Take Ownership Of Where Your Life Is Headed

27:51Yeah, those are done. Yeah. But you see what I'm saying? Those are done. So if you go that route, that's the shortcut out. But make sure you fix the thing all the way at the source so you're never back here again. Right. I got you. Yeah. Hey, how old are you? I appreciate that. 35. What do you do for a living? I'm a truck driver. Yeah. John, I think you're going to do this. I think you've got the ability to do this. And I don't care which way you go. So I'll tell you what you could do. Here's a third suggestion. Suggestion one is gutted out like I talked about. Suggestion two is sell the truck like you talked about and you're out now.

28:25Suggestion three could be a medium. Let's try this for a few months and see how much progress we can make, and maybe we can keep the truck. But if we try it for a couple months and everybody's whining and everybody's barking and everybody's chirping, then we still got to fix the spending, but we got to sell the truck. Right. You could try it for like three months hardcore core and see how much progress you make, see how encouraged you and the spouse become. And then that's OK. I'm OK if you sell it. Doesn't make me mad at all. But if you want to gut it out, as long as you pay it off in under two years and the credit cards, too, and you fix the problem, I'm OK.

29:03Yeah, I, you know, I think you ought to do what Dave says, and I think you ought to try it for 90 days and hold on to the emotion of that truck. You like the truck. So you're going to say yes to the truck by saying no to everything else you've been doing. That's the mindset switch you've got to do. And I actually like that, Dave. I like that approach. Because it resets your brain. Yeah. You don't feel the sacrifice if you just sell the truck immediately. And we know that you can always go back to it. But here's the deal. $40 ,000 in debt. We didn't ask his income. He said$200 ,000. Was it$200 ,000?

29:36I'm sorry. I missed it. The point is that could be paid off really quickly anyway. way. So I kind of like the idea of going, it's like losing weight. It's like saying, I want to lose 50 pounds. Well, there's only one way to do that one day at a time. You know, like you don't, you're not, you're not week one looking in the mirror going, how am I doing? Because then you're discouraged. It is, I got to win each day. And I like that because you and I know there's a higher probability that the habits change. You got to have a permanent change in the process you use and the habits you use and the spiritual look you have on money so that you don't come back here again.

30:14And if you have that permanent change, you got what we wanted for you. We love you and we want you to win. And John, I think you got the right stuff. I think you got the right attitude. If your spouse is on board with you and feeling the same way you're feeling, then I'm with Ken. I think I would give this a hard, hard 90 days, see how much progress we make, see how good this works. I mean, you might look up and go, hey man, we paid off, you know, Now,$30 ,000 over the$40 ,000, we can run through this thing. And by the way, you've got$17 ,000 in the bank, and Baby Steps says you're going to take$16 ,000 of that and throw it at these credit cards anyway.

30:47So that's going to move the needle too. You start plowing through this stuff, you go, okay, living on less than we make is possible in America. Hello. Realistically, Dave, let's take 24 off. So he's now got 24 if he does what we teach. How quick can he pay it off knowing what you know? Maybe it'd be done in 90 days. That's what I think too. Yeah. Yeah, it can be done in 90 days with the credit cards by using the 16 off the credit cards. Yeah, I mean off the savings account.

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33:07Cliff in Austin, Texas. Hey, Cliff, how are you? Hey, I'm doing all right. How are you guys? Better than we deserve. What's up? Yeah, so I'm an apartment complex that I refused to negotiate with me when I got a new job out of state. some media collections. Because you broke the lease.

33:37Hello? Okay. Yeah, I'm still here. Yeah, you broke the lease, right? Well, they wouldn't negotiate with me. They don't have to negotiate with you. You signed a lease. Okay, that's fine. That's fine. That's not what I'm here to talk about. I'm here to talk about how to move forward, and hopefully you're willing to help me out with that. I'll try. but let's establish that they're not legally obligated or morally obligated to let you do whatever you want to do is that okay okay all right so what do you how much do you owe them just under six k six grand and what do you make a year uh right now we are going back to school um the reason i'm doing this is because i now have a wife but you didn't answer the question, how much do you make?

34:28Well, right now we're in school. We're not making anything right now. So zero dollars. How are you paying the current landlord?

34:37We have some money saved up. Oh, good. We have a lot of money. We're in good hands. The reason that I moved, You know, I moved for a new job that paid better than what I was making, and they just didn't really want to work with me. So I just didn't, you know, and now that I have a wife, because I was single at the time. So how much money you have saved, honey? um we have an emergency fund of 12k and we have uh more than 40k i won't go into the exact number okay well nobody's going to come get it it's okay um not from here anyway maybe from the landlord What state was the landlord in?

35:42I prefer not to say. Well, it matters because the—I can't help you, honey. We're just going to move on. This is just bullcrap. Miranda's in Raleigh. Hey, Miranda, what's up? Hey, how are you guys? Better than I deserve. How can we help? Good. I listen to you guys every day, so happy to be here. Thanks. So I just have a quick question, and it's about—I don't know whether or not I should ask my boss for a raise. I don't know how to bring up the conversation or if it should even be brought up. I keep getting mixed messages from like friends and family. And I guess the reason why I want to raise is I joined the company a little under a year ago and they basically just changed the scope of the role.

36:24So I just feel like for the pay and the scope, like it's just not lining up anymore. But again, I got people talking to my ears saying, okay, good question. Very good. Stop listening to all the friends and family. OK, so we have to logically walk through this and then we have to validate your feelings. OK, how did the scope change and be very specific? In other words, did it increase the amount of work? Did the job description itself change? Give me a quick summary. Basically everything. So I joined. I'm in sales. So when I joined the company, they had me as an account manager working underneath the territory manager.

37:07So the scope of the role in terms of what my territory would be and the amount of travel and things like that. So more territory, more travel? Yeah, they basically, when I joined one of the territory, sales reps retired. So three weeks in, they basically just bumped me up into that role. Okay, what is your current comp structure? Is it base plus commission? It's base plus commission. Originally, when I joined the company, it was based with a set amount of commission. It was like a$500 just monthly flat. And when I moved into the new territory role, I asked them about salary. They told me basically nothing changes on the base, but the commission structure would change.

37:51How has it changed? So I'd be able to get more money on that end. How has it changed? But it honestly hasn't changed too much. The commission did almost, right now, it is usually anywhere from like$8 ,000 to$1 ,400 extra a month. Is that capped? Which is greater than the$500 before. Is that capped? But it is not capped. Okay, so you've got to... Even when I brought up salary negotiations and stuff like that, they've always told me, well, hey, if you're doing new business, you'll be able to grow that commission, and that's where you'll see the increase. So I'm completely objective, okay? And Dave comes from a sales background.

38:29So what I'm hearing is opportunity. And I'm hearing pretty standard language here in a sales role that they're not going to bump your base. But if they don't limit you from a commission standpoint and they've increased your territory. So the real question I would want to know, and for sake of time, you don't have to answer it. But you need to know what your potential commission could be based on some previous numbers. You had a person just retire in that role. I'd want to know over the last five years, maybe seven years, one year, what did that person make? What was the total commission? You've got to be dealing in facts.

39:03And right now you're dealing in feelings. And I understand the feelings, but I don't recommend you go in and ask for a raise in less than a year in this scenario when you've effectively been given a chance for a raise. Dave, am I missing something? Your raise is effective when you are. So when you go make more sales, you're going to make more money. That's what they told you, and that's not a bad thing at all. Matter of fact, salespeople make more money than just about any other role in America today if they're not in a situation where they're trapped or have some kind of a ceiling on them. It doesn't sound like you do here.

39:36The only ceiling is your effort, your ability, the hours in the day, the logistics of getting to the customer, all those kinds of things. But those are all things that you can control and manage for efficiency to get more and more money coming in. Because, I mean, if you went and sold a whole – let's say you doubled your sales. You'd be making a couple grand a month plus your base, wouldn't you? Yeah. Can you do that? I can. I mean, I think I can, yeah. Is there anything that the company is doing that's keeping you from doing that? No, I do think when they switched me into the territory role, the territory I took over is much further away.

40:20So my biggest thing I've had is just time management with now the new commute and the new area I'm over and just time management on that end. But there's definitely opportunities. OK, so here's what I just heard. Yeah. So here's what I just heard. Thanks for sharing that. Here's what you're dealing with. You're dealing with expectations have been shifted. And with the expectations being shifted, it has inconvenienced you. and the inconvenience is a real emotion and you're going, well, compensate me for making me travel more. Do I have it about right? A little bit. And I guess, too, because I know this is so bad to not talk about other people's salaries and things like that, but I just know from the account managers versus the territory managers, there is a big jump in the base salary.

41:07So I guess I get emotionally held up. Are you a territory manager? yeah now she is okay are you getting territory manager base or account base no all right now that you can bring up that's a valid thing okay hey listen you move me into a territory you move me into a territory and i'm willing to eat what i kill thank you for moving thank you for giving me this opportunity but also i understand that territory managers make a different base and when you move me to that i i'm i don't understand would you please explain to me why I didn't get the increased base. That's a fair question. But that's different than slamming your fist on the table and demanding a raise.

41:47But, you know, that last little thing you gave us was a game changer. Yeah, I think you have to sit down and ask them, hey, listen, from what I understand. Now, again, posture is everything here. Okay? There's no need to create tension. And you can create tension with a leader really quick. Because we don't know if they're a healthy leader. We don't know if there's some limitations. We don't know that. So the advice has got to be, I'm going to sit down and ask, hey, I understand that this is true. Is this true? It's a question. I'm not telling. I'm asking. Then if they say, yes, this is true, then you can say, obviously, if you were in my shoes, you'd probably wonder, is that going to happen?

42:21And why isn't it happening? Or when can it happen? These are good questions. Under what circumstances do I start earning territory manager base after you made me a territory manager? That's a fair question. That's right. And I would want to ask that. By the way, if the answer doesn't make any sense, there's your sign. It's probably time to start making plans to go somewhere else. Yeah, yeah. Not going to work out for you there. Because they're messing you over at that point. But yeah.

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44:33welcome back to the ramsey show in the fair winds credit union studio josh is in detroit michigan hey josh how are you i'm doing well how are you better than i deserve what's up So calling relating to my dad, he's 62 and about a month ago, had a conversation with him about retirement and where he was with that. And I found out that he is a little over$3 ,000 to his name right now in a checking account. and he makes good money at his job, makes over$100 ,000 a year, but he has really high expenses and recent medical debt has wiped out a lot of his savings. So my question's relating to how can I help him start moving towards realizing an actual retirement in a timely amount of time.

45:26Mostly it would be coaching him, right? That's what you mean by help, right? Showing him some things to do. Number one, why did medical debt wipe out his savings? Did he not have health insurance? He does, but he has a chronic health condition, and so his deductible is really high. And he has to—he's had a couple procedures over the past couple years that he's had to pay out of pocket for because his deductible didn't cover all of it. Well, no, after the deductible, then co-pay kicks in. Yeah, I mean, I don't know the specifics of this. Well, here's how insurance works. The deductible, you pay 100 % of the bills until you meet the deductible.

46:05After you meet the deductible, typically it's an 80-20 after that. They pay 80 % and you pay 20%. And so do you have any idea what his deductible is, like$10 ,000 or something? Yeah, it's pretty high, something like that. Okay. So he's gone through$20 ,000 by meeting the deductible two different years, and then he had a procedure beyond that that he owed 20 % of that procedure and that took some more money, maybe another$10 ,000 or$15 ,000, we'll just call it. So maybe he's gone through$30 ,000 or$40 ,000, so he still didn't really have any money. Right. Right. I mean, he didn't go through$200 ,000.

46:42He went through$30 ,000 or$40 ,000. That's correct. Okay. All right. I'm just making sure that we get the table set here. So he's worked all his life and he makes six figures and he's saved no money is what we're really dealing with. Yeah, yep. Okay. And so is he single? Yep. Yeah, my parents divorced a few years ago, so he's been on his own for a while. Okay. Well, if he called us on the air, we would say get on a detailed written budget and pile cash. You make$100 ,000. Well, my expenses are high. Cut your expenses. You're living too high on the hog, as we say in Tennessee. so what is his stinking expenses uh from what i know and he's shown me he pays about four thousand a month in expenses okay well he makes eighty five hundred or eighty eight hundred yes so yeah that's part of my dilemma is i don't know where yeah i don't know where the money's going he doesn't either okay so that that you know so if you took over a company that was bringing in a hundred thousand dollars a year and spending forty eight thousand dollars a year and they didn't know where the other money was going the first thing you would do is they need a better system right they need to know where their money's going and so if you're going to coach him he needs to know where his money's going and if he doesn't pay attention he's going to retire and eat alpo yes it's time to get your crap together you're 62 you probably got 10 years of good hard work to do And he could pile up several hundred thousand dollars in the next 10 years making 100 grand by managing very, very carefully.

48:19He could have a decent nest egg at retirement. Yeah, there's a second part to this as well, if you have the time for it. Okay. He was recently involved in a real estate deal that went sideways. And there's a chance he could be looking at a judgment payment to a bank of around$500 ,000. Well, that will bankrupt him. yes he hasn't he hasn't seen five hundred thousand dollars ever right and so the only chance he's got there is to negotiate down and um do you have partners in that deal yes he was one of five partners yeah and they didn't have him signed up because they thought he was going to pay they had the other guys signed up because the other guys had assets they're not going to bother of your dad.

49:11Yeah. They're not. I mean, there's zero chance they're going to get any money out of your dad. Zero. He has no money. And if they start putting a lien on his stuff, he'll just file bankruptcy. They know they're not going to get any money out of him. And by the way, they knew that when they got his signature because he was already a broke guy then. Right. So they must have been leaning on someone else's asset base to make this loan. That's correct, yeah. Yeah, so they're going after the rich guy, not the poor guy. That's what they do. If I'm suing them, I'm going after the guy that's got money that I want to get the money.

49:41I'm not going to bother you. That's a waste of paperwork. Yeah, if they don't pursue him heavily, he shouldn't declare bankruptcy. No, he doesn't file bankruptcy on what might happen. Okay. If he has$200 ,000 saved and they're going to come get that, we'll have to talk about what we do. But he doesn't have any money today. And so what I'm going to do is not worry about that. I don't want to put that on the shelf and let it sit over there and cook. And I'm going to get my crap together and start stacking cash and build and get with a SmartVestor Pro. And let's get this stuff filled up and get your expenses cut and quit spending money like you're in Congress.

50:16You know why he did the real estate deal? Because he was desperate and scared and thought he was going to retire bankrupt. Yes. It was a Hail Mary. Yeah, exactly what it was. It's exactly what it was. It's a move of a desperate man. And so let me stop doing desperate things and I'll start doing steady things. Steady. steady, steady, steady. The tortoise wins the race, not the hare. Yeah, I just would encourage you, Josh, this is going to be really hard to hear and even harder to do. At some point, you're going to have to talk to dad and see if he's willing to be guided or coached by his son. And if he's not, you're going to have to put up a boundary there.

50:50And it's going to be really, really hard. And the reason you have to put up a boundary is because you can't make your dad do anything. And you're just going to have to really grieve that and then move on. So I hope that doesn't happen, but super clear in your heart and your desire to help, if he doesn't receive it, you're going to have to put up a boundary. Yeah. So mathematically, your dad has the ability to build a nest egg by 72 that's pretty substantial. But 62 years of sucky habits are in the way. Right. So is he going to look in the mirror and go, after 62 freaking years, I'm going to grow up or not.

51:27And that's not up to you, is Ken's point. That's up to him. Yeah. Yeah, I need a come-to-Jesus moment. Yeah, he does, not you, by looking in the mirror and going, you're the problem. And it's not somebody, nobody took advantage of him, and it's not medical. That's not the problem. None of these excuses are the problem. The problem is, you make a lot of money, and you piss it away, and it's got to stop. And that's what it comes down to. Now, you don't want to say that to your dad, But that's what it comes down to. That's the math that we've got. And fixing the math is easy once the human being starts to get their crap together.

52:04But the humans are now the humans. They're an issue. But the math thing is pretty easy. So we say it around here all the time. Personal finance is 80 % behavior. It's 20 % head knowledge. The problem with my money is the guy in my mirror. If I can get him to behave, he can be skinny and rich. But he likes donuts. It's a problem. and that's an issue. So, I mean, but it's a behavior thing. It's not a lack of knowledge. It's not a lack of ability. That makes$100 ,000. It'll do it. The donuts are good, though, Dave. They're really good. Shut up, Ken.

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54:02tax season is here if you want to get some free checklists and some guides that'll help you with the filing process we'll help you for free go to ramsey solutions.com slash taxes ramsey solutions.com slash taxes. Elizabeth is in Washington, D.C. Hi, Elizabeth. How are you? Hi, Dave. I'm doing well. Good. How can we help? I'm 38 years old, a single mother with two children, and I'm feeling stuck financially. I have about$90 ,000 in student debt,$9 ,000 in credit card debt, and I can't seem to get past baby step one. I'm thinking about making a hardship withdrawal from my retirement account to buy a multifamily home to start generating some income and build stability for my family.

54:58I want to get out of debt, save and invest, but I just feel stuck. Okay. I don't know what to do. Yeah. Well, that move is not going to bring you stability. That move is going to destabilize your situation. It's going to have the opposite effect of what you're hoping for. So no, we wouldn't do that. What do you make? I bring in roughly around$160 ,000 a year. Okay. And on$160 ,000 with two kids, why can you not reduce debt?

55:35there's always an emergency that happens i'm again a single parent i have no other um give me an example of a sixty thousand dollar emergency i i had to have um a medical procedure done last year that it was a real financial blow for me it It wasn't$60 ,000, but it was in the thousands. Just my monthly bills alone take about half my take-home pay. Well, where's the other half? A month. Where's the other half go? I have a lease on a vehicle. The insurance where I live is also very high. Okay, so how much is your car lease? My car lease currently is$600 a month, and the insurance for it is about$340 a month as well.

56:36Okay. All right. Well, that's$7 ,000 a year. Okay. That's probably closer to$10 ,000 with the insurance. Okay. But you make$160 ,000. How much is your apartment rent or your house rent? It's$1 ,800 a month. Okay. All right. Okay, so I don't know where the money's going, but you don't either, after talking to you. You still have not given me any numbers that sound anywhere near like$160 ,000. and there's nothing here that says you can't do this debt reduction idea. I'm making$160 ,000 a year. But how long have you been a single mom? It's been around four years. Yeah. Okay. So having worked for 30-plus years, almost 40 years now doing this, what I run into with people that go through a divorce is it takes it rips your heart out it turns the whole world upside down and there's a certain amount of emotional paralysis that happens because you kind of lose your confidence you lose your swagger you feel desperate and stuck and then you just that gives you an excuse to not manage 160 ,000 well it gives you a it's a reason that a valid not a valid reason but it's a reason that people because emotional recovery after going through a divorce and trying to run a household with two kiddos how old are these two kiddos my youngest is 13 and the oldest is 21 Okay.

58:33Is the 21-year-old supporting themselves? He is working, yes. Is he supporting himself? No. Okay. It's time he did, young man. Help him with that, Mom. Okay. You cannot carry a 21-year-old, number one. Number two, I need you to get the EveryDollar app and download it. I'm going to give you a free trial on this thing and let you get started with it. And it's going to coach you and show you exactly what to do. But I think that you can make substantial progress in one year. I don't think you're going to be debt free in one year, but you are spending some money somewhere out of grief, out of, I don't know, emotional salve of some kind, probably.

59:25probably. And that's okay because you've been hurting. You've been through hell and you're trying to figure out what to do next and all that. But the good news is you don't make$16 ,000. You make$160 ,000 a year. Your rent is$1 ,800. Your car payment is$600. That's only$30 ,000. Okay. And that's shelter and transportation. We got to buy some clothes, some clothes, It's not much. You already probably got a bunch. And we got to buy some electricity and some water. And that's it. And then you got to get in attack mode. Yeah, I just from all the experience that we've had, and this is a privilege to sit and help people.

1:00:07But, Dave, I have a sense here in this situation that what is presenting as an emergency at times. Now, this is notwithstanding health and an HVAC system going out in the middle of the summer or the winter. OK, but some emergencies, Dave, feel like emergencies and they're just emotional emergencies. They're not actually emergencies. And I know you've seen that a lot. And I think you touched on it with being a single mom. You got a 21 year old. I suspect had we had time to ask, give us five more emergencies that have popped up recently. They're all under 10 grand. And they're all emotional emergencies.

1:00:42They don't actually have to be spent on. And I just think you have to be careful there. I think there's a lesson there sometimes. Well, when you're tired and when you're grieving, you're not making good decisions. And when you're not living on a detailed plan that holds you, the numbers of the app, the EveryDollar app will hold you accountable for doing this stuff. You've got to do that, honey. I'm going to give it to you. I want you to get started on it today. But you have enough money coming in where you should be making substantial progress. If you're not debt-free within 18 months, you've done something wrong.

1:01:18You should have all of this paid off in 18 months. You may need to get rid of this stupid car. You may need to do some other stuff too. But you've got to quit buying stuff and an emergency withdrawal to go buy a freaking multifamily. That sounds like you've been looking at something on TikTok. My God, this is the worst idea I've heard in I don't know when. Do not do that. It's not going to do anything except get you more in debt and more problems. and you've got less emotional bandwidth than to work on all this. You've got to tighten up your life and make the money that you – this incredible income that you make, you've got to make it behave.

1:01:53I want you to develop a sense of disgust that I'm not getting any more use out of$160 ,000 than I am. I've got a little sense of disgust about it, so I want you to develop it for you. I want you to go win. I want you to have a good life. I want you to have some margin, have some wiggle room, but you're going to have to go take it back by the throat. It doesn't move until you take it by the throat and make it behave. Money will not behave unless you force it to. Money will just wander off and go to people who are making it behave. It leaves people who don't make it behave, and it goes to people who make it behave.

1:02:34It's a natural flow of life. And so you've got to take this by the throat and shake it. and just go, you are going to do what I say to do. I am in charge of you. And when you get this attitude, this swagger about it, and you start taking that every dollar app and squeezing these dollars and making them win, you know, it's pretty serious. So what are we talking about here? We're talking about$14 ,000 a month income. Wow. That's a lot. That's a lot. You can do this.

1:03:43Thank you.

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1:05:10Our question of the day is brought to you by Why Refi? Defaulted private student loans don't go away by ignoring them. But you can face them with a plan. Y-Refi helps you refinance into low fixed rate payments built around what you can afford so you can take control and get back on the baby steps. Go to Y-Refi.com slash Ramsey. That's Y-Refi, R-E-F-Y,.com slash Ramsey. Might not be in all states. Today's question comes from Isaac in Nevada. I'm two years out from retiring. I'd like to know the best strategy on how to start withdrawing funds from my 401k. Do I change the dividends to not reinvest?

1:05:52Is there a certain percentage that's safe to withdraw every month or year? And if so, how often should I withdraw? Hmm. Okay. Well, what I would do is sit down with your financial planner, your smart investor pro, if you have one, or your advisor, and have them crunch some numbers with you. The stock market has averaged 12%, 11.8 % since it began. Okay. Inflation has averaged for the last 40 years, 50 years, somewhere around 4.2 percent. It's below that right now. It was above that during President Biden's tenure. Due not to President Biden, but due to inflation, I'll just make a comment and keep rolling.

1:06:36Protect him just a little bit there. He got blamed for something that wasn't his. Anyway, but inflation comes and goes, in other words, and so do returns. Last year, you would have made over 20 percent on your money. The year before, you would have made over 20 percent on your money. The year before that, you wouldn't have made that. So just go back and look at some of the track record on the market. If your funds are invested, figure out what they're averaging, have been averaging over the last many years, and what you think they're going to average. But let's just use some easy numbers. Let's pretend that your funds are like mine, and they're averaging around 12.

1:07:10Again, I made 26 last year, but they're averaging around 12. Okay? And inflation's four. So if I draw out 12, the value of my nest egg starts to go away at the rate of inflation. The math is all still sitting there. If I only pull off the income and I let the nest egg sit there, that's fine. But a million dollars 10 years from now, because of 4 % inflation, it won't buy as much as it buys today. So it begins to erode your purchasing power if you take out the full amount that you're earning. okay um if you took out eight percent and left four in and it made 12 12 minus four is eight you would leave enough in to cover inflation and you'd be pulling off on enough so your your million dollars would grow by 40 000 but the purchasing power would lose by 40 000 so you would break even on what it would buy because it'll take a million forty thousand next year to buy what a million would buy this year if inflation is four percent that makes sense good Okay, so if you pull off eight or less, your money is growing still more than or equal to inflation.

1:08:23And it would run forever, if that math is correct. Okay, now that's assuming you're earning 12 and inflation is truly four, average, over years. So if you had a million dollars and you pulled off$80 ,000 a year, you'd be just fine. And, you know, you could do that monthly. You can do it quarterly. But you can say, I want to pull out an average of X percent of this nest egg. You can set it up at$60 ,000. I don't care. And leave a little more in there if that makes you nervous. You know, what you don't want to do is draw out so much that you end up running out of money before your life is over. Hello.

1:09:03And so if you're making$120 ,000 on your million this year and you pull out$150 ,000, eventually that's going to run into a wall if you live long enough. Right? Because you're pulling out more than you're making. And so next year you're going to make even less because you don't have as much in there. You're killing the goose that's got the golden eggs coming out. So pull out less than the average that you project to earn by at least the rate of inflation. So what's your projection to earn, and what do you think inflation is going to be? Sit down with your advisor. A lot of people in the financial world say 6%.

1:09:39I'm comfortable with 8 % because very few people live, outlive their money once they built a sizable nest egg. Now, if you're starting with$200 ,000, it's different than if you're starting with$2 ,000 ,000, too. Changes the formula. because if you whittle away at your$2 million and it gets down to only$1 ,500 ,000 before you die, oh, well, you didn't kill anything, right? No big deal. But if your$2 million grows to$3 million before you die and you live out of it, well, you leave a better inheritance is all. So you kind of got to, you know, how much do you want to leave behind and gauge that? It always helps, too, to know exactly when you're going to die.

1:10:16Then you can run the map. That's true. That's helpful. There'll be an app for that soon. I'm certain of it. But that's how this works. So you will also find, my dear Isaac, that there's a lot of financial nerds out there that are complete freaks about this stuff that actually hate the advice I just gave you. This is true. They are very vocal about how stupid I am and how many people are going to die broke because of Dave Ramsey. I don't want you to die broke. I want you to get broke right before you die. because you've enjoyed the money, gave the money, done with the money, what you wanted to do with it, whether it's an inheritance or something else.

1:10:56Can we mess with the critics just real quick? Why not? Just for fun. Why not? What are we talking, Dave? 48 hours, 72 hours, broke right before you die? Because you know they're going to come after you for saying that. You got to dial it in. You got to dial it in. You got to really know. But here's the thing, too. What ends up happening is that this stuff is not static. See, like last year was 26 % the year before was 24%. And so if you're pulling off eight, you've got huge gains. You got a million dollars, you made$250 ,000 and you pulled off 80. Now backtrack that math and that gives you a lot of pad for some years that have some down years and they don't quite earn eight.

1:11:40So most people, Well, once they get to a million dollars worth of retirement savings, and a lot of people have, in addition to other assets, then they're able to navigate their way through the next many years. So let's say this person is, by the way, 72 and a half, you have mandatory withdrawals called required minimum distributions. What I'm giving you will beat that, so you don't have to worry about it. And oh, by the way, too, you've got to pay taxes on this if it's a traditional 401k and not a Roth 401k. So taxes come out of that$80 ,000. That's$80 ,000 worth of income. And so minus taxes, that's what you got to live on, on that example.

1:12:20So that's the way you can back into it and then play with the numbers back and forth. If you want to be a little bit more conservative, fine. If you want to spend a little more, that's fine too. Most of the time I find, though, Ken, it's harder to get people to actually spend that have been savers. Oh, yeah. Yeah. We get a lot of calls here asking for permission to enjoy the money that they built up over the last 30 years. A lot of those calls. Yeah. And we want to give you permission. We want to teach you to live like no one else, sacrifice, so that later you can live and give like no one else.

1:12:54And be in a position that if someone you love is in trouble, you can just help them. You've got the money. Shut up. It's not a big deal. And so a lot of times, here's the thing. We find people that have been living on$60 ,000. When I talk to them about pulling$80 ,000 out, they think they're in heaven. That's true. You know? And so that's more what we run into than some financial nerd on TikTok who's decided Dave Ramsey's good clickbait. All right. Jeremy is in Nashville. Hey, Jeremy, what's up? How you doing, brother? I appreciate you guys taking my call. Sure. How can we help? Yeah, so me and my wife are debt-free except for our mortgage.

1:13:30We have our fully funded emergency fund, and we're funding both of our retirements to the max that we can. So my question is, we have a fair amount that we're saving every month right now. Is there a ratio? We started doubling our mortgage last month, but I'm wondering if I'm putting too much towards my mortgage and not enough towards future cars, home repairs, that kind of thing. Is there a ratio you recommend? There's not a ratio, but I would run some numbers on the car repairs. I'd run some numbers on the car repairs and that kind of stuff. You probably already got another 100 grand built up the way you're talking, don't you?

1:14:01No, we had to do IVF our first year of marriage. We're kind of late to the game. So we're set up pretty well. What's your income? Oh, probably 275, 300, something like that. Yeah, okay. Well, first thing is I figured out what my income is. And then from there, the ratio doesn't matter. What I want you to do is save just enough to take care of those items, and everything else goes towards the car. I mean, everything else goes toward paying off the house. So if you need to replace a car you stop putting on the house buy a car If you need to go on vacation, you don't put as much on the house put put on the vacation.

1:14:32That's fine But you need to be chunking on this house Don't build up another side savings account of 100 to 200 grand get the house paid off man

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1:16:27Walter is in Montreal. Hey, Walter, how are you? Good, Dave. How are you? Better than I deserve. What's up? So, starting next week, I'm eligible to join my employer-sponsored stock purchase plan. I'm just wondering if that's something I should be taking advantage of. Well, I don't know the specifics of how that might work in Canada. In the U.S., it's typically a 15 % discount. uh so the way my company does it is uh they'll match up to the first uh thousand dollars uh dollar for dollar and there's no there's no discount on the stock you're just buying it at market value yeah and then they'll match it but no discount no no discount no okay no i wouldn't buy that i would just i would just put your money in good retirement investments and the equivalent of mutual funds or whatever you've got available to you that's along that but um you're just buying stock that you just kind of called your broker and bought the only advantage it gets a thousand bucks and that's not going to make a difference if the stock goes south your stock could lose a thousand dollars in 20 minutes you know yeah yeah so now i'll pass i'll just go ahead and do traditional investing.

1:17:55And for those of you in the States where you have a 15 % discount on a lot of these programs, they're almost all identical. What I always challenge you to do is go back and look at your company. It's publicly traded and look at the 52 week, the last year, high on the stock and low on the stock. It won't be unusual for you to see a more than a 15 % swing during that time up or down, meaning that the 15 % discount isn't squat. It's not enough to offset buying a bad stock. And single stocks are much more risky than buying in mutual funds. If you put$5 ,000 over the next several months in a good mutual fund, you're in 90 to 200 stocks.

1:18:39If you put it in one company, you are betting on one company. You're freaking draft kings. You're betting on one game. you know, with your whole deal. And you don't have any control over that game other than you work at that place. And you really probably have zero knowledge of what's really going on in the back room. So I don't buy any single stocks. I did run, and one of the worst ones I ever ran into was years and years and years and years ago. I had a lady that was in her 70s that had$950 ,000 and it was in her retirement. It was all in her company stock. Big name company that makes a whole lot of the items in your house, particularly cleaning items.

1:19:32It went down 38 % in two years. Her nest egg that she had saved her whole life went from$900 ,000 to just over$600 ,000. she was not a happy 76 year old she was pretty pissed but she had bet the entire thing on one game one name household name but it's a publicly traded stock and so that's the risk you take you avoid risk when uh are you you lower risk when you spread out your money diversify not being all in one thing and so that's why i do that because i don't like the risk i like making the money but I don't like taking the risk. I'm not looking for a big play. I'm looking to be the tortoise.

1:20:21Steady wins the race. Emily is in Nashville. Hi, Emily. How are you? Hi, great. How are you doing? Better than I deserve. What's up? Okay, so my husband and I are in baby step three, and we are also expecting our second son in May, so we're also in stork mode. Yay! Trying to save all the money. but we both are also driving kind of drunker cars and my car we just found out this week needs about a$1 ,500 repair and I only paid like$3 ,000 for the car so it's like kind of a gut punch to think about paying half its value for another fix but with trying to stock money away. What's wrong with the car?

1:21:11The air conditioning is out, which is not going to work with babies in the Tennessee summer. Okay. And the air conditioner on a$3 ,000 car is$1 ,500? Yeah, that's what they're saying for parts and labor. We've had it looked at by a couple different different auto places in our town. Wow. That's unusually high. Okay. Especially when the mechanic's sitting there looking at a hooptie and with a straight face going, spend$1 ,500 to keep cool. I don't think so. Right. So we're thinking about... What kind of car is this? It's a 2010 Ford Escape. Oh, sure. Okay.

1:22:03yeah all right so if you sell it without an air conditioner right now what can you get for it uh i mean we're we're probably looking at maybe fifteen hundred dollars okay so you don't fix that car here's how you do the math on this equation if the repair plus the value of the car is more of the current value of the car the broken car if the repair plus the broken value of the car plus the repair is more than the finished value after the repair. You don't do the repair. So example here, you could get$1 ,500 for it as it is, but if I had to put$2 ,000 in it, that's like having$3 ,500 in the car, okay?

1:22:47And you could have sold it. I mean, it's only worth$3 ,000 after you finish, so you don't want$3 ,500 in the car. You take the$1 ,500, put it in your pocket, and you take the$1 ,500 you were going to spend, $1 ,600 on the air conditioner you're going to spend, and you buy another$3 ,000 car with that same amount of money. Now, don't do the pregnancy, I have to upgrade my car because the air conditioner went out. Now, you just go buy another$3 ,000 car, and this time don't buy an Escape. Okay, noted. Yeah, this is a piece of crap of an automobile here. And so, yeah, I mean, get you something get an old beat-up uh camry that's got an old beat-up uh honda accord that's got a lot of value left in it okay a lot of life left in it um escapes didn't have life when left in them when they came off the assembly line new so um yeah this is not the first problem we've had with it yeah so yeah but i mean these cars that have a reputation of running forever and ever and ever that's what you spend a three that's what you buy with a three thousand dollar car it's a camry It's an Accord.

1:23:57For guys, it might be an F-150. I don't care. Buy something that's got a lot of life. I don't care if it's pretty. I just want life left in it. We're not going for pretty at$3 ,000. How much have you got in your stork mode? We're at$12 ,000 right now. Good. And what's your household income? We're right at about$6 ,000 a month. Good. And how much debt do you have? No debt besides our mortgage. Okay. Then I probably would put a little money with this and move it up maybe to a$5 ,000 car. Okay. I will tell my husband you told me to do that. Yeah. Because your stork mode around here is you're in baby step two paying off debt, but you're pregnant.

1:24:44So we're going to stop paying off debt temporarily until the baby comes and pile up cash. That's what we call stork mode. But you're out of debt. This is just an emergency fund situation, and you have an emergency. Yes. Yeah. But this is not an excuse to go buy a$25 ,000 car. Absolutely. Okay, with payments on it. You go, well, I had to. I had a baby on the way. No, that's bullcrap. That's not true. Okay, and people do that. You know that, right? Not us. I know, but you've heard of people doing stuff like that. If you listen to the show, they do it all the time. Okay, so. Yes. Yeah. So I think you're incredible.

1:25:20and I think you're very level-headed, isn't she? It's amazing. Oh, yeah. I mean, there's not impulse here. This is a real situation. Yeah. Very thoughtful. Hauling around two babies in the Tennessee summer, because we have humidity in Tennessee you can cut with a knife. I mean, you can set blocks of the humidity in the backseat if you want to. It's pretty ridiculous. That is true. Like, you know, that feels-like thing. Yeah, feels like 500 degrees. is because you walk outside and you're dripping. You can draw in the air. My grandfather was just there. And just try having babies in the backseat of that hot car.

1:25:56Yeah, I don't blame you on this. I'm with you. I'm on your team this time, Emily.

1:26:24Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm Dave Ramsey, your host, Ken Coleman, Ramsey personality, number one best-selling author, is my co-host. Amy is in Cleveland, Ohio. Hi, Amy, how are you? Hello, sir. Thank you so much for taking my call. Sure. What's up? I wanted to see how can I create and stick to a budget after being laid off nine months and my husband is self-employed. Okay. Is that code for he didn't make any money? It's code that we cannot count on a lot. I mean, you know, he's really trying. I'm self-employed and I do okay. That's what I'm trying to figure out.

1:27:08Yeah. He's a plumber and he's doing an amazing job. It's just that, you know, lately the jobs were kind of like scattered, not a lot of jobs. Well, then he needs to go find a local plumber who's got a thriving business, and that's just about every plumbing company that's been around, and he needs to apply because they've got more customers, more problems than they have plumbers most of the time, and he needs to make a fortune compared to what he's making for somebody else. And I'm talking tomorrow. He gets her in his car. If he's not making a living to support his family as a plumber in today's world, honey, he's not working.

1:27:49Okay? Yeah. We've had several big issues, for example, and that's why I'm actually super grateful that you're on the show, Mr. Ramsey, because I know you have other people also in the show, but I know you're a parent, but I just love it because you're very fair and strict. So our biggest issue was I have a 24-year-old who's not functioning. Like he dropped out of school in 10th grade and he's been doing substances for the last 10 years. And we've been paying his rent. And it's been crazy hard. We're also from overseas. What country are you from? Romania. Romania. Okay, cool. Why have you not gotten a job for nine months?

1:28:38Well, I worked in big pharma, and I got laid off. It's been crazy to get back on the market. I mean, I have LinkedIn. I have everything, and I've been told that a lot of people, very good people, have been laid off. What were you doing in big pharma? Project management. Okay. So you know I do project management. Why don't you do it for something else other than big pharma? I tried. I even opened up kind of like a consultancy, you know. but it's super hard to get clients when people don't know you. And I... Okay, let's stop. Yeah, I have no idea how to call it. Okay, so there's three points that we can be fair and strict on.

1:29:23That's what you asked me to be, okay? Point number one is your family is struggling with finances because of an income issue. Is that fair? Mm-hmm. Yes. Is that true? Yes. Okay. So you need to call the 24-year-old and say, we can't pay your rent anymore. You're going to have to get a job, and you're going to have to get clean, honey. We love you, but your dad and I are starving to death over here, and you're a grown man, and you're going to have to figure out what to do. We love you. We're going to be cheering for you, but we're not giving you any more money. We don't have any money, number one.

1:29:57Number two, your husband either starts making a lot of money next month as a self-employed plumber, or he takes a job with a plumbing company because they will pay him a lot of money. That is a field that desperately needs help. And if he can't make a living because he doesn't know how to get the clients and run the business part of it, but he knows how to do the plumbing part of it, there's no shame in that. But the shame would be if he continues to try to stay self-employed when he could go make three or four times what he's making now by getting a job like Ken said. And then the third step is we've got to get you employed doing something, Ken.

1:30:38Yeah. I mean, again, as a project manager, forget the title of project manager at so-and-so pharmaceutical company. What does a project manager do and do well? You don't have to answer it, but you know what it is. What kind of skill sets do project managers bring to the table? Well, project managers are able to juggle a lot of different balls. True or false? Yes. True. And then project managers are really probably good at communication and organization. True or false? Absolutely. True. I think three languages fluently. Boom. So let's stop trying to play the big pharma game because we are seeing a lot of layoffs and big white collar jobs.

1:31:17I'll go with that because there's some evidence of that, but that doesn't matter to what we're talking about. who in your zip code needs somebody that has your skill set and you start going out and making connections not applying online we go we make a connection i know something works in is not gonna do it that's right i they need an office manager you go well i'm a project manager well you're a project manager who's been out of work for nine months and you're broke so what you can do is go hey i've been a big time project manager i'm dealing with a kid who's got substance abuse issues and he's and it's been hurting us and so i'm getting back in the game there's a story there there's a narrative that people will say this is a mama bear who's who's got to make money and she got laid off from a big time company happens every day no shame and so this is what you do you forget about what you did in the past and we focus on what you can do now and where you can do it and what companies would be thrilled for you to walk in off the street with your skill set and experience A lot of them.

1:32:15A lot. And I'm going to say this one more time. We just kind of, you kind of glossed over what I said. I rarely disagree with Dave, but I don't think your husband waits a month. I don't think he's a good business guy. And that's not a negative. I'm not criticizing him, but I don't think he knows how to run the business. Number two, he's hurting just like you are with this kid. And I think he needs the safety of just showing up every day and turning the wrench and fixing plumbing problems and getting paid. Top dollar. So I wouldn't wait a month. I think he's getting in the car and he's driving around construction sites all day.

1:32:48If I were in your area, that's what I'd do. I'd do a ride-along. I'd go, we're going to show up on construction sites until we get you a job. Because it'd take about... Yes, he actually did that too. Well, but he needs to keep doing it. This is a process of elimination. Not necessarily a job for his plumbing company, a job for him to quit owning a plumbing company and become a plumber for someone else. That's right. He has his toolkit in the car with him. I'm ready to start today. Yeah. and you know you guys but doing um him making one third of what he should yeah the 24 year old siphoning off what little you have coming in and you making nothing while shooting for the stars is killing y 'all so what we're saying is is it's not necessarily what you're going to be doing 10 years from now that's right but for today all of you raise you to raise your income and lower your out go that's right by cutting the 24 year old off and well he's gonna well he's gonna he quit you know quit doing the substance i mean lots of 24 year olds face this and don't have parents that bail them out happens every day and sometimes that's the very thing that helps them turn their life around and say here's here's a here's a coach you can go see here's a counselor you can go see here's a homeless shelter for you to move into um we're cheering for you we hope you get dry and you turn your life around and we love you uh but we're not giving you any more money because we don't have any money.

1:34:08We're broke because of you and because I lost my job and your dad's business is not going well. So honey, I'm sorry, but you know, love does not pay the bills in this case. You're going to have to pay your own. And so cut him off, have, have a sweet conversation. I'm not trying to be angry about it, but this is, you are not making him better by paying his bills when you're broke. Definitely. By the way, even if you're not broke, you're not making him money better by paying his bills. This kid needs some problems.

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1:36:21If you're working the baby steps, the best and fastest way to do it is by using EveryDollar. It's more than just our budgeting app. It is the plan built right in. You track your progress. You get personalized recommendations and coaching for your situation. That'll help you free up more money and work the plan faster. It's like having one of us walking around with you on your phone going, do this. Now you do that. And, oh, you need to do this. Hello, do this. Start every dollar for free by downloading it in the App Store or Google Play. Willis is in Salt Lake City. Hi, Willis. How are you? Better than I deserve, Dave.

1:37:05How are you guys doing? Better than I deserve. What's up? We have a quick question. My wife and I, we are in our 20s. We are completely debt-free. We're a baby step 3D. We've been saving for the last about two years for our down payment of a home. We decided to go with a new build, and we chose a seven-year arm as they were having some end-of-the-year incentives for quick move-ins. And we thought that would be a good idea. I kind of think I know what you're going to say. I have all the numbers and specifics of it, but we feel like it's going to allow us to ease into the home buying purchase and all the payments that go with it.

1:37:43And we can afford it once the seven years is up, but we want to get your opinion on it. You can afford it once the seven years is up. What do you mean? For the first seven years, we're going to have a lower rate. So the first year will be a 1.7. Yeah. Second year will be a 2.7. And then, you know, at the end of it, it's going to go up, our payment, and it's going to, like, plateau at a certain point. But the first seven years, they're kind of giving us a discounted rate, so we don't have to pay as much. Yeah. And 100 % chance at the end of that it's going to be more. Yes. Yep. All right. So you bought a house you couldn't afford?

1:38:23No, we couldn't afford it. Yeah, it's actually quite in our budget. I mean, if you took out a 15-year fixed, can you pay it? Well, the 15-year fixed would be 32 % of our take-home pay. Oh, so you bought a house you can't afford. Okay. Yeah. I mean, you called in here, Willis, knowing what I was going to say, right? you've been here before you've been listening for more than 20 seconds haven't you for the most part for the most part we uh our goal and you know i've heard a lot of finance guys talk about and spreading making the spread on the stock market and those sort of things um you know we plan on starting a family and you know the first time home buyer and we thought that it'd be incentivized uh to have like that lower payment the first couple of years and use that extra money to pay towards the principal, we plan to be super aggressive where we have that wiggle room to pay down the principal as much as possible and then refinance at the end of the seven years.

1:39:23Well, that's assuming something doesn't happen that prohibits you from refinancing, in which in case you get foreclosed on. Because you've added risk to your scenario. And for 35 years, I've taken calls from people who things that they didn't expect to happen to them happened to them. and they were unable to refinance. And you can't pay aggressively on this. Aggressively might be the emotion, but it's not the math because you don't even have the money to pay a 15-year. You don't have enough income coming in to pay it at 15 years, so that tells me you can't pay. You can't aggressively. We do have enough income.

1:40:02No, you don't. You're 15 years, 32 % of your take-home pay. That tells me mathematically you don't have any money to be aggressive. The aggressive word is an emotional word, but it's not a mathematical reality. I guess the point, we're looking at an income of last year where I came home with about $180 ,000. Looking forward to this year, I'm projected to make at least$260 ,000, and my wife is not working right now. So we're going to very quickly double our income as this year. Assuming everything goes the way the plan of mice and men want it to go. The last two months is the plan that the numbers that we're looking at, you know, we should be able to with this new year.

1:40:45I'm sorry. Let me stop this. OK. What is it that you want from me? I guess your opinion with the seven year rate. I think it's stupid. With our extra margin, it is stupid. So should we cancel the loan? You should have a 15 year fixed rate where the payment is less than a fourth of your take home pay. I've said that like 9 million times on the show And otherwise you're buying too much house And if your income is going up so quickly And you're going to be so prosperous That should be no step for you It should be no issue for you But you're rationalized the piss out of this, man I mean, you've got rationalization down And you've crunched so much math that your eyes are crossing And it's wrong Because what you're doing with an adjustable rate is you're taking on more risk.

1:41:36And 100 % of adjustable rate mortgages start in the hole. It's a margin over an index, and the margin plus the index is always more than the introductory rate, which means at the first point of adjustment, it's going to max. At the next point of adjustment, it's going to max. At the next point of adjustment, you've lost your dadgum job, and the thing maxes and you lose your house because all this prosperity that you projected as the only possible outcome and your life is wrong. Other things happen in your life, and you've set your life up to not survive any storms. And when the big bad wolf comes and he blows your straw house down, that's what's going to happen.

1:42:13I'm telling you to build a brick house. Be the pig with the brick house. Be the third pig. And that's what we teach here. This stuff works in good times and it works in bad times, and it's the only system that does. So you got, man, please rethink this. You asked me my opinion, and I love you enough to tell you the truth. I want you to win. I hope you prosper. I hope you go make$160 ,000 and$260 ,000 and$360 ,000 and$460 ,000 and nothing bad ever happens in your life. But you'll be the first person I ever met that never had anything bad happen in their life. Yeah, you're assuming risk with the loan and then assuming that you'll have nothing bad happen in your life.

1:42:58And I understand it because you're in your early 20s. but you're talking to two older guys. And honestly, you got more time with Dave on this topic than I think anybody else would get. You're very generous right now. I can't believe the call lasted as long as it did, but very generous. I think he's got a good heart. Well, of course he does. And I'm such a math nerd. It's the same mistake I would have made at 24. It's the same mistake I did make at 24. So why am I freaking broke? That's the point. So don't call somebody who's been doing it for four decades and who've made the mistake himself and try to talk them into your version of it.

1:43:31You know, this is the thing. We don't know what we don't know when we're in our 20s. So, you know, listen to wisdom and experience. What I'm looking for after I went broke, when I was 28 years old, I lost everything, Willis, because I was stupid. And I assumed the mythology that everything was going to keep going like it had always gone. And it never does. Things change. and the tax law changed, the banking laws changed, the S &Ls went broke, and Dave was on the hook for something that couldn't possibly go wrong. Yeah, right. And it went wrong big time, a lot bigger time than even what we're talking about with you, a lot bigger time.

1:44:13And so what I've learned is that I'm looking for systems and elements of truth in my marriage, in my relationships, in my money that work in good times and they work in bad times. Yeah. Because I'm going to have both. If it only works when everything's working, it's not the truth. It's a facade. It's you're driving down the street and you walk through the front door of the house and you realize you're on a movie lot and there's nothing behind the front door. That's a facade. That's a fake truth. It looks like it's something, but there's nothing back there. And so I want to build my life after having gone broke and almost losing my marriage almost 30 plus years ago.

1:45:01And I want to teach other people as often as I can to build something that is the third pig. Be the third pig. Be the brick house. Take a little longer to build it. Buy a little less. Take a little more time. Be a little more careful with the budget. Don't try to be tricking everything. Don't look for a shortcut. The only shortcut, there's no shortcut to any place that's worth going. And just take your time. No discipline seems pleasant at the time, but it yields a harvest of righteousness. Live like no one else so that later you can live and give like no one else. And that's the basis for everything we teach on this show.

1:45:39If you want to do the hot and bothered, sexy thing and go do it, all of you, you're not going to like it when you call in here because I'm going to love you enough to tell you the truth. You know, the one thing you missed, you gave him great advice, but your very first response should have been, what are you talking about, Willis? That's a dad joke.

1:46:09Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about, and all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Homebase is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start-to-finish guides, a podcast, and even an in-depth video course hosted by yours truly. What's not to love? So if you're ready to take the next steps toward your home goals, go to RamseySolutions.com slash real estate.

1:46:41That's RamseySolutions.com slash real estate.

1:46:56On the debt-free stage in the lobby of Ramsey Solutions, looking at us through the glass, Manuel and Aaliyah are here. Hey, guys, how are you? Hi, Dave. Welcome. Where do you guys live? Avondale, Arizona. Very fun. Welcome to Nashville. and all the way here to do a debt-free scream. Yes. I love it. That's true. How much debt have you paid off? We paid off$320 ,000,$549 ,000. Wow, good for you. And how long did that take? Eight years. Eight years. Wow. And your range of income during that time? We started around$103 ,000 and ended about$240 ,000. Wow, cool. What do you all do for a living? I'm an accountant.

1:47:41and I have a small rebarrow company. We do swimming pools. Okay. All right. Yeah, very cool. Doesn't sound like it's too small to me. Sounds like it's doing pretty good. It's growing. Yeah, you guys are making some money. Way to go. You work hard too, don't you? Yeah, yeah. All the time. I try my best. I bet. I bet. So 320 ,000, eight years, and in Arizona, I'm guessing you paid off your house. It includes our house, Dave. I'm looking at weird people. Yes. Way to go, you weirdos. A paid-for house. What's this house worth these days? I'm guessing around$450 ,000. Okay, very cool. Have you started retirement savings and investing?

1:48:26Yeah, we have some. How much is in that nest egg? Around$300 ,000. $300 ,000. Wow, okay. So already$750 ,000. How old are you two? 40. 40 years old. You're on your way to being millionaires by the time you're 45 pretty easily. hopeful very cool very cool so manuel how long ago did you start this business about uh we started at 2017 but um we really started growing up like in 2021 okay all right very cool very cool now what country are y 'all from mexico mexico okay and how long you been in the states me all i've all my life okay me 30 years 30 years yeah okay wow very cool all right fun fun fun well congratulations you guys thank you american dream baby it is gonna be millionaires by the time you're 45 your house is paid for you run your own business you're making bank you're working your butt off you're doing it i'm so proud of you thank you thank you what do you tell people this is the key to having a paid for house in arizona worth 450 000 when you're 40 years old um like everyone else says it's the budget if you're not on a budget you're not gonna make it wow yeah that's true we gotta know where our money's going okay so whose idea with this how'd this all get started with ramsey stuff uh i was in the accountant i'm afraid yeah yeah i was in italy with my sister um vacationing and she's like you gotta listen to this guy he says not to use credit cards i'm like what you're crazy i have to use my credit card i need my points so um that's where it started and then i got back we ordered the book and i told manny we're gonna do this he's like okay whatever you're pretty easy to talk into this yeah yeah yeah so from the beginning it took me a little while because I was spending a lot of money and I didn't know I was just stopping at any store and whatever spend money but suddenly she hit me with when I saw how much money we were really doing and throwing away like most of it was going like we were not making any progress so yeah and then And, yeah, 2020, we started our business.

1:50:38How many people working for you, Manny? Well, right now we have six people working for us. How many of you have talked into starting to do this since you started doing it? Two guys. I bet. Yeah, they're starting. Hey, Manny, you're not buying stuff at the market every day. What's going on, man? Then you got to tell them the story, right? Yeah, yeah. Yeah. I told them that we paid a house, and they asked me, how did you do it? And I told them how to handle money. I try, and then I put the show, the Day Ramsey show, so they can hear. Okay. Very cool. Very cool. We also do... My Espanol is un poco, so not much help, right?

1:51:16We also coordinate FPU. Oh, thank you. I work at St. John Paul II, and they lend us space to do FPU there. We do Paz Financiera as well. Oh, yeah. Yeah. Very good. Have you run into Andres Gutierrez? No, we've called him, but we haven't. Yeah. So he's doing a lot of those lessons now, the old Paso Fincineria. He's great. So that's very cool. That can help your guys working on the team for sure. So proud of y 'all, man. This is so great. Yeah, I'd love to know for our audience, eight years is a long haul. That's a long deal. So I want to know what were the toughest moments or seasons, and how did you press through those?

1:51:57um i think some of the harder parts were like when our business was a little slower like in the winter he wouldn't have a lot of jobs so we couldn't really do a lot of progress during those months but um in september we took over a couple of other companies because one of the rebar companies um shut down so we've gotten a lot of work since then good and that's that's really helped us. So what kept you focused? That's what I want to hear. I think just not owing anyone anything. Yeah. You're playing the long game. Yeah. If we're going to do all this hard work, we need to have something to show for it, right?

1:52:40Yes. Yes. Good for y 'all. If we live like no one else, maybe later we can live and give like no one else. Very cool. Very cool. Well, you guys are amazing. I'm very, very proud of you. All right. One more time. You tell people the key is the budget. Yes. And I guess you need a Manny because he really didn't resist much. He just did whatever you told him to do, right? Yeah. Yeah. For the most part, there was some parts where he was like, no, I work, so I got to spend money. I was that kind of guy. But it's different now. That's good. Well, there's eight years worth of work there. That's good. Yeah.

1:53:13Good stuff. Very proud of you guys. I'm honored to meet you. I'm proud. You're heroes, man. You're on your way to be a millionaire. So it's very, very cool. All right. Manuel, Manny, and Elia. Elia. Elia. Elia. I'm going to mess it up. I'm sorry. From Phoenix, Arizona area. And who's this? This is Yasmin. And how old is Yasmin? 14. Ah, okay. All right. Very cool. Manny, you need a gun. Yeah. Yeah, to protect her. I do. All right. Count it down. Let's get a debt-free scream going. Three, two, one. Gracias a Dios. We're debt free.

1:53:58Very cool. Congratulations, you guys. Very, very proud of you. Very proud of you. Man, that's fun. Yeah. All right, man, I'll tell you what. You start doing rebar, that's like work right there. Oh, I have. Your back is hurting just thinking about it. This will shock you, but I have a little experience with rebar, Dave. one of my college summer jobs. Very little. But it was a full summer working on a masonry crew. You did. I did. Now, I was the lowest man on the totem pole. I'm guessing. By the time you carried that a while, you were even lower. Sunk into the sand. I'm telling you, man, that's hard work, but it's rewarding work.

1:54:35And here's what's fun about this. They take over a company. So on this debt-free journey, this is what's great. He starts a company and they keep going, they're slogging through it, and then an opportunity arises to take over a couple other companies. And he's on his way to creating a lot of jobs. And what's really fun, jobs for guys are going to eventually become debt-free. And for entrepreneurs, if they can grab this, this is the other side of this deal. Debt-free entrepreneurship, solo ownership, that's exciting stuff. And as you say, that's changing family trees right here. Yeah, yeah, it changes everything.

1:55:07It's a completely different way of looking at things. And it's why you work so hard. Yeah. I mean, it's why you get up. I want to change my legacy. I want to change my destiny. That's right. And that's what those two hard workers have done. I'm really proud of you guys. Very, very well done. That's very, very cool. Wow. Well, and here's the other thing. Our data says that if you come here from another country legally and set up shop like those two have done, that you're four times more likely to become a millionaire than one of us that was born here. Really? Yeah, because the great American dream.

1:55:40Yeah. We're here to get it, man. We're here to do it. Very. She's second gen. That's right. But he's first gen. Yeah. And the numbers tell us that. And so I believe it can happen. I believe it can happen. And that's why I came to America, because it's the land of opportunity. And that's why it makes me so mad when some little snot on their$1 ,100 iPhone is preaching socialism, because it's not the land of opportunity for them. Oh, you found out there was work involved. Wah.

1:56:44We'll see you next time. Thank you. Hey guys, George Camel here. Do you ever feel like insurance companies only care about your money and not what you actually need? Well, there's a better way. When you go to Ramsey's Insurance Resource Hub, you'll start feeling confident that you're getting the right coverage that's truly best for you. You'll find helpful info on everything from life insurance, health insurance, identity theft protection, and more. And when you're ready to get the coverage you need, you can connect with a Ramsey-trusted insurance pro who will only get you what you need at the best price.

1:57:13Go to RamseySolutions.com slash insurance, RamseySolutions.com slash insurance.

1:57:37Our scripture of the day, James 1 and 4, let perseverance finish its work so that you may be mature and complete, not lacking anything. Thomas Edison said, when you've exhausted all possibilities, remember this. You haven't. I do like that. That's a definite Edison mindset, too, for sure. All right, up next is going to be Avery in Columbus, Ohio. Hi, Avery. How are you? Hi, Dave. I'm great. How are you? Better than I deserve. What's up? So my parents gifted my two siblings and I$10 ,000 each to start a family investment club, and they're also adding an additional$10 ,000. So we'll have$40 ,000 altogether.

1:58:23It's a small start, but we formed a corporation with four equal shares, all of our family members, and we'll be meeting quarterly to decide how to invest. And part of this plan really is just to learn how to work together financially as my parents have accumulated a really nice nest egg through rental properties and businesses. And we want to be prepared to steward that really well down the line one day together. So my question is, if you were starting with$40 ,000 in this situation, where would you invest it? Wow. That is a neat goal, a neat reason for doing this. It does scare me a little bit, but it's a neat reason for doing it.

1:59:06It scares me because, of course, you didn't have to put money into it. Your parents just nest egged the whole thing. So you don't really have anything at risk personally, other than the fact that as soon as somebody said$10 ,000 is in your name, you emotionally take ownership of it, but it really, I mean, they set the whole thing up. That's a pretty cool training wheels to get you guys to work together.

1:59:34So, well, I mean, I'm always going to go with the things that I live by and that we teach, which is I don't borrow money, so I'm not going to use$40 ,000 as a down payment on a rental. Okay? Okay. and I don't do single stocks because of the risk. I do mutual funds. The problem with putting the whole$40 ,000 just in mutual funds, which is probably what I would do with it if it was my money, is it doesn't give you any reason to work together because you just put it in there and forget it, and then there's no reason to have a meeting. There's no friction in the relationship that you need to learn to work through, which is the reason for doing this, is for someone to disagree about something, right?

2:00:24And we go, okay, how are we going to handle this disagreement? And everybody gets a different vote and all of that. And so that only comes up if there's something moving around in the investments. And so it kind of defeats the purpose if you just plump$40 ,000 into a mutual fund and forget it. Right. And let it run, which is kind of what I do, okay? I don't – it's kind of – I mean, I buy real estate that I pay cash for, but you're not buying real estate for$40 ,000. So, you know, I guess, you know, you might be playing some single stocks and get to have some healthy discussions around which ones to keep and which ones to buy.

2:01:04And if you blow the whole thing up, you just lost$40 ,000. That's not the end of the world because the purpose of it is not as much turning the$40 ,000 into$400 ,000 as it is the learning that comes from everybody having to work together, right? So it might be that I just start running a single stock portfolio, although I wouldn't do that. I need to say real loud and clear. I wouldn't do that as an investment, but this is not really an investment. This is a relational exercise. Yeah. Does that make sense? Yeah, like practice for what's going to happen in the future. Yeah, and so, you know, how do we make a decision about this piece of real estate after mom and dad are gone?

2:01:45Well, the same way we did when we were talking about these other two things over here four years ago, right? Right. But there has to be some movement in order for there to be a discussion. Right. And so, you know, that's what it kills. So I don't think I'm going to use the investing principles, although I would not go into debt at all on this, period. If they want you guys all to sign up for a mortgage, no thank you. I'll pass. No, that's not the case. But I guess it's a small single stock portfolio. And you guys study and learn about each other in the buying and selling of some single stocks, I guess.

2:02:26But that's, again, that's more about the game than it is the actual investment. I actually think you, I was leaning towards where you were headed and then you said it. And I think the best part of this is not just the practice and learning stocks and things like that. I think it's the research piece. And then watch the siblings. All of you watch each other. Who's a little bit more into the numbers? Who's got a greater tolerance for risk? You know, just it's a great learning experience for one day if you've got to work together on something like this that is far bigger. And I think it's a wildly kind of fun experiment.

2:03:02As long as you're smart and savvy about it, let it be a learning experience. But learn not just about the money piece of it, but about each other. I think that was a really great observation, and I agree with that. That's why this is a fun exercise, not because of the investment aspect. Yeah. But because it forces them to work together. I'm thinking about my three kids. Well, I was going to ask you about that because they're in the business here. Yeah. And so and they are all arguing about the operation of the business, you know, because they all sit on the operating board. Right. And even though Daniel is the president, but the other two, you know, are part, you know, they're functioning as owners together.

2:03:39So they're having that discussion. I've got a bunch of real estate. Rachel's husband, Winston, runs most of our real estate. And I can imagine that if we're not here, that a lot of Winston's brother-in-law or sister-in-law's wife would defer to him on what the family would do with real estate. They would consider him the expert because he is. Okay. And that kind of thing. So that's the interaction and the play. I guess we've accidentally done this. Yeah. It wasn't with as much intentionality as that, which is very interesting. Yeah. Molly is in Nashville. Hey, Molly, how are you? I'm well, Dave.

2:04:14How are you? Better than I deserve. What's up? Well, I have a question. I have inherited a 160-year-old home that's located on our family's farm. Whoa. And trying to figure out how to navigate this, the renovations, whether it be taking out a massive renovation loan or to just go as I can. How much in renovations need to be spent? Between$250 ,000 and$300 ,000. Okay. So the home has not been maintained or updated for decades? It's livable. I'm living in it currently. I spent about$40 ,000 cash in renovations for... Are you the sole heir? Yes, I am. Okay, all right. And how many acres is it sitting on?

2:05:14The acreage is, between my other family members, but 70 acres. Oh, so they have the acreage? Correct, but it's sitting on the farm. How much acreage do you have? um with this is three three acres oh none okay all right um but you're just surrounded by your brothers and sisters ownership that part of the farm the i should get another 15 acres but that has not been distributed yet okay what is that worth um the home or the land 15 acres well right now the villain rate in roberton county is about 33 35 000 an acre okay so a few of those acres were they to be sold if you could put them in a way that didn't damage the family property off on one corner you might get a little bit there to fund some of your renovation if you sold a five acre track in the corner that would pay for a lot of your renovation, wouldn't it?

2:06:19What's your household income? Last year was$115 taxable. Okay. And where were you living before? It's pretty much a family compound. Okay. So you're living on a different house within the property? Correct, yes. But you didn't get that? No. Okay. So you don't have any other assets? Correct. Okay, yeah. I'm going to cash flow whatever renovations I do here. Because an old house can be a black hole. It can be a money pit. They don't build them like they used to. Thank God. And so cash flow it with the acreage sale or with your income is what I would do. Sounds interesting, though. That puts us out of the Ramsey Show and the books.

2:07:07We'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. .