Stop Excusing Debt as a Dream

23:38I'm good.

23:39Dave Ramsey:How are you, Dave? Better than I deserve. What's up? Hey, I was just calling. I'm 20 years old, and I'm a full-time student and full-time working outside of school. What are you studying? Business. Good. Are you out there at WT? Yes. Good for you. and then uh i was curious so i'm in the farm and ranch industry and uh i'm about oh i was about a hundred thousand dollars in debt on vehicle loans and then i just recently took out a hundred thousand dollars to like start a cattle business are you punking me who gave a 20 year old a hundred thousand dollar cow loan i know who i don't know no yeah you know if you did you really do it or not?

24:30Dave Ramsey:Are you punking us? Yes, I did. No, I really did it. You're kidding me. Who made the loan? What's the company's name? I want to make sure all of America hears who's stupid out there. It's a local bank here. What's the name of the local stupid bank? The name of the bank? Education. Education is the name of a bank? Yeah, Education Credit. Education Credit. is low on education. They gave a 20-year-old $100 ,000 loan to buy cattle. Yes, and I have a CD also. How big is your CD? $100 ,000. Oh, so they didn't give you a loan. You borrowed your own money. Pretty much, yes, sir. Where'd you get$100 ,000 in a CD?

25:17It was a partnership between me and a family member on some cattle that we've had for about 10 years and only sold those uh so you made a profit and now you pledge the whole profit into

25:29Dave Ramsey:another herd yes all right what size cows do you get currently what size cat what size what size how many head i got 25 head and then how big are they they are three to six years old and they're going to be having calves in about two to three months. Do you know how to calve babies? Yes. He grew up on it. He grew up in it. The family member was his father probably. All right, honey. You called the wrong show. I'm sorry. How can we try to help you? I'm just trying to figure out really like what I can do and if I'd like made a good decision on trying to like take this loan out. How long have you listened to the show, honey?

26:18Um, about two years, probably.

26:21Dave Ramsey:Have you ever heard me tell anyone to borrow money for anything? No, I haven't. Ever? No, sir. Okay. And here's what I'm afraid is about to happen. So you kind of know you walked into the lion's den, right? Yes. Well, and here's what I'm afraid you're about to do. Those cows, right now, beef is at an all-time high because there's been drought, right? Yes. And you're going to have babies, and you might, maybe, you might be able to get away with this one. And then you're going to go do it again, and you're going to put more down on it. And you're going to take out a bigger loan. And then in 18 months or 24 months, when everyone's got back into new cows because there's been some rain, the beef prices are going to plummet.

27:06And you're going to be up a creek. You're going to have lost it all.

27:09Dave Ramsey:Yeah, your CD is what you lost. The bank hasn't got any risk. Well, I'm saying he's going to make this one. The bank's not stupid at all. They're begging for you to not pay this. They're just going to scarf your CD. I think you're going to make your money on this one. I think it's the$250 ,000 loan you take after this one. I think based on my math and everything, the market looks like it's going to stay where it's at for at least two years. And I'm planning on being able to pay this note off the third year. I think there's no chance. As long as the market doesn't go 50 % less than what it is right now, I should be able to get it done in three years.

27:46Okay. I would get it done in one year. And here's why. The only reason Dave and I have a job is because people like you say, if this scheme I'm running just hangs on for three more years, I'm going to be all right. And it doesn't. Right. That's the problem.

28:02Dave Ramsey:Right. Right. So would you have done this if you just cashed out your CD and used your money?

28:13Yes, I believe so.

28:15Dave Ramsey:Okay. If you're going to make a play like this, you should do it with real money, not borrowed money, okay? Number one. Number two, what year in business school are you? First, second, third, fourth? I will be a—I'm between my sophomore and junior year. Okay. I want you to start doing some reading on commodities, because beef is a commodity. Okay? And there's one thing that drives beef prices, supply and demand. That's all. And if there's a shortage of beef, prices run up. If there's an oversupply versus the demand, The prices go down. So your math was a wild guess. That's what your math was. So anybody that's playing commodities 100 % of the time, you're guessing about what the future is going to do.

29:10Dave Ramsey:The track record, the history of it on beef, like a lot of commodities, has gone up. But another commodity that you could study the volatility of, if you want to test my basic theory of economics here, is oil. Look at the barrel of oil and see what it's done. Okay? It's up and down, up and down, up and down, based on guess what? Whether the Middle East turns the spigot on or off. Whether the local domestic policy for drill baby drill turns the spigot on or off. If the spigots are off, oil prices go through the roof, and so does the gas pump after that. If the spigots are wide open, oil prices drop through the floor.

29:53Okay?

29:54Dave Ramsey:It has nothing to do with the inherent value of oil. It's the shortage or the oversupply versus demand. And that's the game you're playing, meaning that from a business perspective or an investment perspective, you are gambling. You are rolling the dice. Because you are in the world of beef, because you grew up in it, because you know something about the actual cattle, you have talked yourself into believing that you can predict a commodity's price. That is unbelievably dangerous. And it will end in your failure eventually if you keep doing this. so the next time you get ready to make a gamble and you're going to put a hundred thousand dollars on red or a hundred thousand dollars on black make sure it's your money so when you lose it at least it's just your money that's gone if it goes up it was your money that went up if you're going to play this game play it with cash son but i wouldn't play it i wouldn't play it at the level you're playing it and I wouldn't do it at 20 years old period.

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33:11Dave Ramsey:Gang, if you like what you hear, we could use your help. You are our best marketing plan. You're probably close to our only one. Yeah, click the subscribe button, the follow button. It helps with the algorithm. Big time, and it causes the show to be pushed out over the various platforms in front of people who didn't know we were here previous because you liked it or you subscribed it or you followed it. Better than that, you shared it. Tell people about us. Click the share button or cut the link and send it to somebody or just tell people about us. Either one, we appreciate you. Thank you for that.

33:43Dave Ramsey:The listenership, viewership of this Ramsey show thing has exploded in the past five years. The numbers are crazy. Thank you so much. We appreciate you. Steve is with us in Greensboro, North Carolina. Hi, Steve. Welcome to the show. Thank you, Dave. Thank you for taking my call. Sure. I am 78 years old, retired, divorced, and have no debt. I have$300 ,000 in a Roth IRA, all in mutual funds, $100 ,000 in a traditional IRA, all in mutual funds, $1.2 million in an inherited IRA in individual stocks,$3.7 million in a brokerage account in individual stocks. About$100 ,000 in cash, giving me a net worth of about$5.4 million.

34:34Dave Ramsey:Way to go. My issue today is that in that brokerage, the taxable brokerage account, I have stock in one company with a value of$1.8 million, which represents 34 % of my net worth. It's continuing to grow, and outlook is good. My tax basis on that stock is$58 ,000, which means it's basically all subject to capital gains, and I absolutely hate paying capital gains. I don't blame you. What would you do? Wow. Did you inherit any of this? You said an inherited IRA was 1.2. You have the rest of it other than that? No, I inherited$250 ,000 in cash, put it in stocks. I've taken$450 ,000 in RMDs, and it's still worth$1.2.

35:25Yeah, wow. The rest of it were just investments throughout my life.

35:30Dave Ramsey:You've done amazing, Steve. No one can question what you've done. I've been extremely lucky. Well, yeah, you were lucky. You were blessed, and you were smart, and you were working, and you were saving money while everybody was spending it. So I'm proud of you. Good work. Well, I think your analysis, and I don't know what your background is, but it's excellent. Your analysis is excellent. One-third of your net worth is tied up in one single company, and as it goes, so goes your net worth. That's scary. Yeah. That's standing on one leg and somebody's kicking at your knee. I can add that I had some of that same stock in my inherited RA, about a half million, and sold that because of the percentage getting up.

36:10but everything is in my taxable now.

36:13Dave Ramsey:Well, so here's the thing. You're going to trade some taxes for some safety. Diversification equals safety. Or you're going to take the risk because you don't want to pay the taxes. It's a simple formula. There's no way around it. You're going to pay the taxes if you liquidate this because it's not in any kind of a protected account. There's nothing you can do a roll on it. There's nothing like that. You are just going to take the hit. I would not do enough where the taxes activate me above$15 ,000. Dadgum, your income may already be over$400 ,000, though, is it? No, no, it's actually not. My taxable income this year is basically going to be RMD from that, and I'm expecting about$160 ,000 taxable income this year.

37:06Dave Ramsey:Okay, all right. But, well, if I remember correctly, and I'm trying to pull up a cheat sheet because I don't have it, the max on the capital gains is$400 or somewhere right around there. If they had moved it up, it was$400 before you get kicked. Have you looked that up yet? I plugged in, oh, just arbitrarily about$600 ,000 capital gain in that, and it came out to about 25 % federal and state tax, I would pay. Well, okay. Because if you go above$400, it goes from$15 to$20 on federal. And I don't know what your state has, but it must be$5, apparently. I'm not sure. So if you keep it under$400 and you rolled$400 inside of it, keep your total income under$400 or whatever the number is.

37:57Dave Ramsey:I'm not a tax guy, obviously. But I'm going to move up to the$400 ,000 mark, the$340 ,000 or whatever I can move, or$240 ,000, whatever I can move to not get above$400 ,000. And I'm going to start gradually moving this at 15 % because I don't like the risk of the lack of diversification. It's painful to rebalance your accounts, but you're going to take the risk if you don't. and you're looking at that company going, I'm really, really like you.

38:35Dave Ramsey:Because I'm going to be over there eating in their lunchroom, seeing how people are doing. I've heard you ask before if someone would, if their life would change, if maybe they lost a certain amount of money or whatever. Yeah. Yeah, if you lost$1.8 million, you would feel that, yeah. I don't think you're going to lose it all. You just could go in half. Steve, I just get itchy because I grew up in Houston when Enron went away. And I had friends and family that worked at Enron. And, man, that just makes me nervous. Or just thinking about what Tesla was a year ago versus what it is right now. everyone can it's just so easy to think yeah this one's got a good upside to it and man my my lived experience is sometimes these things are just a vapor you know i understand i know nothing's assured i don't know what they'd do you any good to know the company that i've no no because it doesn't matter i don't want to it sounds like i'm trashing just that individual company and i'm not i'm trashing the last diversification yeah and so um yeah okay yeah I'm going to start systematically moving out of this.

39:48Dave Ramsey:I'm not going to panic and pay the over 20%. See, are you married filing jointly or you said single, didn't you? Single. Divorce, single. Okay. I just pulled it up while we were talking because I didn't know. It's up to$566 ,000 now that you can move. And so if you've got$160 ,000, that leaves you$400 ,000 that you could move a year and still not be at except at 15%. Yeah. Because you've got a$58 ,000 basis, so it's pure gain, basically. Right. So, yeah, I'm going to start moving about$400 ,000 a year over and paying the 15%. And the 15 % is not just tax. It's the cost of safety due to diversification versus lack of diversification.

40:34Dave Ramsey:And that's the way I'm going to look at it. I don't want to be that deep into one company. And so good question, though. Wow. Congratulations still. I mean, you've done a lot of obviously very smart things. And at 78, you're calling to ask that question. That's a pretty technical, ticky-tacky question. And it shows you really know what the flip you're doing. Congratulations. Very neat. Very neat. That also shows to all the 26-year-old, George calls them the Instagram bros, it's just dedicated time. It's just time. Small amount over time. bought that at 56k and it's at 1.8 million that is just getting in early and just set it and forget it just go slow yeah i mean there's not a um i can't think of a publicly traded company that's a household name well i don't know when he bought it at 58 that's the other thing that would give you that in a short period of time right it's not going to go to 1.8 in a short period of time i know there's not one on the big board on the new york stock exchange there's not one unless you had a friend who worked in a video the day of or something yeah i don't know if you could get it You know, your wife was in Congress or something.

41:39Dave Ramsey:There you go. That'd be helpful. But, you know, that kind of stuff. But, you know, that's the only way you're going to. I don't know if a stock has done that. I don't buy single stocks, folks. And the lack of diversification is one of the reasons. All of the data, even though Steve has done incredibly well, and I do congratulate him, all the data for the rest of us says we buy mutual funds because there's 90 to 200 different stocks in the average mutual fund. If you had 1.8 million in 9 ,200 stocks, you'd be perfectly safe compared to you've bet 34 % of a$5 million net worth on one singular company's behaviors.

42:16Dave Ramsey:They can make the decision to do anything stupid and suddenly you could have a Bud Light moment. In half, yeah. I mean, it could be. A Tesla moment or any cracker barrel moment right now, any of them. You can see the stock just nosedive. Yeah, yeah. You can have all that. And I don't want that. I don't have control over that, so I'm not putting my money in that.

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44:20Dave Ramsey:welcome back to the Ramsey show dr. John Deloney number one best-selling author is my co-host today Anna is with us in Utah hi Anna how are you better than I deserve. What's up? Yeah, so my husband and I were 35 years old. We both have master's degrees. I work part-time. We've got littles, and we're in our second home that we've owned, and I've found a lot in my dream area to build on, but it's very pricey and not where we'd want for a mortgage. It'd make it a high mortgage, and I wondered if there's any time it'd be appropriate. We both make good money. My parents have offered to help us out with about$100 ,000 to make more of an affordable mortgage.

45:08Anytime that that would be appropriate to take that kind of money or how, yeah. My husband disagrees and doesn't think that we should do that. So does that make sense in the question?

45:21Dave Ramsey:That you should not take the gift from your parents or you should not buy the lot? I mean both. It would require taking the gifts from my parents to buy the lot. But he doesn't want to buy the lot. He doesn't want to take the money from my parents, so therefore not do the lot. But I think— What's the lot cost? $4.25, a really expensive lot. It's in a really nice area. So I think it's a good opportunity. I don't want to lose it. My parents, it wouldn't be a loan, but I think that we'd eventually be able to pay it back. Anna, I think you told me three times indirectly you can't afford it. Yes. The words you're using say, I can't chew this amount of food if I put it all in my mouth.

46:05Yeah. I mean, if we did do it, it'd be about close to 50 % of our income for the mortgage. You got a lot of fever, girl. You need to take a cold shower. You also have not wanting to be in the life you live in right now fever. Yeah.

46:22Dave Ramsey:Tell me about that. You cannot afford to live in that place. You don't make enough money.

46:30what's a hundred thousand dollar loan from your parents or a gift whatever you want to call it what's that going to actually cost you like emotionally yeah yeah what kind of strings are attached yeah that's i have no problem somebody getting a big gift from their parents i think it's amazing and i hope i can do that with my kids but i'm gonna have to make sure in my spirit there's no strings attached to it when i give it like i think that's my husband's concern that it'd be.

46:54Dave Ramsey:And it's based on the track record. He didn't just dream this concern up. Right. So I'm asking you, what are the strings? Not a lot of strings, but I mean, yeah, I think he'd just feel uncomfortable and just normal. Are you an only child? No. Are you the oldest daughter? The youngest. The youngest. The youngest daughter. Are you the Only daughter? No. Because I'm confused about why your parents want to participate in helping you be broke. Yeah. To live your dream that you can't afford. Because you told me six times you can't afford this. I mean, indirectly. You know in your heart. Your brain is telling you you can't afford it.

47:40Yeah. I'm more interested in... But at this time, and if times change, and that kind of mortgage wouldn't be as crazy in a few years...

47:47Dave Ramsey:Well, then get it then. We'll talk about it then. But right now, it's cray-cray. I'm worried about what it is about your life. You both got the schooling that you wanted. You have the family that you wanted. What is it about that life that you're not at peace with? We're currently, the home we're in is in a dream area, a wonderful area. It's the same place the lot is at. But it's an older home, and it's given us a lot of problems, including termites, which has been kind of traumatic for me. We've gotten those taken care of. I just don't want to deal with situations like that. So I don't know if that's a, yeah.

48:19Okay, so what is your home? Termites has been a, currently we think we could make$600 off it.

48:25Dave Ramsey:You could make$600 off of it, okay. And the lot is$425. Sorry, that wouldn't be made. I'm sorry. $425, that's without the build. I know, I know. And the$100 gift. And you have$600 equity or the price would be$600? The price. Okay, how is a house in the same neighborhood as a$425 ,000? lot, only selling for$600 ,000. It'll be a million. I mean, that's, maybe we could get more. That's just, it's. Where did you get$600 ,000? The area has no, that was not appraised, but that's kind of what comparisons to around the area have been. Okay. All right. Because if you buy a lot, let me tell you, if you buy a lot for$400 ,000, the rule of thumb in building is, is the lot should be around 20 % of the total when you're done.

49:18Okay. All right.

49:20Dave Ramsey:And so that means you're building a$2 million house.

49:26Dave Ramsey:And you don't have that kind of money, do you? What's your income? About 200. Yeah. You don't have that kind of money. And I could work full time. You know what I want to do with the littles right now? No, I don't want to. It's not worth it. It's not worth it. I mean, you could kill termites. You can't kill a big mortgage. That's what I keep. I don't think this is the house. I think this is something about you not being in the skin you're in. Yeah. Well, it's the scarcity. I mean, it's on the mountain. There's no more lots around here. Everything is built out here. You have to go out west if you want to.

49:59Yeah, but somebody's going to buy that lot and build on it. I like to be on the mountain. And then their nest egg's going to need to move somewhere. They're going to have grandkids, and the house will come up on the market. But there's a fever inside of you.

50:13Dave Ramsey:listen there's there's plenty of lots and there's plenty of mountains and there's the rest of your life to figure that out um yeah dave i hear this listen i i am a spender and i love real estate and i'm running through my head the number of times i have sounded like her i'm telling you man she's about to do something i have gotten i get the fever for something and i get like a dog on a bone and i'm i'm just like a chasing a rabbit running through the forest looking at looking i'm gonna i'm gonna run this thing down and i can hear that i've because i do it i can i have to catch myself and go wait a minute this is stupid i mean i can tell i can point to you a lot down by our lake house that i chased like this and it is a very unique property it's on a peninsula and you own the whole peninsula yeah and it would have been very it's like she's talking about and i chased that thing and chased that thing and then a guy bought it and built a house on it and I actually tried to buy the house and we were sitting in the front porch of that house and there's nine million boats going by and I felt like I was in the middle of the interstate and I went thank you God for protecting me from me and not letting me get this because I don't want to be out here in the middle of this this hell of a highway on the lake and so I you know I that's a that's a 10-year story I just did right there yeah but I I had I had the Jones for that stupid lot yeah it's like I can do I can totally relate to you take a cold shower don't buy the lot, you can't afford it.

51:39Dave Ramsey:And there's something wrong about the way you're approaching this. John's hearing it in your voice and your words. I am too. And you're willing to sacrifice even dealing with your parents to get it. That's how bad you want this lot. Or even you've done the math like, okay, what if I gave up a core value, which is staying home with my kids, and I gave up that for this piece of dirt. Yeah, there's something on the grass is greener in your spirit right now godliness with contentment is great gain and when i have violated that and i have i just told your story when i was doing i didn't end up with a lot but i swear to i think god just literally kept me from getting hey i walked out of guitar center the other night with my hands in my pockets stupidity yeah i didn't have good spirit that's right yeah and i just man it's like going to an auction man keep flicking your ear you know i'm just like yeah touching your nose it's bad y 'all we all got it you know we do

52:41you

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53:58Dave Ramsey:Blake is in Arizona. Hey, Blake, how are you? Great, thanks. How can we help? So, the background is I'm 62. My wife is 51. We do not currently have any debt. Our home is paid for. I recently retired and started taking Social Security after I was let go from my job after 34 years. and we have, I still have my 401k just sitting left with my former employer. I have about$1.1 million in that and another$100 ,000 in a Roth. We have approximately$500 ,000 in a high-yield money market earning about 3.5%. We want to know it's really not, you know, it's safe, but it's not returning the kind of money that we really need to.

54:57Really don't, we're living on pretty much below our means. My Social Security, and then I also picked up a part-time job working at a local golf course just for something more to do. That covers our expenses. We're wondering what would be best to do with that approximately$500 ,000 for us for the future. And then also, we'd like to start putting, we have a new baby grandchild, and we'd like to start saving for them. What would you recommend? Wow.

55:34Dave Ramsey:What did you use to earn at your other position? I varied in income. At the last, when I was let go, I made a little over$100 ,000. Okay. All right. The$1.1 million is in traditional or Roth? It's in traditional. Okay. It's in a Fidelity, like a target date fund. Okay. All right. I would have you sit down with a SmartVestor Pro, and there's a couple of things in this portfolio I want to work on, and I'll give you the background on what and why, okay? Sure. A SmartVestor Pro is a network of people that are in the business. We don't do investing at Ramsey, but we endorse these folks. We embrace them, and they are aligned with the teaching that we give.

56:22Dave Ramsey:So you're going to hear things that sound a lot like Ramsey when you sit down with one of them. The first thing is you never invest anything without understanding it yourself. You've done a very good job getting to this point. Congratulations. You're almost multimillionaires, and you're definitely millionaires, and it's pretty incredible. Well, you are multimillionaires because your house is worth enough to get you over the 2 million mark. So net worth wise. So good. Congratulations. You're in really, really, really good shape. I got two things here. One, we want to get the 500 invested, which is your question.

56:55Dave Ramsey:The second thing is I want to begin to think about how to move that 1.1 gradually to Roth and pay some taxes on it. Because at 72, you're going to be facing, which is going to be here in a heartbeat, only 11 years. you're going to be facing what's called RMDs, required minimum distributions on that. And I want to keep that from happening. And if you die with the whole thing intact, the entire account, of course, is taxable in an inherited IRA for your kids. And by then, it'll be$3 million. Okay. Because you're not going to die anytime soon. And it'll double and double again, double again. It might be$5 or$6 million even.

57:34Dave Ramsey:And so if it's in a Roth, if we can get it into a Roth gradually in the next 11 years before you get to RMDs, A, you don't have RMDs, B, your kids will never pay taxes on it, C, you'll never pay taxes on it if you decide to use some of it for something. So if it is invested, and I would probably reset the investments inside of there today from target date into some quality, long track record growth stock mutual funds. I invest inside my retirement, and I've recommended for 30 years people do that, in growth, growth and income, aggressive growth and international. I do not do target because I don't believe – because I'm 64.

58:12Dave Ramsey:I'm going to be 65, a touch older than you. And the data tells us that at your age and my age, if we're in good shape, healthy, which you are right now, I guess, and I am too. You didn't tell me otherwise. We have a high likelihood of making it into our 90s statistically. And so that's still 30 years you've got to outpace inflation. And that target date is going to dumb down your returns as you get a little bit older. and there's no need to do that because you don't need – you can handle the little bit of risk that a good quality investment portfolio represents. So I'm going to move you away from target date.

58:47Dave Ramsey:I'm going to move you towards Roth with the 1.1. That's two things. All of this as you understand it. Don't do it because I said do it. But I'm really happy right now that all of my retirement accounts are Roth for those reasons. I don't have RMD. I won't ever have any taxes on it. Neither will my kids as an inherited IRA. How are you – am I able to convert the traditional 401k to a law? You're going to pay taxes when you do. You're going to pay taxes on the amount you convert every year. That's why you're going to want to do it in stages to keep bracket creep from hitting you so hard. Because it's all ordinary income.

59:22Dave Ramsey:There's no capital gains available. Now, moving on to the 500, which was your original question, which is a good question too. You've done a great job. I just want to say it over and over. These are minor tweaks, but they'll help you to the tune of millions of dollars over the next two decades. the 500 that's what we're looking for yeah the 500 uh the 500 obviously you do need to get that invested sitting there in a stupid high yields crazy it needs to get you lost 50 grand last year or 60 grand by sitting there and you you could that would have been nice to have around so um don't tell my wife that yeah i mean it's it's missed what the market did versus what you did you know that's what you're missing opportunity cost right so the uh what you're going to do there is look for what's called a low turnover mutual fund.

1:00:06Dave Ramsey:So inside the mutual fund, there's 90 to 200 stocks. If they sell almost none of them, low turnover of the stocks, it does not activate any taxable gain or very little taxable gain unless you sell it. Okay. An example of that is an S &P 500. They typically have a 3 % or 4 % turnover ratio, meaning 97 % of the stocks sit there and grow but create no taxes. It's like buying a single share of Home Depot for$50 and it goes to$70. You don't pay any taxes on the$20 until you sell it. That's capital gains growth. Okay? Okay. So it's like buying a rental house for$500 ,000 and it goes to$700 ,000. You don't pay any tax on that$200 ,000 growth until you sell the house.

1:00:54Dave Ramsey:Same thing is true in a low turnover mutual fund. So you're not going to have taxes. That's great for now. When you do have taxes and do decide to pay them, they're going to be a capital gains rate, which is 15 percent instead of 37 percent. So that's wonderful. So low turnover growth stock mutual funds. So I use S &P 500 for a lot of that. You can use other stuff, too. I've got another couple of million in a different one that's not an S &P that I'm letting sit. At the S &P, I use it for saving up to buy real estate. But anyway, so you're looking to learn about the low turnover mutual fund because it grows with no taxation unless you pull it out.

1:01:32Okay.

1:01:33Dave Ramsey:And you're going to get marketplace growth because S &P 500 is going to be, you know, traditionally it's been 11%, 12 % a year. It has been the rate of return. So in the last two years, it was over 20%. And it's not going to be that forever. That's not an offbeat thing. But so low turnover mutual funds, that keeps you from paying taxes on it as it grows unless you pull it out. If you leave it alone a year and you do pull it out, it's only going to be at capital gains rate, not an ordinary income rate. So smart. All of this to say, learn all that again because you don't want to learn it from some guy on the dadgum podcast.

1:02:08Dave Ramsey:You want to sit down and learn about this yourself. It's millions of dollars. It matters. So you're smart to ask the questions. The SmartVestor Pro's job is not to do it for you, not to tell you what to do. Their job is to teach you what is possible, and then you choose among the things that are possible. And that will get you there. But those two little tweaks right there in the next two decades are probably$4 million, maybe more, in what happens to your stuff. versus target regular investments versus target date, Roth versus traditional, and low turnover versus high yield. And those rates of return and that amount of money, that's what it's going to do.

1:02:49Dave Ramsey:And a good thing to keep in mind if you're looking at this stuff, folks, is it's fun to do the math real quick. Okay, he's sitting on basically$2 million. If it's growing at 10%, every seven years, it's going to double. He's 61. At 68, he's going to have$4 million. At 75, he's going to have$8 million. At 82, he's going to have$16 million. And he's very likely to get there statistically from an actuarial table, which is the death rate table thing, okay, for life insurance policies. So once you make it up to into your 60s and you're healthy, you're not going to die at 76, usually. 76 is your average male death rate, but that includes infant mortality, teenage death, and so on.

1:03:32Dave Ramsey:So you can't run your numbers based on that anymore once you get to be old like me and him.

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1:05:03Dr. John Deloney has had three number one bestsellers,

1:05:09Dave Ramsey:two of them big, hairy, nice, hardback books. John none of them are as pretty as this they're not as pretty or and none of them are as personally important to a guy that struggles with being on time as the 2026 Ramsey goal planner yeah you have a goal and a planner maybe you can be on time but if you write I didn't see the thing you did on Instagram that's pretty funny if you co-write a book with Rachel Cruz and Jade Warshaw it's gonna the the beauty will win out over whatever madness I was trying to tell you the The Ramsey team, the design team, yeah, the Ramsey Gold Planner is a big deal. Everybody gets them every year.

1:05:50Dave Ramsey:And they always sell out. We only do about 10 ,000 of them. But they sell out like immediately here in the fall. So this is 2026. It's gorgeous. The creatives, we kind of just turn the creatives loose and go have fun. Right. This is like their sandbox. And usually I'm like, hey, I want to see it. And they say, you're not allowed to see this one. Yeah. And you're not allowed to touch this, John. Nope. Dave, you can't even say anything about how much it costs because it costs a lot to produce the thing. It's a beautiful piece, though. A full calendar, of course, and a full process for applying the calendar, setting goals.

1:06:21Dave Ramsey:And it's absolutely amazing. And let me shout out all— And the weird thing is we did cut the price. We do. We sell it early, and we do cut the price significantly. And I want to shout out everybody who's fighting the system and still writes things down with pen and paper. I got to tell you. I love it. I love it. My wife and I in the mornings, one of the things she says, let's do calendars. which is one of the things we stay aligned on our money we stay aligned on our time oh that's romance talk in my house and we stay aligned yeah so um yeah we we this morning she said let's do calendars let me tell you what she gets out old school that's what my wife does a little black thing with a little flip on it and it flips it open it's got she's it's all written down yep and uh you know what it doesn't get deleted nope unless you mark through it there's no ai bot But I'm going through it.

1:07:05Dave Ramsey:$35.97 if you want to pre-order. It's the best deal you're going to get because we paid a lot to Brucey. So, yeah, we did. Jade, Rachel, and Deloney, monthly content from them as you go through your months and planning. If you grab it before Labor Day, it's just$35.97, the lowest price. Even Black Friday pricing won't beat this. RamseySolutions.com slash store. If you're watching on YouTube or podcast, you can click the link in the description. I got to tell you, we put out a lot of nice products. I'm really, really proud of this product. The people that get it always love it. It's a lot, and it's all there.

1:07:42Dave Ramsey:It walks you through lessons from Rachel, from Jade, and from Dr. Deloney as you're going through. And you can lay out your spiritual year. You can lay out your physical year. You can lay out your time. It's all in there, and it is an incredible, incredibly well-designed tool. And, again, it's a beautiful, beautiful piece of work. So all the way around. Eric is in Cleveland, Ohio. Hi, Eric. What's up? Hi, good afternoon, everyone. So I am a third-year medical student, and I've talked to a lot of physicians who have advised me not to worry about loans because they'll easily be paid off when you're earning a physician salary down the line.

1:08:20Sure, easily. Med students never call. Honestly, that's a long way to way. New residents never call into the show, Eric, ever, panicking. So you're right. Nothing. Go ahead. Go ahead, Eric. So I also recently got married about eight, nine months ago, and I want to know the best way for my wife and I to be proactive about our loans starting now and manage slash know how much we should be putting aside the savings for our house, investing in our Roths at this

1:08:52Dave Ramsey:time. I love your question. It's a very wise question to say, I'm getting ready to come into some money. What is the smart thing to do with it? I've worked really, really hard to get to this point. How can I be the smartest and get the most traction with all this work I put in? Because you've worked your tail off to get here. Congratulations, sir. So very good question. All right. All snarkiness aside, I'm still going to tell you the truth. The first rule is this. I live in Nashville, okay? And so I know the country music folk. I grew up in Nashville. I know the country music folk, okay? And I know all of them that almost made it, too.

1:09:35Dave Ramsey:And I also speak to NFL rookie camps and explain to the young guys that NFL stands for not for long. The average NFL career is 3.8 years, and they think they're rich, okay? So there's only one thing dumber than a country music artist who's getting ready to lose everything because of bad financial advice or a new NFL star that's getting ready to lose everything, and that's your fellow doctors giving you financial advice. They are the world's worst with money. 35 years I've been doing this, I am constantly amazed at how the typical MD is absolutely stupid with money. It blows my mind. Now, there's exceptions.

1:10:21Dave Ramsey:There's exceptions. So that's rule number one. Don't listen to these guys that have advice. Now, rule number two, you're very smart to ask advice and to learn things from several different sources, and you use that wonderful brain God has given you because dumb people don't get this far in medical school, even though I just made fun of them for their financial stuff, but they're not dumb, okay? But you don't get that far, and so use that brain of yours to learn. Do not put money in stuff you don't understand and keep asking a thousand questions like the one you just asked for the next 10 years and you will become very, very wealthy.

1:10:55Dave Ramsey:So you are on the right track in the multitude of counsel. There is safety, the Bible says. And so you keep gathering and learning and learning and don't do everything. Dave Ramsey says you go learn about it for yourself. Now, having said that, also having coached some docs who did a great job becoming very wealthy very quickly, one of the things we coach them to do is to avoid what we call doc-itis when you come out of med school. So you have a – you're in the top 1 % of the population in emotional maturity. One measure of emotional maturity is the ability to delay pleasure. You have, while all of your friends from high school have been out playing beer pong, you've been going to class and reading books for a decade longer than they have to get to where you are.

1:11:43Dave Ramsey:And so you've been holding your breath much longer than the typical person walking around listening to this conversation right now. You've been delaying pleasure to get to a greater good. So you know how to accept pain to get to a greater good. You know how to pay a price to win. Otherwise, you wouldn't be where you are. You don't graduate med school unless you get that concept from a psychological, emotional standpoint. Does that make sense? Yes. That's a huge compliment to you. My wife doesn't necessarily have that, which sometimes can create a clash, but I agree. I understand that. Yeah. So when you get out, the typical doc has been holding their breath for a decade longer than everybody else.

1:12:21Dave Ramsey:And when they exhale, it looks like this, a new house, an investment account, and a BMW. and the student loans are just sitting there looking at them because they've been waiting so long to enjoy this income that the first thing they do is go enjoy it. And I'm going to beg you to do one thing, and that's continue to hold your breath for 18 more months after you get out and pass your bars, you take the big job, you take the signing bonus, and you clear the$200 ,000 as fast as you possibly can. Keep living like a broke resident for a short period of time and clear the debt because then you've got$200 ,000 to$800 ,000 a year or whatever your income is going to be for the rest of your life with no monkey on your back.

1:13:04Dave Ramsey:And you can go, you can become wealthy so quickly. But if you kick the can down the road on this 200K, like those docs are suggesting, you're going to be in debt the rest of your life and you're going to suck at money and you're going to struggle. So I would live like a resident, like you were broke and clear this up as fast as you can. And with your marriage income, brother, I would invest not in Roth, not in real estate. I would invest in you right now. Can you and your new wife, can you all get through the rest of this year and next year before you start getting paid? Can you get through the tuition?

1:13:37Can you all cash flow that? So she was making around$80 ,000 as a registered nurse. And then we were able to chip about$40 ,000 off. Amazing. First goal is no more debt, though.

1:13:54Dave Ramsey:First goal is no more debt. Second goal is chip away at it. So the problem was she went back to nurse practitioner school as well in January. So how much is she going to owe? So she doesn't owe anything. Her father had a 529 for her, so we don't have any loans on her part. It's all for me. Excellent. You guys are going to be making 600 grand. Yeah, y 'all are going to be doing well. This is so great. Please pay off the debt as fast as you can. As fast as you can be possible. No investments, no purchases. Live like broke college students till all the debt is cleared. 18 more months, dude. Both of you pass your bars.

1:14:31Dave Ramsey:Don't suffer from Doc-itis.

1:15:01Dave Ramsey:Today's Ramsey Show question of the day is brought to you by Y-Refi. If you've been turned down for refinancing your defaulted private student loans, well, you're not alone and you're not out of luck. Y-Refi exists to give people just like you another shot. Go to Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Not in all states. All right. Today's question comes from Felix in Pennsylvania. Felix writes, I am a millennial and multiple families that I know who have children are selling their houses to live in RVs because they want to get out of debt. They are basically homeless.

1:15:40What is going on with my generation? I don't think we can cover that in this podcast. We don't have enough time. I know debt is to be avoided, but is this trend healthy or is gazelle intensity going too far?

1:15:56Dave Ramsey:It's a good question. I don't think that's gazelle intensity. I think that is gazelle intensity is being very intense and sacrificing to get to a future goal. goal. Um, I've done this show for 35 years. I've never told someone to sell their home and live in an RV. I think that's a part of our, the, the hack virus that we live in as a culture. Yeah. But that's not you and I, I mean, it's not Ramsey advice and Ramsey advice is gazelle intensity. So I invented that phrase. So no one used that phrase before me. Right. So that's, but is this a segment of a generation that feels hopeless and stuck, and so they resort to extreme measures that are over the pale to try to get unstuck?

1:16:49Dave Ramsey:Yeah, that would be true. Yeah, or people have bought way too much house, way too much car, and they're just hitting control-alt-delete on their life, or they grew up playing video games, and they're just hitting reset on the Nintendo and starting over. But yeah, I think it's one of those not an either or question here. It's not the right move. Right. Agreed. But getting out of debt is very important. Yeah. Now, selling your home, moving into an apartment, that might work. Absolutely. I've done that. I sold my house and moved into a dorm, for crying out loud. Yeah, I've been there. But I always answer questions the way I would answer them.

1:17:24Dave Ramsey:What would I do if I was in the shoes? and there's never a moment in my life that I would live in an RV because I want my wife to live with me and she wouldn't live there. So it's not a dream of ours at all. It's more like a nightmare. And we would be like Cousin Eddie. And so, no, we don't need to do that. The Ramses don't. So I don't tell other people they need to do it. I have had people do some wild things. I remember about, gosh, it's a long time ago, a couple decades ago, a guy in Birmingham sold his home and he called me up and told me he bought a trailer. And I'm like, oh God, why'd you buy something going down in value?

1:18:04He goes, Dave, I paid a thousand dollars

1:18:06Dave Ramsey:for it. You moved into a$1 ,000 mobile home. You might be a redneck if my God son, really? And he's like, yeah. And he was making like serious money. And he goes, but in two years, I'm going to pay cash for a house and that's the price we're going to pay. And we're willing to do that. I'm like, okay, you're willing to do something I'm not willing to do. So I can admire you for that, but I can't make that the program. Sure. It's not what I teach. Yes. And he did. He saved up like 300 ,000 bucks or something in two years and went and bought a house for cash. It's amazing. But I don't see you moving Sheila into a single wife.

1:18:47Dave Ramsey:Nope. Nope. Here's the thing. When he has a question, what's going on with my generation, there is a challenge. You can call it resilience. You can be whatever. Discipline over time, doing a hard thing with repetition, whether it's diet, whether it is working on relationships, whether it is getting out of debt. I would say there is a generic allergy in our culture to discomfort over 24 to 36 months. People don't mind doing something painful right this second. and um but but they don't want to stick to a hard thing over time and we've been told you don't have to and actually we're a little sliver of history where there is some hacks around some stuff and so everyone's looking for a way to do the craziest thing as pain-free as possible um and i so i think if you ask me that question your culture doesn't want to live within their means and and take what that means, which is, okay, we can't live in Manhattan doing this edit editor job that we saw on Instagram.

1:19:49We're gonna have to live in Kansas or in Nebraska where we can afford to live and do a job that maybe isn't our quote unquote passion job. Or if you found yourself way, way in debt to sell the cars and put two kids in car seats in a Corolla, which is uncomfortable, but it's doable and take three years to work with intensity, focus intensity over time and be uncomfortable for that long. That to me is the biggest allergy I think we have culturally. Yeah. I remember distinctly Millie Ramsey driving a Chevy when she's 19 years old,

1:20:25Dave Ramsey:driving a Chevy 2, which is like the first version of a Chevette kind of thing. It had two doors. It had a small little four-cylinder in it. Gas was 12 cents a gallon. And you could get to the top of the road above the gas station and run out of gas and coast down to the gas station and we did yeah and uh i would say mom when are we getting an air conditioner for the car and she said we have a 240 air conditioner roll down two windows we're going 40 and so that they paid a price that's right that generation paid a price to uh live they lived like that for a long time before they saw prosperity right um and then i saw that and so but you know i i was telling somebody the other day they were asking me about gen z's because we've got so many gen z's here at ramsey and millennials i would say out of our 1100 those two generations represent probably 700 people maybe maybe 600 someone something like that the vast majority of people work in this building following that and i think they're the two best generations i've run into in a long time for wealth building and for a lot of things and the reason is is they grew up with a magic wand in their hand and the magic wand says if you push a button, stuff shows up on your porch.

1:21:38Dave Ramsey:If you push a button, you can get the answer to any question. If you push a button, it'll track all of your medical desires and things you wonder about. If you push a button, and so they have an abundance mentality because to them, everything's possible. Because if they push a button, anything happens. And it's a natural built-in in their DNA and abundance mentality. They're not scarcity driven. They're abundance driven and that's a wonderful thing and so they think like anything's possible because to them anything's possible right and so that is a wonderful trait of this generation what they don't have is zero patience right or a tether to reality when you push a button crap shows up on your porch that day that day i mean you know you didn't have to walk uphill both ways in the snow to go buy some toilet paper that's right it shows up on your porch you know and so there's no patience.

1:22:29Dave Ramsey:I'm not going to wait for anything. I'm not going to struggle for anything. I want it right now. It's a microwave, not a crock pot. Don't talk to me about cooking something over the whole weekend. You don't cook stuff overnight. You cook it and we eat it right now. Right. And if they have a fallacy, it's that. And it relates to this question. Yes, exactly. And so I would tell you, yes, get out of debt. And I think when it comes to pushing a button, I think the friction between what I want and what I can get has been so intentionally dissolved that it is untethered us from reality. Exactly. That water comes from somewhere.

1:23:04That cow came from some farm somewhere. It's just magic. It's magic. And the longer you live in magic land, the more divorce from reality you get. And that's what companies want, right? They don't want you tethered to reality.

1:23:16Dave Ramsey:I'm going to hold an$1 ,100 magic wand in my hand and criticize capitalism. I'm going to give an$1 ,100 computer to a six-year-old. Right. Because you, quote unquote, need one. It's mad. It's madness. But we're untethered from reality. Yeah. Right. But it is. There's good parts to it. There's amazing parts. I think the possibility thinking, to quote a guy from three generations ago, Dr. Robert Schuller. Right. Possibility thinking this generation thinks anything's possible. And when you're sitting in meetings with them, dreaming up the next thing to do in business, that's about as positive a trait as you can have.

1:23:53Dave Ramsey:rather than some sour-faced boomer sitting there going, well, it won't work. It can't be done. That'll never work. Like Eeyore is in the meeting with you, right? It's a weird juxtaposition of, yes, we can do that, but I need to work life balance, right? But I want to work from home. It's like the boomer is like, that ain't going to work, and I'm going to spend the next 80 years trying to tinker it away until it finally does work, right? Yeah, I'm going to keep messing with this and keep messing with this and keep messing with this. Perseverance. So the allergy is like discipline over time. perseverance.

1:24:23It's going to suck for a long period of time, and we're going to be stunned at how much we got done and how strong we are at the end of this thing.

1:24:31Dave Ramsey:Start it with the possibility thinking and then stir in a little patience. Stir in some discipline and perseverance, and you've got a real... These two generations are going to be the best generations we've ever seen on the planet.

1:24:47Dave Ramsey:It's way too easy to put off making a will. And believe me, I've heard every excuse in the book. But not having the time is one excuse we can kick to the curb right now. Because these days, most folks can make a legally binding will on their laptop between loads of laundry. If you're wondering if you can make your will online or if you need a lawyer, we have a quiz to help you figure that out in less than five minutes. Just go to RamseySolutions.com slash willsquiz. ramsaysolutions.com slash will's quiz.

1:25:37Dave Ramsey:Welcome back to the Ramsey show. Dr. John Deloney, Ramsey personality and host of the Dr. John Deloney show is my co-host today. The phone number is 888-825-5225. Mike's in St. Louis. Hey, Mike, how are you? I'm good. How are you guys? Better than I deserve. What's up? Just wanted to ask, is it a good idea to sell our house in order to get out of our consumer debt and fast forward the baby steps? Okay. How much consumer debt do you have? About$36 ,000. 24 credit cards,$12 ,000 in a car. Okay. And what's your household income, sir? Household income right now, I just picked up another job, but currently I'd say our household income is about$4 ,000 or$4 ,500 after taxes right now, but that should bump by about$3 ,000 here in the next few months.

1:26:36Dave Ramsey:So you're going to be making$7 ,000 a month in the next few months?

1:26:44I'm sorry. I'm being a little exaggerative, I guess. So let's back that down to$6 ,400,$6 ,500 a month.

1:26:54Dave Ramsey:Okay, so you're making$6 ,000 a month. How much is your house payment? $1 ,200. Okay. All right. Do you hate your house? No, I don't hate it. Does your wife hate it? It's very small, so we do not hate it, no. Okay. All right. No, you should not sell your house. Your house is not the problem and it's not the solution. Okay, so you make$6 ,000 a month. You have a$1 ,200 house payment. At some point, you'll make six. You don't today, I understand. But we're talking about a couple months now, right? Okay. $1 ,200. So that leaves me, you know,$4 ,500 to buy food and reduce debt. Okay? You owe$36 ,000.

1:27:40Dave Ramsey:so uh if you put two thousand dollars a month on the debt you're out in 18 months if you put three thousand dollars a month you're out in one year so somewhere between one year and 18 months depending on whether you're six thousand or you're seven thousand is correct one of those two but somewhere between 18 one year and 18 months you should be out of debt then no you don't sell your house for that reason instead you live on beans and rice rice and beans for one year to 18 months don't go out to eat don't go on vacation roll up your sleeves the two of you sit down and make your budget scream make your broke friends think you've joined a cult get really really serious about leaning into this debt and chop up the credit cards tonight light a candle and have a plastic surgery ceremony.

1:28:33Dave Ramsey:And then let's just tear into these cards and this debt. You guys have not been living on a plan and you've just increased your income substantially in the last year or so. And that's concluded by this next raise, right? Correct. Yeah. Yeah. So here's the way I like to think of a dude. If, if there was a marathon in your town. You could take an Uber to the last mile and run the last mile. They'll give you a ribbon. They will congratulate you and everybody will cheer for you as you cross the finish line. You could do that. And you'd still have crossed that finish line. If you train for that thing and you run that thing and you get all the blisters, all the pain, all the stuff that comes with running it.

1:29:20When you cross that finish line, A, you're a different person. Y 'all will be a different married couple together. And you're going to be way stronger, way better shape than the person who just took the Uber to the last mile. And so selling your house right now is a hack and it might clear it up, but y 'all will still be y 'all. And so the chances y 'all fall back into something is a hundred percent. And so I love the idea that y 'all are going to scratch and claw for a year, 18 months. And the sweetness of crossing that finish line will be such a different feeling and you'll have a different level of strength than if you just got dropped

1:29:56Dave Ramsey:off. And the two of you locking arms to set a goal and attack this goal with a vengeance is huge for a young marriage. And the deeper you cut, the faster you get out. The more you work, the more you make the faster you get out and so just look at this to say how much work can i do how little can i spend and look at your spouse and go how much work can we do how little can we spend and then we'll be out that much faster and john's right you'll never look at a credit card the same after this you know it's kind of like once you get food poisoning on something you never want eat it again. I need nothing again.

1:30:36Yep.

1:30:36Dave Ramsey:Ever. Like 40 years later, it still turns your stomach. It's like, I am never the, you're just smelling it. It's just, it's the same. That's the way I feel about debt. And once you fight through this, you'll feel that way about it. John's right. So no, you mathematically, relationally, psychologically, spiritually do not need to sell your house. Nothing in this call says you need to sell your house. And if you needed to, I'd tell you because I love you and I want you to win and I think you're gonna win and I just I I can hear it's funny John doing this all these years I can hear in their voice sometimes that that they're getting ready to do it this are done this guy's he's got that thing in his voice like I'm gonna I'm I've had it yeah so but he's had it so bad he's willing to sell everything yeah I'll do whatever whatever I've had it the great Les Brown the great motivator back in the Zig Ziglar days, used to do a whole talk on that.

1:31:31Dave Ramsey:He was like, when you get sick and tired of being sick and tired. And you finally look around and you say, I've had it. That's when you're about to change your life. And you can hear that in people's voice and their structure and their tone when they're talking to us. And so many years of being able to just listen to them and not see their body language, but hear it in their voice. He's got that thing. I think I predict Mike and his sweet wife are going to be multimillionaires. And it started today. Today. Day one. So it started three days ago when they started talking about this. And we gave it a little boost today.

1:32:06Dave Ramsey:One of the two. Something like that. But when you're willing to do whatever, there is nothing that can stop you. Yeah. I have recently become obsessed. It's probably too dramatic of a word, but pretty close to the idea of what is the hardest way I can do something great or do something well versus what I think I've spent the last 20 years. What's the easiest way I can get through this thing? The neuroscience keeps coming back that when your body doesn't want to do a thing and you go do that thing anyway it the cascade of benefits is so beyond the accomplishment of that thing and at the same time we live in a culture where Dave I was looking up I was trying to find a part for the mower Hank and I were working on a mower and a riding mower that I got and right when we got it all fixed up the belt broke I just opened Chad GPT and said what is the belt product number for this and it gave it to me there's no friction at all anywhere for anything anymore and it's like do you want to order it here and i now want that doesn't disturb me when i robot shows up and puts the belt on for you now i'm getting pissed i'm just right here's the thing like i like the idea of sitting down with my son and going to tractor supply and looking through it and it took takes so much longer and man when that thing took off across the yard watching him cheer watching me like it we did a thing together it was hard and the benefits were beyond just replacing that belt And so I like the idea of taking, okay, 18 months, I bet we can do it in 13, and we're going to figure this thing out.

1:33:41And you will have a different kind of marriage on the other side of this beyond just being out of debt. It's everything all at once, and it's amazing. Yeah.

1:33:49Dave Ramsey:When people do that stuff, they sell the knife collection. They sell everything. They sell the gun. And they lose 30 pounds. It's weird. And they don't talk bad about each other at the water cooler anymore. It just changes everything. Yeah, they like each other because we're working together. Don't you mess with my wife? Don't you mess with my husband? All of a sudden, we're a team. Now we're locked.

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1:35:16Dave Ramsey:Abby is with us in Virginia. Hey, Abby, what's up? Hi, how are you guys? Better than I deserve. How can I help? So I am an applying medical student this year, and my family has an exchange student. And my mother informed me that they're going to be using my 529 to pay for our exchange students' education here in America. And I'm worried about how much debt I'm going to be collecting from medical school. Okay, so there's a 529 account that you thought you were going to get to use for school. How much is in it? Yes, sir. That I don't know. My mom has never disclosed it to me. But she's the one who put in majority of the money, and my father didn't really put in much of his income into it because he was in the Army.

1:36:12Dave Ramsey:Mm-hmm. Okay. I currently am receiving benefits from the VA to go to a university. Okay. And that's for undergrad or for med school? Undergraduate. So it'll stop at the end of the four years that I just did. All right. And then you're going to go to med school to become an MD? Yes, sir. That's the hope. When will you finish your four years? I'll finish this year in 2026. Okay. But as far as you know, there's enough for the exchange student and your medical. You don't know how much is in there. I don't know how much is in there. My mother said ballpark is over 400K, but she doesn't know. She knows, but she won't just tell me the actual number itself.

1:37:04Dave Ramsey:Okay. All right. So I get to learn something on this show. I've been doing this show for 30 years, and I get to learn something brutally every so often when I screw up an answer on the air. And about three weeks ago, I screwed up an answer on a 529, and I've gotten trashed for screwing up the answer. So I've thoroughly learned about 529 is what I didn't know in the last three weeks or so. So here's the correct answer because – and I screwed it up before, and I'm not going to this time. You don't own the account, Abby. She does. She can do with it what she wants to do with it. Yes, sir. So would I take out loans for medical school?

1:37:45Wait a minute.

1:37:46Dave Ramsey:I don't know on what planet she can't help an exchange student and still have enough left for you to go to medical school out of$400 ,000. Yeah. Why are you whining about this? There's a bigger conversation to be had. Why is it that your mother – why are you and your mother at odds? Because my mother believes that I should take out loans from medical school like she did for her graduate program. So she doesn't want to use the 529 for you to go to medical school regardless of the exchange student? Yes, sir. But she then told me she's going to use it for the exchange student instead of for me, and that's like where some of the tension lies.

1:38:29Dave Ramsey:Not really. The tension just is that she doesn't want to give it to you for med school, period. She did pour salt in the wound and say, but I am going to give it to this other kid. That's not even a family member. That's not you, yeah. I'm not even sure she can do that, by the way, without getting penalized. But I don't know the answer to that, and I'm not going to answer something else. I don't know the answer to it. But, yeah, maybe she can. I've never read that you can give it to an exchange student, only siblings and people in the family. She could give it to your husband. You can give it to your wife.

1:39:02Dave Ramsey:You can give it to your parents. You can give it to your kids now. But I've never heard exchange student. Maybe you can, though. Maybe you can. It doesn't matter, though. That's not the core issue. the core issue she's not gonna give it to you anyway yeah i understand that's her yeah why what's her reasoning it's like it sounds like an old like frat bro like i got haze so you get haze like she should be the one saying how ruthless it was trying to pay back student loans and be a new mom and all that kind of stuff so i have almost a half a million dollars in an account i'm gonna I'm going to take care of you.

1:39:38So I have paid for all of my medical school applications. I'm paying for all of my flights to and from interviews at other medical schools.

1:39:45Dave Ramsey:Are you a senior? Yes, sir. Okay. Wow. So I am paying for everything I pay for my rent. I, yeah, I do pretty much everything. I have a job. Okay. There's something deeper here. What's the tension with you and your mom? um this exchange student has lived with us for four years trying to get an associate's degree and has not yet completed it i know let's take the exchange student is a symptom they're not the problem what is the problem is your mother and you yeah what is going on i honestly don't know i really appreciate my mom really you don't know really i i genuinely don't know i have a feeling it's because she went through this whole process without any help from her parents and expects me to do the same.

1:40:33Well, I can tell you, I went through some things all by myself without my parents' help, and I'm making dang sure that my son doesn't do that. And there's some things that I had to do that were really hard that I'm making sure he does because it's appropriate.

1:40:46Dave Ramsey:Okay, number one, let's set this aside. The exchange student is not causing you to go to mid-school with student loans. Your mother is. She has the money to do both. Yes, sir. Okay. So take the exchange student out of the conversation completely. And then if I were in your shoes, you're not going to like this, but I simply wouldn't go to med school. I don't think you can afford to go. She's not willing to help you, and I'm not going to tell you to go$250 ,000 in debt to go be an MD. Not in the current medical climate. I think it's financial suicide. I know it's your dream, and it's your A game, and it's what you've been wanting to do your whole life, and you're going to do it no matter what I say.

1:41:29Dave Ramsey:I know that but I'm not going to leave this call without telling you the truth and the truth is you should not do this and then you should call your mom up and say based on the fact I've got to go into student loan debt I've decided not to go yeah I I agree with Dave and but I also think it's worth sitting down at a table and asking your mom what happened what in the world is wrong yeah what did I do um I had this amazing opportunity ahead of me I've clearly did you go at her after the divorce with your dad and she never got over the fact that you got out you know you took his side or I mean what happened yeah I'm pretty gnarly or this woman is just wounded from something else and she's taking it out on her kid I don't know but this is a game of cat and mouse I don't want to be in I would opt out of the game yeah that's exactly right I'd step out and Dave's right even at the at the highest case scenario she could put a hundred grand towards this other student's tuition and still have three hundred thousand dollars for you and you can still go to school So it's not about her.

1:42:23Dave Ramsey:Choose a school you can afford. If you've got$250 ,000 of casualty in there, choose a school that's$250 ,000 or don't go. Right. Find one that gets – because you can find it in med school and get through for that. But if she's making you pay for flights – And no one asks the doctor where they went to school ever. Yeah. If she's making you pay for flights, if she's got$400 ,000 and she's not paying for tuition your senior year, helping you with rent, there's something underneath all of this that is borderline pathological. or mom just thinks she's toughening up her daughter. And then you have to live in that mathematical reality.

1:42:56I simply don't have the money to go to med school right now. And I'm like, Dave, I know too many medical doctors whose kids are going to school and they're still paying on their student loans. And so I can't in good faith tell you to do that right now. And John has a PhD in higher education.

1:43:13Dave Ramsey:So he does know actually what this stuff, man. It's tough, tough, tough, tough, tough. Yeah, I'm sorry. I hate it for you. Yeah. That's, you know, there's a thing where you teach your kids to do hard things. And then there's a thing where you're just being a jerk. Right. Or it's like, I'm going to I'm going to box my kid around the ears because I know the world's tough and they're going to get boxed around the ears a lot. And what you end up doing is beating your kid down so much before they even get into the world. And there's something about teaching your kids strength and discipline and resilience.

1:43:46And then there's something about kicking your kid's knees out from under them before they leave the house. And so, yeah, to this mother, congratulations. You win. You're going to have$400 ,000 in an account. And you have what sounds like a pretty hardworking, amazing young woman who's going to have her dreams diverted. Either she's going to go into catastrophic debt trying to prove herself or she's going to have to go do something else, robbing a generation of potentially a great young doctor. Because you want to be right. So congratulations on being right and altering everything here. Yeah. That's just.

1:44:22Dave Ramsey:But you're a tough old broad. You proved it. You showed her. Congratulations. You showed her. Give me a break.

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1:45:53Dave Ramsey:In the lobby of Ramsey Solutions on the debt-free stage, Jonathan and Sashia are with us. Hey, guys, how are you? Hi. Good, how are you? Better than I deserve. Welcome. Where do you all live? Savannah, Georgia. Fun. And how much debt have you two paid off? $373 ,346. Whoa. How long did that take? 16 months. Good for you. Whoa. And your range of income during that time? I started out$90 ,000 and ended up$530 ,000. Okay, that's bizarre. Yes. Who got a job? What in the world? So that's me. That would be you. Yes, sir. Okay, so I'm guessing you must have come out of med school, huh? Yes. Okay, and so you went from making nothing to making$400 ,000.

1:46:44Yes.

1:46:45Dave Ramsey:Or something. Yes, sir. Way to go. What specialization are you in? So OBGYN. Oh, wow. Good for you. Thank you. That's the most fun kind of doctor. Babies, babies, babies. Yes. It's the only time people are happy to be in the hospital. Yes. Yeah. Absolutely. Very cool. Good for you. That's fun. So$400 ,000 from nothing. So$373 ,000 is not a house. That was med school. All student loans. Wow. And you just said we're going to pretend like we're not making any money. We're going to pay off the loans in 16 months. That's exactly what we did, Dave. So you heard us telling somebody in an earlier segment.

1:47:19I said, yes, that was the seed that was planted for our story. Okay. Tell us about this adventure. So the journey really started in 2019. Whenever I graduated medical schools, staring at six figures of debt and it was smothering. It was hard to breathe. So we went through residency, not making much. Our goal then was just let's not make that number larger. right so we lived well beneath our means we had twins yes so we went through all of that um medical journey like it was her fault she got pregnant she had twins yeah um we have a teen so we got her through school and we were like let's just keep this number steady um and then when i graduated training it was like let's live well below our means live like a resident literally and pay everything onto this debt.

1:48:10You did it. And that's what we did.

1:48:11Dave Ramsey:Just exactly like we described. That's incredible. Yes. So when did you get connected to the Ramsey stuff? So I heard about you in medical school just from students talking about it. We were all wondering, how are we going to pay off these loans? And some people really wanted loan forgiveness. And some people talked about Dave Ramsey. And I said, well, the loan forgiveness doesn't sound very good. So let me look into that. And so you were simmering for a long time before we could press play. Wow, okay. Yes, sir. So you had it all lined up, and then just as soon as you get out, boom, we're hitting this.

1:48:43Dave Ramsey:Hit that end domino and go. Yes, yes. We like it. Residency was tough because we wanted to, but we just didn't have the means. Yeah, you didn't have enough margin then. But even having the courage and the grit to hold the line and say, okay, we've dug this big of a hole, that's a tough order with, what, three kids? Yes. And you in residency, which means you're working 900 hours a week. Yes. and you're holding down everything. Yes, sir. Still does. To just say we're holding the line, that's really tough. That's like doing bench press, and instead of pushing it all the way up, it's just holding it.

1:49:17Yes, sir. That's hard, man. That's really tough. Yes, absolutely.

1:49:20Dave Ramsey:Well, congratulations. Thank you. Amazing. The great news is now. Woo-hoo! Yes. Wow. You're going to be able to do amazing stuff. Yes. Do you have a mortgage? We just bought a house. We just bought it last month. Good. Yes. Right after this. Okay. And now turn around and get it paid off. Exactly. All right. Cash-flowing, college. What do you owe on it? $5.85. Okay. All right. It's a modest. We haven't even got our first mortgage payment yet. So what is your plan on it? So we're on a 15-year fix. Shout out to Amy Jo with Churchill Mortgage. She was amazing. But our plan is to get that paid off, hopefully, in five years.

1:49:59Dave Ramsey:Yeah. Good. That's perfect. I like that. And the fact that y 'all didn't go out and buy a$7 million home. It was tempting. I bet it was. I bet they said you qualify for any home you want. Yes, we qualify for$2 million. It was crazy. And we didn't. We said, no, we don't need a$2 million house. Amazing. Well, you will someday. Yes. But not now. Won't be long. Amazing. Oh, y 'all. Thank you. Way to go. I'm so proud. How does it feel? It feels good. The excitement part for me was every time we made that payment, it's like you make it. Let's keep going. Let's keep going. Let's keep going. And that was the, that was, that's once we made the last payment, it was like, this is it.

1:50:39Yes. We're done. Yes.

1:50:40Dave Ramsey:We are done with this. How'd that feel when you hit that last button? I loved it. It was amazing. It was amazing. How much dancing around the living room was there? Oh, yes. A lot. Champagne cork going off. Yes, for sure. Yeah, that's great. Submit. No more student loans. Yes. Done, baby. That's it. Mic drop. Okay, how many of your classmates that you graduated with do you think are debt-free right now? 16 months later. Minimum. Zero? Zero. One percent? Zero. I work in a large practice and nobody who got out of residency, it was a primary goal for them. And it was hard. You mentioned Doc-itis.

1:51:19You know, I had a lot of colleagues, a lot of classmates with brand new cars, new homes, vacationing, educationing and we're just, you know, thrift shopping and living below our means and pushing through. But, but now they're like, man, you did it right. You know, so I'm inspiring them even now, hopefully to try to make those changes. And hopefully this story will help those people in medical school or graduate in residency. You know, it can be done. It's hard. It's so hard, but it can be done.

1:51:46Dave Ramsey:373 ,016 months. Yeah. That's just not messing around. That's pretty studly. that's pretty steadily right there. Jonathan what was it like keeping everything duct taped and bailing wired together over those many years? It was hard it was hard um because I you know we had the older daughter and then the two twins it was it was a lot to keep up with I would probably say the good thing for me is I like everything to be on a schedule so once everything was on a schedule it made a little bit easier but the hardest thing is just not being able to see her and I've got to give a shout out to her she worked extremely extremely hard I mean I can't I can't say enough you know if she she dug and dug and dug there was a lot of nights we you know we didn't see each other didn't hardly talk we may have text a little bit but I've got to give her a lot of credit on that and um you know I knew that there was it was hard but I could see the light at the end of the tunnel.

1:52:47I said, I know it's coming. I know it's coming. Just, you know, we just got to dig in there and just keep going. I can't wait for a few years from now when that older teenager comes home and sees the clothes these young twins are wearing and says, Hey, wait a minute.

1:53:02We're goodwilling it when I was that age. It's amazing. But she's seen the grit and she's, you know, she's in college. We second week this week. Oh, you've changed her life. Changed her life. You've changed her life. Yes. Able to cash flow her college and set her up. But she has no excuses. She watched her mom and her dad just be gangsters. She has no excuses, man. But not from words. She got to watch you guys do it, which is the most powerful lesson a parent can give. It's amazing.

1:53:29Dave Ramsey:And you're not going to put her in student loan debt to teach her a lesson either. No. No. So she can learn grit. So cool, guys. We've had those calls today. It's crazy. absolutely crazy wow so proud of y 'all thank you how does it feel it feels amazing you know to be able to just work earn money and you keep it all you know you put it towards things that are going to build your future a home our first home ever um we're able to now start and save for retirement how long y 'all been married seven years seven years yeah so what what's the you bought the house That's a good first thing to do. What's the next second thing you're going to do just to celebrate and enjoy some of this?

1:54:14Dave Ramsey:I want a truck. Yes. There you go. He needs a truck. I need a truck. You do need a truck. Get him down the truck. You do need a truck. What are we going to get? What are we going to get? I want a Denali, Chevrolet or GMC Denali. Yeah, that's a nice truck. Yes. Funny, on the drive up here, my battery went dead on the side of the road. No way. It did. Yeah, I replaced it in the parking lot of AutoZone. Jasper, Tennessee. All right, let's get on it. We're about to run out of time. Let's count it down. All right. $500 ,000 a year, and I'm changing the battery in the auto zone. Yes. I like it. I like it.

1:54:47Dave Ramsey:Count it. All right. $373 ,000 paid off at 16 months, making 90 to 530. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Yeah. I love it. Get the man a Denali. Thank you.

1:55:56Dave Ramsey:Our scripture of the day, Proverbs 16, 9, in their hearts, humans plan their course, but the Lord establishes their steps. Milton Friedman said, if you put the federal government in charge of the Sahara Desert in five years, there'd be a shortage of sand.

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1:56:51Dave Ramsey:RamseySolutions.com. Sign up for free. RamseySolutions.com slash webinar. Be sure and check that out. Nick is in Knoxville. Hi, Nick. How are you? Hey, Mr. Ramsey. Thanks for having me today. I really appreciate it. And doctor, you as well. Thank you. I got to, I'm very fortunate in my life. I inherited a pretty good chunk of money from my grandfather and my granny and pop. Their estate, when they passed away, my wife and I have no children. We're very conservative. We live conservatively. We live below our means. We already are doubling up on our payments on our home. We currently owe about$212 ,000 on it.

1:57:37And the money that I have is I've completed phase one, basically. It happened in 2022 when my grandfather passed away. He was with a longtime financial advisor. And I had to kind of break the ties with him because it was all invested in like one chunk of the company that he worked for. So I had to diversify it, which was very difficult. So I went with a good family friend of ours with a large Primerica financial institution, which you're familiar with, Mr. Ramsey. And it was all diversified. And so I've kind of got over that now. And I'm like, do I pay the home off? How much is in the account?

1:58:20Right now, 1.639. And not all of that is my grandparents. I've saved up a whole lot during my career.

1:58:29Dave Ramsey:Why would you not pay off your house before now? Why would you not just do that automatically? It's an irrelevant amount of money if you've got$1 ,600 ,000. Yes, sir. So the reason being is because my financial advisor friend of mine and then the financial advisor through Prime America also was like, well, you're making money on this money, and you're fixed at a 2.5 % interest rate with your mortgage, and you could make 10 % here. So based on that, these idiots would tell you to go borrow a million dollars on your house because you could make a spread on it. Well, that's why I'm calling you today.

1:59:05Dave Ramsey:No, I mean, that's what these idiots are telling you. It's the same dadgum stupid thing. Yeah. But they don't make any money when you pay off your mortgage. They only make money when you buy stock or mutual funds from them. Their commission is not based on your debt reduction. It's based on how much you keep with them under management. Yeah. Yeah. Yeah. That's another thing I wanted to ask you. Yeah, they're ripping you off, brother. This pisses me off. Yeah. And then they drop my name to boot. So, um. Yeah, pay off your house today, man. Yeah, pay it off today. And change financial advisors again.

1:59:41Really?

1:59:41Dave Ramsey:And get one that has some dadgum sense. Yeah, they're lying to you, brother. Telling you to stay in debt when you've got a million six in your account and you only owe$200 ,000 on your mortgage. That's just asinine. Yeah. It has nothing to do with Dave Ramsey. I can tell you that. Drop my name and then give that advice. Just ask, what would it be like to sit at a table with your grandfather? Yeah. Who's seen a few things. What would your grandpa do? He'd say, if you have a chance. He'd be kicking your butt more than I am. To own your house outright. Do it right now. Don't make these other men rich, gambling off your spread.

2:00:18Yeah. Nope. Dave, that makes me so mad. I don't it makes me irrationally angry I'm glad you got angry for both of us but geez

2:00:27Dave Ramsey:I got I got two dips one bad advice and one drop in my name to give the bad advice I double dipped on the anger but yeah that no no no no no no yeah and Nick another thing I do number one I use common sense when I'm applying these things and I've never had anyone in 40 years of doing this show it's approaching 40 now uh tell me that I gave them bad advice when I told them to pay off their house. I've never had a single person send me hate mail that said, I paid off my house and I hate you. You're awful. And if you pay off your house and you hate it, you can go get you a new mortgage. They'll give you another one.

2:01:02Dave Ramsey:So if you hate being debt free, I've never had that experience ever. And all the data tells us among the millionaires that we've studied, not broke financial people selling you mutual funds, but real millionaires that the paid off house is one of the key elements of becoming a multi-millionaire because it sets you free. You don't have anything to think about anymore. I promise you the grass feels different under your feet when you walk out in the backyard with no shoes on and no mortgage. My grass, shut up. Because there's risk involved. We've done detailed research, and 100 % of the foreclosures occur on a home with a mortgage.

2:01:41Dave Ramsey:So, yeah, go to RamseySolutions.com, I'm going to click on SmartVestor Pro and find a Ramsey SmartVestor Pro in your area that will give you good advice instead of that clown show you're with. Yeah. Oh, man. All right. Katie's in New Hampshire. Hey, Katie, what's up? Hey, guys. Thanks for taking my call. Sure. How can we help? So my husband and I are first-time homebuyers, and we've been paying extra to the mortgage. Good. But we've been seeing how much interest we've been paying versus the amount that's actually going to the principal. and after talking to my in-laws, they highly recommended HELOC, as they said that it's just interest payments, which is not a lot compared to the interest that we're paying now.

2:02:25Dave Ramsey:Your in-laws don't know how to do the math. Yeah, they don't have a calculator. That's not how it works. Oh, my gosh. You have a conventional mortgage, right? Yeah, we do. Okay. Your conventional mortgage is calculated exactly like a simple interest HELOC. Exactly. Okay, you're not prepaying interest on the front end. You're paying interest based on the current interest rate of your mortgage and the outstanding balance as of this month. When you pay a principal balance, you slide forward in the amortization schedule. So if you put$10 ,000 extra on principal balance, it's not next month on the am schedule.

2:03:06Dave Ramsey:It's$10 ,000 worth of principal reduction forward because that amount of interest is charged on that$10 ,000 less balance. So the amortization schedule is calculated as if it were perfectly done simple interest. And a HELOC is simple interest as well. So your in-laws are under the mistaken impression. It's a fallacy that's believed out there. It's mythology that because you mainly what you pay on the front end of a mortgage is interest, that you're prepaying the interest on the front of the mortgage. You're not. You're paying the exact amount of interest due. The reason it's so high is it's the highest your balance is ever going to be.

2:03:44Dave Ramsey:As your balance goes down, the amount that goes to interest goes down and the amount that goes to principal goes up because you have a fixed payment all the way through. OK, that's how the actual math works. So bless your in-laws heart, honey. They don't take financial advice from their math challenged. And that's how this works. They gave you a good husband and let's just call it. Yeah, they made a good husband and he's a good boy and we'll move on. She makes a good casserole, but we're not taking math from her. I'm just.

2:04:12OK, OK, Dave. Help me with this. I know we're running out of time. Yeah. And this segment's about to be brought by brought to you by Preparation H because hemorrhoids are getting a little bit out of control with how frustrated I'm getting. And teach me about why that would even under the scenario you drew, they're mistaken understanding why would taking out a loan against your house somehow be better? Well, if you were prepaying the interest somehow and you could avoid that by paying down the principal, then borrowing money at simple interest to do that would mathematically make sense.

2:04:48Dave Ramsey:But there's no such thing. It's not how it works. and so would the bank come up with a loan and just cross their fingers and hope that nobody figured out that sophisticated response well there's been more than one hack on the internet over the 30 years i've been doing the 40 years i've been doing this so there you go oh here we go i'll always be in business john you always got a job we are always going to have work to do my brother always work to do between financial planners and in-laws and in-laws here we go that puts this hour of the ramsey show in the books we'll be back with you before you know And in the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

2:05:38Up next, we are headed out to Chicago and Orlando for The Ramsey Show Live. Yep, you heard me right. We are taking this show to you. This is going to be everything you love about The Ramsey Show, except you get to be a part of it. Part of what, George? The Ramsey Show Live. Ken, that's what I'm telling them about. Ramsey Show Live in here? Nope, we're doing it on the road. You're going to Chicago with me and Rachel Cruz September 30th. Are you free? The Windy City. I like it that time of year. You know what else I like, George? I like the deep dish. Oh, okay. Maybe we'll have some deep dish. You mind if I finish the promo?

2:06:11Is that okay with you? Okay. Okay. Appreciate that. Questions and answers, real conversations, and I'm sure a few surprises here and there. George, are you in here talking about TRS Live? I am, Jade. I'm trying to talk about it. Nice. So that means it's actually happening, right? It's happening. If I could tell the people, I think it could actually come to fruition. Listen, just tell me when and where. You don't know? Okay, we're going to Orlando. You're going to join Dr. John Deloney and I October 2nd. Yes. Okay, great. I'm going to go pack now. Thanks, George. Please do that. Go pack. Hey, George, speaking of packing, Is this like sweater weather or is it not that cold yet in Chicago?

2:06:48What is happening? Can I please just get to how they buy the tickets? Jeez, I thought it was a good question. Okay. This is not an arena tour. This is a one-night-only event in Chicago and Orlando. General admission is only$39, plus there's a VIP experience if you're bougie like that. But here's the thing. There's only 300 seats available. So get your tickets now at ramsysolutions.com slash events. Hey, how come you get to go to both cities? I just go where they tell me, man. Hey, have you been there the entire time? Maybe. Okay, and also, are you reading a children's book? I'm expanding my mind, George.

2:07:25That's how he got those PhDs. Yeah, that's probably where you got that jacket. Okay. See you on the road, John.