Wealth Is Built On Facts, Not Feelings

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21:28Dave Ramsey:Andrew is in Salt Lake City. Hi, Andrew. How are you? I'm doing great, Dave. Thanks for taking my call. I've been a long-time listener, and I really appreciate it. Sure. What's up? Well, I've got a question. My wife and I were wondering, so we had actually a negative net worth just 10 years ago, and we have completely changed our life in a good amount of that due to your teaching, and we really appreciate that. Well, thank you. We have a problem, which is not a bad problem that we have now, but we're just trying to figure out, like, are we putting too much into our 401k accounts now? So we're currently putting about 25 % of our gross income into our 401k.

22:08That includes our Roth as well. We just thought we were so far behind for so many years that we've really stepped it up to just the maximum that we're able to do. And we're just trying to figure out if we have just too much in there right now. Is your mortgage paid off? We're on four, five, and six, and we have about$290 ,000 left.

22:29Dave Ramsey:No, you're not. Well, you're right, because we're doing more than 15%. Yeah, exactly. Yeah. And the reason we don't do more than 15 % is we put the difference on six, pay off the house early. Okay. How old are you? Paying off the house early is as important to building your net worth as pouring money into your 401k. Both of them are important. That's why we have 15 % in baby step four. Five is kids college and six is pay off the house early. How old are you? We are 44 to 45. Okay. How much is in your nest egg so far? Just shy of a million dollars. Oh, shut up. How much do you think you need?

23:17We don't know.

23:18Dave Ramsey:We're just, we were still scared. Way to go, man. Way to go. Oh, stinking millionaire in 44. Look at you. And you're saving like you're scared to death that you're broke. That's funny. Well, we both came from not a whole lot. I know where you came from. I'm talking about where you are. Yes, I appreciate that. Way to go. You need to actually look at these numbers and let them settle in on your heart as well as your brain. Yeah, because you're just speeding past it like it's no big deal. You were so desperate to never be back there again that you went all the way over to the other side now. Way to go, man.

23:55Dave Ramsey:Very true. Yeah. No, stop. You need to back down to 15%, and you need to get your stinking house paid off. What do you owe on your house? We owe about$290 ,000. Perfect. And what's your household income? It's about$320 ,000. Okay. So here's – good Lord, you're doing so good, man. Way to go. Oh, man. All right, so it's so much easier to just take a horse that runs this fast and direct it in the right direction than it is to beat one and get it running. You're just incredible, man. Way to go. So, man, you're incredible. All right, so just slow down a little bit. Think about it this way, okay? If you start chunking on the house with the same, not the same fervor, you need to lighten up in general and enjoy some of this, but you also need to chunk on the house, okay?

24:46Dave Ramsey:How quick we get the house paid off? Probably four years, something like that. Does that sound right? Yeah. We've been paying, just starting this year, we've been paying an extra$5 ,000 a month, and we have about a 48-month plan to get that paid off. Yeah. Well, I think I just upped it because I lowered your baby step four back down to where it should be. Yeah. If you put$4 ,000 a month into retirement, how much could you put on the house to go aggressively? How much more could I put on that? And you're putting 10%, so you're putting$30 ,000 too much into retirement right now. I'm going to throw that over on the house.

25:21Dave Ramsey:So you're done in 36 months. Are you actually doing anything fun at all? Well, actually, we just got back from a month-long cross-country road trip with our kids, and that was our first. We said fun. Yeah. Yeah. I think you need to take your wife to Rome, man. Yeah, there you go. Wow. She would love that. Yeah, you do. And what are you driving? What kind of car are you driving? I've got a nice paid-off 2021 Ford F-150. What's she driving? She has a paid-off 2016 Ford Fusion that she just uses to go back and forth to work. You need to get your wife a better car. Are you both nerds? Are you both nerds or is she a spender?

26:09We're both nerds.

26:11Dave Ramsey:Yeah. I'm a financial nerd, and she is a great saver. Yeah, I really don't want a millionaire's wife driving a used Ford Fusion. There's just, I don't want anybody driving a used Ford Fusion, but I really don't want a millionaire's wife driving that. And meanwhile, you're driving an F-150, but yeah, which is a great car. But yeah, so anyway, the, good Lord. Okay, so what would I do in your shoes? This is so fun. You're doing so good. You are. These are minor adjustments and we can have some fun. All right. Number one, I'm going to book a trip to Paris or Rome. Number two, I'm going to upgrade my wife's car.

26:47Dave Ramsey:Number three, I'm going to lower your contributions down to 15 percent. And number four, I'm going to get the house paid off. When the house is paid off, you're going to have so stinking much money. Okay, so you're at the point the house is paid off, you're 48 years old, okay? And your million dollars will have become two million by then, okay? And then by the time you are 55 years old, it will be five million, and the house will be worth a million. So you're going to be 65 with a$20 million net worth if you do simply what I'm telling you to do. Okay, I can do that. You are kicking butt. And I want you to enjoy some of this money.

27:34Well, we are enjoying it. Please, don't tell me anybody driving a Ford Fusion has a good life, okay?

27:40Dave Ramsey:Just please go buy your wife a car. Seriously. Way to go, man. You're so cool. I love talking to him. So let's talk about... Such a nerd. He was a nerd. Both of them are nerds. Let's talk about this because it's important. And I feel like if we don't, it can give the Ramsey plan a bad name. which is learning how to spend so the first three baby steps are very intense right you're getting a thousand dollars saved you're paying off your consumer debt you're stacking up three to six months of expenses and that is gazelle intensity and you don't you drive a ford fusion then you drive a ford fusion and everything inside of you is telling you don't spend extra don't spend more hold your money right scorched earth no lifestyle no enjoyment no trips no eating out we're cleaning up the freaking mess.

28:25Dave Ramsey:Like he said, he started with a negative net worth, right? And it has to be that way. And the way that you do that, the way you get to the gazelle intensity that we talk about, and one day Dave will explain that on here. The way you do that is you practice it, like John Deloney would say, you practice what it means to say no. You practice what it means to stick to the budget. You practice that behavior and you become very, very good at it to the point that you have accomplished baby steps one through three. Then there's a shift that occurs when you get to four, five, and six, where you can pull your pedal, you know, you pull your foot off the gas a little bit, you can start to enjoy life.

28:57And I want to point out that that also, you have to practice that behavior. Otherwise, you will not be good at that behavior. You have to trust yourself to know, okay, I know what it feels like to let myself spend a little. I know what it feels like if I'm going off the rails. I know what it feels like if this is out of, you have to practice that same behavior so you become good at spending and actually enjoying and living your life. And sometimes people just get afraid of it and so they don't do it.

29:24Dave Ramsey:Ah, that feels weird. Well, you keep your emotions back when you were broke. Yeah. And you have to retrain your body, your mind, your emotions, your spirit that things are different now. Yes. And it's not that we're going to get sloppy and immature and impulsive that got us in the mess in the first place, but now we're not in a mess. We're not in that. We have a million freaking dollars. We're 44 years old, plus the net worth in the house. So a million and a half probably in net worth, right? And we're making$300 ,000 a year. Those facts are, you need to tell yourself what are the facts, not what are the feelings.

30:00Dave Ramsey:That's right. Because your feelings can still be stuck back there when we were broke. You know, I remember, I know, I don't care what you remember. I remember being broke too. I remember on my third date with my wife, I had a 280 ,000-mile Monte Carlo on the third engine and fourth transmission. I changed them because I'm a redneck. I turned the wrench. And I was taking my wife out on the third date, explaining to her somehow. I had$1.12 in my checking account, how someday I'm going to be a millionaire. We crossed a railroad track, and the muffler fell off my car. I remember that conversation because it was so ironic.

30:35Dave Ramsey:And I rolled up under it, put the muffler back on, and we went on the date. But the, you know, and then it came true. I was a millionaire by the time I was 24. And so stupid I had to do it two times because I lost everything. Got the opportunity to start over. So this is the feelings. Don't get stuck in the feelings. What are your facts? Live in the facts.

31:08Thank you.

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32:32Dave Ramsey:Well, people are always asking me, Dave, what'd you do to build your real estate portfolio since you don't borrow money. How'd you do that? And how do you do your investing? What do you really do? They always want to know what mutual funds and all that. We don't tell you which mutual funds because we want you to think for yourself. We don't want you to do a particular mutual fund just because Dave did it. We want you to actually use your brain and learn how to do your investing. But I am going to open for the third time ever our investing playbook. I'm not going to get into the details on which mutual funds, but I'm going to give you some real world examples of stuff I do.

33:07Dave Ramsey:George Camel and I started doing this three years ago. This will be the third time we've ever done it. It's called Investing Essentials. It's a two-night virtual event. It will be September 1st and 2nd. It's the only place you're going to get my personal playbook, and we're going to nerd out. George and I are both super nerds, and we're going to nerd out on all the little nitsy nuanced crap. If you don't want to know nine million details about investing, don't come to this because this is going to be 9 million details about investing. And, you know, honestly, I think it's a little boring, but it's really, really a lot of meat, a lot of meat, not even any potatoes, just meat.

33:47Dave Ramsey:So we're going to go into the basics of investing for just a minute, just to make sure you've got that foundation. And then we're going to tear into the stuff that we do. That's a pretty high level stuff. And so tickets start at$199. You You can get it at RamseySolutions.com slash events, or you can click the link in the show notes, and it'll take you right there, either one, September 1st and 2nd. September 1st and 2nd, two-night virtual event, Investing Essentials. Daniel's in Fort Smith, Arkansas. Hey, Daniel, what's up? Hey, how's it going? Better than I deserve. How can I help? Well, so I got presented an opportunity within the last two weeks.

34:29just to start off with. I work in construction and build relationships here and there and do what I can for my customers. About two years ago, I got involved with a customer. He's an 80-year-old man, older man. Had the health care not too long ago, and, well, I thought he was going to talk some numbers on a job he was letting me do, and I get to his office, and he basically tells me he's going to give me a commercial property. He's going to deed it over to me completely for free. And it's a big commercial property, and it's a life-changing event for me. Does he have any sons or daughters or a wife?

35:09Yes. He has three kids, two sons and a daughter and a wife, yes. I asked him the same thing. I asked him multiple times the same thing, just to make sure we're all clear. All of his kids, from what I can tell, are okay, and they're doing good. basically doesn't want to mess with it. Is that his only piece of wealth? No. Or does he have lots?

35:37Dave Ramsey:Lots. Lots and lots. Okay, so he's a multimillionaire, and he's giving you a property that's worth what? Well, he said he bought it for a million 20 years ago. And it's 3.23 acres as far as the lot goes. and then there's a 42 ,000 to 43 ,000 square foot building on it. It's a strip mall, and it's full of businesses that, you know, pay him rent. What does he estimate the worth of it is today? Well, I haven't got that far yet. I'm actually going this week sometime to talk to him and his attorney to, I guess, figure out more details. Well, that's wild. Okay. Yeah. So how can we help you? I have no idea what to do.

36:26Dave Ramsey:I'm terrified. How long have you been working with him? How long has your relationship gone back? The last two years, and we've gotten pretty close over the last two years. Apparently. Yeah. Sounds like he's giving you a$10 million property or so. Right. Okay. Wow. He did have a health care not too long ago, and I think that's why he's wanting to get stuff out of his hair, less stress in his life. yeah there's a lot of ways to do that but this is an interesting one okay um yeah i i just i um i want you to learn as fast as you can learn uh because you're getting ready to become the landlord of a commercial property and so you need a good real estate agent that is a commercial broker in your corner to teach you how to manage that property and how to manage that type of tenant and how to refill when one of them you know when one of the leases expires and they move out or when they quit paying and you have to throw them out and you put a new tenant in how do you do that you don't have any idea this is your first ride on this truck right so you're getting ready to be a big-time commercial landlord and you're going to have to have some people in your corner to teach you how to do it not do it for you but do it with you and so you want to get somebody that's got in in the commercial world there's a designation in the commercial real estate world called the ccim and that's a commercial that's a real estate agent who has studied how to value and how to manage commercial real estate and it's it's like a uh it's like getting your cpa but in commercial real estate does that make sense so if you find somebody i have a lady that works for me that has a CCIM and she works for me and manages our real estate.

38:14Dave Ramsey:We've got a bunch of commercial real estate and I've got a degree in real estate, which is the equivalent of that too. So, but you've got to learn the nuances of stuff like the CAM, common area maintenance fees is what that's called the CAM. You've got to learn the per square foot, who's paying what are these triple net leases. And you just, you, there's some things to learn here and you're going to be taking a crash course on it, and ask him if he has a recommendation for someone to mentor you on handling all of this. Does he want to do it while he has his health? Yeah, he said I could come to him for any help he needs.

38:55And I do have some help in my corner, too, with some other friends of mine. One other little detail I forgot to mention, I guess it's a big detail. One of the tenants had a business there, and it burned down. and so that would be my responsibility and one of my biggest concerns right now is i don't i don't have a lot of money to my name i don't necessarily make a lot of money and uh my concern is getting a loan to fix this place am i going to be able to afford it with the income that the that the strip mall is bringing or do i am i going to have to dip into my own finances is it part of the

39:35Dave Ramsey:strip mall that caught on fire? Yes, but it's the only business that is out of business right now due to the fire. Everyone else is still up and running. So it just, it didn't, it didn't burn the structure, it just gutted the interior? A little bit structural damage in, inside that part of the area, but not unsafe for everyone else to be concerned. And I take it the property has no debt? Yes, correct. Then it ought to be cash flowing like a bandit. You ought to be able to stack the cash out of the rents fast enough to do these repairs you don't take anything out of it you just use all the cash to pour back into the property okay that's that's kind of out because i didn't know if i need to go to a bank i would i would see if i would cash flow the repairs okay i don't know i mean if this thing's it should be generating yeah you should be generating some pretty serious money per month and it sounds like you'll find out that information when you have that first meeting.

40:32Dave Ramsey:Yeah. I have a good idea right now, and it's around$6 ,000 a month. That's not right. That's not right. That's from what I understand. How many businesses are there? The Seattle has one, two, three, four, five, probably seven or eight, and there's probably three or four vacant spots within the strip mall. Hmm. That's wrong. I think he's very, very cheap on a lot of his rent. That's beyond cheap. That should be one tenant. I was going to guess$50 ,000 a month. Yeah. And you're telling me$6 ,000 a month. Something's wrong. Something's really, really wrong. So you need to get in there and find out what's going on.

41:14Dave Ramsey:$6 ,000 a month? Whew. Yeah. So good news is you know people in the construction business, but cash flow the work, honey. Don't take out a loan. and otherwise just let that tenant go on his way and and then you cash flow it when you can cash flow it um but yeah you've got tenant improvements you're going to be doing on those empty spots i don't know i don't know if you're gonna be able to handle this or not what do you think causes the 80 year old guy to just i have no idea it's very strange it's very strange i thought the property was worth more than it is maybe i can't tell what's going on yeah me neither once i got that last piece of information, my head went on tilt.

41:52Why don't you get more information and call us back?

41:56Dave Ramsey:That'd be fun. If you want to. Yeah. But you need to get some independent people outside of his circle, a CCIM, to look at this with you. And they're going to talk to you about borrowing money. I'm not. But other than that, they'll know what's going on.

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43:43Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Jade Washall, Ramsey personality, number one bestselling author, is my co-host today. Jason is in Philadelphia. Hi, Jason. What's up? Hello. How you doing, Dave? So long story short, I'm 38 years old. I'm a heavy equipment operator for a union in New Jersey. And unfortunately, I've made very, not even bad, but horrible financial decisions throughout my life. I am ready to make a complete change because of my financial situation. It has caused me to lose a fiance recently. I am a father to a five-year-old. And, yeah, I just need a battle plan.

44:30I do have something that presented itself recently. I also do plumbing on the side. And, you know, I have an opportunity, but it might be a big risk.

44:41Dave Ramsey:What are you making as a heavy equipment operator? You ought to be making bank. Yeah, I make pretty good. It depends if you order overtime or not. But, like, for example, last year I think I made 115. Yeah, okay. Is keeping a job the problem? What's been the problem? So the problem is, you know, I went through a divorce. I have child support. I have daycare payments. I have, you know, a car payment that is astronomical that I can't even get out of because I'm under, you know,$10 ,000 to$11 ,000 underwater on it. We'll help with that. Yeah, I'm totally like probably$65 ,000 to$70 ,000 in debt. Okay, so let me ask you this.

45:19Dave Ramsey:I love the way you opened the conversation. It's like, help me, I'm ready to change. That's my favorite kind of person because I've been there myself. The person that's sick and tired of being sick and tired, they're ready to do something. I don't have to talk them into it. They're going to do something because things have to change. And that means your mind is in a perfect place on this. Congratulations. I'm sorry you had to go through all this crap to get there, but that's normal human stuff, right? I had to go broke to get there. So I understand. So what and so really, it sounds like, though, that, yeah, you made a couple bonehead moves.

45:58Dave Ramsey:But more than anything, you just hadn't paid attention. You made decent to great money and you just hadn't paid attention. And it just all kind of frittered away and you don't even know where all of it went. Is that right? Yes. Yes. Yeah. I thought so, because that's fairly normal. Yeah. OK, in your situation. So thank you for saying that. So here's what's weird. 90 % of solving where you are and turning you into a millionaire is to start paying attention, and you're ready to do that. Because if you have a game plan, anything that interrupts that game plan is off limits. But when you don't have a game plan, everything that's stupid looks smart.

46:46Dave Ramsey:so when you say i have got to go from where i am to a millionaire status i need a million dollar net worth i'm 33 or i'm 38 i want to be there by the time i'm 48 or the time i'm 50 and i think you can do that probably all right but you're going to have to actually pay freaking attention to every single financial transaction and make every one of those dollars you work so hard for behave, okay? Because they've not been behaving. No. Money is a great slave. It is a horrible master. It will do what you tell it to do. And if you tell it to do nothing, it runs wild. And so that's what's been going on.

47:29Dave Ramsey:All right, now, so you got a stupid car. Tell me about the car. How much do you owe on it? So I owe about right around$30 ,000 on it. I pay like$900 a month, not including me. You owe$30 ,000, and you think it's worth around$20 ,000? Yeah, it's a$21 ,000 GMC Sierra. Why do you think it's worth$20 ,000? I just looked it up, and I went to dealerships before to see what they would give me, and it was around$20 ,000 to$21 ,000. Okay, dealerships give you wholesale. They resell the car and make a profit over that, which means you could put it on Craigslist and probably sell it for$25 ,000. Correct.

48:07I just don't have the access to pay the rent. Yeah, well, we're going to figure that out.

48:11Dave Ramsey:Who do you owe the$30 to? I guess the TD Bank or whatever it is, the auto. No, I mean, what's the name of the organization that you send payments to, honey? Oh, yeah, the TD Auto Finance. Okay. All right. So it's a high interest rate. Yeah, 11.9%. Yeah, you got screwed twice. Okay. and um wow and so your credit's probably ripped up isn't it uh my credit is pretty bad like i said i have about 70 000 in debt 30 from the truck i have 6 000 in credit cards i have 20 000 in student loans that i got 10 to 15 years ago i never paid for them um you know i actually just got done about a year or two ago paying back taxes that i owed so i've just been in a whirlwind okay so So what we're going to do now is we're going to take all the overtime we can take, and we're going to get on an every-dollar budget.

49:11Dave Ramsey:We're going to sign you up. We're going to give you the premium version, and we're going to be on beans and rice, rice and beans. You now have no life. You're not going to be seeing the inside of a restaurant unless it's your extra job and you're not going on vacation. I want you to work like a maniac, and I want you to stack five or six grand as fast as you can stack it and get this car sold. Yeah, so right now I do have about$5 ,000 in the bank. Sell the car. But I do have a second job that I might have a big opportunity on, but it would be a huge risk. I don't need any risks right now. I need money.

49:48Well, it would be money, and it would be potential for me to make a lot more money.

49:53Dave Ramsey:Really? More than you're making$150 a year or$115 a year as a heavy equipment operator? So, yeah, it would give me an opportunity to learn more about the plumbing and then honestly open my own plumbing business. What's the how long does it take for this to unfold? Well, I do the plumbing now. I am like I said, I am in the union, so I could shelf my book and go to work for this company full time. I could work either six or seven days, whatever. But I would have to work six days to make the same amount of money that I would make work in just the 40 hours. No, I don't need to start a business right now.

50:29Dave Ramsey:Right now I need to stack money. So I want you to get the car. I want you to get a little bit more money, maybe$6 ,000 or$7 ,000, and I want you to get this car sold. I want you to work all the overtime you can work at something. I don't care what. But you need$150 ,000 income in the next 12 months. And no, we don't need to go into business, and no, we don't need to do all this opportunity bull crap. You need to get your mess cleaned up, and then we'll talk about doing that. Okay. But you got about 12 months of just tearing the head off this thing, man. Because here's the thing. You sell the car, then$26 ,000 and get you a junker car to drive back and forth to work to run the heavy equipment.

51:06Dave Ramsey:And you don't need a car to date because you're not going on any dates. You're broke. Okay? And you're not going to do nothing. You're just going to work all the time for one year. And you'll be 100 % debt free. How would it feel to have no payments and be in control of your money? It would feel incredible. As soon as you do that, you're ready to talk about doing the plumbing gig. Okay. But you can't be doing two things at once. You need to focus on the cleanup here, and learning to tell your money what to do is the key to that. It cleans it up for you. So hang on, Christian will pick up, and we're going to get you signed up for financial peace.

51:44Dave Ramsey:But don't be chasing something that's going to get you out. The secret sauce for your success is not plumbing. The secret sauce for your success is the guy in your mirror. He's the stud, whether he's doing equipment operating or whether he's doing plumbing. But you go make some money and make your money behave and clean this mess up.

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53:43Dave Ramsey:Lisa is in Fort Collins, Colorado. Hi, Lisa. How are you? hi dave hi dave hey what's up so this is a situation i never thought i would be calling you guys on we've my husband and i have been a long-time follower and we're on baby step four five and six um this morning my husband got a phone call uh from somebody representing um a life insurance policy and our three sons inherited four hundred thousand dollars this morning And since it's not my, if it was our money, my husband and I would have a plan and we'd be paying off our mortgage. And, you know, we kind of know what to do with it, but we're not sure what to do with it when it's given to your children.

54:28Dave Ramsey:So they were named the beneficiary on someone's policy that passed away, obviously? Yes. Who? It was, it's a crazy, crazy blessing. It was, my husband and I rented our first home when we were married. We rented from a lady and we just became friends, but we were kind of friends at arm's length. And she originally said that she wanted to bless our boys with the house that we had rented for three years and that she wanted them to have it. And so we, you know, we talked to her and we promised to be good stewards of it and gave, you know, the boys information for her to be able to do that. But the call that my husband got this morning wasn't about the ownership of that house that we had rented.

55:16It was about life insurance cash payouts. Wow. How old are your boys? They told it about$400 ,000. How old are your boys? Yeah, they're 10, 7, and 4. Wow. And it's equally split amongst them? Well, there's actually one account that is all three of them, and then there's one account that is just two of them because the third one wasn't born yet. Wow.

55:42Dave Ramsey:Okay. I would just sit down with a SmartVestor Pro, and I would just open some mutual funds in their name. That simple. Okay. My husband wanted me to ask about a UTMA account. Yeah, that's it. That's going to be a Uniform Transfer to Minors Act, only there's no transfer here. It's just she's transferred the money to them, but these are minor accounts, and you're the custodian, meaning you're in charge of the money until they turn 18.

56:15Dave Ramsey:and just invest it in good mutual funds like you would for yourself, and then that's going to set them up beautifully. They're going to have a lot of money by the time they're in their 20s. Yeah. Then the thing that goes with that is the problem that this sets up is that this is their money at 18 years old. and so if they're doing drugs they're going to be well-financed drug users right that's a problem is there any way to move it into a trust nope not yours you don't have a choice i mean you could get sued if you do by the kid later because your job is to manage it for them as their parent and um if you use it personally or you somehow trap the money, that could really come back on you.

57:07Dave Ramsey:I wouldn't do that. But what it does do is it kind of highlights what happened with me and Sharon as well with our three was it highlighted that we didn't get an inheritance like this, but we were making a lot of money as the kids were growing in this business. And so it highlighted that this money is going to screw up their lives. Oh, wait, no, it's not. it's going to reveal that we were horrible parents or it's going to reveal that we did a good job parenting one of the two and so we started raising our children not to be good children but to be good adults and so i'm going to teach the little turk characters how to work i'm going to teach them how to save i'm going to teach them how to spend i'm going to teach them how to live on less than they make and then i'm going to gently start revealing the fact that there's some money there for them as they move into their teen years.

58:03Dave Ramsey:I would not just surprise them on their 18th birthday. They might lose their minds. And so I would gradually unfold how investing works, how investing works, and then go, and you've got some investments that have been done for you, and you can talk about it vaguely and then later on talk about it in more specifics to where it becomes just a part of the rhythm of their life. But do not allow them to be entitled brats that don't work. This is not that much money. Okay. What about, like, through their childhood, is there any time that you would use that money for expenses before they turn 18? Yeah, I mean, I might buy them a car with it.

58:47Dave Ramsey:What we did was we matched what they saved because we wanted them to have some skin in the game on the car. We had 401 Dave. So whatever they say, we'll match it. And I would just match it out of this account. I wouldn't match it out of your pocket. And you could use it for college. You can use it for college. So college is taken care of. But the sticky thing is it's technically their money at 18. And so they could choose not to spend it on college. Right. They can choose to do something stupid like going to student loan debt and keep the money in the account because some bonehead financial advisor told them to do that or something like that.

59:24Dave Ramsey:right so um instead of just paying for things and so but if you can make it through to where these become good adults that know how to work save spend wisely be generous that are grown up become good young adults then this money is going to be a massive blessing if it's if you don't then there it's going to be a it's going to reveal whatever shortage whatever shortfall is in their young character so it just it made me and Sharon get very very serious about growing kids with character not kids that are characters and so um you know and we just went at it and so the book that Rachel and I did together was her first bestseller was called smart money smart kids I'll send you a copy of it on how to raise smart money kids because you need to now and that's a little bit scary.

1:00:18That sounds a little scary. I could, yeah.

1:00:22Dave Ramsey:You know, and it's kind of like we had this money coming out of the Ramseys because we had bestselling books and we had all this stuff going on, you know, 25 years ago when Rachel was little and Denise and Daniel. And, you know, and on top of that, we had even worse because we had some notoriety, some in air quotes fame, right and so we had to also teach the kids you know no you can't use your dad's popularity with your teacher to get a grade you know right Rachel might have done that once right just once yeah do you know who I am yes do you not know who my father is I mean what the what kind of grotesque human being says something like that that's the most gross thing could ever come out of somebody's mouth and so we had to you're not allowed to play the dave card your your life will come to an end we will take you out you know you're not going to do that because you got you got to learn to do stuff on your own absolutely you know and um and besides that everybody that knows that they you know something about dave ramsey not not all of them like dave ramsey so you got that other problem right yeah yeah i mean uh so you might work against you you have to run into that too yeah So anyway, all of that to the side, we faced all of this head on.

1:01:38Dave Ramsey:But the good news was that it just made us more cognizant that we had to be very intentional about installing character. Yeah, because the fear isn't in the money or the dollar amount. It's in the person who has it. Because you run into people all the time who are almost afraid, afraid of success, afraid of having a lot of money. I mean, the way I grew up, it was like, oh, no, you don't want millions. that'll that'll wreck you you know well people when i'm with wealthy people and we're talking generosity or we're talking about other things one of the number one questions they ask me is how do i not ruin my kids with money and i'm like money's not gonna ruin your kids it just exposes that you did yeah yeah yep you know money doesn't do anything money just magnifies money does not make people evil it just magnate just it reveals whatever you are it doesn't make people generous it just reveals that someone is a generous person so whatever if you get a big old pile of money it just magnifies who you are.

1:02:33Dave Ramsey:And so that goes into this discussion because this isn't a lot of money today. It's a hundred something thousand a piece. But by the time those kids get there, it's going to be several hundred thousand. And it really doesn't even have to be a large sum of money, whatever you're thinking of as a large sum to magnify. I mean, if you start out broke, but if you learn to manage your money when you're broke, when you get a little bit of money, even if you just start making a hundred thousand dollars a year, you'll learn, you'll know how to manage your money. If you were a good manager when you were broke, you'll be an even better manager when you got something.

1:03:03Dave Ramsey:Exactly. Good stuff. Good stuff.

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1:05:06Dave Ramsey:If you want to work the Ramsey plan and you want to work the baby steps and go from debt to millionaire, become a baby steps millionaire, the fastest, most efficient way to do it is following the baby steps with a detailed monthly game plan called a budget. Every dollar does that, and it gives you personalized coaching and a personalized plan to fit your situation, and it's going to help you turn up the heat on this. You can download the Every Dollar budgeting app and do the whole Ramsey plan for free in the App Store or Google Play. Every dollar. Shelly is in Tampa. Hi, Shelly. How are you? Hi.

1:05:43Fine. Thank you so much. I'm super excited to talk to you, both of you.

1:05:47Dave Ramsey:Well, we're honored to talk to you. How can we help? Thank you. Thank you very much. Um, I'll try to get you all the info. So I'm wanting to move, but we bought a house around 2020. We got a great deal on it. So we have about 300 ,000 left on that mortgage. We have a HELOC plus credit card debt. Basically we could get it all paid for if we sell our house and list it for about 585 right now, which is where the market is in our neighborhood. and then that would obviously like i said clear our heloc all of our credit card debt so the next home we'd be buying would be we're going with 20 down but the problem is my husband's on board because our mortgage right now is two point i think two and a half and the new mortgage would obviously be higher like i think six and a half and he's not on board but of course i see it as being debt free which i feel like i'm going to sleep better at night with what's your household What's your total income?

1:06:48About$145 ,000 total.

1:06:50Dave Ramsey:And how much credit card debt do you have? I'm giving you-ish numbers, but I think about$40 ,000-ish. All right. And how much do you owe on the home equity loan? I think about the same. Okay. And how much do you owe on your car? How much do you owe on your cars? Free and clear. Two cars are paid for. What are they worth?

1:07:14I have no idea. but I would probably hand mine down to my 16 year old daughter. She's getting ready to get her license. So I probably hand it down to her. I've had it for eight, seven, eight years. If you didn't have 80 ,000 in debt, would you be talking about selling your house right now? And if so, why? Okay. That is a great question because right now we live in a really young family neighborhood. It's like fun and social, which was great when my daughter and her younger, but now they're older. I kind of want to pull my back. I kind of want more. I don't know. You know, if they're getting older, they can drive to their friend's house.

1:07:47And it's not as important to be in such a, you know, young neighborhood. So I do feel like I'm wanting something smaller, like ranch with a basement and not right now it's a two-story. So you're wanting to downsize? I would say downsize, but upsize in quality, yes. Like more custom home, but at the same time it would, we have to do a little bit of work in it, but not a ton. The house I'm particularly looking at, we just need, you know, a new paint and maybe bust the floor. Okay, so one more time. One more time.

1:08:19Dave Ramsey:Let's be very clear. If you did not have$40 ,000 or$80 ,000 in debt, would you be talking about selling this house today? I would say yes. Yes. You would want to sell it anyway? I would. Okay. Let me tell you my other concern, and I'm not saying this is true. It's just a concern I have. Okay. what you're talking about doing with this other house, maybe doing some work on the other house, I would be afraid. I'm not sure you know how you ended up in 80 ,000 of debt. And I would be concerned that you could sell this house, move to another house. And before you know it, you're taking out another HELOC and doing some projects on some credit cards and doing the like all over again.

1:09:05Why will it be different?

1:09:10Well, I do know how we kind of got in credit card debt about three years ago. My husband's in between jobs, and it happened to be right at Christmas time. Both of my girls are involved in travel sports, and it was just—

1:09:19Dave Ramsey:You spent$40 ,000 on Christmas and travel sports? No, you didn't. No, no, no. I feel like it's gone nowhere, though, because the interest rate is— I feel like we're getting nowhere fast. Here's where I'm going to stop. I'm going to stop you right there, because here's what I wanted to hear, and I'm going to tell you the difference. What I wanted you to say is, Jade, the reason it'll be different is because now we have savings. Now we understand that when things come up, we know how to pay cash for them. We've drawn a line in the sand. We just don't do debt anymore. That's what I was hoping for you to say.

1:09:52But instead you said, well, the reason it happened was because you gave me a long list of excuses. I hear me I love the idea of paying off debt I love the idea of getting the house that you want but from based off of what I've heard and I know this is a short call I'm not convinced that you wouldn't turn around and do the same behaviors again yeah so if I woke up in your shoes based

1:10:16Dave Ramsey:on that I agree with her by the way um if I woke up in her shoes I would uh side with your husband and say, let's get on a tight budget. We make$145 ,000 a year, and let's not blame travel, sports, or anything else. Let's get this debt paid off. And if you pay off the credit cards and cut them up and learn to live on a budget and learn to save money, then we'll talk about selling the house after the credit cards are gone. But right now, you're just moving from one thing to another thing to another thing. And the problem is we know that when people pay off debt in one fell swoop and they don't change their habits, the debt grows back.

1:10:54Yeah.

1:10:54Dave Ramsey:And there's nothing in this conversation that indicates any change in habits. Nothing. Nothing. Nothing in your verbiage, nothing in your sentence structure, nothing in the words you're using, all of it. It all says you're going to do it again. So I want you guys to prove to yourselves that you're going to live on way less than$145 ,000 and get these credit cards paid off, and you're going to cut them up and never use a credit card again no matter what happens. And don't talk to me about travel sports when your husband's laid off from work and financing that with a credit card. That's like dumb.

1:11:30Dave Ramsey:Don't do that. That's a dumb move right there. And that's the type of stuff you learn when you take the time to pay off your debt is you learn how to say no. Yeah, no way. No possible way we're doing that. So that's the process. Abby is in Atlanta. Hi, Abby. How are you? I'm good. How are you? Better than I deserve. What's up? Um, so me and my husband, we just completed, uh,$55 ,000 of student loan debt. Wow. Um, yes, we're very thankful for that. Um, and we're expecting baby number two in October. I am wanting, he's wanting to go on to baby step number three. I am wanting to put that money towards a car, um, a more reliable family car.

1:12:15Cause we currently have one. Okay. So you're pregnant right now. Yes, but maybe number two. It'll be two under two.

1:12:25Dave Ramsey:Okay. And so you have one car family. Well, kind of. His car, you cannot fit a car seat in at all. It was in his car for a couple years now. That's different than what you said earlier. Okay. Okay. I'm in one family car. So you have, he has a car. What is his car worth? Well, we have looked up anywhere like$1 ,000 to$3 ,000. Not very much. Gotcha. And what is the car you're driving? It doesn't hold two car seats? No, we travel a lot for his work, a lot as a family. I'm a stay-at-home mom, so we travel a lot with him. And right now, it's fantastic. He's going to take a newborn on the road to work?

1:13:08I mean, next summer. We travel during the summer with him. What type of work is it? Is he a pastor? What does he do? He coaches. Oh, okay. Okay.

1:13:20Dave Ramsey:So a year from now. Yes, sir. Okay, so we've got a year to talk about this. Yes, but my concern is I'm a very cautious person, so I like to have, okay. What are you driving right now? A paid-off Ford Escape. Both our cars are paid off. And how old is the Ford Escape? It's either 2018, we bought it from a family member, or 2019. What's it worth? uh not very uh probably like five it's very high mileage yeah and you only have a thousand dollars saved you haven't started saving towards the three to six months yet um so we have so let me put out the list of what we have so right now we have roughly saved about like 12 000 12 to 15 000 um well set your emergency fund at three months worth and above that save for a car and move up in car with cash.

1:14:19Dave Ramsey:Yeah, but that's what you would do after baby step three, but set your emergency fund at three months. Yeah, you probably do need to move up in car and pay cash for the move up above your three months of emergency fund.

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1:16:15Dave Ramsey:Today's question of the day is brought to you by Y-Refi. One financial mistake doesn't have to define the rest of your life. If you've fallen behind and gone into default on your private student loans, Y-Refi can help you explore low fixed rate refinancing options and affordable payment plans. Go to Y-Refi.com slash Ramsey. That's the letter Y-R-E-F-Y dot com slash Ramsey. Might not be in all states. All right. Today's question comes from Abigail in Washington, D.C. She says, I'm debt free thanks to your principals, but I get a lot of flack from family and friends about not having a credit card for emergencies.

1:16:53Would you recommend having two different debit accounts so that one can serve as an emergency fund? I really don't want to get a credit card, but at the same time, I get nervous about only having one avenue to access my funds. So I hear two questions here. The second one I'll save for later. First off, yeah, if you have an emergency fund, I would keep that in a separate account. I would put it in a high-yield savings account, not just a regular checking account. I'd have a regular checking account for your day-to-day, and then I would have a high-yield savings account for your emergency fund. And I'll just go a step further.

1:17:28I like to keep mine at a separate institution. I like an online one. I just like that. I like the degrees of separation. It helps for my personality type.

1:17:36Dave Ramsey:A lot of people are using Fairwinds Credit Union's bundle right now. There you go. For high yield savings. And you can put a debit card there. Yeah, I like that. It doesn't hurt to have two checking accounts with two debit cards, even with two banks. It doesn't hurt. Or both with one bank is fine. Because if you walk up and there's something wrong with your debit card, just like if there's something wrong with your credit card. Let me give you an example. With either card, they will shut them down if something triggers the algorithm and they think there's theft going on. They think there's fraud, like your number's gotten stolen, right?

1:18:12Dave Ramsey:They'll shut either one of them down. And you can get in a pinch if you only have one thing. Yes. So I have a debit card on my personal account and a debit card on my business account in my pocket. So if I get to a hotel to check in and there's something screwed up with one of the cards or something, I just use the other one. I've got that too, yeah. And I've actually got then a third one with a different bank on another personal account. So I've got three in my wallet. That's the only things in my wallet other than my driver's license and my handgun carry permit. That's the only plastic there is.

1:18:46Yeah. Okay. That's a good point. When I think about it, I have the same. I have the same. But for the purpose of which.

1:18:52Dave Ramsey:Because my experience has been that the algorithm will screw you up. I mean, like if we're traveling, sometimes the thing activates because it thinks that, you know. Something's wrong. Dave's not really in Mexico. Yeah. And somebody in Mexico stole his number, right? Yeah. And so it shuts it down. so not on we've even gotten where we now contact the local our banker and say we're going to such and such country so it doesn't activate it we put a travel warning on the account so the algorithm doesn't kick but in case it does having another one and it's not really for emergencies though it's really for the stupid card not working yeah that's and i'm trying to understand is she talking about it sounds like she's it sounds like she's trying to please her family and friends which you need to stop doing.

1:19:34Well, it's an emergency fund conversation and they're thinking, well, the only way you can be prepared for an emergency is if you have a credit card.

1:19:41Dave Ramsey:That's just, that's bull. That's the line of somebody that's going to be middle class their whole life. You're not lying. Yeah. Because what happens if you have, I mean, if you have 15 or $30 ,000 saved, what can really pop up that you can't pay cash for? Not much. I mean, even if your roof springs a leak, if you have 30 ,000, you're in there. Yeah. You don't need a credit card for emergencies, but you might need a second debit card to be able to access your money in case one of your debit cards doesn't work. Yeah, and I think that's fair. And then the second thing you need to do, you probably need to purchase some earplugs to wear while you're around these idiot friends and family.

1:20:18Dave Ramsey:That's right. Yeah. If you listen to broke people for your financial advice, you're going to be broke. I mean, it's like asking fat people about physical fitness. It's just don't do it. I mean, don't, you know, no, no, thank you. All right. Up comes Frank in Baltimore. Hey, Frank, what's up? Hi, Dave. I know there's very short time for salutations, but I love and appreciate what you've been doing for people for all these years. Thank you. And you provided an incredible service to people, and that's so cool. You single-handedly encouraged, inspired me, and showed me the path to buy my first house.

1:21:01Dave Ramsey:Wow, good for you. So that I'll be grateful until the day I die. Well, thank you. So I just wanted to make sure I said that. Thank you. And I'm embarrassed. I'm almost embarrassed to ask you this question, but I'm going to be retiring hopefully within three to six years from the police department. I'll keep my second job, which is port security. But the question is, this house, I have no one to leave it to. I lost my brother recently. I have no other family, no wife, no kids. So somebody said to me the other day, well, what are you doing? Just do a reverse mortgage on your home. Take those funds that you would pay for your house and put that in a high-yield savings.

1:21:57and let that grow until you retire, and then you'll have that income for your retirement. Yeah, whoever that is is telling you that doesn't know what they're talking about. Okay.

1:22:12Dave Ramsey:Because the interest rate on your reverse mortgage is higher than high-yield savings account. You'll lose money on this transaction. Oh. It won't work. So what they're talking about, Interest rates on reverse mortgages are ridiculously high. The fees are ridiculously high. And the foreclosure rate on homes with reverse mortgages is five-fold a regular mortgage, five times more often. So we never recommend a reverse mortgage. But it sounds like you've got enough money. Don't you have a pile of money? Well, I didn't take savings seriously until I was mid - Well, how much do you have? What's your nest egg?

1:22:58So, you're going to be very saddened by this. I have a deferred comp with about$40 ,000 in it. I have a pension.

1:23:09Dave Ramsey:Are you getting a pension from Port Authority or the police department? Yeah, police department. The pension will be about$1 ,600,$1 ,800 a month. I won't be getting a full pension. And then Social Security, if I were to take it today, would be somewhere around$2 ,500. If I wait for the full, when I'm$67, it would be about$3 ,200. And I have some jewelry and watches that are worth probably$40 ,000. and my debt is the house,$130 on the house, and I owe$23.5 on my truck, and credit card debt is around$3 ,700. Well, you said you've got six years before you retire, right? So you've got some time to get this mess cleaned up.

1:24:04Dave Ramsey:Yeah, you need to get the truck paid off, get the credit cards all paid off, so that you can live on the pension and the Social Security, and that's going to make a lot more sense. And you owe enough on the house. You can only take out a reverse mortgage up to 65 % of the value. And so you already owe$130 on it, so you're not going to get much out of it if you did do it. You bet you did. So I think someone's trying to talk about something in a vague sense that they heard on the Internet, and it doesn't really work. And so I think you need to go back to the baby steps and just work those straight through like Jade was suggesting.

1:24:39Yeah, I agree. You've got time. You've got six years. If you put pedal to the metal, we didn't get how much you earned. But if you put pedal to the metal, you get out of this truck and get it paid off. You pay off the$30 ,000 in credit card. And all the while, once you're done, if you can do that quickly, say in the next year, 18 months, then you're investing for the next five years.

1:24:57Dave Ramsey:Yeah. And investing in five years and being serious about it, following the steps, you can build up a nice nest egg. and then as far as who to leave the house to. We've actually had two calls today with semi-distant strangers leaving people substantial money. Yeah. The lady that left the money to the life insurance to the little boys and the guy, the 80-year-old's giving him a strip mall. Yeah. And so it may be that you just look around for some young couple that you want to be a blessing to when you pass. That's sweet. Or something like that. and give yourself some meaning for having done all of this.

1:25:37Dave Ramsey:You sound like a great person. So I'd probably be trying to figure out a generosity play in this.

1:26:13Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Rachel is in Cleveland, Ohio. Hi, Rachel. How are you? Good. How are you? Better than I deserve. What's up? So I am 33 years old. I've been married for a year and we just actually had our first son almost three months ago. He'll be three months on Thursday. But I've always had a dream pretty much since I was like in my early 20s. I've always been like super obsessed with like houses and home decor and design. I've always had a dream of like flipping a house, but it's always felt like I know it's bigger than just like going out and buying a house and flipping it and then selling it and it being super easy.

1:26:56so um just kind of been trying to figure out like how do I go about doing this and whether or not it's like one of those crazy dreams you just need to kind of forget about or if it's something to go after my husband's kind of like if this is something you want to do then like let's see a plan like get something on paper of how like financially we're going to do this and like let's go from there so I'm kind of like curious just from your perspective like any tips because I feel like if I don't do it now I'm probably will just like never do it because we want more kids and whatnot.

1:27:27Dave Ramsey:That's a dumb reason to do it. Like, I'll never do it if I don't do it now. That tells me you're getting ready to do something dumb. Don't do something dumb, okay? I want you to flip a house, but I don't want you to do it in some crazy manner because you feel like some clock is ticking that doesn't exist. Yeah, your life is not over just because you have kids. You have less time, but your life is not over. Yeah, and it's not like that. I mean, I said that I want to do it before I'm 40. Well, I don't care. If I had to take a time to do it. I want to do it when it's smart to do it. I love the idea of flipping houses, okay?

1:28:03Dave Ramsey:I used to do it for a living, and I made really good money doing it, and I went completely bankrupt doing it because I borrowed too much money. So I've done about 2 ,000 real estate transactions in my life, So I actually do know how to do it. And I would suggest that you do save up your money and do a flip. And I can give you some guidance on how to do that, okay? But don't use any of the things that you just outlined as reasons for doing it. It just sounds like a fun idea. I want to save up some money, and I want to do it when I can do it with wisdom. Now, number one, you have to pay cash. And that's the thing.

1:28:45We have a lot. We have really good savings. We both do really well. What is really good savings? Well, I think it's, I guess I should say I think it's good. But we have$160 ,000 in savings. You have how much? And then we both. $160 ,000. $160 ,000. Okay, all right.

1:28:59Dave Ramsey:And so if you picked out a house to buy for$100 ,000 to flip and you pay cash for it, that's step one, okay? Mm-hmm. And you leave the rest of your savings alone. So set yourself a budget with that. The second thing then is the money on a flip is nothing is done like it's done on television. The stuff you see on television, the flip fixes house up crap and this little couple's doing a house and they do a renovation and that's a bunch of crap. Okay? That's not – there is no reality in reality TV. All right? So the way you really make money on a deal is you're going to buy the house at 70, maybe 75 % of value minus repairs.

1:29:50Dave Ramsey:If you don't, you're going to lose money on it. Yeah. Because when you put a house for sale at 100 % of value, someone will make you an offer at 95 % of value that you're going to want to take. and you're going to pay a real estate commission. You're going to pay some closing costs and you're going to walk out of there with about 88 % of fair market value at the closing. And if you have 86 % of value in it, you didn't make any money on the flip. So you need to be down in the 70s, probably around 70 % minus repairs. So let's just use$100 ,000 house as an example. That's hard to find, but makes the math easy.

1:30:37Dave Ramsey:So that means if you bought a$100 ,000 house in value, you're going to buy it for$70 ,000. If it needs$10 ,000 in repairs, you're going to buy it for$60 ,000. Or you're not going to buy it. I know. That almost seems like... Welcome to reality. I know. We bought our first house last year, and so we actually have been able to save up this$160 ,000 a year because we did use like a big chunk of our savings at that time to buy our house. Okay, if you want to do a flip as a romance move, I can't help you. If you want to do a flip as a business, I just gave you the formula. What about the work? Are you thinking that you're doing the work or are you thinking about hiring someone to do the work?

1:31:21See, I would want to hire someone. And I'm actually meeting with a gal who she actually flipped our house. Our house was a flip, a remodel. And so I'm meeting with her tomorrow to kind of also pick her brain because, yeah, it's almost like it feels like we would need more money, too. Because especially, like you said, like finding a house with$100 ,000 is very...

1:31:43Dave Ramsey:I think you buy a nice little$150 ,000 house and you buy it for$100 ,000 and you put$100 ,000 and you do a little bit of work to it and you flip it and you make$10 ,000 or$15 ,000,$20 ,000 on it. And that means you did a good deal. You make it sound so easy, and I think what I get so nervous in my husband is that's our savings for our kids. Good. I want you to be nervous. Nervous is good. That's a lot of money. The first time you drive a$10 ,000 car, it's good to be nervous if you don't know how to drive a car because you'll wreck it otherwise. It's good. I know, and that's why I haven't done it forever.

1:32:19It's always felt scary.

1:32:21Dave Ramsey:The hardest part of the whole thing, Rachel, is buying the deal. You're going to look at 50 to 100 deals before you actually buy one. You're going to get sick of looking at flat houses. But if you pay too much, you're going to take your money and turn it into less money, not more money. Yeah. I think I need to also make sure I'm looking at the, like you were saying, like the cost of what I should be looking at. I definitely, I mean, I stalk realtor.com for fun every day, but I definitely don't look at$150 ,000 houses. So I think I need to. It's all you got. You don't have that much money. I know.

1:33:04And probably need to be looking at them in person, no?

1:33:07Dave Ramsey:Yeah. Yeah. You can stalk them and then you go look. And then if you see one that's a possibility, you go look at it in person. and what you want to buy is not something that has structural damage or some kind of historic rehab. You want something that needs just carpet and paint. Right. It needs some new bushes. And then finding good contractors so you don't get screwed. It's just, yeah. The less work you do, the higher the probability you're going to make money. So what you're saying, Dave. It's like taking the first step. Yeah, you've got to go find a deal. Because I want to help her out because the money is not made on making tons and tons of changes to the house.

1:33:43The money's made on buying it.

1:33:45Dave Ramsey:At a deal. At a deal. And then the rest of it. All money in real estate is made at the buy. Yeah. So she's not making structural changes. She's not gutting stuff. She's doing the bare minimum to get in and get out. Anybody that does any kind of thing on a television show, whatever they did, do the opposite. Yes. Because that's bull crap. It's like, I'm going to paint it. I'm going to change out the carpet. I want to be so I want this to be so freaking boring yeah it's there's no like I got to be a decorator no don't don't be doing that crap okay run a coat of paint through it clean it up change out the dishwasher mow the grass tear out the bushes you know put thing on the seal the driveway put the thing on the market make some money flipping a house is different than being an interior designer it's and it's different than being on a reality tv show

1:35:01Dave Ramsey:All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey Trusted Agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey Trusted Agent near you at RamseySolutions.com slash agent. That's RamseySolutions.com slash agent.

1:35:44Dave Ramsey:Speaking of real estate, if you put your house on the market with a real estate agent that doesn't know what they're doing, or you buy a home with a real estate agent that doesn't know what they're doing because they're brand new, or they don't sell but two houses a year, you could lose tens of thousands of dollars. we had a call like last week week before last uh a guy called in his mother-in-law sold her house for 330 000 and the appraisal came back at 375 and i'm like uh he's like what do we do and i'm like i think you sold your house too cheap i signed a contract i mean you have a contract you get sued if you violate a contract and so uh why is that well the real estate agent priced it wrong Wow.

1:36:30Dave Ramsey:Didn't know what they were doing. So you want a real estate agent that's high octane, high protein, that is an actual professional that moves a lot of houses. They've done a lot of transactions. They know what they're doing. They're not going to make a tens of thousands of dollars mistake. We vet the real estate agents that we endorse very carefully to be high octane, high protein that follow the Ramsey way of doing things. and they're called Ramsey Trusted Agents. If you want to find a Ramsey Trusted Agent, you can do that for free at RamseySolutions.com slash agent or click the link in the description if you're listening on the podcast or on YouTube.

1:37:11Dave Ramsey:Roy is in San Antonio. Hi, Roy. How are you? Hey, Dave. What's up? I just had a quick question. And so I've known about you for a while. I got out of debt myself. A lot of my friends know me. I talk about getting out of debt, not doing credit cards, not taking loans a lot. I started dating a woman about six months ago. She's seen my lifestyle, and slowly I've gotten her on board. She shared with me how much debt she has. and when she looks at my life, I am able to live a little bit better and she wants to live that same kind of life. So my question is, how do I approach the gazelle intensity to her without scaring her off?

1:38:03I think that's the only thing that she did. She never saw that part of me. A lot of people didn't where, you know, I wasn't eating out and I was working my butt off and, you know, everything that you teach in that sense. So you want to explain to her that the only way for her to get what you have is for her to be gazelle intense. But you think that if you tell her that. Well, let's start by explaining gazelle intensity, because I feel like that's a deep cut if you're listening for the first time. Dave, that's your. Yeah, it just comes from Proverbs, and it says,

1:38:44Dave Ramsey:if you found yourself in debt, to deliver yourself like the gazelle from the hand of the hunter. And the primary predator of the gazelle is the cheetah, which is the fastest mammal on dry land, zero to 68 miles an hour in four leaps. and yet the cheetah does not kill the gazelle but one in 19 chases because the gazelle is trying to stay alive and the cheetah is just trying to have lunch. And so even though the gazelle is not faster, it has a desire to stay alive and running for its life. And that's gazelle intensity. That's where we use that phrase. And so, you know, if you're going to run, if you're going to get out of debt, you have to run for your life.

1:39:32Dave Ramsey:and that's what Roy did, and that's what he's trying to get her to do. Now, the reason Roy did it, the reason I did it, the reason you and Sam did it, the reason we ran with great intensity, an intensity that the culture does not understand, they think you've lost your mind. No, they don't understand it. It is because we believed it would work, and we believed nothing else would work. Yeah, we knew what was at stake. Yeah. And so we didn't want to be lunch. We wanted to avoid death. And so we've been screwed by the banks. We've been screwed by the car companies. We've been screwed by the credit cards.

1:40:13Dave Ramsey:We've been screwed by the student loans. And we're like, we don't want to be screwed anymore. We're going to get away from this system that is broken and that is set out to take down the consumer. And so we ran like our hair was on fire to get away from it and sacrifice deeply because we wanted to be out of debt so badly so that we could live the good life that Roy is living. So I guess the way you describe it to her is you say, if you really want out, if you really want to go from where you are to the good life, I can show you how. But the sad news is it's going to be painful. And you can't manufacture the intensity for her, by the way.

1:40:57I'm just letting you know. There's something that has to be inside of her. You can tell her all about it, but for everybody, there's a catalyst. There's a moment that happens. You can call it an I've had it moment. There's that moment that you say, and I'm sure you said it too, Roy, never again. And my guess is she's probably going to have to have that moment for herself. And that's when it's going to click in.

1:41:23Dave Ramsey:But it can be manufactured. You can just look at your situation and go, I don't want this. I want that. And so I'm going to be willing to pay the price. That's an I've had it moment. It doesn't have to be bankruptcy. It doesn't have to be huge amounts of debt. It just has to be I'm sick and tired of being sick and tired. So, I mean, you can hire a personal trainer, and the only thing they're going to show you is how to be in pain.

1:41:50Yeah.

1:41:51Dave Ramsey:You know? they're not going to show you anything else because there's no other methodology that works 100 of muscle growth is happened by fibers being torn down called pain lactic acid and fiber tear that's where muscle growth comes from and so you just don't get muscle without lactic acid and fiber and that's painful and sweaty and guess what getting out of debt is painful and sweaty but it builds muscles it builds financial muscles and so you know i just talked to her about that And if she's not mature enough to have a conversation about, you know, a personal trainer is not a pleasant thing, but the result is pleasant, if the process is unpleasant to get to the pleasant result, then this is not a woman.

1:42:35Dave Ramsey:This is a little girl. Well, she's had her moment probably about two months ago. She lost her job for four days, and she ended up getting it back, but that four days was brutal for her. and I told her that, you know, normally we were supposed to have a three - to six-month emergency fund. And I was like, girl, like, it was four days and you thought that you were going to be homeless. And I think that that was her point where she realized that she needed a change. And I've always told her, like, imagine your life without a car payment and credit cards. Yeah, well, what did she say then? She says that she thinks about it nearly every night.

1:43:13And I was like, I used to be like that, too. I remember those days. And now I live those days, and it's great. I can show you how. I can show you how, but it's going to be unpleasant. Uh-huh.

1:43:25Dave Ramsey:I mean, because it is unpleasant, isn't it? Uh-huh. Yeah, no, it was. Yeah. But the only thing is it's worth it. It is worth it. That's the only thing. It's worth it. To be able to sit down on the stage and scream, I'm dead free, it's an unpleasant process to get there. But no one has ever told me they wish they didn't do it once they win. Yeah. And by the way, a lot of people can learn from what your girlfriend is going through. If you're listening, all you have to do is stop. And I remember in the Total Money Makeover, I had the workbook edition. It had you go through, there's pages and pages of questions and workbook you filled in.

1:44:05But one of the questions that I remember was a catalyst for Sam and I is what basically what would happen if you didn't get your next check? And that's the question that if you ask yourself, what happens if I don't get my check on the 15th? What happens if I don't get my check on the 30th? That right there will reveal a lot. Would you have to use a credit card? Would you have to borrow money from friends or family? Would you be late on rent or your mortgage?

1:44:29Dave Ramsey:He said homeless. He said she was worried about being homeless. Yes. Four days. And that's the truth for so many Americans. You're walking along the edge of the cliff. Get back from the edge. And the way you get back from the edge is unpleasant, but it's worth it. So I think that's how you talk to her about it is like a grown-up. It's like if I sit down with a personal trainer and they go, this is going to be easy. There's no pain involved. I have a personal trainer that's a liar. Yeah, give me my money back. Yeah, because I know it's not going to work. You go into PT and they go, you're going to feel no pain in physical therapy after this operation.

1:45:02Dave Ramsey:all I'm going to have scar tissue then because you're not going to stretch where we need to stretch. Right.

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1:46:31Dave Ramsey:Cora is in Atlanta. Hi, Cora. Welcome to the Ramsey Show. Hi, Mr. Dave. Thank you so much. Sure. Thank you. How can we help? Okay. So me and my husband are 23 years old, and we make about$70 ,000 a year. And we're currently on babysit number two. We've paid off$12 ,000 in debt, and we have about 10 more to go. And we're supposed to pay it off by, like, January, I think according to our EveryDollar app, like, January, not this year, but next year. 10 ,000? Yes,$10 ,000, yes. Why would it take 18 months to pay off$10 ,000? I guess because we're not hitting it hard enough. I guess. How much have you paid off so far?

1:47:24Dave Ramsey:$10 ,000 so far, right? We paid$12 ,000. And how long did that take you? That took us about 13 months, but we just also had a baby. So we kind of went stork road. So y 'all don't make a lot of money. No, we do not. What do you make? We make about$70 ,000 a year. Oh, you told me that. That's right. We're comfortable. You told me that. I'm sorry. Huh. I would have thought you'd have paid off$10 ,000 in like six months making$70 ,000. Yeah, especially if you pick up extra work, especially your husband. Well, we originally were not in debt when we got married, but we had some medical debt hit. so we like had that happen and then we got pregnant so it's just kind of been like a little bit of one thing after the other but we're trying to hit it as far as we can yeah okay what's your question um i was just wondering um since this past year you know it's paying off debt and everything but i think i know the answer now but we i do have some inheritance money that has just been like left alone for some years now and I just wanted to know is it smart to maybe pay off the rest of our debt so we can move to baby step number three how much do you have an inheritance money 50 ,000 write a check today and be debt free oh I just didn't want to rush through it and like not learn the learning lesson oh I'm not worried about that write a check today and be debt free and then learn your lesson.

1:48:58Okay.

1:48:59Dave Ramsey:But don't ever go back in debt again. Oh, no. So who left you the$50 ,000? Well, my grandma left me$15 ,000, and then I put it in investments. Okay. So here's the way I would think about it if I were you. Okay. If you ever borrow money again, you are dishonoring your grandmother. I know. Mm-hmm. Yeah. So you have to be on a budget. You have to build your emergency fund. And no whining and no excuses and no reasons for going into debt. Yes, sir. We needed a car. Wah. You save up and pay for it. We wanted to go on vacation. Wah. I've always dreamed of doing wah. No. No. Okay? Yeah. That's dishonoring to your grandmother.

1:49:49Dave Ramsey:You're going to pay cash for it like a grown-up person that has a baby. like a huge adult okay and if you can't commit to that emotionally both you and your husband look at each other in the eye and pinky swear and spit shake we cut up all the credit cards we never we don't have any credit borrow money again for anything if you're willing to say that then i would write a check today out of the inheritance and be debt free oh my goodness Well, this is so exciting. Yeah, we don't, all of our debt is medical debt. So we do not do that. We do not want to go into debt. Okay, so now you have an emergency fund for medical debt.

1:50:31Yeah, let's start saving that up because if it was from the baby, we want to make sure that we don't get ourselves in that situation again coming up.

1:50:39Dave Ramsey:Ever. We have an emergency fund for medical. We have a budget. We live on less than we make. We save up and pay for Christmas and cars. Yes. We save up our trips. We don't go into debt. We don't go into debt. We have money for surprises called emergencies. We don't go into debt. If you get this drilled into your head, then you can be very wealthy someday because you're starting young at 23. That's the wisdom of this. Roman's in San Diego. Hi, Roman. How are you? Hey, Dave. How are you? Better than I deserve. What's up? First of all, it's really nice to be talking to you. I've been listening to you for maybe since I was 16.

1:51:20I'm 22 years old right now. Wow. My question is less about myself, and it's more about how I can help my parents and give back to them. They put me through college. They bought me my first car, all that good stuff. Same with the rest of my siblings. And I was recently made aware that we actually have about, or I guess they actually have about$40 ,000 worth of deferred payments on the mortgage for the house that I grew up in. Why? And I guess, I think they had some sort of modification back in the, I honestly don't know the details about it, but it was decades ago. And I just want to help them with that.

1:52:02How?

1:52:02Dave Ramsey:You're 22. I think I want to play, like, I want to act maybe as like a financial coach, maybe like walk them through how they can take care of it. What I don't want them to do is to have to refinance because it's due in 10 years. So my initial thought process was to open a high-yield savings account. But then I'm thinking, you know, it's 10 years. Why are they going to listen to a 22-year-old son? Did they ask? No, but I just want to take the initiative to be able to help them with something. How do you find out about it? I don't remember the exact details, but it came across maybe last year. Okay.

1:52:45Dave Ramsey:Well, number one, Roman, I appreciate your heart, and thank you for being a young man who cares about his parents. It's very unusual for parents to be willing to take the advice of their 22-year-old son on financial matters. It's called the powdered butt syndrome. Once someone has powdered your butt, they don't want your advice on money or sex. And that's generally it. So until they get very old and you become very rich and you're 55 and they're 80 and they're broke and you're a multimillionaire, then they might take your advice. But probably not today. If they would take your advice, what I would tell them to do is the opposite of what you were thinking.

1:53:27Dave Ramsey:and that is I would go refinance that mortgage right now. If their credit is good today and they're able to refinance today, even if it's a higher interest rate, I would refinance now instead of waiting on this balloon to come bearing down on them like a train through a tunnel. Those things come and they come at you fast. And then all of a sudden it's the day that your dad loses his job is the day he thought he was going to refinance or do whatever on his payments. So if I have a bunch of deferred payments on some kind of a modification thing from 2008 or whatever it was, and that stuff's laying around hovering like a monster in the closet, I'm going to put him out of his misery and go get a 15-year fixed-rate loan at about 5.5 % right now, 5.75%, and I'm going to get rid of the balloon, period.

1:54:22Dave Ramsey:That's simple. And then if you want to work the baby steps, you can work towards getting your house paid off. And that's what they should do. But I don't know. It'll be a very unusual day that they're going to do what you tell them to do. Yeah, especially if you're not a homeowner. Then it's just everything that you say to them is just going to sound like a theory that you heard somewhere versus something you really know what you're talking about. I do appreciate your caring for them, but I don't think you're going to be able to coach them. I'll be shocked if you can. You know, it's, you know, not many people in our families come to us for financial advice.

1:55:07Right. Yeah. And the hard part is when you know you can help, you just have to kind of be quiet and just let it play out.

1:55:16Dave Ramsey:Yep. Yep. They're not going to do it. But if they're smart, if they call me on the radio, what I would, I mean, on the podcast, I would, the radio, either one, I would tell them, refinance it right now. Oh, the interest rate's higher. I don't care. I get rid of this. Represents extreme risk. And stress. Oh, my goodness, to know that that's going to be due. It's a monster in the closet. Yes. I'm afraid to open the closet.

1:55:47Thank you.

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1:57:14Dave Ramsey:Our scripture of the day, Proverbs 15, 22, plans fail for lack of counsel, but with many advisors, they succeed. Henry Ford said, most people get ahead during the time that others waste. Wow. That's a good one. Used to work with a guy. He said, work while other people sleep. Yeah. Pray while other people sleep. That's a good word. Read while other people sleep. Yeah. Or while other people watch TV. Oh, throw a brick through your TV. What does Ziegler say? He said rich people have big libraries, poor people have big TVs. That's good. I have both. What does that say? I actually do, too. So there you go.

1:58:00Dave Ramsey:All right. Mary is in San Antonio, Texas. Hi, Mary. How are you? Hi. I'm doing well. Thank you for taking my call. Sure. What's up? Hey, I just have a question. And I think I just wanted a second and third opinion about the possibility of me taking a different job with a different company. I do. My line of work is something that I've heard you on the show say negative things about. But I am a property manager. No, no, no. Not that bad. Okay. I'm a property manager for homeowners associations. And I currently work for a company. And I have a total of nine communities in my portfolio. And a few months ago, I put my, you know, updated resume up on, you know, a website and an acquisitions team member from a different company contacted me late last week.

1:58:54And I've had a total of two interviews with them, and I'm going to have a third tomorrow. And they are really excited about my experience and what I've done to educate myself and get certain designations in my line of work. but I just, you know, it's going to be a significant increase for myself. I am on baby step number two. I have stopped investing in my Roth IRA in order to pay off debt. I had a total of$58 ,000 of consumer debt. So what do you make today? I make a little, about$67 ,000. What would you be making at the new gig? The new gig would be between$80 ,000 to$85 ,000. and that's what the team has acquisitions.

1:59:40Dave Ramsey:And you'd be doing the same type of work? Yes, but I think it'd be easier. So why would you not take it? What's the downside? The downside is I currently work from home and there's a lot more flexibility. But again, I am divorced now for about four years. That's why I have the debt. And I'm an empty nester. My two children are grown, and I would have the time and the ability to do that. I don't have to take care of anyone anymore besides myself. So what's the problem with going to the office? So where's the issue? No problem with going to the office? Is it just nervousness? No, no, not at all.

2:00:19Actually, I'm kind of looking forward to the possibility of talking to other adult humans again. So this is just a change. You're just processing a change. I'm processing the change, the flexibility. I get to help my mom out by taking her to doctor's appointments here and there. You know, just that. But I've worked hard to educate myself and be better at what I do. And I just think that this new company—

2:00:44Dave Ramsey:Most places, like you're talking about going to work for, have a certain amount of flexibility for executives. The leadership team at Ramsey, if they want to take an hour and go take their mom to a doctor, we don't have a big deal about that. Yeah, I agree. I think that tomorrow with my last interview that I'm going to talk to them about those types of things. I'm going to be completely open and honest since they're the ones who contacted me, right? I wasn't out there looking for a job. But since this opportunity came up, I thought, gosh, the difference in the income would help me. I'm on track to pay off all my debt by this year in December.

2:01:22Dave Ramsey:Let's pretend you were debt-free and had a million dollars in the bank. You still should look at this deal. Oh, I would. Yeah, I definitely would. So is the only downside you have to take your mom to the doctor here and there? Is that the only thing that you can? Just the flexibility that the current employer currently offers me. That doesn't mean that the next employer wouldn't do that. But another thing that I like about what they've spoken to me about is that they like to promote from within, and I'm ready for that. But the current company that I'm with doesn't see I've been with them for four years.

2:02:00I think you've made your choice. You haven't made any case for staying. You're right. You haven't made any case for staying. Thank you.

2:02:06Dave Ramsey:There's no reason to stay there. You're right. If they offer you a good job, unless you sense some kind of a toxic environment or something like that, would be the only reason you wouldn't take it. You don't want to go from this. But honestly, people that work in an office with other people produce a lot more and have more opportunities for promotion than someone that's working from home. Yeah. It's one of the huge downsides, the unintended consequences of working from home. The people that work from home don't get promoted nearly as often. And so, yeah, I think you ought to look at it. It sounds like it.

2:02:41Dave Ramsey:And by the way, I'm not against property managers and HOA professional managers. I'm against Barney Fife, who lives in the neighborhood and hasn't got a life, and he runs around with his one bullet trying to bother everybody in the neighborhood. Have you been to my neighborhood? About every bush that he doesn't like or something. That's the guy that drives me nuts, who needs to get a life and has no power anywhere else in his life, including in his own home. So he has to go out and exert himself through the neighborhood. These are the people I don't care for. All right. Chris is in Charlotte, North Carolina.

2:03:17Dave Ramsey:Hi, Chris. What's up? Hey, Dave. Big fan of the show. Just want to call in. My scenario is probably a little different than most, but I'm 52 years old. I grew up very poor. I had tremendous success. I just had my best friend at 55, passed away of a heart attack. Oh, no. I'm sorry. And I'm in that position where I'm like, with what I have, do I retire now? Or do I make a play for something else? Because I'm OCD. I can't sit around the house. I have to be doing something nonstop. And it's like, how much money do I need to live the life that I want to live when I'm done? I want to take X amount of vacations with my wife because she stayed at home for 30 years.

2:04:03Dave Ramsey:I work 75 hours a week. And so just want to kind of see what the next play is for me and get your thoughts about timing for me, I guess. What's the size of your current nest egg net worth? I would say my company and my house and my land, probably around$10 million. Okay. And did you say you're 54? 52. 52. 52. Yeah. And so you don't, I mean, can you begin to move away from the company? Do you want an exit strategy on that? Is that what you want? I mean, I'm obviously still making good money with the company, and I have people that have been with me for 20 years. But it's like I spend a lot of, you know, most of my daughters obviously are graduated college now.

2:04:51Dave Ramsey:What's the end game with your company when you're 80? Where's this company? I mean, it still will be going. I mean, I'm a partner in a car dealership. Okay, so other partners will be running it or their kids or your kids or own it or whatever? No, it's just me and one other partner, correct. Okay, so what happens to your share when you're 80? What's your exit strategy? Does it go to heirs or does it sell out to the partner? Yeah, I have a living trust. I have it all set up and it's an S-Corp and it's set up for my percentage in the trust. Okay, all right. So the only thing I could do other than that is to say as a partner, sit down, talk to your partners and say, we've both done very well.

2:05:36Dave Ramsey:Can we restructure the operations of this to give us both more freedom? But you don't sound like you're asking for an exit, a complete exit. You just want some more flexibility back to our last caller. But, yeah, I mean, I want to take six weeks off and travel with my wife. You've earned it. And I want to build a leadership team to do that. And that's kind of the stage I'm at. I'm 65. Sharon and I take three-week trips and four-week trips and that kind of thing, or just leave for that period of time, whatever. But Ramsey is set up to run where I don't have to be in every part of the day-to-day anymore, and the operations are set up.

2:06:16Dave Ramsey:And certainly the on-air portion, Jade and Rachel, they do a better job than I do. So that's where you are. I think you just reset your ops on that. I don't hear anything here that's painful that you have to exit from. I like it. Good plan. Well done, sir. Very well done. That puts us out of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.