Your Goals Need Numbers, Not Wishes

24:13Dave Ramsey:If your investment portfolio makes 10 % a year, you make$700 ,000 a year.

24:21Okay.

24:21Dave Ramsey:Right? So I should be able to afford a horse, right? Yeah. Yeah. But just remember, just remember, though, when it comes to horses, it's like a lot of things. It's like my cars and my guns and some other things. The first one is the gateway drug. Oh, yes. I've had horses. This is going to be a problem. It's going to get worse. Yes. It's going to get worse. Yeah, they're like potato chips. I'm a recent widow, and so my husband always worked and had a big job, and so we were able to afford horses, and it was fine because he had an income. But now I don't have. You have a$700 ,000 annual income. Right.

24:57Right. Other than that, other than that, I don't have a job. What's your house situation, Caroline? Do you own your house? Are you still paying on the mortgage? I still have a$140 ,000 mortgage. Why? And it takes me about, because that's what my husband did. My recently departed husband, we had a very low, less than 2 % interest rate. So he was just like, let's just pay it off, you know, over 15 years, that kind of thing. So I might pay off my house.

25:29Dave Ramsey:I would pay off your house, and because you want the horse, you should buy the horse. You can afford it. I just want you to – I buy some things that are absolutely – everyone buys some things that are absolutely ridiculous, meaning that we just take the money and burn it in the middle of the floor. It's just a – it's ridiculous consumption, right? We all do. And the only question is, does it harm your life when you do that? Okay. That's the question. And this does not harm your life. $150 ,000,$75 ,000 for the horse, and the next two years of upkeep gets you to$150 ,000 real quick, right? Burning$150 ,000 in your fireplace tonight, your life would not change one ounce.

26:14Okay. And$45 ,000 a year for the upkeep ongoing doesn't change. $700 ,000 a year coming in.

26:22Dave Ramsey:I think in the future I would want my financial advisor to phrase differently so I don't fire him. He should say, you can afford to do this, but you need to understand that you are completely burning this money in the middle of the floor. If you understand that and you feel like you're going to be okay, mathematically you're going to be okay. But you can't do this ten times. You can do it once. We don't go to$1.5 million. We're not going to$1.5 million on this. Yeah, I want to keep it going a year over. You know what I mean? I want to keep it. No, I'm saying. Every probably four to six years, I'm going to buy another horse and retire the other one.

27:05And the retire horse is$15 million.

27:06Dave Ramsey:Well, if you live on considerably less than$700 ,000 and you end up with$14 million and you want to buy another horse then, I think you'll be fine. Okay. Yeah, but just some of my portfolio is in, you know, IRAs, like about half of it's in an IRA that I can't really touch. Yeah, but it's growing at that rate is my point. You are not going backward. You're going forward. Yeah. And that's seven years. So you can get to it. So, yeah. And seven years from now, it will have doubled if it's continuing at 10 percent or greater. And so your seven will be 14, seven years from now, if you're earning 10 or greater.

27:45Dave Ramsey:And you have been. So you've got a good portfolio. And so the question is, if you booked a$200 ,000 Four Seasons or Ritz private jet around the world, which is actually available for about that, it would be the same thing. I'm going to travel around the world for the next six months by private jet, and I'm going to book it through Four Seasons or Ritz. They both have it, okay? And it'd be the same exact thing. You're just burning the money. Yeah, but that's triple what she's paying for the trip. No, she's$200 ,000, I said, and she's paying$150 ,000. But that's over, yeah. I mean, she's going to pay$75 ,000, and then she's got two years of upkeep.

28:28Dave Ramsey:She's going to have$150 ,000,$200 ,000 in this horse in a heartbeat. Yeah, and ongoing. The upkeep is$45 ,000. Yeah, yeah, yeah. All that's safe. But if you have$7 million and you want to go on a$200 ,000 trip, you can do it. You can do that, yes, yes. That's my point. Yep. Now, would your financial advisor agree with that? Obviously, he wouldn't. You know, but he doesn't get a vote on that stuff. You know, he just is there to help me understand the math. And, you know, let's couch this decision looking at what it does to the arithmetic. Does this harm my life? I wonder why he would tell her. well i'll give you let's give him the benefit of the doubt for a second yeah okay i'll be nice he might be her husband just passed away he's been coaching both of them for years he might be afraid she's buying this out of grief and he might be trying to protect her as a widow for a large purchase from making a large purchase um while you know and uh because maybe she if her husband was here maybe they wouldn't have done this purchase or whatever he may be kind of standing in there trying to love her well right that may be what it is but yeah but um but that's a different thing than to say you can't afford it and you need your portfolio to grow that that sounds parental and you're not my parent you're my financial advisor yeah yeah and so um you don't folks the relationship you always want with your financial advisor is not parental it's teacher so it's like i worry about you if you're going to spend two million dollars and you've got seven i think that's unwise i think you're going to make some i think you're going to regret that and here's why here's how that destroys your nest egg and messes with it but um but you also could say to her instead of saying you can't afford it you know hey you just lost so and so you know a year and a half two years ago and make sure you're not doing this from a place of grief.

30:30Dave Ramsey:You're not medicating the grief somehow. Yep, yep. And I'm worried about you and I care about you. That would be an okay position. Right. That's a brotherly position rather than a parental position. Well, glad Caroline called when George Camel wasn't on because he'd be like, sell that horse. Yeah, because George is just no horse guy. He has, he's on all the... I think he would even tell Caroline she can buy the horse. He would, but he would... He would. He would be... Because he's on all the... He'd be under the desk. He's on the hate list of all the horse people websites.

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32:34Dave Ramsey:Heather's in Chicago. Hi, Heather. How are you? I'm doing okay. How are you guys doing? Better than we deserve. What's up? Okay. So my question is, I don't even know where to start. I just recently learned about you and started watching a few of your videos, and I saw the Baby Steps video. And I know that step one is save$1 ,000. My problem is I have absolutely nothing. And when I say I have nothing, I mean like when it was due Tuesday, I get paid tomorrow, and I'm still going to be$300 short. and I don't know where to start. How did you get here, Heather? How did you get to this place? Divorce.

33:32Majority of my life I was an at-home mom taking care of my kids and so when I got divorced I was working a part-time job, had no benefits and I have a decent job now.

33:47Dave Ramsey:What do you make now? I bring home about$2 ,100 a month after taxes, which isn't great, but it does offer benefits. And you had nothing in the divorce, Heather? I did. And what I got, I used to pay off one of my student loans, which was about$30 ,000. but I still have probably about$20 ,000 in student loan debt, which also scares me because I heard you say on one of your videos, do not take out a student loan because you can't get rid of them. You can't get rid of them with bankruptcy. You've got to get rid of them by paying it off. How long have you been divorced? A little over three years now.

34:39Dave Ramsey:Okay. And do you have kids? I do, but they're both adults. Are you getting any alimony? No, I don't get any alimony. Where I'm at, that's not a thing. The screen says you're in Chicago. Are you in Chicago proper or in a suburb? I'm actually in Indiana, but they asked what the closest major city was. Thank you. That's why I asked, because that's what I know. Yeah. So Indiana, you don't? Well, I mean, she's not got Illinois taxes. and probably a little different economy, micro economy that you're sitting in versus in Chicago itself. More likely you can make it on 2100 there than you could downtown Chicago.

35:15Dave Ramsey:That's my point. Right. Barely. What are you doing? What's your job? So I work for a major health care company, and I work in a call center for them. Good. Okay. Good for you. How long have you been with them? It'll be two years in March. Two years, okay. And do you see forward progress at that company to get your income up, to move up? Yeah, so like in October, so I started almost two years ago, March. And then six months later, I got a promotion within the department and got a pay raise. and now it's yearly. So now in October next month, I'll get a review again and get a pay increase, but I don't know what that'll be.

36:11Dave Ramsey:And you're working 40 hours? Yes, at least. We're offered overtime the first of every month and I always try and get at least eight hours of overtime in depending on what day of the week the first falls on. Okay. So you're bringing home$2 ,100 a month. How much is your rent? My rent is$13.20 a month. So half of your... I'm in an apartment, and that's typically what the rent is going for in any safe neighborhood. Okay, the bad news in your overall situation is, you described it accurately, this is a really, really tough spot that you're in. The good news is this is the worst it's ever going to be.

37:00and I hope so.

37:01Dave Ramsey:Oh, I promise you. I promise you. So you've got two hurdles that I hear and we'll see what Rachel wants to add or subtract from that. Uh, hurdle number one that I hear is, um, you guys were married a long time. Your heart is broken. Uh, you're grieving, you're angry, and you're still healing from, you know, getting muddy boots trampling on your heart. and uh and with that part of that healing is getting your personal confidence up to say i'm going to win again chapter two of my life the encore after the curtain comes down and the curtain comes back up the encore is going to be amazing i just haven't figured it out yet and your heart hasn't gotten to that yet that level of belief but i will tell you this i've been doing this about 35 years and I've seen ladies at exactly your age have the best decade of their entire life overall, but certainly including income from 53 to 63.

38:08Dave Ramsey:I see it all the time because of the stuff, the gravel that is in your belly. You got the right stuff inside of you. You just don't believe it again yet. And as that starts to wake up, you're going to go be somebody you never even dreamed you would be over the next 10 years. I've seen it happen over and over again. Okay. So I see that in your future more than you do at this moment. So that's one hurdle you've got to overcome. The second hurdle is we've got to work on this income because you're starving to death. You got to pick up overtime, side jobs, everything else. You got no margin in this math this math is hard hard hard hard hard hard so um and so i you know and the the if you had another two thousand dollars a month coming in your whole life would change right now because the difference in 2100 and 4100 in your world is so huge it would just so i mean working all the time at something that's moral and legal and makes good money, starting with all the overtime you can get, not just eight hours.

39:22Dave Ramsey:I want eight hours a day. How much will you work me? I need money. Okay. And this is not a way of life for the next 10 years. This is for the next six months. So you can pile up a little money in the corner and know you get to eat next month because you live from fear to fear, hand to hand, mouth to mouth right now. Agreed? Yeah. And if you had$10 ,000 in the bank, your whole attitude, the way you walk down the street would shift.

39:56Yeah. And it'd be part of your healing as well, which I really desire for you after talking

40:01Dave Ramsey:to you. I think you're special. Yeah. I mean, it's from the financial standpoint, Heather, fighting for that piece and having some safety. That's your next goal. At this point, yes. I'm not worried about the$20 ,000 student loan. I'm worried about Heather having a little margin, a little wiggle room, or a lot of wiggle room. I'd like for you to just kind of slosh around in the cash for a few minutes, like you've just got a little pile of it for the first time in a while. instead of worrying about, you know, whether we're going to get, you know, canned tuna fish or canned dinty more or whatever it is you're having to choose between.

40:41Dave Ramsey:I mean, yuck, right? I mean, this is tough right now. These numbers are hard. So I'll tell you the other thing I would do is I would make sure I'm, if I'm you, I would make sure I'm plugged into a good church and get some people around me that begin to love me and believe in me and that don't mind if you scream and cuss a little bit, don't mind if you cry a little bit, and they might take you to dinner occasionally and just tell you what I've been telling you for the last few minutes, that you're a child of God and I see a good future for you, and I'd like for you to have that in your life too.

41:16Yeah, and I do. I do have a wonderful church family.

41:21Dave Ramsey:okay good yeah well lean on them lean on them they they you know it's an opportunity for them to love someone well and i'm not saying become a permanent charity case but girl you in a hurt right now yeah let people love you and it's okay to be loved while you in a hurt you know and then later on you're going to be having you're gonna have 10 million dollars in the bank and you're gonna find a heather somewhere and you'll help her that's right amen but yeah it's you're in a You're in an exhausting place, Heather. Emotionally, financially, the hours you're going to be working, it's going to be tiring.

41:56But even if you can put$100 a week away, I mean, you look up in two months, you're like, there's$800. Like that even in and of itself is like, okay, we need some moving progress.

42:07Dave Ramsey:I need the math to get me back from the edge of terror. Yeah.

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43:29Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. James is in New York City. Hi, James. How are you? I'm better than I deserve. Dave, how are you doing? Just the same, sir. How can I help? I'm glad to hear that. I'll go right into it. It's great to talk to you. I've been listening to you for about a year now, watching your show every day while I run. Thank you. About eight years ago, I started trying to buy real estate, you know, with, you know, saving 20 or 30 % down payments and borrowing money from friends to be able to buy. I know it's a huge mistake now, and it's not what TikTok says that it is.

44:03Dave Ramsey:In the same time, my cousin asked for money to do the same, and I borrowed about$300 on her behalf from my network, so that she can also grow her portfolio. Fast forward to now, real estate is the opposite of what TikTok says. I am also married, and we are planning a wedding next year. I've paid off over$600 ,000 of real estate debt that I borrowed from my friends after listening to you guys for the last two years. Wow. And I also have five of my rental properties have been paid off. Wow. That's amazing. And I am working. Thank you. And I'm trying actively working towards becoming debt free with all of my real estate and all of my debts.

44:42Amazing. I do have some debt outstanding. And I still have. So I paid off all the debt that I borrowed from friends. And I only have mortgages on about 15 on my rental properties. But the balance that my cousin borrowed is still outstanding. And she hasn't made any interest payments in over 18 months. And she also got she got foreclosed on all of her houses. And with a wedding to pay for next year, newly married, I'm thinking, should I sell some of my real estate to pay off her debt and start over from scratch, or should I wait it out and pay it off little by little? Did you borrow the money on her behalf, or she borrowed money, you had$300 ,000 cash that you lent her?

45:24So the same people that I borrowed from to start my own portfolio, I borrowed from them so that I can give to her. to buy.

45:32Dave Ramsey:And I think it's fairly easy to figure out she's not going to pay this. So, no. So you're going to have to. Her house is proclosed on. So I am on the hook for that. So how are you going to pay the$300 ,000? Now, the numbers you're throwing around are amazing. Congratulations on your change in direction. So you paid off$600 ,000 already. How did you do that? Little by little, I've just been saving up cash from the real estate income that's been coming in, my record W-2 job, and I also sold a couple houses. In what period of time did you pay off$600 ,000 doing that? Two years. In the last 30 months.

46:14Okay.

46:14Dave Ramsey:So why could you not just continue on that track and clear this$300 ,000? I still have 15 houses with mortgages on them. But you paid off$600 ,000. So in your current situation, you paid off$600 ,000 in 30 months, right? Yeah. And you sold a couple properties and you cash flowed the rest of it out of the rentals, right? Yeah. And so you've still got that cash flow and you can sell one other rental or two other rentals and do that. How much are you making a month, James? They vary. is usually anywhere between$20 ,000 to about$28 ,000 after mortgage, utilities, and taxes is paid out. And then your personal W-2 income is what?

47:05$180 ,000.

47:07Dave Ramsey:Yeah, good job. Okay. Well, so overall, let's just say this, okay? You got 15 still mortgaged. You make$108 ,000. You got cash flow because you got a bunch of them paid off, and you have a$300 ,000 unsecured loan hanging over your head like a knife that I need to clear. That's the overall picture. And so what would I do in that overall picture, not just the$300 ,000 but everything else? I would lay out a game plan and say in X number of years, I want to be 100 % debt-free with my real estate portfolio. Now, what I would suggest you do is play with the math because you're good at it. I've been listening to you.

47:47Dave Ramsey:You've got this dialed in. You know where you are and you know how you got there. So this is a gift you've got. You like math riddles almost, right? So lay out this math riddle and say, how many properties do I have to sell and which ones would I sell of the ones that are mortgaged in order to be 100 % debt-free in three years? Because the 15 that have mortgages also have equity. So you don't have to sell them all to clear the mortgages. You would sell the ones you hate the most or that have the most equity because you want to get the most traction in this scenario. Okay. So let's just use an example.

48:30Dave Ramsey:I've got to sell seven of the 15 that are mortgaged to clear the$300 ,000 and clear the other eight. And I can do that in three years. Well, that's one thing to consider. What if I waited and went a little slower and I took five years? Oh, then I've only got to sell five of them. or whatever the number is. I'm making that number up. It's probably not that far off. But, you know, lay out a three-year plan. What would have to be true? What would I have to sell? And what would I have to do with the cash flows to clear the$300 ,000 and to clear all mortgages in three years? What would I have to sell?

49:06Dave Ramsey:What would I have to do? What would have to be true to do all mortgages in five years? And then you decide which one of those programs you want to work. I'm okay with either one of those two. I'm going to stay in debt the rest of my life. That's the only time I would yell at you. But you're not urgent right now. No, no. Because it's real estate. He can clear the 300. Because it's real estate. But if it was credit card debt, we'd be having a different discussion or student loan debt. Yeah, but he's got the ability to retain some of this portfolio. He doesn't have to destroy it. You don't have to burn it down to clear it.

49:36Dave Ramsey:Because you've already made progress on my idea when it wasn't my idea, right? Yes. So I've been trying to pay it off and I've been mainly focused on like my own debt. But now I'm just thinking there's just no way that she's ever going to pay it back. Honey, let's just change the name on that. That is not her debt. You borrowed it. What you did with it was really stupid, but you borrowed it. It's your debt. you gave it to an incompetent real estate investor who happens to be kin to you and you lost your money that you borrowed so it's not her debt she's not gonna pay it how's the how's does she talk to you james she feel bad about it not at all i think the relationship is strained there so um at no point there's no text messages on return calls on return oh wow okay so she

50:37Dave Ramsey:truthfully even if she wanted to pay it she doesn't have anything left they took all the property yep she's she's working in a coffee shop i mean you're not getting 300 grand out of this check not at all that's why i want to carry up and just get it out of the way and so you need to pay your your 300 grand you've already paid 600 of your 900 and now you got 300 left to go another example of co-signing don't well our worst loaning money to relatives the only thing worse than loaning money to relatives is loaning money to relatives that you borrowed to loan i know but it's that same idea that i'm having to step in the middle oh yeah of your debt situation a co-signer taking out a loan on behalf of someone else yeah um yeah it's not great yeah so i'm sorry james yeah it's awful and then it destroys the relationship you're gonna be i think you're gonna to end up with the property that you have now that's debt-free plus some portion of those 15 properties.

51:35And he's got five sold off or paid off, five properties paid off. I think you could clear it all.

51:39Dave Ramsey:I don't know what the equities are in them, but you start running the math out on that. It's a neat math riddle to run.

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53:31Dave Ramsey:Lauren is in Houston, Texas. Hi, Lauren. How are you? I'm good. How are you? Better than I deserve. What's up? So I was wondering if it's worth living almost paycheck to paycheck and staying where we are to work forward getting to, like, owning our family's business? Or should my husband change his job into something that we can live a little bit more comfortably? The business cannot afford to pay him what he is worth? Not at this moment due to how his father and his mother are spending the profit. Okay, that's not the answer. The answer is the business can afford to pay him a proper amount because it would just simply make less profit.

54:26Dave Ramsey:So, for instance, what does your husband do at this company? It's a telecommunication company. He's a lead technician. Okay. What does a lead technician make in the marketplace in Houston? I think, honestly, it's around$32 an hour. Yeah, that sounds about right to me. What's he making now? Half that,$16. Okay. Oh, my. And so here's the rule, okay? Then if he leaves and they want a technician, they're going to have to pay$32 an hour because they're not going to be able to hire someone to do this job for 16. Right. Yeah. And so what we teach people in Entree Leadership with family business is you pay the family member market rate for the position and we discuss future ownership, not instead of future ownership so I can go on a cruise and you guys are starving.

55:30all the employees the most one employee is making is 19 an hour okay so they're underpaying everybody

55:37Dave Ramsey:well no no they're not or everybody would have left so something's wrong with your numbers it's because they've got people with i guess history behind them that makes it very hard for them to find other jobs as in like a criminal background. Oh, okay. Okay. So they're kind of grandfathered. If you leave, you won't find anything else, so you're staying situation. Mm-hmm. Okay. So more out of desperation, these people are staying. Yes. That's kind of what you're saying. And I'm there helping in the office. I mean, I'm basically taking over the office. I'm getting 15 hours, almost what he's making.

56:22Plus, I've got childcare. I've got an infant on my hands.

56:25Dave Ramsey:What does your husband say about all this? Is he dissatisfied like you are? Yes, but we like where we're getting it to be. I guess getting the business to be for it to be in our hands. So he's willing to put up with it in order to own the business? He is, yes. And when are you supposed to own the business to offset the fact that you're being paid half of what you're worth? By the end of next year. Oh, okay. So not five years. So what kind of profit does the business make? We can take home anywhere between$40 ,000 to$60 ,000 a month. Okay. And you won't trade that for$16 an hour for a year? I guess my issue is we're kind of slowly getting behind on our bill situation.

57:14And my in-laws are refinancing everything so they have better cash flow because they are racking up a bunch of credit cards and things like that so that they don't have to take it out of their own bank because COVID hit them hard. And they've got so many loans they're trying to catch up, and they're just not, I guess, doing it right.

57:34Dave Ramsey:How are they going to give you this business? It sounds like it's all in pieces. That's why I'm in the office putting everything together, I guess, getting the business up to date. It's a data telecommunication company. So, I mean, it is very needed, I guess, in this world. They have retirement, Lauren? They're making$40 ,000 or$50 ,000 a month. Yes. $600 ,000 a year. Yes. And why are they having to refinance anything? Why aren't they just paying it off? because they've got 6 ,500 um I guess a month going towards a line of credit that is at 75 interest that I keep telling them to pay off but they're like well what if this happens and they rack up another credit card or I guess they're very stubborn and I'm slowly getting to them to be like okay do they have retirement Lauren I'm scared in a year from now they're not going to have the ability to walk away from$40 ,000 to$60 ,000 a month?

58:40No, but within the end of the year, how I'm getting things kind of refinanced into every, like, lower interest rates, we are getting to the point. Okay, let's stop.

58:52Dave Ramsey:You're all over the place, all right? These numbers aren't adding up anymore, okay? So here's the thing. if you could too you and your husband can sit down and see a path to becoming the owner of a business that makes forty thousand dollars a month net profit and if we believe that the parents are going to be in a condition to hand us that in 18 months yes i would sacrifice to get that but everything you go back to sounds like you're bitter and mad towards them and you think they're stupid And I really don't care about that in this conversation. The conversation is, is your husband underpaid? Yes, he's underpaid.

59:34Dave Ramsey:But that's a great deal to trade$16 an hour for$40 ,000 a month profit a year from now or 18 months from now. That's a bargain. But I'm not sure that you believe that that's going to happen because I think you think they've got so much debt and other things going on that they're never going to honor their word and walk off. That's what I think is really going on. You don't think this is going to happen. Is that true, Lauren? Yeah, that is pretty. It sounds true to me. Yeah. Yeah. You're throwing so many darts in these balloons that there's not anything here for the clown. I mean, it's just there's nothing left.

1:00:10Dave Ramsey:So, you know, you've got to sit down with them and figure out where we're going next and how we're going to get there. and you've got so if i'm going to stay i've got to see a path that is logical on how we're going to get there in 12 to 18 months and these people sound just wild if they can't help you with that path you should leave them and let them have this circus yes and it needs to be written out an agreement of what you all four are agreeing to like on paper this is very vague like i jumped in and help for a little while now i'm running the whole stinking thing and they said they're going to give it to us but they've got a 75 interest line of credit what are they dealing with the mafia oh my god and so you know and who wants to keep that around like it's a pet so this is so illogical there's so much crap going on in this conversation so yeah you've got to comb through all this stuff and go when we get the business here's what we're going to have to pay uh pay off because you won't have paid it off and here's how we're going to operate it but if you can trade $16 an hour for$40 ,000 a month in 18 months you should make that trade yeah but you've got to come to the place you believe that's going to happen and like Rachel said it's written down yeah and that they have the ability to hand you a business and they can go off in retirement I don't think they have money I think they're broke yeah the whole place is a lot more broke than everybody yes I'm like I don't think I'm not sure I believe the$40 ,000 a month thing anymore well she said she's running i don't think you keep 75 interest around i mean you'd have to your parents would have to be cousins to want to keep 75 interest around if you're making 40 000 a month let's just keep that we might need it you know that's just that's just ridiculously stupid so no i i don't believe there's something wrong in this and uh i think lauren is has figured out that there's something wrong with this story and it's not all adding up and and it doesn't add up.

1:02:11Dave Ramsey:That's what she's figured out and that this is a trap. And so you don't want to be in the business of rearranging the deck chairs on the Titanic. Yes. And if you have to be at a place in your life where you make$40 ,000 a month in order to keep payments afloat, you're broke. That's not a profit. That's not a profit. You don't have money at that point. You don't have $40 ,000 a month. The bank does. Yes. We don't need that. No, no, no, no, no, no. And I kind to think that's what's going on. I think these people have leveraged this thing to its eyeballs. I can't tell because Lauren doesn't really know, but she smells a skunk and it's usually because there's one in the area.

1:02:50Dave Ramsey:That's what you're looking for. We've got a lot of metaphors in that one call. I was going to say circuses, clowns, balloons, skunks. Good luck, Lauren.

1:03:10Thank you.

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1:04:47Dave Ramsey:We coach about 10 ,000 small businesses nationwide through our Entree Leadership brand. We have executive coaches. We have an online app that coaches them. The Entree Leadership podcast is built on helping small businesses navigate. A lot of them are family-owned businesses. I just spent the weekend with 34 businesses that were averaging about$20 -$25 million each annually and in coaching them over the long weekend. And last weekend, that's where I was. And we talked to them a lot last weekend. And every time we're with them about succession planning, about handing to the next generation or selling or whatever it is you're going to do.

1:05:32Dave Ramsey:So a couple of rules, a couple of principles you can go by in family business. Your family business is going to be no more functional than your family. If your family is cray-cray, expect the business to be cray-cray. If your mother-in-law is operating in the business and she's nutty, expect her to be nutty when she's at the office. People don't suddenly become smart, well-regulated, relationally brilliant when they walk through the doors of a business. When at home, they absolutely can't find their way through a kindergarten. And so you're not going to have crazy people that operate a business well together.

1:06:22Dave Ramsey:And that is where family business gets a bad name. Don't ever go to work for family. It's because your family was crazy. That's why you say that. And so, no, but we work with family every day, and we love it. And we have some fun. We argue about things, all that kind of stuff. We have conflict like anybody else, but we have conflict resolution skills too. Hello. And we know how to lay out a plan and execute the plan and be in alignment and everybody be in agreement this is what this looks like, and we're going to do it. So if you're going to enter into a situation like our last caller, Lauren, the thing that she and her husband did wrong, they were just like the convicts that mother-in-law hired.

1:06:59Dave Ramsey:They didn't have any place else to go, so they took a$16 an hour position that should be paid$32 and agreed to it and then later whined about it. So you need to enter into that whole thing and say, okay, the only reason I would take this is because I'm going to take the business over. Now what does that look like? And comb through the exact details. You can't vaguely promise off in the distance something that no one believes because they leave. And that includes your own children. And especially in that situation, expecting to take over the company in 18 months. Like, that's a fast period of time for all this.

1:07:43Dave Ramsey:Fascinating that the daughter-in-law who's running operations calling here is like, how do you get the other people to work for 19? Oh, they hire convicts who can't get a job anywhere else. I mean, she just dropped that and kept driving. I mean, that's a mic drop and just kept driving. It's a very nice thing to do to get people back on their feet. Yeah, it's really sweet. But taking advantage of the situation. And now your husband's in the same category. Yes. Only he's not a convict, at least as far as we know. Well, taking advantage of people is what it feels like. It's what it sounded like. That's the way she couched.

1:08:16Dave Ramsey:That's what she believes. Yeah. And so this is who you want to work for? I don't think so. so you need real clarity you need to have exactly what the plan is and so forth and a good rule of thumb folks if you own a business and you want people in the family involved is to pay them what the marketplace demands and so if you have a son going to work for you and he's going to be a software engineer you pay what software engineers make not more not less and and then you say as you grow in your leadership skills we can talk about you taking over this business someday but today you're a software engineer.

1:08:52Dave Ramsey:Today you're a tech. He was a tech. And so that guy, her husband. So today you're a tech and you make$32 because that's what the marketplace demands if we weren't hiring convicts. And so that's fair. And if you're going to go in and take the operational position, it's not a$15 an hour job. The COO of a company that makes$500 ,000 a year profit does not make $15. That's asinine. So no, we're not going to do that. We're going to figure out what this position is worth and you're going to pay me that amount. And the only reason we're taking these two positions instead of working somewhere else is because we have a two-year plan for this to be handed off to us.

1:09:39Dave Ramsey:And these six debts that are laying here will be paid off by that time out of the profits so that you don't hand us a pig and a poke. And so you have to lay this out and have a dadgum clarity. But it's this vague throwing grenades over the fence and wondering what blows up stuff has got to stop. Which is like, and to me. It's your fault too for taking the deal. And this is a big deal from$16 ,000 an hour to$40 ,000 to$60 ,000 a month. I'm like, this is the biggest jump ever. And the fact that it's not so buttoned up worries me, right? It's pretty wild. She's pretty sure it's not going to happen because she thinks that they've got so many other things going on that nobody knows about.

1:10:26Dave Ramsey:And 75 % interest. I mean, all these things. So back to that. But anyway, so the point being for Lauren and for anyone else entering these things is I would say market value is fair to be paid. and it's what we pay at Ramsey for our, for everyone. And that includes Rachel and that includes her brother. And that includes, you know, these people get paid. Rachel gets paid on the same schedule that Deloney and George gets paid on same schedule, same percentage of speaking fees and books and everything. Okay. All that. So, um, no change there at all. Then, then as you become an owner, you can participate in the profits.

1:11:06Dave Ramsey:In addition to you being paid for your position. And that's a proper way to do this. And then lots of communication and lots of clarity where there's not lots of clarity and lots of communication and people aren't relationally functional. You're not going to have a completed succession plan. It's not going to work. And so I don't think that one's going to complete because of all the things, all the stink that Lauren smelled, but also Lauren and her husband entered into this improperly. It's on them, too. Yeah, that they took the positions. They shouldn't have taken these positions. You should have said you should have demanded up front the way we come in here is where we see a clear path to ownership in 18 months and an ownership of something we actually want to own.

1:11:52Dave Ramsey:OK, so we're going to clean up whatever mess is doing here during the 18 months. You're going to pay me accurately for being the COO and pay him accurately for being a tech during that time. And if you can't do all of those things, including a clear path, then we're not going to come over here. And that's the thing that should have been decided up front. But now you're in, and now the thing's going down the toilet, and you get to go on the ride. Jonathan is with us. Jonathan is in Harrisburg, Pennsylvania. Hi, Jonathan. How are you? Hi, I'm good. Thanks for taking my call. Sure. What's up? So we made our last mortgage payment yesterday instead of in 2051, as the bank thought we were going to.

1:12:36Wow, Jonathan, congratulations. Way to go. That's amazing. Yeah, your content really motivated us to put some pep in our step there. Wow. So I like things with engine and wheels, and I've had nine motorcycles and 60 cars throughout my life, and plenty more to come, Lord willing. So my question naturally is about the 50 % rule. We have a fund separate from everything else that's just for toys. Right now it's got about$45 ,000 in it. But my wife and I are not especially high earners. So if I upgrade my net worth right now is$715 ,000.

1:13:16Dave Ramsey:Okay. All right. So I'm not looking at buying a new thing. Go ahead. Just, you know, a random toy. They come, they go. There's like a lot of different experiences. But if I upgraded my daily, I could barely touch the 45. And if I used the whole 45, we'd be already above 50%. So does that rule apply in baby step seven? Or what advice would you give for me? The rule is based on the principle that the more you have tied up in things going down in value, the harder it is to build wealth. Yeah. So fix that. Don't put so much in things going down in value that you go backward. You've gone forward beautifully.

1:14:02Dave Ramsey:Don't stop going forward, right? So there's no magic to the 50 % in your situation. I don't care. But just don't put so much stuff and money in stuff with wheels and motors that you go the other way because you got confused about where this wealth came from.

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1:15:57Dave Ramsey:Today's question of the day is brought to you by Why Refi. If you've fallen behind on your private student loans, you don't need more shame. You need a plan. Why Refi helps borrowers explore refinancing options with low fixed rate and payments based on what you can afford. Go to whyrefi.com slash Ramsey. Might not be in all states. Today's question comes from Matthew in Michigan. I have a car worth$20 ,000 that's in need of a$5 ,000 repair to replace the head gasket. Is there a rule of thumb to determine if a repair expense is too much to pay percentage-wise for a given car's value? hmm well yeah the it usually doesn't come with a car this expensive though yeah so the the thing that we've always taught here on the air is let's say you got a five thousand dollar car and you blow a head casket and you need to spend three thousand dollars not five to put a head gasket on and uh so i'm gonna spend am i gonna spend three thousand dollars on a five thousand car.

1:17:02Dave Ramsey:Here's the formula. What can you sell the car for as is with the blown head gasket? In the case of the$5 ,000 car with blown head gasket, you might get two, you might get three. Let's say you could get$3 ,000 for it. If the value that you can sell it for plus the repair is more than the value after the repair, you don't do the repair. So let me recap. If it's a$5 ,000 car after it's repaired and you can sell it for three and the repair is three, that would be$6 ,000. You would not repair that car. You would take the three from selling it, put the three you were getting ready to spend on it, and buy a$6 ,000 car instead of a$5 ,000 car that you have after you're finished with this.

1:17:49Dave Ramsey:That's how you do the formula. Now, Matthew, I do not know what your car is,

1:17:58Dave Ramsey:and I'm an old redneck that used to put my own head gaskets on and replace my own motors in cars back when I knew what the car was. When I open a hood now, it might as well be a spaceship. I have no idea what's in there now. So I don't know what I'm talking about, but$5 ,000 sounds awfully high for a head gasket on a$20 ,000 car. I am going to shop that. Good rule of thumb, folks, is car dealers are the most expensive shop by, in most cases, as much as double. So finding a local, independently-owned shop, like Christian Brothers is one that we endorse. I know a bunch of those guys. It's a franchise, and they're independently-owned shops in your market.

1:18:45Dave Ramsey:And someone like that, and they're honest, they do a good job. You go in there and find an honest, good local mechanic and let them give you a bid for a head gasket. But I'm a little, I don't know what the engine is. I don't know what the car is. There may be a complication with that. But for$20 ,000, I probably am fixing it. I'm fixing it. Yeah, you're fixing it, and I'm probably fixing it for three, and I'm going to fix it. Yep, that's what I'd say. That's where I would go to. All right, Jen is in Detroit. Hi, Jen. How are you? Hi, I'm good. Thanks for taking my call today. Certainly. How can we help?

1:19:22So I'm calling because I'm 46 years old. I'm single. I've never been married all my life. I've always wanted to get married, but I haven't found anyone yet. And I've been holding off on buying a home because I've always had this dream of buying my first home with my future spouse. And as I've gotten a little bit older, I'm starting to wonder if I need to rethink that plan. I did want to mention also that this is something I'm thinking about for the future because I can't really do anything at this moment because I am currently laid off. But I'm hopeful that I'm going to get a new job very soon and I'll be back to normal, making money again and back in my and I can move forward with some of my goals that I've got here.

1:20:04So I've had a lot of time to think in the last eight months that I haven't been working. Has it been eight months since you haven't had a job?

1:20:10Dave Ramsey:Wow. Yeah, I was laid off in December of 25. How are you living? How are you paying bills? So I was able to live off of unemployment for the first six or seven months. And then I was also given a pretty generous severance package. So once my unemployment ran out in July, I've been starting to chip away from my severance package. So I've been very thrifty. You need to land something, don't you? Do you have any debt, Jen? I do not. Not anymore. Yes. Good for you. Any savings? Yes. Yes, I have savings. I have a total of$394K in retirement between a traditional and Roth IRA. Good for you. And I have, thank you, and I have$31K in a non-retirement mutual fund.

1:20:58And then I have in my high yield savings, I have$32K, which is basically my severance money. That's what I've been looking for. And then my last job, my income was$114K, and I'm hoping that my next job is going to be something similar to put me in a good position again. Yeah, for sure.

1:21:14Dave Ramsey:Do you wait to get married to buy a house? Well, I was going to answer her question. Yeah, no, no, Jen. I think because I just checked off the boxes. You, you're debt free. You have savings in the bank. And as long as you have a good down payment, I would, I would move forward for sure. Because owning your home is going to give you a level of stability. And it's going to continue to add to your net worth and your wealth building process. And, and here's the thing too. it's just a house that if you meet a guy and in two or three years you're like okay things are moving and you know we gotta we gotta sell a move that's great it's just a house like you can do that um but no i would no i would not wait you don't have to keep a house forever yeah so if you meet somebody to rachel's point and this house doesn't fit into the new plan sell it and and then live the part of your dream where we buy something together okay yeah you're too successful Jen you got it like getting in the market now and seriously and being a homeowner women are now outpacing single women are now outpacing single men in home ownership oh really yes almost double yep you're okay oh that's I did not know that okay so single women are buying homes making a life for themselves and again I I pray that your prayer you know comes true and that you do find someone and meet someone and that's the case then great you can sell he can move into your place you know whatever it looks like for you guys but it's not a it's not like you have to be married to this to this house no pun intended charisma is in sacramento hi charisma how are you hi i'm good how are you better than i deserve what's up i was calling um i'm working the baby steps i'm on almost the end of baby step two um i do know that i have to save you know my emergency fund still.

1:23:05But I know that a house like saving for a house is baby step three B. And I have been, I guess, planning ahead, trying to figure out how I would do that. I'm a single mom of two on a$50 ,000 income and houses in my area, like rundown houses that have been gutted out or

1:23:28Dave Ramsey:at the minimum like three hundred thousand dollars they are you're right they're extremely expensive i'm on a low income um i mean i know that i could change my income but as of right now i'm working for my dad at a family-owned business um so i'm hoping to possibly stay um but i know that that's probably not the best financially for me could you make more somewhere else um i don't really have any degrees or anything in my name but what are you doing now for work works for i'm the office manager what kind of work is it though i do everything in the office i'm the only office person so i do payroll i answer the phones i schedule appointments if you if you went to work somewhere else what could you make being an admin being in that kind a role.

1:24:22Honestly, probably the same without a degree.

1:24:24Dave Ramsey:Okay. All right. So you're not really taking a pay cut working for your dad, which is kind of what you indicated at first. Okay. I could make more if I didn't work here, you said, and that's not true. Um, I mean, I do have 12 years of experience. Is it true or not? Uh, probably not. Okay. All right. I don't care. It doesn't matter to me. Either one's fine. So we're dealing with a$50 ,000 income in Sacramento. You're probably not buying a home soon. It's a very difficult, very expensive real estate market. Yep. So between that Baby Step 3B charisma and Baby Step 4, we say there's not a hard and fast rule, but it's kind of that feeling if you know it's going to take longer than probably three-ish years to save up that down payment, you need to start doing both.

1:25:13So be putting some money in retirement while you're saving for that down payment.

1:25:16Dave Ramsey:So in order to be a homeowner, you have two choices. Do something to get your income up permanently, or go to an area that you can afford to live on what you make. You cannot buy a home in that area. It can be very difficult with the numbers you gave me. I don't disagree with you.

1:25:48Dave Ramsey:Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Taylor is in Reno, Nevada. Hey, Taylor, what's up in your world? How's it going, Dave? Better than I deserve. How can I help? Well, I got a question for you that I have a feeling I know the answer to. But, like a regular one, I think I need to hear it from an authoritative figure. We'll see if we can find one for you. my wife has been wanting to do like more traveling, more fun things. I run a mobile sound system, so I work a lot on the weekends. So the weekends we do have off, we tend to not go anywhere. Outside of that, I just have a problem spending money unless it's on something that I can use to make money.

1:26:39That make sense. Yeah. So no fun for you, Taylor. I'm just kidding. Basically, basically, My work is fun, so that's good. But outside of that, I mean, we spent$300 on food at a festival this weekend, and that hurt.

1:26:56Dave Ramsey:Yeah. You're still recovering. Emotionally, yeah. So what is your household income, Taylor? It's going to fluctuate about$70 to$100, depending on how good you might get. How much debt do you guys have? Do you have money? I mean, the house is the only thing we owe money on her car and my two trucks are paid for. My sound system's paid for. So that's the tear I have is we want to go do things, but I want to take that money and put it on the mortgage. But nothing, the mortgage, from what it is, I'm on track to be at least double the mortgage by the end of the year. That's good. So what timeline will you have it paid off by?

1:27:42Uh, that I haven't calculated because it hasn't been consistent enough. I started this household venture this year. Okay. Um, prior to was, was all the trucks and the trailers. Yeah. What do you guys have in investments and savings? Uh, savings. We have a fully funded 10K emergency fund. Uh, it's just the two of us. There's no kids. Uh, my 401ks are split since I separated from the Navy. I have about 80 grand in the government TSP. And then I started my own personal Roth 401k after I separated. This got about 20 in it. It gets about 700 a month. Okay. And then we've done her 401k up with her work to probably more than it should be.

1:28:27But she's doing about 900 a month plus the company match.

1:28:34So she's sitting about 40 in that one. Okay. Gotcha. Gotcha. I quirl away another$500 into mutual funds, and that sits at about$72. Okay. Yeah, well, you guys are doing a great job. My question would be, are you on a pretty detailed budget month to month looking at your income and where it's going? For the most part, I got a pretty good grasp on it. That's not what – you're not doing what she said.

1:29:08Dave Ramsey:You're not doing what she said. She said a detailed budget, not I got a grasp on it. No, I mean, every dollar has an assignment in the EveryDollar app, and you and your wife are looking at that where every dollar is going together and you're agreeing on it. You are not doing that. No. Okay. So I think that's going to be your relief, Taylor, honestly, because I think when you guys see where your money's going and what you have to spend, then when you actually give it permission to say, yeah, at the beginning of the month, we're going to have a category for fun and there's going to be 800 bucks or whatever you are able to put in there and want to put in there and agree to put in there, that you guys then have that number and then you can freely go and spend it as you want.

1:29:54Or a vacation, right? We want to save for this vacation. So we're going to put X amount away. And so I think the lack of detail could be stressing you out just thinking, is this okay to do is it not okay to do i would rather it be here for something that makes money right like but when you force yourself to spend as you should you should be giving saving and spending where you guys are so that spending element needs to be in the budget and you guys

1:30:19Dave Ramsey:need to agree on the amount it doesn't have to be ridiculous here's the here's what you'll experience okay when the two of you write it down and you say okay this month we're going to agree that the fun category has, I'll just make up a number, 700 bucks in it, okay? And you put 700 bucks in that category. What you're going to experience is that it's as if for you that it already got spent right then. So when you turn around and actually do spend it, you're probably going to actually enjoy it. But the angst over spending money or wasting money on fun when I could be buying more equipment happens when you write it down even though it hasn't left.

1:31:03Dave Ramsey:And so you're going to have that emotion out of the way, and you're actually going to be more fun. It's going to be more fun for you, more fun for her, and you do need to budget something. But if you both agree to the number, and this month it's a little low because I need to buy this piece of equipment, this month I'm good, so it's a little higher because we're not buying anything this month. And you go back and forth like that. You need to have that in there, And that way she will agree to you continuing to grow this business without resenting your business. But if all of her fun is involved in you buying a piece of equipment, she's not going to enjoy this for very much longer.

1:31:43Dave Ramsey:And right after she quits enjoying it, you're going to quit enjoying it. That's the way that's going to work. So we need to get a plan that we can both ride this together and both stick to it. Emma is in Spokane. Hi, Emma. How are you? Hi, Dave. I'm good. How are you? Better than I deserve. How can we help? I had a quick question about some debt that I owe that doesn't accrue any interest. So right now I owe about$9 ,000 on a car, and I owe, I believe, the total is around$52 ,000 on student loans that I had taken out. and I was having a difficult time because I was using, you know, a really intense debt payoff method and I had paid$36 ,000 off in a year and a half on my student loans and I was working really hard on it, but I went and visited a family member who is kind of well off and they saw how hard I was working on it and they saw how much it was kind of taken out of me and taken out of my life.

1:32:45So they decided to buy all that debt for me. That way I can pay it back to them without worrying about all the interest that I'm accruing. The problem is that it's a pretty large monthly payment. Has that deal already been done? Yes. Oh, crap.

1:33:10Dave Ramsey:Okay, so how much do you owe your family member that was trying to be a blessing? I think if I don't have the exact total on hand right now, but I think it's$62 ,000 is the rough estimate. And what do you make? Last year, I'm a nurse, so I make a good amount. I made like, I think, brought home$76 ,000 last year. And you have the opportunity for all kinds of overtime, and you paid off$36 ,000 earlier in what period of time? A year and a half. Okay. So if you use that formula, it's going to take you three years to clean out the family member. Mm-hmm. Okay. I wish you hadn't done that. But I'm going to lean into it just as hard because you want this out of your life as soon as possible.

1:33:59Dave Ramsey:Interest was not your problem. And I wish you hadn't done this.

1:34:36Dave Ramsey:Dave Ramsey here. For more than 30 years, I've been talking to folks on the air, and I can tell you that most people are broke, Not because they don't make enough money, but because they don't have a plan. You need to give every dollar you earn a job. Because when you do that, something changes. You stop guessing. You stop worrying. You stop stressing. Our Every Dollar Budgeting app will show you how to find extra cash, pay off debt, and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change.

1:35:12Dave Ramsey:It's time to say enough is enough. It's time to take control of your money. It's time to start your every dollar budget for free today. Go download it in the App Store or Google Play.

1:35:33Dave Ramsey:Ramsey is taking over an entire cruise ship. our second Ramsey cruise, 2 ,500 people. All Ramsey people will be on there. We're going to talk about having celebrating, or we're going to celebrate with them, them having beat debt and changed their family tree. We're going to do the world's largest debt-free scream all together on the ship. Seven days with me, all the Ramsey personalities, plus others. Natalie Grant is joining us. We've got pastors on board to do devotionals with us. We've got all kinds of fun things happening. It's going to be a blast. Western Caribbean, new wealth building teachings.

1:36:12Dave Ramsey:We're going to do all the entertainment will be us. So when you go into the theater on the cruise ship, it's going to be Rachel Cruz speaking. Pretty cool stuff, y 'all. We had a blast the last time we did this, and it comes up in March. There's a few cabins left if you want to go. You don't go on a vacation unless you're Baby Step 4 or beyond, and you don't go on this one if you're not Baby Step 4 and beyond. You're not invited. But if you are out there and you're kicking it beyond baby step four and you want to celebrate the milestone with us, we want to do it. I mean, we've had a absolute blast.

1:36:46Dave Ramsey:I mean, I walked around. We did pop up Q &A's. We just jump up on a stage and start doing question answers. People would stop. We did pictures with them. There's all kinds of fun stuff happening all over the ship the whole time. You don't want to miss this. It's this coming March. You can reserve a cabin with only a$600 deposit. Go to RamseySolutions.com slash events and book your cabin now. Caleb is in Raleigh, North Carolina. Hi, Caleb. How are you? Good, Dave. Thank you for taking my call. Sure. How can we help? So I'm 23. Me and my wife, we have zero debt. We actually just paid off our last car.

1:37:23Congratulations. We're looking to get our first house. Good. And I guess my question is, is it better to get a house now? Is it better to wait and keep renting? Like, in the state of the market, I'm not exactly sure what the best option is. Are you guys at a point that you're debt-free and you have a fully – oh, yeah, you said you just paid off your car. Do you guys have money for a down payment, or you're just looking ahead in the future for the next couple years? No, we have about$40 ,000 saved right now. We make about – we bring home about$153 ,000 a year. Okay. So you would rent.

1:37:59Dave Ramsey:You said, I want to keep renting. Why? No, I don't want to. I just want to know if it's better to rent or to buy now. Yeah. So the time to buy, honestly, Caleb, it's when you are financially ready to go ahead and get in. Because they're, I mean, home prices, they're not obviously skyrocketing like they did years ago. But they're not going down. No, they're up 2%. Is that what it was that we heard? Yeah. Nationally, they're up 2%. But Raleigh, they're up more than that. Yeah, they're not going down. You don't want to wait on them to go up. I'm steady. Yeah. So, yeah, if you're ready, when you're ready, buy.

1:38:36Dave Ramsey:If you want to wait a little while because you want to save some money or something, that's fine. But I wouldn't wait a little while because I think prices are going to come down. Whoever told you that's full of crap? No, there's no price adjustment coming in the real estate market. We have 1.1 million homes on the market in America right now. and we brought 2 million people trying to buy them. There's been a shortage of inventory, more buyers chasing too few houses, which drives prices up for 25 consecutive years. So you just don't want to get in that game. Now, we were seeing 10 % or more increases in value a year, and we're seeing 2 % or 3 % increases in value a year in most markets now.

1:39:21Yeah, so it has slowed down in that sense. So actually being a buyer right now is more for your advantage because it's now average days on the market is 57 days. And so you actually may have the ability to negotiate and all that versus, you know, four years ago, people were offering above asking price and like in these bidding wars. So so, yeah, if you're if you're a buyer right now, you actually have a little bit more leverage, I think, to get in there and negotiate.

1:39:47Dave Ramsey:Yeah, it's a great time to buy and don't wait on the rates to go down either. You date the rate, you marry the house. So you can take the mortgage out today and a 15-year fixed at about 5.5%, 5.75 % right now. 5.98%. Okay. And if it, let's see here, anyway. 6%, yeah. If the rates go down, you can refinance. Daniel is in Washington, D.C. Hey, Daniel, how are you? I'm doing well. How are you, Dave? Better than I deserve. What's up? All right, I got a bit of a family will issue that I want to get your advice on. So my mother's parents have passed away. My grandfather was lost to go. That happened earlier this year.

1:40:34The will they left behind took their inheritance, and one-third went to my aunt, one-third went to my uncle. And for my mom's third, they cut it in half and distributed it between me and my two siblings. Now, the reason for this is my mom and my grandmother never had a good relationship. For whatever reason, my grandmother just never thought my mom stacked up. And she let her know it every chance that she could. and so it's very sad and what's unfortunate is is after my grandfather had passed away you could tell that she had started to mend some of those feelings was looking back with kind of a positive outlook and then all of a sudden this will shows up and it's one final slap in the face that you know the things were just not good when I learned about this now and for the record I don't know the exact amount, but I would assume that my third of her half, if we're tracking here.

1:41:48Dave Ramsey:It's actually your third of your third. Yeah. Yeah. Well, it's probably around 30 to$50 ,000 something in there if I had to guess. Now, as soon as I heard about this, my instant reaction was very firm and it hasn't changed in the month following, which is I don't want anything to do with this i will accept the money because i have to legally but morally i do not want to be a part of whatever my grandmother was trying to accomplish when they wrote this will um and i just i don't want anything to do with it i consider it um to be my mother's inheritance and and that's who it should have went to and and i don't want to be part of it now i have not discussed homelessness, um, with my other two siblings.

1:42:37Um, I, uh, so I'm not sure how this is going to play out, but I just kind of wanted to hear your perspective on this situation as far as how you would handle it, how, um, and just generally how you see things. Wow. You feel pretty resolute, Daniel. So I would, my knee jerk is to say, follow your gut. If it feels like dirty money to you, you don't like it. You don't like the spirit around it. You don't need to do with it. I think that you I think you trust your instinct for you and then to know that your siblings may not have that same conviction either right so so and if you're free of that which you should be right that they can do what they want they get to do what they want to do and you get to do what

1:43:19Dave Ramsey:you want to do but I probably your grandmother gets to do what she wants to do yeah it's her money she left it where she wanted it to go but you're looking at it going I don't want it I don't want That's your decision. Yep. It's your money. Yeah, absolutely. And I think I would let my siblings know. Just an FYI, it's like a no-pressure thing. Yeah, I'm not asking you to do this, and I'm not judging you if you don't, but I don't want anything to do with this. It smells. Yep. Gotcha. You think your mom will accept it, Daniel? Will she take it? Obviously, her initial reaction was, you know, absolutely not, no.

1:43:52Oh, you've talked to her about it. Well, I mean, I was staring her right in the eyes when she told me, and I could see the heartbreak in her eyes. It was gut-wrenching just to see. And I just, and of course, you know, she said, no, absolutely not, absolutely not. And I just put my phone down and I said, no. God has, you know, me and my siblings, we're all firmly middle class. We're all around, you know, each other in the same regard as far as like financially. I don't know all their details, but we're kind of in the same bucket.

1:44:22Dave Ramsey:And I think is what, let me do, let's wrap. And I just don't feel the need to take it. Yeah, that's fine. You need to seek a tax consultant because you can only give$19 ,000 to another individual in a calendar year. Are you married? Yeah, I am. Okay, your wife can give your mom the other bank. You give her$19 ,000, your wife can give her the other two checks. Okay, that's how you're going to execute this. What I don't want you to think is going to happen is this is going to make your mom's heart not be broken. Your mom's heart was broken by your grandmother, not by you. and you can't fix that.

1:44:58Money will not fix that.

1:44:59Dave Ramsey:And this money will not fix that. It's your decision, though. I don't want, this is weird, I don't like it, I don't want to be part of it. That's your call. But don't ask this transaction to do something it doesn't have the power to do, which is heal your mom.

1:45:28Dave Ramsey:Hey, guys. Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

1:46:18Dave Ramsey:Everyone needs insurance, but it can be hard trying to find pros who aren't just looking to make a buck and agents who really know their stuff. Ramsey trusted insurance pros are vetted and coached to make sure they're market experts who have your best interests at heart. Go to RamseySolutions.com slash coverage to find the type of insurance you're looking for and connect with a Ramsey trusted agent. Josh and Aaron are with us on the debt-free stage right here in the lobby of Ramsey Solutions. Hey, guys, how are you? Good. Welcome, welcome. Where do you guys live? North Vancouver, Canada. Oh, wow.

1:46:57Dave Ramsey:Nice trip to Nashville, huh? Yes, it is. Wow. Well, welcome. Good to have you. And how much debt have you two paid off? $93 ,451.06. Way to go. How long did that take? 25 months. Good for you. And your range of income during that two years? We started at$73 ,000, and we're at about$120 ,000. Excellent. What do you guys do for a living? I am a Baptist pastor. Awesome. Very nice. So great, you guys. What was the$93 ,000? It was three personal loans, two credit cards, and a family loan. Wow. All of it. Just the normal stuff. Normal stuff. So what happened two years ago that made you go, enough already and do all this Ramsey stuff thing?

1:47:46So our daughter took Rachel's high school class, actually. Oh, yeah. In her school. And she kept coming home and going, Rachel says we need to do this. Rachel says to do that. I'm such an influencer. Do you hear that? Not Dave says. So he started looking into the Ramsey and then he got hooked. I liked Dave's direct approach. I guess that's the pastor in me. and I started listening to the podcast and read the book in one sitting. And I did what you're not supposed to do. I went to my wife and I said, we're doing this. I don't care. And, you know, we're going to start tomorrow. And she was not as on board with that right away.

1:48:29But we started listening to the podcast. And the reason she got on board was actually the debt-free screams. Oh, so you heard it. Yeah. And something, what happened inside you that made you think like, oh that is inspiring I guess it gave me hope that um if others could do it then sure we could do it too yeah because you felt like 93 ,000 was just too much you didn't think it was possible it was the one area in our marriage that we struggled having conversations about because I wanted to talk about it she just didn't want to pretend it wasn't there wasn't there and uh it just you know I just got sick of living paycheck to paycheck being stressed out and uh she was feeling it as well and so that's why we started the journey.

1:49:11Amazing. You guys. Okay. So marriage before little chaotic around the subject, some avoidance, you know, some fighting probably. What is it like now after you walk through two years of this journey together? It's probably one of our favorite topics. Yeah. Yeah. We love our monthly meetings. We like, we look forward to it and yeah. And finances is totally different. Doing the every dollar budget. Um, that app just helped us so much and you know once we started doing that you know it wasn't like it set us free we were able to do what we needed to do she was able to buy what she needed to buy and keep everything you know going in the right direction so that's amazing you guys well you still move the needle at 45 000 a year it's a lot yes yeah yes four thousand dollars a month for two years yeah that's with your average that's pretty crazy he has a video game um collection so we sold a lot of that

1:50:10Dave Ramsey:oh yeah and then he used to have yeah that's true used to have um and also he started selling it on ebay and i was like hey that's pretty easy so i started to take over that i know absolutely nothing about video games but i like selling them so i'll go thrifting i like selling his video video games. Yes. So we do a lot of thrifting and he's very good at fixing things. So he'll clean them up, fix them, and then I'll sell them. Good for you guys. You had kind of a side thing happen to bring in some extra income too. Good for you guys. Okay. What was the hardest part though? For two years, that's a lot of work, a lot of cutting out things in the budget, all of it.

1:50:52What was the hardest part? Just saying no to things that we used to say yes to. yeah so yes especially with the kids yes we didn't eat out uh we didn't go on any uh vacations we just you know we lived on as little as we could possibly live and we sold everything we could possibly sell and uh yeah so that was that was hard was it worth it a hundred percent yes yes

1:51:18Dave Ramsey:yeah a hundred percent talk to somebody who's out there listening or watching that is going, you know, I don't know if I want to miss out on eating out for two years. I don't know if I want to miss out on dot, dot, dot. I would just say it's worth the sacrifice. The freedom, the peace that we have now compared to before we started, it doesn't even compare. And we just have so much more financial freedom. And you should just do. Start now, one day at a time, and it'll change your life. And this has changed our lives. So how many years you all been married? Almost 20. Almost 20. Oh, wow. So you guys changed a whole 20 years of marriage.

1:52:00You know what I mean? A shift of 18. Yes. Yes. Probably the biggest change in our lives. Wow. Yeah. Does the freedom feel as great as you expected or even better? Much better, actually. I think better. Yeah. Yeah. Yeah. Once we made that last payment, it was like, okay, you know, what do we do now? Totally. Yes. Yes. And so we're looking forward to the future. We want to pay off our home and keep moving forward in that direction. And we just know it's possible now. So we know we're going to keep going on it. We're different people than we were before we started. So good. You know, I think that's such a good point, though, the sense that I think so many people live with debt.

1:52:38And it's so normal that they don't even realize the weight that they carry. And even though you all recognize it because you're like, we don't want it anymore. still even after that final step, after that final payment, you're like, that was even, it's even better than what I expected. It's like, you don't even realize how much stress you're carrying when you're carrying that debt until it's gone. You're like, wow. So good.

1:53:00Dave Ramsey:In your 20 years of marriage, have you ever been debt free? I guess when we first got married the first couple of years, but then I made some dumb decisions. I was actually investing and doing good things. And I took out our money and bought a car, you know, all the, all the wrong things. You started out debt free and then you became normal. Yeah. Yeah. And you have four beautiful kids over there. I can see them. What was that like for them on Xander? You said you had to cut out some things because of them, but what was, what was it like having four kids in the house and doing this? They were actually on board.

1:53:35They were very gracious with us whenever we would explain, sorry, it's not in the budget this month. they were really good about it they jumped on board and just did it with us I would say that they don't want to see a box of Kraft dinner for a long time which is our American mac and cheese so they're like no more please we're done, we're so sick of it that's amazing, incredible you guys, that's a feat of what you all just did you changed your family tree because they watched their mom

1:54:08Dave Ramsey:and dad become heroes Thank you. And they'll never be the same because they, you know, more is caught than taught. They're going to do what you do, not what you say. Yeah. And so they watched you change your whole family tree using these spiritual principles from the Bible you preach from every Sunday. Yes. Yes. And congratulations. We're very proud of you guys. Thank you. Thank you. Very, very, very well done. All right. Bring the kiddos up and introduce them and give us their ages. All right. We have Callie. She's our oldest. She's 17. Elena's 14. and then we have Raylene's 12 and then my youngest son Lance is 10.

1:54:43Lance, you're holding up all the girls.

1:54:46Dave Ramsey:And Callie, you're the one that brought Rachel home and started the whole thing, right? Hey girl, see you, well done. There we go. I love it. Rachel says, Rachel says, Rachel says. I know. You're probably five months into that mac and cheese and you're like, dad, come in. Why did I do this? Why did I do this? Why did I tell mom and dad about Rachel? Oh my gosh. Well done, you guys. Hey, way to go, you guys. You're a model. You're absolutely beautiful. Congratulations. You transformed your life. All right. Josh and Aaron and the team,$93 ,000 paid off in 25 months, making$73 ,000 to$120 ,000. Count it down.

1:55:20Dave Ramsey:Let's hear a debt-free scream. Are you ready? Three, two, one. We're debt-free! Yeah! Woo! Woo-hoo! That's how you do it, ladies and gentlemen. Love it. Thank you.

1:56:07Thank you.

1:56:09Dave 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.

1:56:58Dave Ramsey:Our scripture of the day, Galatians 6.10. So then, as we have opportunity, let us do good to everyone, and especially to those who are of the household of faith. Warren Buffett says opportunities come in frequently. When it rains gold, put out the bucket, not the thimble. Emily is in Akron, Ohio. Hi, Emily. How are you? Hi. I'm doing all right. Cool. What's up? So about three years ago, my husband left his stable job to start his own vending machine business. And since then, he's racked up about a million dollars in debt. He's run out of money to run the business. Personally, I don't feel like he's worked very hard to make it work.

1:57:39He recently just went back to work to try and give us an income because mine's the only one. I just started a job also.

1:57:45Dave Ramsey:So wait a minute, wait a minute. Stop. The vending machine business that he spent a million dollars on is not making money? Correct. Why? Correct. Well, I think he tried to buy too many too fast. And he followed the Robert Kiyosaki way and kept telling me, you've got to get into debt to make money, which I strongly disagreed with. But he kind of just kept going anyway. So I guess at this point, I just don't know if we should be pursuing bankruptcy. That's what he wants to do. Personally, I feel like the Bible is very clear on paying back our debts. But at the same time, the business is probably only worth$450 ,000.

1:58:24So that would leave us with about$500 ,000 of debt.

1:58:27Dave Ramsey:Who is the million dollars owed to? Some of it's business. A lot of it is personal credit cards, HELOCs. He took out a couple of mortgages on our house. We don't have any equity in our home anymore. A house? There's a rental house? We did have a rental house. We just sold one. We have another one, but it's not selling. that one's only worth about$60 ,000. And how long has this been going on, Emily? Three years? A few years, yeah. Okay, and you're done. I hear it in your voice. You're pretty pissed. I'm very done. Yeah. And you've had to go back to work. Do you guys have kids? We have four. How old are they?

1:59:1613, 12, 10, and 6. Man.

1:59:22Dave Ramsey:All right. Wow. I'm sorry. So there's nothing left to sell against the million that's still outstanding? He could try and sell some. He has some micromarkets and he has any issues, but what he would sell it for would be a huge loss. I mean, selling the business as a whole, the most would be like$450 ,000 or$500 ,000 is what he's being told. So then you'd have half a million still left. And there's how much, is there still a million owed? right now all together with all the debt yeah we owe just under a million dollars right now he hasn't sold it yet it's he has two people running it um but it's not making money he doesn't have enough money to like fill inventory um it's just okay so if he sold it for 450 what who would that pay off i guess it would depend on who we want to pay off it so the vending machines don't have a lien against them.

2:00:22Dave Ramsey:The business doesn't have a lien against it. Well, he leases some of the micro markets and he rents to own some of the vending machines. Some of the vending machines he does own outright, but most of it is in debt. Okay. I'm trying to figure out what the$450 ,000 would be used to pay off. Would it go to HELOCs or credit cards? Would that clear all of those rent-to-own machines and all that, or does that actually get to clean up some of your house debt? He wants to put any of it towards the business. I didn't ask what he wanted. I mean, is the money going to have to be used to clean up these machines in order for the thing to be marketable?

2:01:06Yes, yes.

2:01:07Dave Ramsey:Yeah. So you're going to have to put it towards the machine. Yeah. So you've got$450 ,000 worth of debt on the machines that you would just use that money to clear that debt. So selling it doesn't really net you any cash to pay off like your credit cards or your house. It just clears some of the debt that's on the machines. Correct. And gets you out of this business. There's more than$450 ,000 on the machines, right? Yes. Okay. And then you have your house and you have credit cards and you have a HELOC, right? And a$60 ,000 rental. Yes. Okay. It's not being rented. No, it's vacant. and we were trying to sell it, and it's just sitting there right now.

2:01:48Dave Ramsey:Okay.

2:01:52Dave Ramsey:So, wow. There's so much going on here. And you guys have no money, Emily, right? None in retirement or? There's no cash. No, he drained our 401K to do it, and our personal credit card. Did you know this was going on, or would he make decisions and tell you later? We would agree on things, and then he would go do whatever he wanted. Eventually, I kind of released it over to him, and I found out because our credit card got declined, and then I checked our bank account. Oh, wow. How much do you make at your day job? Right now, I'm at$25 an hour, working 30 hours a week. And what does he make at his day job?

2:02:32He just started last week, and it's$21 an hour base, and he's trying to sell insurance with Allstate.

2:02:38Dave Ramsey:Okay. All right.

2:02:44Dave Ramsey:well if you were to file chapter 7 bankruptcy you would have to resign on all the debt that is on your home including any HELOCs or anything else that doesn't go away or you lose the home one of the two yeah how much is all that Emily the HELOC on the home uh it's like 450 ,000 dollars And I think our home is probably worth a little under that. So the bulk of that second part of the debt is the home. Wait a minute. Let me back up. So if you sold your home and sold the business, you would clear up$900 ,000 of the million? Well, no, because we wouldn't. I'm sorry. So we owe about$450 ,000 on our house right now.

2:03:30I know. We bought it for$185 ,000. Is that part of the million? No. So the HELOC is, which is like another$200 ,000. The personal mortgage is probably$250 ,000 right now.

2:03:42Dave Ramsey:Okay. So it would clean up$200 ,000 of the million. $450 ,000 would be cleaned up when he sells the business. So that$650 ,000 is cleared, which would leave you about$350 ,000 in other debt if you sold your house and sold the business. Yeah, credit card and business debt. And the business debt, when you say business debt, what is that? Like business loans he's taken out. Okay. Well, they're signed personally, so they're not business loans. They're just personal loans he used to buy vending machines with. Now, if you sold the business for$450, are there any machines that are not included in that package?

2:04:21Dave Ramsey:No, he would sell them all of them. That would be done. Okay. Mm-hmm.

2:04:28Okay.

2:04:29Dave Ramsey:So what I'm trying to do is work through if we cleaned house, because in a Chapter 7 you're going to clean house anyway. And then if the other$300 ,000 or whatever gets wiped out if he files bankruptcy. So usually when I'm getting into these things, bankruptcy doesn't do as much for you as you think it does because if you sold the business and sold the house, we've not got a lot left to do, and that can be negotiated. That debt can be negotiated down for pennies on the dollar versus filing bankruptcy. So it's possible mathematically, legally, you could probably work your way through this. I don't know, but I think you could, okay, just based on what I've heard.

2:05:08Dave Ramsey:I'm trying to get figured all out. There's a lot of moving parts. I got to tell you, I'm about having been through this. Only I was 28 years old, and I was the stupid husband, okay? I was him. I didn't lie, but I just did stupid stuff. I just went deeply in debt and lost everything on real estate. It wasn't vending machines, but same thing. Um, and I'm more concerned about him being depressed or suicidal and I'm more concerned about your marriage than I am about any of this money. And you're, you're rightfully so very disgusted right now. Um, but if I were going to coach you guys, I would coach him on throwing his shoulders back and building out chapter two of your old's life.

2:05:53Dave Ramsey:And I would coach you guys on sitting down with your pastor, with a good marriage counselor and try to work your way through this where he repents of the stupidity and he begins a process to rebuild trust with his wife and relationship with his wife because you are very disgusted right now. And you should be. Yeah. You should be. But money fights, money problems take marriages. Number one reason for male suicide is financial issues. So there's big. So I want to take care of you two. Yeah. 90 % of this discussion and 10 % bankruptcy or not. Who cares? I try to sell everything and work my way through it.

2:06:28Dave Ramsey:That puts this hour 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.