeah you're starving and you need to look for an extra job in the meantime and your car is fine we just need to get paid off but you're one of the reasons that your budget is tight is you don't make any money kiddo um you're starving and so uh we're going to increase your income with short-term part-time jobs right now and then you start looking for a new job you're worth more than that and you hang on we're going to help you i'm going to put you into every dollar and kelly i want to sign her up for the webinar too so that she can be with one of the ramsey personalities and see how to do the budget.

1:03:12Dave Ramsey:I want to teach her how because she's ready. She's willing. And let's help her. Let's help her do that. Put her in every dollar as our gift, and then make sure she's in that webinar this week.

1:03:40Thank you.

1:03:53Dave Ramsey:If you're buying or selling a home with all the clickbait ads that are going on and all the garbage on the social media, all you get is drama. Let me tell you, when you're looking at an unstable, weird situation, facts are your friends. So when you're dealing with real estate right now, you need facts, not opinions, not your broke brother-in-law flipping out because he thinks he can't buy anything and all that stuff. Instead, you need to know what's actually going on. Okay? And we've got the data for you. You can go to RamseySolutions.com slash market, and you'll be able to keep updated on what is actually happening in the market.

1:04:29Dave Ramsey:For instance, as of this moment, there's 1 ,082 ,520 homes on the market in America. That is the highest inventory since 2019. Demand, however, is higher than the inventory. And so house prices have not gone down, period. They have not gone down. They've gone up. The median home price this month is up again, and it's$441 ,000 right now in America. And it was less than that last month, and it was less than that the month before, and it was less than that the month before. So that's what's really going on. Interest rates are hovering just a 15-year fixed is 5.95, just below 6%. And that's not a bad interest rate unless you compare it to 2.

1:05:20Dave Ramsey:But if you compare it to 12, it's half. So it's not a bad interest rate. And plenty of times the real estate market has boomed at 9, 10, 11, 12%. And you get above 12, it starts to slow down. But the interest rates have, you know, the market has moved at plenty of times with higher interest rates than this. And so it's not a bad thing. And by the way, when it comes to real estate, you date the rate and you marry the house. So you get the right house at the right time at the right price. And if rates go down, you refinance and or you just pay off the mortgage and then you got a zero percent. So there you go.

1:05:58Dave Ramsey:RamseySolutions.com slash market. You can keep up with all this. Anthony is in Myrtle Beach. Hi, Anthony. How are you? I am great. And I think the facts is my friend and actualities is a very good lead-in for this call. And so I appreciate that because that's what I'm looking for. I'm looking for facts and actualities, not dreams. I'm looking for some goal help. Okay. Here's my situation. I guess I'm on step seven. I told you, Screener, that. We don't have kids, so I guess I got a lowered step there. So that said, debt-free, I've got about$250 ,000 in cash, $300 ,000, I would say$450 ,000 between my wife and I in our 401ks.

1:06:46days. Now that our house is done, we're looking to find an investment help, and we have been looking at your suggested investment advisors. The problem is that I'm getting a lot of feedback that I don't know I'm not an investor. And what's happening is I'm getting feedback like, oh, we'll make you a multimillionaire. And I get guys that are like, well, if you can't put away $30 ,000 a year, you might as well eat caffeine. So I don't know what the real number here is.

1:07:20Dave Ramsey:No, wait a minute. Ramsey trusted SmartVestor Pros did not say that. No, no. To be fair, they didn't. What I'm trying to say, though, is there's a lot of range there because what they're asking me is, what are your goals? And I'm like, I'm 53. My wife is 60. I don't know what my goals are. That's what I need help with. Okay.

1:07:43Dave Ramsey:Well, congratulations. you've done very well. What is your home worth? I would say right now somewhere between$4.00 and$4.35. Okay. All right. And what's your household income? With my wife and I, probably in the area of$200. Okay. Good for you. Well done. All right. Well, what I would suggest doing at that stage is to You max out all the keep the government's hands off your money programs, 401Ks, Roth IRAs. Do everything Roth that you can do because that's all going to grow tax-free. And you're going to discover when you get to be my age at 64 that you're not staring down the barrel of a 72-and-a-half-year-old mandatory withdrawals, RMDs, required minimum withdrawals.

1:08:36Dave Ramsey:Okay? And so if you're in Roths, you don't have that. If you're in regular traditionals, you do. So I'm going to move everything towards Roth. I'm going to spend some money to do that. I'm going to put new stuff all in Roth, 401Ks, Roth IRAs. I'm going to max out everything, keep the government's hands off of it. Now, but as far as the amount of money I'm aiming at as a goal, I never set a certain amount. I just said I want to build wealth and so that I can do three things in my case. One is a good man leaves an inheritance to his children's children. You don't have kids, but you're going to leave an inheritance to someone to be a blessing.

1:09:19Dave Ramsey:Number two is I want to be outrageously generous. And I've noticed that to be outrageously generous, you have to have outrageous amounts of money. And so let's do that. and then three is I want Sharon and I to be able to do whatever we want to do and if she wants a car I can just go get a car if she wants to go to freaking Croatia which we just did it's wonderful we loved it and she really loved it and we did it and so didn't think anything about it I want you to be able to do some stuff like that right when you're my age that's 10 years from now for you so you want to be able to enjoy the money to be generous with the money and to leave a legacy with the money.

1:10:01Dave Ramsey:And that's what money, that's the only thing you can do with the money. It's only three things you can do with it is give it, live it and invest it. And so I'm going to invest with that in mind, but yeah, you should have making 200 a year, maxing out everything for the next 10 or 15 years. Plus the, uh, you know, you're already a millionaire roughly, or probably are a millionaire actually with all the numbers you gave me you are yeah you are good and so you you should have your net worth approach 10 million dollars uh that's that's where it should go but what why and the only reason why is so that i can do good with the money for me mine and others you know money's not good for anything just piling it up but it's good it's really good when you can do good with it and that includes doing something nice for your wife who put up with you all these years and that kind of stuff.

1:10:55Yeah. Okay. So it makes sense. Okay. So I'm looking at this too much from a, when I'm asked that question, what are my goals? I'm looking too much at it.

1:11:03Dave Ramsey:My goal is to build a big old pile of wealth with steady investing. That sounds good. I didn't think of it that way. I automatically went right to the numbers. Yeah. That's a good, that's a good thing to do. There's nothing wrong with that. And then, and then, you know, but just run and then run the numbers out and go, okay, If I fully fund my Roths, my 401Ks, and I fully fund, and I'm making 200K, you're going to max out everything, by the way. You'll be able to max out your 401Ks, you'll max out your Roths, all that. You know, if I fully fund all of that and I do another whatever, then here's where we'll be, and we're going to consume the rest of it.

1:11:39Dave Ramsey:We're going to enjoy it. Very good. Yeah, and run those numbers out, and you're going to see a$10 million number. That's what you're going to see when you run that number out. uh i'm i'm pretty sure i'm i didn't i didn't run it on a calculator but i'm pretty sure i'm right here's here's what i love about that dave you've been teaching that for three decades now um you and i both are our buddy james clear i love the way he framed it which is reverse engineer and identity not not a deadline and so we both know people who get obsessed with I've got to have a million dollars. Well, you sacrifice joy, family, giving.

1:12:16You become a monster in pursuit of this thing. If your identity is, I'm a guy who builds wealth, who enjoys my life, and who gives a ton of it away, you will end up far surpassing this white-knuckle goal thing you are obsessed with.

1:12:32Dave Ramsey:That's why it's always so humorous to me when someone says, well, you can get a million dollars, but that's not enough. And I'm like, enough for what? For what? For what? That's right. It's not as much as it used to be. Right. I mean, when everybody started celebrating millionaires the first time, monopoly was popular. It was the 1920s, the go-go roaring 20s before the crash in the Great Depression. Millionaires then, that'd be like having 12, 14 million now. Or maybe a little more. And so it was a lot of money then. Right. But it's still a lot of money. And it's still more than most folk got.

1:13:12Dave Ramsey:If you have a paid-for house, covered. Still more than most folk got. You've got money to eat, covered. Now it's just about who are we going to be. Yeah, who do we want to be? And really, that's what you're aiming at all along. That's the whole point. First thing, though, is sustainability. Yeah, that's who we is.

1:14:02Dave Ramsey:The Ramsey Show Question of the Day is brought to you by Why Refi? Feeling stuck with defaulted private student loan payments? Y-Refi can reduce your payments and help you regain control of your money. Yeah, take the first step towards getting unstuck. Go to YRefi.com slash Ramsey. That's the letter Y-R-E-F-Y. Dot com slash Ramsey might not be in all states. Today's question comes from Matthew in Ohio. Matthew writes, my wife and I are in our 20s and we're on baby step two. my in-laws make good money but are in a lot of debt whenever my wife goes shopping with them she always comes home with something she has hinted to me about wanting that they purchased for her am i wrong to feel as if my in-laws are enabling her to continue bad habits by purchasing what she wants without practicing patience herself she knows they are in debt and what was purchased was most likely put on a credit card hmm

1:15:02Dave I'm torn on this one because here's what I'm hearing um hearing two things one yeah me too I'm hearing a husband that wishes he could buy his wife stuff and he can't and so he wants to shut the whole thing down and also hear a husband who wants to be the parents of her parents and dictate how they do what they do and when they do it for their child and and he's also wanting to parent his wife. That's right. Also be the father slash mother.

1:15:28Dave Ramsey:Talking about her like she's a 17-year-old daughter. And she's developing bad habits hanging out with her mother. Yeah. I'm sorry. I don't like that. Yeah. So, I mean, Matthew, if you and your wife get together and say, hey, we don't want to support our parents' bad money habits, and so we're just going to stop taking stuff. We're going to stop letting them buy things for us. You can do that. Let's reframe the position that your wife is in. Okay. Your wife is not your child. Correct. And the two of you as two freaking grownups should sit down and talk about this. Honey, it bothers me. Your mom and dad shouldn't be putting crap on a credit card that they can't afford that are buying us stuff we can't afford.

1:16:08Dave Ramsey:Right. It's bothersome to me. Does that not bother you? As a grown woman, you should be able to look at your mom and go, no, I can't afford this. You can't afford this. We shouldn't be doing this. Honey, we need to talk this through. You need to be on that page. He needs to with his wife and raise her up and involve her in a noble discussion rather than a tactical, I'm going to tell you what to do discussion. That's right. And the second thing here is what gets me most frustrated with Matthew and with her. Matthew, you're really frustrated that your wife wants something. And if she can't get you to get it for her because y 'all can't afford it, she's going to go manipulate her parents into buying it for her.

1:16:50what you seem to be upset here really is your wife's attitude. Yeah. And so sit down and have that conversation. That's what I exactly was saying.

1:16:58Dave Ramsey:Yeah. Yeah. And I would be too. Yeah, absolutely. I would be too. It's like we are on a plan because we are trying to get out of this and your mom and dad are screwed up and we don't need to add to their debt to circumvent the fact that we're working on this and be making purchases that frankly this household doesn't even be making right now. Right. And so, you know, no, there's so much wrong with this whole situation. But it's not framed in you've got the high ground and the parents and your wife all need to be brought into line. That's not it at all. It's that you and your wife need to be and go visit a place of nobility where the two of you as two adults decide what is best for your family.

1:17:45Dave Ramsey:and I do not think that your wife is building bad habits here other than the bad habit of running to mommy. Well, I was going to say I would be willing to bet money that this is not the only place when she doesn't get what she wants from one place, she'll go and figure out a way to get it somewhere else. And so, Matt, it's being honest about what is beneath the money question here. Brock is in Knoxville. Hey, Brock, how are you? Good, how about you? Better than I deserve. How can I help? um i got a weird question that's kind of specific to me i'm 23 um i'm a huge fan of yours um i've known about you for a long time um i saw you on the sean ryan show that's something i watch all the time and um i just want to say i'm i'm a huge fan of how you uh are unashamed about letting people know that god has done great things for you um that's something that i really admire and I look up to and hope that I can be that way someday.

1:18:42But the specific question I have would be, I guess, I'm kind of at a clean slate in life right now. I'm 23. I'm about to go back to school. I'm going to trade school for IT. And I've been in debt for like my whole adult life. Since I turned 18, I moved out. My parents got divorced, so I moved out. And I've just now dug myself out of that hole for the most part. Through some blessings with family members and things like that. And I just want to know, you know, someday when I get out of this year-long training and I'm making some type of decent money, I plan to have a part-time job while I'm in school, what can I do to prosper?

1:19:20Because up until this point, it's been hell. I've tried to take care of myself, me and my fiancé, just struggling by on a full-time income the best we can. But it's just like wages aren't proportionate to the expenses of everyday living anymore. So I guess that's my question. No, that's not true.

1:19:38Dave Ramsey:That's not true. Wages are definitely proportionate to the expenses of everyday living. Your wages maybe aren't. Exactly. But wages in general are. Yeah. Lots of people prospering out there. We had rented for a long time. You're 23. You haven't done anything for a long time. You're talking to old guys, man. Yeah. Yeah. I feel old. I do. I feel old. Well, you've been through a tough patch, and you're fighting through it. I really like your moxie. I like your confidence and how you're leaning forward until you went sideways with me there on the way. Just the woe is me. That thing like you're somehow.

1:20:17Dave Ramsey:Listen, you are taking the steps to control your success. You control your success. There's no boogeyman in the economy. There's no boogeyman in capitalism. You control your success. And what you figured out is I'm not making enough money, so I need to go get some training to make more money. Good for you. Well done, sir. So you're going to code school for a year, right? Yes, sir. What do you make now? I'm going to do a cybersecurity at UT. Awesome. Currently, I'm unemployed. Why? So I actually just moved. So her family offered us a trailer. You just moved from where? From Maryville to Oneida, Tennessee.

1:20:54Dave Ramsey:And you're going to the University of Tennessee? Well, no. I'm going to be going to TCAT for a year, and then I'm going to do a few months of coding training at UT. It's like a boot camp thing they have that I plan to do afterwards. After my TCAT is up, I'm going to go to UT. That's the plan. My goal is to have every certification I can get so that when I go looking for a job, I have no issues finding one. No, you just need enough certification to get a job. And as a matter of fact, you can probably get that now. You've got to be doing something right now. When are you going to work? So, like I said, I just moved recently.

1:21:29I had to quit my job because it was going to be like a two-hour commute. I was working at a credit union down there, and I quit because we moved so far, and I was like, you know, I'll take care of myself.

1:21:39Dave Ramsey:Maryville is not a two-hour commute to Knoxville. No, no, no. I'm saying I moved to Oneida. Why? I moved from Maryville to Oneida because that's where my fiancé's family is from, and they offered us the ability to move into their trailer rent-free, no house payment. So we gave up our$2 ,700 a month house payment in Maryville, where I'm from, to move to where she's from. And although, you know. Yeah, but Oneida to Knoxville is a commute, dude. That's a long way. Yeah, it's like 50, 55, 10 hours, something like that. But, yeah, that's my goal. And I've been looking. There was not a two-hour commute anywhere in this story.

1:22:17Dave Ramsey:What happened? I'm so confused. Okay. So, I'm sorry. I know it's a lot. It's been a ride. No, where was the two-hour commute? Oh, from Knoxville to Oneida? Yes. There was a commute to go see her mother, but not to work. I work in Madisonville. I work in Madisonville. So I would have had to drive from Oneida to Madisonville every day. That's the two-hour commute. Oh, I see. So that's why I had to quit my job, because I couldn't drive from Oneida to Madisonville every day. It just wasn't realistic. You quit your job to go get a free trailer, and now you don't have a job. Yeah. Yes, sir. Okay. But the plan was, here's why.

1:22:54We were so struggling to get by in the house that we lived in because it was so expensive. It was a$2 ,700 a month payment, and with everything else we have going on, it was just hard for us to get by paying those payments. So when they said, hey, you can move in.

1:23:08Dave Ramsey:Yeah, so the tail's wagging the dog, though, dude. You quit your job. You can sell the house and not quit your job. You sell the house and stay in that end of the town, that end of the country, and keep your job. Now you don't have a job. You set your feet on fire because your head was hot. You traded your job for a trailer rent. with your mother-in-law. So that's what's blowing my mind here. No, honey, the way you're going to prosper is you're going to go back to work. Okay? Now, while you're going to school full-time, you're going to work full-time. I worked 40 to 60 hours a week in Maryville when I was at the University of Tennessee, and I graduated in four years.

1:23:48Dave Ramsey:I was sick and tired of being sick and tired, bankrupt with a toddler and a brand-new baby at home, scared doesn't even begin to cover it, but I got mad enough to change. I started using God's and grandma's ways of handling money. That journey became the total money makeover, a plan everyday people can use to take control of their money. Millions have changed their lives following the plan in this book and found hope. Start your makeover today at ramseysolutions.com slash store.

1:24:40Dave Ramsey:live from the headquarters of Ramsey solutions it's the Ramsey show where we help people build wealth, do work that they love, and create actual amazing relationships. Open phones at 888-825-5225. Dr. John Deloney, Ramsey personality, is my co-host today. He's the number one best-selling author and host of the Dr. John Deloney Show, a big hit on the Ramsey Networks. You ought to be sure you check it out. PhD in Counseling. Open phones at 888-825-5225. Mike's in Seattle. Hi, Mike. How are you? Good, sir. How are you? Better than I deserve. How can I help? So my wife and I, you know, we got ourselves, it was mainly my fault.

1:25:28I'll be completely honest about that. Mainly, you know, I'm the spender in the marriage. We got married about five years ago now, and, you know, I kind of, I racked up some credit card debt, and we've been trying to pay it off. The only thing we've done right during this entire time is we've earned a lot and we've tithed consistently the entire time. Right now, we're tithing about$3 ,000 to$5 ,000 a month. We earn anywhere from$300 ,000 to$350 ,000 a year. But we just cannot seem to get ahead of this debt thing. So I guess my first question would be, how does God feel about me not tithing and using that extra$3 ,000,$4 ,000,$5 ,000 a month to try to get out of debt?

1:26:18Dave Ramsey:I don't think you have a 10 % problem. I think you have a 90 % problem. Okay. You're horrible at managing money. Yeah, for sure. I mean, you make$350 ,000 and you're broke. so 10 % doesn't fix that I mean I can tell you how God feels about it and I will sidebar that in a few minutes but let's actually deal with what's going on because 10 % doesn't fix it how much debt have y 'all got? in credit cards you got like 43 I've got 45 on a Tesla and probably 30 left on a Ram Okay. All right. And then, you know, our mortgage is probably, it's like$505 we've got left. Yeah. Instead of worrying about$3 ,000 a month, why don't we get rid of two$45 ,000 cars?

1:27:17Yeah. And I knew you'd say that, Dave. My whole thing is, you know, I'm in construction, and I probably drive more than anyone you know. So I drive about four, easily 4 ,000 miles a month. And I was doing that with a traditional gasoline. Were you working in Canada? No, no, just all over the state, just all over the state. Yeah, I probably drive 6 ,000.

1:27:46Dave Ramsey:So you're destroying a$30 ,000 ramp. Oh, yeah. I've had it a year, and it's probably like 50 ,000 miles on it already. Yeah, so you're destroying the value rapidly. Oh, for sure. That's a bad business decision. It is. It is. So I don't even know where to start. I mean, I just started and you sidetracked automatically. I just told you. How much do you bring home a month? $350 ,000 a year,$25 ,000 a month. Yeah, yeah, it's about that. I bring home about$20 ,000. Okay, but hold on. Let's say you have$1 ,000 a month truck payment. You got$1 ,000 a month Tesla payment. That's$2 ,000. That's$23 ,000 left.

1:28:29I know. Where's it going? Then you got a house payment for half a million dollars. Let's say it's$7 ,000, right? And you're down to what? $23 ,000 minus$7 ,000. What's that? $16 ,000. What are you doing with this money? I don't know. You can't even blame the debts.

1:28:48Dave Ramsey:That's where God's concerned. He's not worried about your tithe. those that are faithful if you if you want to be spiritual about it we'll talk about what the bible says when you're faithful with the little things you'll be given more to manage and you've not been faithful with what you've been given and so listen you're you're building a house if you built a house this shot he'd fall over yeah yeah okay so you've got to get you and your wife need to sit down and say all right we've been too blessed to be this sloppy we're going to start managing this money. We're going to make this money behave.

1:29:22Dave Ramsey:And in the midst of that, we're going to make some decisions about purchases and paying off debts. Okay. But 90, I mean,$110 ,000 gets you out of debt. You could be debt free in a year if you bothered to live on 200 ,000. I know. So that's all it takes. Okay. It doesn't take the tithe is not blocking you mathematically. automatically what's blocking you is the other 90 that's not being managed well so let's get on a written plan i'll put you into every dollar the premium version and you and your wife sit down tonight and you all start a plan where you spend every dollar on paper before the month begins and you start making the money that you have behave here's what's weird you will get peace immediately once you get on top of this money instead of it being on top of you.

1:30:13Dave Ramsey:All this disjointed chaos is robbing your peace. And you've mentioned a couple of times, I'm the spender, and you mentioned regret and shame and those kinds of things. That stuff goes away when you just decide those emotions, negative emotions all go away when you just decide me and my wife are grownups and we're going to tell our money what to do, and we're going to look at God and be proud of how we've managed what he has blessed us with. And then the tithe is not an issue anymore, because you're going to clear the debt and tithe, and you're a hardworking dude. You're a very productive guy. You don't have any trouble making money.

1:30:54Dave Ramsey:You just have trouble keeping it. And dude, I don't want you to look up 10 years from now and go, hey, I made$3 million in the last 10 years and I got nothing. Yeah. That would be like having the worst hangover ever. Yeah. And that's where I'm headed. Yeah. So other than the every every dollar budget, should I be selling everything? You know, should I go that that you may need to? But I think what you got to do more than anything else is get your your monthly cash flow under control. And if you can't redirect enough of that to clear these debts and start living on less than you make, then you've got other issues.

1:31:33Dave Ramsey:Can I ask you? Because you make a lot of money. How's your health? It's terrible. Okay. Here's what you need more than anything, okay? Yeah. Because this doesn't happen in a vacuum. You're a guy who's lost trust in himself. Yep. And you don't need a hack. On this issue. Well, on your health, on your weight. You've lost trust in you, haven't you? Yep. 100%. And you've tried to achieve that with a dollar amount in a bank account, and it hasn't made you feel whole. What you need more than a hack is, as my friend Lane says, stop stepping over$100 bills to pick up pennies. You need a steady, consistent display of discipline for nobody else but you to begin to prove to yourself that you're worth feeling good.

1:32:19Dave Ramsey:I'm going to walk a mile in the morning. I'm going to eat less, and I'm going to make my money behave, and I'm going to be in agreement with my spouse on all of these things. and dude, that's going to change everything for you. It'll change everything. And by the way, God doesn't need your tithe. He has you to tithe because it's good for you to learn to be a giver because it's part of who you are. You're made in his image and he's a giver. And so he has us to tithe to remind us that part of our created being is one of generosity. That's why we're tithing. Not because he needs your money and not because he's going to punish you if you don't or you do tithe.

1:32:58Dave Ramsey:None of that. But you're tithing for that reason, to continue to flex the generosity muscle.

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1:34:51Dave Ramsey:Smarter way to shop for insurance. Go to RamseySolutions.com slash bundle. RamseySolutions.com slash bundle or click the link in the description if you're on YouTube or on a podcast. Hillary is with us in Huntsville, Alabama. Hi, Hillary. Welcome to the Ramsey Show. Hi, Dave. Hi, John. Thank you so much for taking my call. Sure. I'm a little nervous. So, okay, we are trying to figure out if we should sell some properties to either pay off our mortgage or do an addition on our house. Okay. And we owe, the mortgage is$3 ,500 a month. And how much is the balance? The properties, it's$500 ,000. Okay.

1:35:40Dave Ramsey:All right. And you said do some work or do an addition to the house. What did you say? Yeah. So we sold our house in Huntsville four years ago, and we moved into one of our properties. We paid off five rental properties that we own when we did that. We moved into one of those properties for about eight months, and then we found our forever home, I want to say. I know you guys hate that term, but our dream home on Lake Gunnersville purchased that for$750 ,000. And so we're trying to figure out— So you owe$500 ,000 on a$750 ,000 purchase, and you want to renovate the home you just purchased? We do.

1:36:22Well, it's a big fixer-upper. So we bought it. It's on the lake. It's on the water. But, yeah, it needs a lot of work.

1:36:30Dave Ramsey:What kind of work does it need? well it's about 2 ,000 square feet we've got three kids um it just it's in 1960s just uh it needs an updated kitchen we're sharing a bathroom um so we would just love to add some square footage

1:36:51Dave Ramsey:okay and the houses the houses in the immediate proximity so for what um just two houses down a house sold for 1.7 million um all right and it's a two-bedroom home it's a lake house so yeah okay all right um okay so you're going to spend how much on all this renovation do you think it's about four hundred thousand dollars is what we've been uh quoted after our architectural drawings came through okay and and what are your rental properties all worth? Well, our net worth, the only debt we have is in the house, and our net worth is about $2.5 million, with the house included. Okay, but you got$250 ,000 equity there, so that means you have rental properties worth$2.25 million?

1:37:42Well, actually, so the rental properties are worth, yes, just right around$2 million.

1:37:48Dave Ramsey:Okay. So sell a million dollars of them and pay off your mortgage and fix up your house. Okay. Okay. Do both. Well, I didn't know if it would just be a no-no to do the renovation because we all worried about taking that monthly pay cut, I guess. We bring in about$19 ,000 right now a month. I'm not worried enough about it to not borrow$400 ,000. Well, we weren't going to do both. We were just going to try to figure out, okay, should we sell a property or two to do the renovation? But would that be smart to do that? If I woke up in your shoes, and you've already set the terms of surrender here. The terms of surrender are you bought a lake house and you are going to renovate it.

1:38:33Dave Ramsey:So those are givens. That's not going to be undone. There's nothing in this description that left any of that on the table to be undone. Don't drive you nuts, I'll just tell you, because you're spending almost as much on the stupid renovation as you did on the purchase of the house, which tells me you're going to be up a creek for a long period. Drywall dust is your new breakfast. Okay, so yuck. But anyway, you're doing this. So I think you're selling a million dollars worth of property, and you're paying off your mortgage, and you're 100 % debt-free, and you fix up the house that you're living in.

1:39:05Dave Ramsey:It's why you guys have worked and done all this. You didn't work and do all this to be landlords. You worked and did all this to have a place to live that you like and have a good quality life. And no borrowing or deciding not to borrow, deciding not to pay off my mortgage so that I can do the renovation. It's the same thing as borrowing to do the renovation. Right, right. You're just moving the P under a different shell's all. So it doesn't do any good. So, yeah, if I'm in your shoes, I'm just going to sell a couple of these rental properties, you know, get down to a million dollars. then you're going to have a million dollars worth of rentals you're going to have a million dollar house a million two house i hope a million five house i hope if you take 750 and you put 450 in it i pray god it's worth a million five after you're done well the comp's in the area for a finished home for the one seven for the one down the street yeah but i mean you better you better be you better be as nice as it is when you're done right right so um yes and you guys have done enough construction that you have an idea what you're getting into, I hope.

1:40:11Yes, we've actually fixed up all of our rental properties ourselves.

1:40:15Dave Ramsey:Yeah, because this is going to be a, this is not a small task you're taking. And these are the kinds of things that people do where they bust budgets, and they add and scope creep as you go along. And all of a sudden, your 400 ends up being 600. Okay. So you lay out a detailed construction budget and a detailed construction timeline and a detailed blueprint and you manage to those three pieces of paper and you do this renovation professionally on time on budget and to plan. Don't make it up as you go because you're going to end up six or seven hundred K in. You know how that works, right? And we do have, I forgot to mention we've got 180 ,000 in savings as well well then maybe I don't maybe you've got a 700 ,000 property you sell then I don't know what these properties are worth individually but I would just look through and find enough of the rental properties with my 180 to pay off my mortgage and to do my renovation with cash okay because you're going to do both and you might as well just do it and then use your increased cash flow because you don't have any mortgage payments anymore to save up and start talking about buying another property at some point if you want to move back into another piece of real estate at some point with cash but we're out of debt we're going to stay out of debt we're going to work our way that's the point of having a two million dollar net worth is to get to get to do the stuff you want to do and so i you know i'm more concerned about my home at this point now your homes will be 1.7 Yeah, your house is going to be a very high percentage of your net worth.

1:41:56Dave Ramsey:Be over 50 % of your net worth. That's a little scary. That's a little scary with your all's net worth. So you guys are heavily invested in this stinking link deal, I'll just tell you.

1:42:09Dave Ramsey:It's getting close to being crazy. What would you like to see, Dave, on a breakdown of somebody's net worth? You got a$3 million net worth. I mean, I don't want more than a million dollar house usually. Okay. And she's going to be at a million seven. Yeah. And she's, you know, and it's going to, the other million three is going to be the real estate that's left. The other houses, yeah. And the other stuff. And so we've, we plowed it all into our single family personal residence, which does not generate revenue. Right. And so you've got too much of your net worth tied up. Now, if your net worth is a million dollars, 50 % of your net worth going into your house is one thing.

1:42:47Dave Ramsey:Sure. But when it's$3 million, it starts to be, eh, I don't know. It doesn't feel great. What is a rule of thumb for— The higher your net worth, the smaller the percentage of your net worth— It needs to be in one asset. —your home should be. Is there a rule of thumb on how much you should expect to go over on a renovation this big? I don't expect to go over a dime. I lay out a detailed budget and a detailed plan. I mean, I just built a several-million-dollar house last year, and it was 2 % under budget. And it was two months early. And I used a contractor. He did a great job, but we managed to the budget and we managed to the schedule and we managed to the blueprint.

1:43:28Dave Ramsey:So scope creep, that's the decorator's thing. We don't do that.

1:43:54Dave Ramsey:Listen, your home is your most expensive asset, and now you're ready to sell fast and for a lot of money. But in this wackadoodle real estate market, one mistake could cost you tens of thousands of dollars. Here's the deal. This ain't amateur hour. You need a pro in your corner, or someone who knows how to price your home right, market it well, and negotiate the best deal. That's where a Ramsey-trusted real estate agent comes in. To find one near you, go to RamseySolutions.com slash agent. That's RamseySolutions.com slash agent.

1:44:41Dave Ramsey:Hey, if you like what you hear on this show, we can appreciate, we would appreciate you leaving us a five-star review, clicking the share button and letting your friends know about it. Click the follow button, the subscribe button, whatever it is in the methodology and platform that you're listening on. All that stuff makes a huge difference to the algorithms on the Internet. It pushes the different platforms. If you involve yourself, engage with the show, it pushes us forward and other people see the show. So thank you for that. We appreciate it. The growth in our viewership, listenership is off the chain, and it's because of you guys.

1:45:18Dave Ramsey:So thank you very, very much. We appreciate you spreading the good word. Michael's with us in Louisville, Kentucky. Hey, Michael, how are you? I'm doing terrific, Dave. I'm calling you guys today because I've got a serious spending problem. and I hope you can help. Okay. Tell me about it. Well, a little background. I've lived a very frugal lifestyle and I've accumulated a little wealth, but I'm at the point in my life where I can afford to spend it, but I have emotionally a hard time buying things that go down in value like a rock. And I'm torn because I'm entertaining the idea of spending$100 ,000 for something with wheels.

1:46:08Dave Ramsey:Good. How much money you got? What's your net worth? That's about$3 million. Okay. What are you talking about buying that's$100K? A recreational vehicle. Okay. That's not much for an RV. Well, I currently have It would be$100 ,000 Above what I currently have Invested in recreational vehicles I have about$50 ,000 invested in Recreational vehicles So you would trade in the$50 ,000 And put$100 ,000 cash with it Yes So you're going to buy an RV What are you going to do with an RV? I'm going to travel Are you single? No, I have a wife and she wants you to travel too. Good. But I have lived so long using the live on less than you make.

1:47:03Dave Ramsey:Yeah, good for you. That sort of thing. Paid off. And you started with nothing. You didn't inherit this money, right? I inherited zero. So you've got$3 million. How old are you again? I'm 78. Okay, all right, cool. I started the Dave Ramsey method about 10 years before you invented it. It used to be called common sense, didn't it, Michael? I just didn't have enough sense to make it into a radio show and become more wealthy. All right. So the rule I use from an emotional standpoint or a spiritual standpoint, If I stand before God, am I being irresponsible with the money he entrusted me with? Number one, that's the spiritual side.

1:47:51Dave Ramsey:Emotionally, how can I deal with this? And it helps me if Sharon's wanting to go on a nice trip or wanting to make a purchase that is, that based on my old life would have been very weird to purchase something like that. For you, that's a$150 ,000 RV. it feels weird because it's not a muscle you've ever used before. The one thing that's helped me with that, I look at two things on the responsibility side. Number one, is my generosity good? Am I giving? If I'm giving and we give carefully a lot more than we spend. so um we don't have to publish that from a pr standpoint or publicity standpoint but if i'm giving and i'm being generous then it's okay for me to also enjoy some of what god has blessed me with okay and uh the second the second rule i use is the burn the money in the middle of the floor rule okay so if you took a hundred thousand dollars and lit fire to it your net worth would be$2.9 million, your life would not change one ounce.

1:49:09It doesn't change my life a bit.

1:49:12Dave Ramsey:That's exactly it. And so that means it's not irresponsible. Dave, I've never earned more than$50 ,000 a year in my life, and yet I've accumulated. You're amazing. That's amazing. Well, I always tried to buy things that were not money pits. And it worked for you. It worked for you. An RV is like a boat. It's a money pit. But, dude, you have earned it. Get you and your wife a good RV and go for a ride, baby. It's time to change. How do I do it? It's not a change. You just look at it. You say, if I burn this money in the middle of the floor, if this is the worst mistake I've ever made in my life, it does not change our life.

1:49:55It doesn't change a thing. And here's the thing I want you to do. I want you to tonight, by yourself, write Michael, 88-year-old Michael, a letter. And say, dear Michael, I'm so glad as I wrap up my life that I've got all this money in the account and I've got no experiences to show for it. And then I want you to write Michael another letter at 88 years old and say, Dear Michael, me and my wife left no tread on the tires those last 10 years. And you read both of them to her, and then you'll be at the dealer in the morning. And you'll be on the way to Kentucky tomorrow evening. Get in that RV and go have an adventure, my brother.

1:50:41Dave Ramsey:Yeah, proud of you. Very well done, sir. And for the rest of you listening, that is a completely different conversation than, well, I'm going to live while I can, and I'm going to spend while I'm young. I don't want to get old. No, that's someone who is spending – they're burning so much money in the middle of the floor that it is affecting their life. They're spending money on travel that they don't have. They're spending money on cars that they don't have. They're spending money on things they don't have. The difference is Michael has the money. The thing Michael is short on is time. Go. Yeah, go do it.

1:51:20Dave Ramsey:Go do it. Go do it while you can. That's right. And run it, baby. Run the gauntlet on the thing. Now, and so that is not the same advice that I would give to a 22-year-old who's broke. Right. Because it's not the same. Oh, no, live your life. Enjoy your life. that that's that's an immature person making an excuse for buying crap they can't afford or doing things they can't afford to do right and that's a completely different conversation although it sounds like the same result but it's not it's a completely different direction that's what we're doing so um the point is is that you you he's right though we run into this with uh folks who have built a good net worth very often you you're you're spending muscle atrophies because you don't use it you never spend any money and so then when you do try to spend money it's hard emotionally it strains you and that's you he's being honest he wasn't he wasn't making up a joke that was a true thing and he's never made more than fifty thousand dollars and it's three million dollars yeah at 78 years old so tell me that that it can't be done of course it can be done yet this thing called success, this thing called wealth building.

1:52:37Dave Ramsey:It can be done. And so, and the odd thing is when we studied that, when we did that millionaire study that we've talked about in Baby Steps Millionaire's book, that out of the 10 ,000 millionaires that we studied, one third of them, which was surprising to me, have never had an income over 100 ,000. That really shocks me too. I would have guessed some high percentage, 50 % never had an income over$200 ,000. I would have guessed that. But not one-third never made in their working life$100 ,000. And yet they're millionaires. Diligence. It's a steady. It's a steadiness. It's a steadiness. Time and consistency.

1:53:22Dave Ramsey:Time and consistency. This is where money comes from. That's where health comes from. That's where weight loss comes from. That's where good marriages come from. You mentioned clear earlier on Atomic Habits and our buddy James, and he says, you know, doing the little thing every day. Do it every day. The cumulative effect of that is a lot more than doing a big thing once occasionally. That's right. Yeah. And that's true in investing. It's true with relationships. It's true with exercise. Yeah. It's like you hear that, like, hey, I bought a whole bunch of flowers. Man, every day, you just help with the dishes.

1:53:54Just do that. Just do that over and over and over and over. Shut up, John.

1:53:59Dave Ramsey:And over. And over. I did. I did last night. No, he didn't. I put the dishes last night. He did. I really did. I didn't a long time ago, but now I do. Now I do. Yeah.

1:54:46Dave Ramsey:Our scripture of the day, Galatians 6, 4 through 5. Each one should test their own actions. Then they can take pride in themselves alone without comparing themselves to someone else. for each one should carry their own load. Jordan Peterson said, do only those things that you could speak of with honor. That doesn't even sound like him, but I mean, not to say he wouldn't say something like that, but that's a cool quote. I like it. I like that a lot. That's a great quote. Brianna is with us in Dallas. Hey, Brianna, welcome to The Ramsey Show. Hi, thank you so much for taking my call. Sure, what's up?

1:55:25so um i just need some advice because about well me and my husband had a daughter about 10 months ago now yay and um he lost his job around the same time wow um and so it's just been me um single income and it's not at all what we expected going into he's not gotten a job in seven months right why um i don't really know i mean he has a bachelor's degree doesn't matter why isn't he throwing boxes at walmart so right now he is doing like tasker jobs so like doing housework for people um but that's kind of the only job that he's what's he making or like what does he make yeah oh doing that um he makes probably like on a good day about 500 a day okay yes but it's not every day it's like it's like 50 an hour for 10 hours work yes i think he charges 35 dollars an hour is he working 40 hours making 35 an hour so maybe not five hundred dollars um maybe closer to like five i'm sorry it's five hundred dollars a week is basically what he brings so he's not working 40 hours no it's it's basically like

1:56:59Dave Ramsey:people sign up for what i understand what it is but he's not working 40 hours why no no sir forgive 40 hours he's not working 100 with supporting him like trying to do more i guess I don't need to support him. He needs to get off his butt and go. Why does he need support? So what was he doing that he got fired from? So he was a child, a children's director at a church that just didn't work out. Like, he's not really good at the admin side of things. Okay, so what is he going to do with his life, and when is he going to get his income up? That's your all's problem is your husband is not working.

1:57:43Dave Ramsey:Why? and how are we going to fix that? That's what we come down to in this conversation. Does that make any sense at all? Your main breadwinner at this point is not earning much money and doesn't have a plan to. It doesn't sound like that's scaring me. Yeah, well, I've always been the bigger income earner. I'm a nurse, so I have always been the breadwinner in a sense. So we've been able to make it, but we just can't pay off our debt. Because he's not working. Why are you defending him so much? Why are you defending him? You're talking to two husbands with kids and spouses. Who believe in hard work all the time.

1:58:23Why are you defending him? I'm just curious.

1:58:30I mean, he's not on here to defend himself, so... On behalf of husbands and fathers everywhere, he needs to go get two jobs, if not three, and begin to scratch and claw his way back. Because he's lost faith in himself. He's lost trust in himself. He is piddling around. Sitting around looking at the app, waiting on somebody to task him to put in a dishwasher. My 15-year-old son made more money than that this summer cleaning horse stalls with a shovel. Like, it's about getting out there and taking care of his baby girl and honoring his family. I mean, it's that simple. And Dave and I are both guys who follow dreams, too, but we also had to work day jobs when we were first starting.

1:59:10That's just the nature of it.

1:59:12Dave Ramsey:So what I'm going to do is I'm going to send you a copy of Ken Coleman's book, The Proximity Principle. I'm also going to send you a copy of Finding the Work You're Wired to Do for him. I want him to take that assessment that's in there and develop a game plan to go be somebody. I also want to send you economically go be somebody. Building a non-anxious life. Y 'all, I'll say it this way. You're enabling this stuff. If you keep apologizing for him and keep trying to support him and pat him on the back seven months later, that shame thing is getting deeper and deeper and deeper. I want you all to read that book together, too.

1:59:44Dave Ramsey:There's three of them we'll send you. Yeah. We're going to load you up and try to help you get going. But the answer to your math equation is more income, and it's sitting in front of you looking at an app waiting on someone to task him to do a dishwasher. And he's not even doing a lot of that. So there's lots of things to do in your wonderful city of Dallas that people will pay you for. And they're not necessarily what you want to do right then, but you do what you got to do until you don't got to do it no more. And you just push and push. and yeah, I would imagine that he's anxious and I'll help you with this.

2:00:22Dave Ramsey:His anxiety will go down as his workload goes up. Yes, and his shame and that low-level dysthymia, that depressive feeling, I don't want to know, that will go away as he begins to walk taller that he is proving to himself that he can work hard. And by the way, people like to do the counselery part, but they don't like to take notes. they like to do the ministry play and and let's think about things but they don't like doing the administrative stuff that's just part of that's just a job it's a job right like and so he has to do things he doesn't like and that's the core here man he's got to go work and all work has hard parts of the job that's not fun no matter even this job that we have and it's a blast but there's also parts of it that are hard that i don't like to do i don't want to do but it's part of the job every job has that and he's gonna have to get over himself and then get after it and go get a job get multiple jobs and get his confidence back and then he can start looking towards what do we actually want to build together but man oh man oh man yeah day that's like the second or third call we've taken today yeah there's a manhood crisis there's a bad manhood crisis and it's just um i don't i don't know what it is and it's happening but it's i mean it's multi-layered and multi-tiered but there's a lot there's a lot under underlying all of these things and there's different situations, obviously, that we're talking to, but it still comes down to my grandmother used to say there's a great place to go when you're broke to work.

2:01:47Dave Ramsey:Right. And the first thing you do is you get up and you leave the cave, you kill something and you drag it home. We will discuss living dreams and self-actualizing and maximizing your potential and putting right tools in your belt and education and all those things later. Right now, let's go about the business of eating. And let me say this, let me own this on behalf of the mental health practitioners in the United States. We sold everybody this bill of goods, which is the key to being well and whole and right with yourself and relationship was to get all the right thoughts in the right order.

2:02:23And if you just sit around and think about the next thing and think about it and think about it and think about it, that suddenly everything becomes clear. And that's just not how it works. You have to take action on things. And so if you sit around waiting for this job to materialize in your mind, and waiting for this plan. That's just not how it works. You get out there and start working and you start figuring out what part about this job I'm good at, I'm not good at, I like, don't like. I'm going to take another job and another job. And it begins to distill down for you what you are fully created to go do.

2:02:52And then you get really good at that thing. And then you become passionate about it. But this idea that I'm, I don't know, man, it's just ruining families across the country. The diligent prosper. Gosh, just keep showing up. Not the contemplative. There you go. And even the contemplatives, even the monks had daily ritual practices that got unworked. It's a thing they did. Yeah. Right? Absolutely. You can't just sit here and think your way to these solutions. You got to get out there and get after it. If you feel stuck, go get a job, go to a gym, go for a walk, go do things.

2:03:28Dave Ramsey:And then your thoughts begin to work themselves out. Well, and, you know, I'm singing to the choir here, but the data also says that the chemicals are released, the endorphins are released that fight back depression, that fight back the blues when you are engaged physically into doing something, when you're mentally engaged into doing something. And so when you step into something, all of the condemnation and the shame, bad tapes playing in your head, they start to run out because you're too tired to think about it. And you're focused on a thing. Yeah. Yeah. And like a guy I used to work for said, he said, you won't die of hard work.

2:04:04Dave Ramsey:Right before you die, you'll pass out.

2:04:10Dave Ramsey:That puts us out of the Ramsey Show and the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:04:30.