The Real Reason You’re Broke May Not Be What You Think

[0] from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people, build wealth, do work that they love, and create actual amazing relationships.

[1] Open phones this hour.

[2] I'm Dave Ramsey, your host.

[3] Thank you for joining us.

[4] Jade Washaw, Ramsey Personality, number one bestselling author, is my co -host today.

[5] The phone number here is 3 ,8 -2 -5 -2 -25.

[6] Billy is with us in St. Louis.

[7] Hi, Billy.

[8] Welcome to the Ramsey Show.

[9] Good morning, Dave.

[10] Hey, what's up?

[11] Well, my situation is I own a homestead of about 70 acres.

[12] I paid $275 ,000 for it in 2020.

[13] Two weeks ago, I had a solar company approached me wanting to buy it.

[14] I entertained our offer, and they offered me $1 .3 million.

[15] Wow.

[16] Nice wick.

[17] I fell into a pile of crap and came out smelling like a rose.

[18] There you go, man. So the, wow, you're living on the property, right?

[19] Yes, I am.

[20] Personal residence.

[21] Excellent.

[22] Okay.

[23] Wow.

[24] What's your question?

[25] Congratulations.

[26] Well, I know about annuities and whole life terms.

[27] life and but i never really invested in anything like this because i grew up basically poor and i was never good with money until i read your book and started saving and right now i i want to set myself up and i want to set my son up to be successful down the road phenomenal wow way to go well um To start with, you will have capital gains taxes on anything over a $500 ,000 gain married filing jointly.

[28] You're married filing jointly, right?

[29] I am single.

[30] You're single.

[31] You will have capital gains of anything over $250 ,000.

[32] Gain.

[33] So you're going to have capital gains on about a million dollars.

[34] Okay.

[35] So that's probably going to be about $150 ,000, give or take.

[36] How much improvements have you done?

[37] Capital improvements have you done to the homestead while you've owned it?

[38] Basically none.

[39] Okay.

[40] I've been trying to add an old house on the property that I live in.

[41] I've been trying to save up to build a new house.

[42] But it's been a rough couple years farming.

[43] I'll put it that way.

[44] Okay.

[45] I'm sorry.

[46] Well, the wonderful thing is it turned out, like you said, So the, congratulations.

[47] So the answer is you feel like you hit the lottery.

[48] Now what do I do with this big old pile of money that I didn't see coming?

[49] So emotionally experiencing it as part of the equation, right?

[50] And the way that I suggest folks do is they start giving a name to this.

[51] Because here's the thing, you're going to have, do you have a mortgage on the property?

[52] I do.

[53] Um, between, between farm equipment and my farm, I owe about 300 ,000.

[54] Okay.

[55] So you're going to have, you know, give or take a million dollars in your hand.

[56] And if you don't watch your brain, we'll spend about three million of that million.

[57] Uh, it's been running.

[58] So we need to sit down very carefully and give every one of these dollars an assignment, temporarily and long -term, both.

[59] And the first thing you would do is see a good tax advisor.

[60] Go to Ramsey Solutions .com and click on ELP for taxes and sit down with someone and properly calculate the amount of tax to hold aside because I don't want you spending that capital gains tax money and having trouble later.

[61] It's probably going to be around $150K.

[62] Go ahead and get ready for that.

[63] And then you set that aside.

[64] You're going to pay off all the mortgages.

[65] And so, you know, we're going to be walking around with somewhere around $8 .50.

[66] after those two things now we've got to decide what we're going to do with that now what do you want to do with it well i've if everything goes correctly i already found uh another little homestead uh for sale um he's probably going to be asking about 3805 000 okay so that let's take 400 if you did that that's a reasonable purchase if you took 400 out of the uh out of the 850 now we got 450 what are you going to do with that?

[67] Well, I was going to put it back into retirement and maybe some annuity funds to just watch my money grow.

[68] Okay.

[69] So some mutual fund investing.

[70] And I don't think I would do annuities.

[71] I think I would just do mutual funds.

[72] Just do mutual?

[73] Yes.

[74] Yes.

[75] And again, Ramsey Solutions .com and click on SmartFester Pro.

[76] But the point being here that even if you wanted to buy some more real estate with it, whatever you're going to do with it, here's a couple of rules.

[77] Number one, decide.

[78] ahead of time what you plan to do.

[79] And so if you said, I'm going to buy that other homestead, and I'm going to put $400 aside in $450 aside just in a high -yield savings while I think about it.

[80] If you want to do that, that's okay.

[81] But you don't want to leave it there forever.

[82] But that's your short -term play.

[83] Then your long -term play is, I might want to buy some other real estate, or I might want to improve the homestead, or I might want to put some money in mutual funds, or I might want to be generous with some of the money, or I might want to take my kid on a trip with some of the money.

[84] I don't care what you do with it.

[85] All I care is you do it on paper on purpose before you get the check.

[86] Okay.

[87] Because that's when your brain's still working.

[88] When you get the check, your brain needs to go into autopilot and execute the plan that you did before your brain quit working.

[89] Yep.

[90] You see what I'm talking about?

[91] Because you have that where who, I mean, I don't care who you are.

[92] You make a million dollars is sweet.

[93] Yeah.

[94] Yeah, my mind's been racing.

[95] If I were you, if I were you, there's a big portion of this money I'd treat as though I never, like I never saw it.

[96] Like, I like that 450 is just going to go straight into investing.

[97] It's like you never saw it.

[98] Pretend like, and then pretend like it's not there.

[99] Yeah, like it never existed.

[100] How old are you?

[101] I am 32.

[102] Okay.

[103] So if you put it in mutual funds as an example and did what Jade said and just forgot it, If it averaged 10 % when you're 39, 450 will be 900.

[104] When you're 46, your 900 will be 1 .8.

[105] Yeah.

[106] Yeah.

[107] When you're 54, your 1 .8 will be 3 .6 if you just don't touch it.

[108] That's what Jade's talking about, the power of compound interest.

[109] So sit down with a good SmartVestor Pro, sit down with an ELP for taxes, and just develop you a game plan of exactly what you're going to do.

[110] with this money.

[111] But what you're describing is all very smart.

[112] I didn't hear anything unwise, even in your tone.

[113] I didn't either.

[114] I like that you're thinking ahead of time.

[115] And I think that you kind of know this has the potential to go crazy if you don't sit down and write out what your intentions are ahead of time.

[116] If you think you can do something today with that money that sets you up for life, you're wrong.

[117] It's not enough.

[118] But it could be invested into something that could set you up.

[119] That's right.

[120] If you left it alone to Jade's earlier point.

[121] And that's the thing.

[122] So, Billy, I'm going to be doing an advanced investing course.

[123] Dave Ramsey's investing essentials, something I've never done before.

[124] I'm going to open up to the stuff I do and that very wealthy people do with real investments, not stuff on TikTok, May 21st and 22nd.

[125] It's a virtual event.

[126] I'm going to give you a free ticket because I want you to watch this event, those two nights, because I'm going to teach you a lot about investing that I didn't have time to in this one -minute discussion or five -minute discussion we just had.

[127] Congratulations, sir.

[128] Thank you for calling.

[129] Buying your first home is a big deal and sets the stage for your financial success.

[130] So work with a mortgage advisor you trust, not just some random website.

[131] Churchill Mortgage is Ramsey trusted because they help you avoid hidden traps and expertly guide you through every step.

[132] Learn more at Churchillmortgage .com.

[133] This is a paid advertisement.

[134] in MLS ID 1591 and MLS Consumer Access .org, Equal Housing Lender.

[135] 1749 Mallory Lane, Suite 100, Brentwood, Tennessee, 37027.

[136] Jade Walshaw, Ramsey, Personality is my co -host today.

[137] Ken Coleman's book, Get Clear Assessment.

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[150] Thanks for joining us, folks.

[151] We're glad you're there.

[152] Check out ramsysolutions .com slash store.

[153] where Rachel is with us.

[154] Rachel's in Phoenix.

[155] Hi, Rachel.

[156] Welcome to the Ramsey Show.

[157] Hi.

[158] Thank you all so much for having me. Sure.

[159] What's up?

[160] All right.

[161] I'm trying to keep my fan girling at Bay here.

[162] So I'm just excited to be talking to y 'all.

[163] Okay.

[164] Here's my situation.

[165] I am selling a recreational vehicle that I own a private party.

[166] And the interested buyer, she came out, looked at it, loved it, wants to buy it.

[167] And in our conversations, she has asked if I would be willing to say on paper a lesser amount than I am actually going to be receiving for the vehicle.

[168] So my question is, you know, as the seller, is there a risk to agreeing to this?

[169] Why?

[170] Why did she want you to do that?

[171] Yeah.

[172] Tax purposes.

[173] How do you feel about it?

[174] Um, does it bother you that someone's asking you to lie for them um yeah it does you know it gives me pause for sure and i just you know i if if i were to agree to this i just i don't know what the possible ramifications would be so you're more concerned about would you get caught or whether you're more listen it sounds like you're more concerned about whether you would get caught as opposed to whether this is wrong or right.

[175] And I think that's what's giving me pause.

[176] Okay.

[177] You tracking with me?

[178] Yeah.

[179] Yeah.

[180] So morally, no, you're lying.

[181] No, I would say no, don't do that.

[182] That's telling a lie.

[183] And who cares if you could get away with it or not?

[184] Morally speaking, that's a lie.

[185] Yeah.

[186] I mean, sounds like you might do what you want to do on this, but since you asked us, it's a lie.

[187] I wouldn't do that.

[188] and it's weird to me that is this somebody that you know or this is just a stranger it is a stranger yeah I know okay and you know and let me tell you what I would also say Rachel is I would look at the person and say and I won't lie about this and everything I've told you about the RV is true also because I wouldn't lie about it either and so you should feel really comfortable buying this because I haven't misled you and I'm not willing to participate in misleading someone 100 % I hate I hate taxes I hate taxes I hate anyone having to pay taxes and I hate I really hate income taxes but I pay 100 % of what I am legally bound to pay in income taxes not a dollar more not a dime more but, and I will figure out any way I can that I can legally avoid them, but whatever the law requires, whatever the regulation requires, because I hate income taxes, and I hate the way the federal government operates, and I really don't want to give them money.

[189] But more importantly than that, I don't want to be a person who doesn't have integrity.

[190] So I'm going to tell the truth, and I'm going to pay 100 % of my taxes.

[191] And this is just a word to the wise for anyone Hey, beware of good deeds, because this woman wanted to feel like, hey, you're going to give me a tax break if you do this.

[192] Beware of people who want to manipulate you to do something out of what seems like it could be a good deed.

[193] What seems like, oh, but this is the loving thing to do.

[194] But at the end of it is a lie.

[195] Okay?

[196] Just word to the wise.

[197] Phillips in Washington, D .C. Hi, Philip.

[198] How are you?

[199] I'm doing good, Dave.

[200] Good.

[201] How can I help?

[202] Hey, Dave, I recently received an inheritance, and some of it was in cash, some of it was in stocks.

[203] I left the stocks alone, the cash I put into a money market.

[204] And I'm able to pay off my mortgage if I wanted to because I have more than double in the money market than I do on my mortgage.

[205] But my mortgage is 2 and a quarter percent, and my money markets a little deliver four and a half.

[206] Would it be wise to go ahead and pay off that mortgage or let that money sit in the money market and just do a withdrawal from my bank automatically out of that account?

[207] So what you're saying is, how much you own the mortgage?

[208] $125 ,000.

[209] And how much is this whole inheritance?

[210] What are we talking about?

[211] $310 in cash in the money market.

[212] Plus stocks.

[213] Plus that, not yeah, plus stock.

[214] Okay.

[215] So I would pay off your mortgage tomorrow, or maybe today, whichever one you want.

[216] Either one's okay, today or tomorrow.

[217] And the reason is very simple.

[218] As we studied 10 ,000 millionaires, the largest study of millionaires ever done, none of them precisely zero out of 10 ,000 said, I became a millionaire because I borrowed on my mortgage and reinvested the money.

[219] Not one.

[220] Not a single.

[221] One.

[222] So people that do the math equation that you're doing generally don't turn out to be wealthy.

[223] And the reason is they're at risk to their lives.

[224] When you don't have a mortgage, it puts you in a completely different mindset, put you in a completely different place with your relationships, with your career choices, with everything.

[225] When you don't have a single payment in the entire world, you have no other debt, right?

[226] No other debt.

[227] Good.

[228] How old are you?

[229] Fifty -four.

[230] And who left you this money?

[231] my mom so let me guess about your mom okay could i could i make a guess about her would that be okay yes please my guess is the day you pay off your mortgage she's in heaven smiling because she was that kind of woman yeah i would agree okay i have a 529 that my son never used um and i'm trying to figure out also how to not get killed by withdrawing that out the only thing you're if you withdraw it out, straight out, you're going to hit a penalty on the growth.

[232] That's all, just on the growth and taxes on the growth.

[233] And so I don't know how much it has grown versus what you put in it.

[234] What you put in it, there's no tax on.

[235] But the growth over what you put in it, the gain is taxable.

[236] And you can see one of our tax EOPs and get a full picture on that.

[237] That's independent from this other decision, though.

[238] Let's pay off the mortgage.

[239] Yeah, absolutely.

[240] Open phones at AAA 825 -5 -2 -2 -25.

[241] Thanks for hanging out with us, America.

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[258] Thanks for joining us, America.

[259] I'm Dave Ramsey, Jade Warshall.

[260] Ramsey Personality is my co -host today.

[261] Brittany is with us in Saginaw, Michigan.

[262] Hi, Brittany.

[263] Welcome to the Ramsey Show.

[264] Hi, Dave.

[265] Thanks.

[266] Sure.

[267] What's up?

[268] So we've been going through a hard time, me and my husband, for the last two years.

[269] And I've been watching your show, and I just really need some help on what we should do to kind of get our credit up and get out of this hole.

[270] So what's going on?

[271] Tell us more.

[272] Well, last year in December, we had a house fire.

[273] Oh.

[274] Oh.

[275] And that was only after an eviction the previous year.

[276] So it has killed us.

[277] The house fire, was it complete?

[278] Did it take everything?

[279] It was not.

[280] It was a double Y that we had on land contract.

[281] So it ended up in just a bunch of messy paperwork and us not getting, you know, our house or any of the money we put into it.

[282] So what's going on right now?

[283] You had the eviction.

[284] You had the house fire.

[285] Well, right now, since then, we have.

[286] been trying to just save money, you know, and get, so we moved to Ohio and we got a good job down there.

[287] And that was a rental ending in disaster.

[288] Okay.

[289] Why?

[290] Well, the landlord had hooked up the gas wrong.

[291] Some children came through and smashed out all my front windows and she wouldn't get them replaced for over a month.

[292] So we ended up leaving that, lost our security on that, you know, so it's just been one thing after another.

[293] And I'm just trying, you know, I watch you guys, and I'm trying to figure out, you know, live below your means.

[294] So you're in Saginaw, Michigan now?

[295] Yes.

[296] So from Ohio, back to Michigan, then.

[297] What's in Michigan family?

[298] Yeah, yep.

[299] We're both born and raised here.

[300] Okay.

[301] What kind of work are you guys doing?

[302] What's causing this kind of bouncing around?

[303] Yeah, so my husband does concrete, and so in the spring, you know, in the winter, we kind of have a slowdown, too, every year.

[304] Sometimes he can stay on depending on how big the contractor is, you know, but most of the time it's a layoff in the winter.

[305] And so that kind of slowed us down.

[306] Okay, but he's been in concrete for a while.

[307] He's been in concrete for a while?

[308] Yeah, about 20 years.

[309] Okay, so then we know that when winter comes, it gets, it gets slow, right?

[310] So what have you guys determined that during those winter months is a good move for him to kind of pivoting?

[311] He actually has like a handyman that we run, you know.

[312] Okay, so what does he make a year, and what do you make a year?

[313] So he makes about $750 a week, you know, depending on how slow the winter is, you know, yearly.

[314] It's a little bit fluctuating, but that's what we're getting right now.

[315] I'll call it $45 ,000 to be conservative.

[316] What do you make?

[317] Yeah, so what I was actually going to ask you about, I had a kid.

[318] catering business, I was running out of our kitchen.

[319] That burned along with it.

[320] So I haven't been able to burn.

[321] The kitchen did.

[322] That's right.

[323] So I haven't been working.

[324] Why?

[325] All my stuff's in storage.

[326] I'm paying for a storage.

[327] You have a kitchen now, don't you?

[328] I do not.

[329] That's why I'm calling in today.

[330] Where are you living now?

[331] Our credit got destroyed and we have been bouncing around.

[332] Where are you living now?

[333] We are living in an RV running.

[334] to own.

[335] Why would you rent to own an RV?

[336] Well, we couldn't get approved for a rental apartment.

[337] Because your credit is that the whole discussion around our credit cards after the fire and it's been, you know, it's just been hard because our credit tour went down so quickly.

[338] And you didn't have renter's insurance?

[339] No, ma 'am.

[340] Okay.

[341] So what I'm hearing here and Dave will jump in, it's just a series of very, very bad decisions, and they keep catching up with you, but here's the thing.

[342] I'm not convinced that you guys are learning from these mistakes.

[343] I kind of feel like you keep doing the same thing over and over again, and it's to no avail.

[344] Right.

[345] That's why I'm kind of calling Dave.

[346] I was like, you've got to know more than I do because something's going on.

[347] Well, quit trying to jump in one jump out of the hole.

[348] So you went from eviction to I felt trapped into a bad deal on a trailer and it burned.

[349] Then you take off running to Ohio for some ungodly reason.

[350] Nobody knows why.

[351] But then the place you move into there was a piece of crap, and you get in the same exact thing.

[352] And then you come back, and your answer to all of that was to rent an RV.

[353] None of these four things work.

[354] None of them work.

[355] After I tried to get my, to get the apartment, so we kept.

[356] Yeah, I know.

[357] Well, some apartment somewhere.

[358] I don't know what or where or who, but somebody without trying to, you don't need to own anything.

[359] You just need to get a rental and you need a pile up cash and you need to get on a rutting budget and get your pans back out and start cooking again.

[360] Or doing anything at this point.

[361] Or work and doing anything.

[362] Anything you can do is add some money to this equation.

[363] Because if we can double your income, a lot of this starts to smooth out.

[364] very, very quickly.

[365] If we can just increase your income, it starts to smooth out very quickly, and then slow down and quit.

[366] A lot of these decisions sound like you were very afraid and desperate when you made them.

[367] Mm -hmm.

[368] I would say.

[369] Yeah.

[370] And I, because I can smell it, because I used to do that a lot.

[371] I have found that when I'm desperate, right after I get a pattern here.

[372] And it's not saying you're stupid.

[373] I'm just saying you did some stuff that's cost you.

[374] And admittedly, you told us that.

[375] And so what I want you do is go find some very solid predictable rental situation.

[376] And you don't have to do it by the weekend, but I do want you to do it this month.

[377] And move into that out of an RV, get your family settled in, get your stuff out of storage, quit paying storage to store stuff you should be making money with.

[378] And I'm not convinced that you guys are steadily making three to four thousand dollars a month i think that that's on a good month so i want to make sure that both of you him in the off times has something steady because i think the handyman thing is there but well it can be steady if you fill it up yeah but you got to fill it up well he's had 20 years it can't be i don't do anything and i call that being a handyman yeah it's handy to not do much you can't do that okay so you got to be you got to be handyman in like 15 hours a day And you can make really good money doing that, by the way, better than you're making in concrete.

[379] That's true.

[380] You could grow that business and get out of the concrete business completely.

[381] You've got to get out of it.

[382] A lot of them are making $100K right now.

[383] So you set that business up and fill yourself up with taking care of rich people doing little tiny stuff they don't want to screw with.

[384] And going there dressed and nice and bathed and clean tools and clean shoes and take care of business and charge good money for a tiny little job.

[385] and you can really make a good living doing that if you build the business out.

[386] Now, if you don't want to do that, that's fine if you want to stay in concrete.

[387] But let's build it out enough that it's that it's handy that you make making $2 ,000 when you're not doing concrete.

[388] I want wifey working too.

[389] Wifee needs to get those pots and pans out, baby.

[390] I don't think it, again, I don't think it's the pots and pans.

[391] I think that because there's only so much catering you're going to be able to do out of a double wide.

[392] I think that she needs to.

[393] It's an RV.

[394] You're not doing any.

[395] That's what I'm saying.

[396] You got to get out of there into something where there's a kitchen and either get a job.

[397] or get that kitchen fired up one of the two or both or both go make a bunch of money and slow down on your big decisions and when your heart rates up and there's a little bit of sweat on your upper lip and in the palms of your hands that indicates fear don't make a decision because you're getting ready to do something dumb all of you everybody listening including me fear does not lead to good decisions and desperation does not lead to good decisions and scared and stuck and forced to, and these kinds of words come out of your mouth right before you do something dumb.

[398] And I've done a bunch of it, Brittany, so I'm not picking on you, honey.

[399] I know where you are.

[400] And we'll put you guys into Financial Peace University right now and get you started on learning how to handle money.

[401] We've got to get the income side of the equation and the housing both stabilized for you to be able to prosper and move forward.

[402] The instability of your housing situation and your income is what has caused you to be sitting in this crisis.

[403] Those two things combined and you get those two things fixed you're going to find this thing stabilized pretty quick this is the ramsie show you know it doesn't take a degree in statistics to realize this one stinks 93 % of undergraduate private student loans are co -signed so when you're delinquent and drowning mom or papa or uncle joe is stuck in that financial stress along with you but there is a way out why refi why refi offers a custom refinancing option with a fixed rate loan based on your ability to pay.

[404] And the average interest rate Y -Refi offers is 3 .9 % which can significantly reduce your monthly payment and decrease your total cost.

[405] Contact Y -R -R -R -R -F -I -2 -R -M -Zi or go to Y -Refi .com slash Ramsey.

[406] That's 8442 Ramsey, or the letter Y, then R -E -F -Y .com slash Ramsey.

[407] Why Refi is not licensed by the California Department of Financial Protection and Innovation.

[408] Why Refi is not authorized by the New York State Department of Financial Services to service any New York loans.

[409] Funding may not be available in all states.

[410] Jade Washall -Ramsey personality is my co -host today.

[411] Thank you for joining us.

[412] Mark is in Nashville.

[413] Hey, Mark, welcome to the Ramsey Show.

[414] Yes, sir.

[415] Thank you for taking my call.

[416] Sure.

[417] How can I help?

[418] My profile's a little bit different than your usual profile.

[419] Okay.

[420] I am 69 .5 years old.

[421] I am single, unexpected divorce 10 years ago.

[422] I went for a career change from full -time ministry to be in a registered nurse.

[423] And I want to know how to plan for my retirement.

[424] Okay.

[425] All right.

[426] So now you're a nurse these days?

[427] Yes, sir.

[428] Okay.

[429] Cool.

[430] When did you make that transition?

[431] finished school four years ago cool interesting good for you okay so what's your uh what's your financial situation what's kind of money you got saved okay uh through divorce lost all all our saved assets i was married to someone a little bit younger and our plan was to you know i retire first she keeps working and we can be generous and give and take care of our children build a nest egg by mortgage anyway that's all off the rails.

[432] So I earn roughly 70 ,000.

[433] I have 20 ,000 a year.

[434] I took an early pension from my previous career.

[435] So my income is basically 90 ,000.

[436] My child support of about 18 ,000 a year will be ending at the end of June.

[437] You have an 18 year?

[438] Yes.

[439] And a 24 -year -old.

[440] And then I have a $10 ,000 college loan from the U .S. government.

[441] And I have any money saved?

[442] Yes, $5 ,000.

[443] Well, I had $100 ,000 before the divorce.

[444] No, I know now.

[445] Do you have any money now?

[446] No, $5 ,000 on mutual fund and $5 ,000 in cash.

[447] Okay.

[448] All right.

[449] And the divorce was final when?

[450] Back in 2013.

[451] 13.

[452] So over a decade ago, over 10 years ago, and yet you've still saved no money.

[453] I've had child support and I had nursing school and related expenses.

[454] Okay.

[455] All right.

[456] But now you're ready to save money.

[457] Okay.

[458] All right.

[459] So that's been my plan.

[460] So the answer is to pile up as much money as fast as you can, obviously.

[461] You already knew that.

[462] You didn't need me for that.

[463] How can I help?

[464] Well, I have a question.

[465] What's your living situation?

[466] How are you living?

[467] Are you renting?

[468] Do you own a home?

[469] I am Airbnb, paying basically a thousand a month.

[470] You live in an Airbnb and you're paying a thousand a month?

[471] Okay.

[472] Correct.

[473] Okay.

[474] Well, for you, it's the baby steps like anybody else.

[475] I mean, the first step is you've got to pay off this 10 ,000 loan that you have.

[476] You got 10 ,000 and let's knock that out instantly.

[477] You're making 90 ,000 a year.

[478] You're single.

[479] You'll, you have.

[480] You have to pay off this 10, a very low, I'm going to call it rent compared to everybody else out there who's, you know, would be looking for a rent today.

[481] So how quickly could you pay off the $10 ,000 loan in two months?

[482] Haven't done all the math on that.

[483] But I'm only paying like 140 a month.

[484] Well, let me start you.

[485] Let me start you off right.

[486] Five thousand a month for two months.

[487] Well, you've already got $5 ,000 cash.

[488] So you could put $4 ,000 on it now and then have the rest paid off within the next two months.

[489] So that puts you down to $1 ,000 emergency fund.

[490] You've now paid off your your debt in two months.

[491] Now, the key after that is we've got to save up some emergency funds and as quickly as you can save up three to six months.

[492] In your case, I might start with three to four months and then move on and start baby step four and get to retiring.

[493] I want to start saving money by Christmas.

[494] I want you have $10 ,000 in the bank and be rid of the $10 ,000 before Christmas.

[495] And then start investing like crazy.

[496] Sit down with a smart vester pro and dump as much money as you can towards retirement and build up.

[497] And then once you get that going, I'm going to start thinking about, you sound like you're in very good health.

[498] I'm going to start thinking about buying something to live in because you can stabilize.

[499] Because at some point out in the future, 10 years from now, let's say, that rent's going to double, triple, whatever it does.

[500] and when you can buy something, you lock in the most expensive line item in your personal budget, which is your home budget, your cost of housing, whether it's rental or mortgage or whatever it is.

[501] And let's get in that as fast as we can.

[502] Something very inexpensive, and it sounds like you're living in something modest now.

[503] So a modest one -bedroom condo that you pay cash for or that you almost pay cash for and pay off very quickly.

[504] That kind of a thing is out there depending on where you're doing your nursing work and how you know what what the proximity around town is and all those kinds of things but yeah i'm sorry mark you've obviously been through a lot of pain and heartache and heartbreak with that divorce i'm very sorry for you um it does sound like you've you've painted yourself into a new future and i like that painting it looks good let's lean towards that and it's easy to look back and talk about what once was um and it's it hurts um but it's it's it hurts um but it It's very important that you lean into the future right now and clean up his debt, put an emergency fund in place, and then start stacking cash in an investment, and then start thinking about buying a home at some point in the process.

[505] So good questions.

[506] Hey, thanks.

[507] Thanks a bunch.

[508] Very cool.

[509] Yeah, that's crazy.

[510] Stephen is in Knoxville.

[511] Hi, Stephen.

[512] How are you?

[513] I'm doing wonderful.

[514] How's it going, Dave and Jade?

[515] Better than we deserve.

[516] What's up?

[517] Hey, so my wife and I, we.

[518] are ministers, and right now we're bringing in about, I don't know, 47 ,000 or so a year.

[519] The question I have is, and we have no debt, and we have a fully funded emergency fund of about $10 ,000.

[520] The question I have is she has an old 401K, and it's about $65 ,000, and I was wondering, this is from her previous job, is it a good idea to roll that over into a Roth IRA, pay the taxes on it now and then continue to fund that Ross or if you're 100 if you're 100 % if you're 100 % debt free and you have extra money that's house and everything then I would consider doing that otherwise I wouldn't you wouldn't roll that into a Roth no I would not okay now the other the other thing is you have a house mortgage no no we rent we uh we we we travel a lot as ministers.

[521] Okay.

[522] Do you have the extra money to pay the taxes that that will create, $15 ,000, $20 ,000 if you did that?

[523] Would the taxes just come out of what's been built?

[524] No, I don't want you to do that.

[525] I want you to roll the whole thing or don't do it.

[526] Yeah, so we do have $25 ,000 in a taxable brokerage account as well.

[527] In addition to your emergency fund.

[528] Exactly.

[529] And you're 100 % debt -free?

[530] 100%.

[531] Okay.

[532] Then if you want to roll that to a Roth and you want to use that brokerage fund to pay the taxes, you're going to come out ahead.

[533] It has the mathematical effect of having invested an extra $20 ,000 into your Roth.

[534] That's what the math effect of it.

[535] But if you take the 60 and you drain it down to 40 just to pay the taxes, that 20 you took out to pay taxes would have grown to enough to pay the taxes.

[536] So all you do is break even.

[537] How important is it that they do it now versus waiting?

[538] Several years.

[539] The better, because from this point forward, it's 100 % growth tax -free.

[540] So, yeah, but if you want to use the $20 ,000 out of your brokerage to do that, it's an extra way to invest into retirement.

[541] How old are you guys, Stephen?

[542] I'm 29, and my wife is 35.

[543] It's going to hugely benefit you.

[544] But you've got to have the rest of your life figured out, not the whole rest of your life, but I mean the other parts of your life today figured out, like cars and whatever else, that brokerage money was you were sniffing.

[545] around that brokerage account to do something else, because now I just spent it.

[546] Yeah, I think that's the thing, because we have a 20 -year -old car, and we do want to have kids there, so.

[547] Yeah, pay cash for whatever, no debt, no future debt, because of this move.

[548] But if you can pay the taxes with outside money rolling to a Roth with zero debt, house and everything, because you don't have a house, that's easy, but then, yeah, the Roth makes mathematical sense to do that and as you become very wealthy later that having all of it in roth is really handy from a retirement standpoint and from an inheritance standpoint in particular so really good move to get it to a roth but not does no good at all to use the roth or to use the money out of the IRA to pay the taxes it just nets out the same so hope that helps you man thank you for your call this is the ramsie show live from the headquarters of ramsie solutions It's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

[549] Jade Washaw, Ramsey, Personality, bestselling author is my co -host today.

[550] Open phones at AAA -8255 -225.

[551] Thank you for joining us, America.

[552] Jade, did you know that it's producer James Childs' birthday?

[553] I was not informed.

[554] Should we sing happy birthday?

[555] not maybe not you oh says the singer who's heard me apparently singing church oh i've never heard me saying a joyful noise in church i'm just saying the only time i'll be caught dead singing happy birthday james thanks guys i love it sammy is in philadelphia hey sammy how are you hey dave thanks for taking my call sure what's up so um my question is in regards to funding inventory for my small business um so currently this is going to be my third year in business um we're expecting to hit two million dollars this year great um yeah so i don't have any employees just me and my wife helping me on the side um so my invent my my my most almost about 70 percent of all my business expenses is just in cost of goods um so my question is netted two million or you grossed two million.

[556] That was my, no, that was my, that was my, that was my, that was my, that was my, that was my, that was my, so we should be netting about 400 this year.

[557] Your gross profit on that would be about 600, yeah, 400.

[558] And then you'd have some other miscellaneous expenses.

[559] What other expenses do you have, other than cost of goods?

[560] Um, it's just basically, uh, rent among some other things that we do.

[561] It's consumer electronics.

[562] So each of them have to be inspected and tested, um, yeah, and cleaned all that.

[563] What does it cost you?

[564] what are your expenses run you you said you had a you said you're 70 or 30 % gross margin right it's about it's about 25 % okay so 25 % gross margin so on 2 million that'd be $5 million gross profit after cost of goods sold before operating expenses what would your operating expenses be it would be about $50 ,000 okay so you netted taxable income about $450 ,000.

[565] Correct.

[566] That's what we're expecting this year.

[567] Phenomenal.

[568] Cool.

[569] Good for you.

[570] Well done.

[571] How can I help?

[572] So my question is, till now, I've been funding my purchase orders.

[573] You're not going to like this, but with a credit card.

[574] I've been paying them off within a 30 -day mark.

[575] The card I use doesn't actually allow me to carry a balance.

[576] But I've basically been spending about $80 ,000 on the card every month on average I make sure not to spend above why are you doing that you have the cash so I don't I don't have the cash because every single dollar is reinvested back into new skew I'm trying to since we just started a couple years ago I'm trying to expand my skew every single month I'm trying to get new lines you're electronic you spent $450 ,000 on personal living expenses this year?

[577] All that profit was put back.

[578] I don't pay myself a dime.

[579] All that profit was put back into the business.

[580] And it was all on expanding schemes.

[581] Then why would you need to use a credit card?

[582] Because you have put $450 ,000 back into inventory.

[583] Because, well, that's the numbers we're expecting this year.

[584] Last year, the number we made in profit was about $300 ,000.

[585] Okay, so you put $300 ,000 back in.

[586] Why would you need to use a credit?

[587] card you should make that cash machine run off of 300k organic correct correct currently right now at the moment I have over 400 ,000 dollars in inventory that's paid for however if I want to expand into new skew so it's not actually to cash flow the operation of the business it's to expand the growth correct or to fund the growth is with a credit card correct if you want to stay open you're going to quit doing that why do you say that because most people that do that do that crap go broke.

[588] I coach over 10 ,000 businesses in Entree leadership.

[589] People that run small businesses off a credit card inventory control system go broke.

[590] They don't make it.

[591] Instead of actually running your business on cash, which you have the ability to do, you're smart enough to do it.

[592] You just didn't have the appetite to slow down enough to do it.

[593] You're going to slow your growth rate temporarily until you get weaned off this credit card and get 100 % cash on your inventory reinvestment business but it's going to cause you to buy different inventory too what are you spending uh what are you currently spending on the credit card to fund your new and your new your new inventory your new skews so i i it's not exactly just on new skew it's just it's just i just spend as soon as i i make an order every week um and that ranges like currently for example on my card i have 15000 but i just got another order today which was 55 000 so But I have about 40 ,000 coming in a week, so that's easily going to get paid off.

[594] If it's easily paid off, it's easily fundable with cash.

[595] It's the same thing, dude.

[596] One of these is not true.

[597] Either it's not easily paid off or it is easily paid off.

[598] And if it is easily paid off, it is easily run with cash.

[599] You just got to have a one or two week hiccup here and get weaned off these credit cards.

[600] You could do what you want to do.

[601] You call me and ask me what I think you ought to do.

[602] Yeah, because ultimately it won't take him much time to adapt that cash system.

[603] He's just going to have to basically get ahead a couple of months so that he can have that reserve to do it.

[604] So what I would tell you to do is to, Sammy, is to sit down with one of our CPAs or our tax people, go to Ramsey Solutions, click ELP, and have one of them help you sit up.

[605] a bookkeeping system you need to learn accrual accounting accrual accounting is when you buy an item you book it as sold okay instead of right now you're booking it as cash and every time you sell an item you set aside a percentage of that item like 70 % or 75 % to buy the next one that's a cruel accounting with cash you're just throwing cash up in the air and hold it all lands and you're not managing cash well you're selling the crap out of stuff and you've grown a good strong business in terms of revenue growth but you're not managing it well you're not managing the accounting and the numbers well and it's going to bite you in the butt so what you should what a proper business function would be with accrual accounting is every time you sell an item you set aside 75 % for a replacement item if you want to grow you set aside 85 % 10 % for new skews and 75 % for replacing the old skew and then you can you can stay ahead of the cash you'll always have the cash if you set that back set that back for the next purchase and then you don't purchase or make sales beyond your cash position and you you know you can run this business forever this way the way it is right now if the music stops and you don't have a chair you're screwed because you're playing musical chairs that's what you're doing you're playing hide the pee under the shell.

[606] This is the Ramsey Show.

[607] Jade Washaw, Ramsey personality is my co -host today.

[608] Thank you for joining us.

[609] I'm Dave Ramsey.

[610] The phone numbers, AAA 825 -5 -225.

[611] C .J. is with us in Hickory, North Carolina.

[612] Hi, C .J., how are you?

[613] Good afternoon, Dave, and Jade.

[614] How are you?

[615] Better than we deserve.

[616] What's up?

[617] So, I'm going to jump right in.

[618] I have me and my wife have about 57.

[619] thousand dollars in outstanding debt um about 27 ,000 of that is a student loan.

[620] Um, then we have two cars.

[621] One is 10 ,000, uh, sorry, 12 ,000 and the other is 16 ,000.

[622] Um, and then there's a small amount of credit card debt, um, in there as well.

[623] Um, so we had decided, I've been listening to you for about three weeks, um, and we decided to sit down, make a budget and figure out and, uh, decide, you know, get debt free.

[624] Cool.

[625] We were living comfortably.

[626] Um, um, because we're making the payments, but...

[627] What's your household income?

[628] Household take home is $7 ,300 a month.

[629] And how much of that is you versus her?

[630] I don't know.

[631] It's at my head.

[632] Okay.

[633] I just not, we did everything as a whole.

[634] That's good.

[635] Okay.

[636] So your question's what?

[637] So my question is this.

[638] So we were starting to pay everything down.

[639] We have $16 ,000 in the back.

[640] We were going to dump that into paying things, right?

[641] However, we were also trying for a baby, and we're pregnant.

[642] Yay!

[643] Nice.

[644] Great news.

[645] But I'm wondering what I should do with that $16 ,000.

[646] Should I save it for the baby?

[647] Should I use it to pay down debts?

[648] What should I do with it for now?

[649] If the situation were different and you weren't yet pregnant, I would say, yeah, like I'd skim that down to $1 ,000 and I'd take the other 15 and I would throw it, I'd knock out the one car and I'd start on the $16 ,000 car.

[650] But because you have the baby, I would say for us to pause all of this for right now and let's see how much cash we can stack up.

[651] That's kind of, I had a feeling you were going in that direction.

[652] That was also why I wanted to know how the income broke down because, you know, there might be a portion of time where she's not working and I'm not sure what the maternity leave is.

[653] So for that reason, it's good to have as much money saved up as possible until the baby becomes the baby's healthy and then you can crank this thing back up and you'll have a big pile of cash sitting there hopefully by then I mean she just got pregnant so hopefully by the time this is all said and done you might have enough to knock out both vehicles hey C .J if you if you weren't doing this and you're really tightened the budget down how much a month were you planning to throw at the debt so our total to when after we tightened everything down was about between 12 and 50 hundred a month okay all right so let's call call that in nine months $12 ,000 for fun, okay.

[654] So I want you to save the $1 ,500 a month.

[655] I want you to get to $12 ,000.

[656] Added to the $16 ,000 is $28 ,000 in a big old pile of money, doing nothing but sitting there, making sure you have a peaceful pregnancy and delivery.

[657] Mommy and baby come home and everything's okay.

[658] Now we push play on the total.

[659] money makeover baby steps and that means you're going to take of the 28 27 ,000 and you're going to pay off both cars.

[660] You're going to pay off both cars.

[661] Okay.

[662] The day that she comes home and the baby's okay.

[663] Now you're debt free.

[664] Except your student loan and then you get in, now you get into beans and rice, rice and beans mode and as fast as you possibly can.

[665] And you don't spend this 28 ,000 to build a $20 ,000 nursery for a newborn that weighs eight, pounds.

[666] Listen, if I were you, I'd be calling up the hospital where she's going to deliver, and I'd ask outright, you know, how much is it going to cost to have this baby the natural way?

[667] If she has to do another way, find out what it's going to cost.

[668] Find out if you're going to hate your deductible.

[669] Then you'll kind of already be able to kind of put some guardrails around this money.

[670] You'll kind of be able to look at it and go, okay, this much is the deductible.

[671] Then we'll have this coming out.

[672] And you'll be able to see all the things that you can do and accomplish, to Dave's point.

[673] If you have reasonable insurance, you should be able to bring the baby home.

[674] and have almost no effect to your cash flow and have the whole $28 ,000 clear to throw at the debt.

[675] Excellent.

[676] But if there's a hiccup, if there's a hiccup, we got $28 ,000 worth a piece to help us with a hiccup.

[677] Okay.

[678] Awesome.

[679] Sounds great.

[680] Yeah, and then you get, so you're not going to miss a step.

[681] You're not going to miss any progress to amount to anything here, as long as you don't sidetrack some of that money with something silly as you go along.

[682] And that can happen, so be careful.

[683] You have to guard against Silly.

[684] Silly's how we got here, by the way.

[685] So we want to get out.

[686] Not using Silly.

[687] Jonathan's in Murray, Kentucky.

[688] Hi, Jonathan.

[689] Welcome to the Ramsey Shep.

[690] Hey, thanks for having me. Sure.

[691] What's up?

[692] Our student loans are currently on pause right now.

[693] We're on the safe plan, so we don't have a payment.

[694] We're not getting any interest.

[695] Wait a minute.

[696] Can I call it?

[697] I've thrown a flag on that play.

[698] There's not a student loan pause.

[699] Now you could be on the one -year ramp.

[700] No, I'm on a safe plan.

[701] So it's on, like, our payments are on pause right now.

[702] We have zero payment right now.

[703] Because you have no income or because you're in back in school?

[704] Our income is low and we have two kids.

[705] So they're just letting the interest pile up?

[706] No, it had no interest on the safe plan.

[707] The interest doesn't pile up.

[708] Okay.

[709] Keep going.

[710] So I'm on that right now.

[711] We want to say for a house, we had a house and we got in some debt issue.

[712] It was a really hard decision, but we had sold our house.

[713] So we're currently saving money, but we do have the student loan debt.

[714] So I'm just trying to, and we have money going elsewhere.

[715] We're just trying to make sure we're in a good train of thought with our budget and everything to make sure that we're setting ourselves up.

[716] How much student loan debt do you have, honey?

[717] We have 62.

[718] Okay.

[719] Until you clear that, you're not going to prosper.

[720] Trying to monkey around and find some way to twist and turn and do a double backflip and act like that's not there and some kind of.

[721] mathematical denial is not going to work the sooner you clear that the sooner you're going to prosper it's hanging over your head it's always in the background it's always in the in the closet the monster ready to come out at midnight clean up your freaking debt quit screwing around with intellectual exercises while meanwhile you're hovering with this thing over your head it's not going anywhere until you take it out pay it off now what's your income oops that's all right Well, here's what I want to say.

[722] The screen said, should we save for a house if we have student loans?

[723] But I'm like, you just told me, you just told me your income is low enough that they gave you a $0 payment.

[724] So there's your answer.

[725] You shouldn't be safe.

[726] You shouldn't be, if you can't pay a payment on a student loan, you don't have any money to start with.

[727] And if you did, what are you going to buy?

[728] Exactly.

[729] I mean, a one -bedroom house?

[730] I mean, what are you going to do here?

[731] So no, no. Right now, you need to clean up your student loans as fast as you possibly can.

[732] Quit trying to use some governmental stupidity as an excuse to not do it.

[733] Knock it out as fast as you can, get it out of your life, then build an emergency fund, you're 100 % debt free, then save for a down payment on a house.

[734] It's the slower version of getting back into a house, but it is the proper way to do it.

[735] And by the way, hopefully your income won't be so stinking low as you go along this process.

[736] And you can actually make some better progress than trying to try and, to sidestep this stuff.

[737] Open phones at AAA 825 -5 -2 -2 -5.

[738] Guys, the things that we teach you here on the air are never pleasant in the present.

[739] They're always the best thing long -term, though.

[740] And most things that are good with money long -term are a bit painful in the present.

[741] The ability to delay pleasure, the emotional maturity that allows you to delay pleasure is a real indicator of building wealth.

[742] No discipline seems pleasant at the time, but it yields a harvest of righteousness.

[743] And so we're always going to tell you hard stuff and stuff that makes you frustrated and give you some reason to, you know, do a whole Instagram post about how stupid Dave Ramsey is and all that.

[744] And let me help you with this.

[745] Dave Ramsey doesn't care.

[746] I'm not taking a poll.

[747] You know, I'm not asking you what truth is.

[748] You were asking me. And there's a reason.

[749] It's because for 30 years, I've been showing people the real way to build wealth.

[750] And it's called common sense.

[751] Get yourself out of debt.

[752] Get on a written plan.

[753] Build an emergency fund.

[754] Then start your saving for a house and buying and start your investing.

[755] This is common freaking sense.

[756] It's what old rich people did.

[757] It's how they got to be old rich people that you make fun of.

[758] This is the Ramsey Show.

[759] Jade Washaw, Ramsey Personality, is my co -host.

[760] She's the bestseller, bestselling author of the book, Money's Not a Math Problem.

[761] It is a Ramsey Quick Read, and what that means is it's about 74 pages long, give or take a page, and that means you can read it in one setting.

[762] Money's not a math problem, the real reason you're broke and what to do about it.

[763] Check it out at Ramsey Solutions .com.

[764] Today's question is from Donna in New Mexico.

[765] Yeah, Donna says, I sold my home two years ago because my son was co -borrower and wanted to purchase his own home with his new wife.

[766] Good.

[767] After the sale, I purchased a new home with my daughter.

[768] Oh, you didn't learn.

[769] I used over $140 ,000 from the house sale for the down payment and other expenses for the home.

[770] Now my daughter and I are having relationship issues, and she has told the rest of our family that I need to be.

[771] and assisted living.

[772] All the money I had went on the new home and I have no savings.

[773] I want to move out, but I'm retired and on a fixed income.

[774] What are my options?

[775] Oh my gosh.

[776] Well, the first thing is you need to learn to just buy it home on your own.

[777] If you want to buy a home, you buy it on your own.

[778] I'm not sure how old she is, but I would say if you're on this together, the only way to get somebody off is to refinance to get out of it.

[779] But, um, Yeah, if she needs to buy you out, or we need to sell the house, and I would tell her, she has 30 days to decide, your daughter, tell your daughter, because you're trying to get me put away in a nursing home, we are selling this house.

[780] I don't want to live here anymore, and I'm not going to leave my 140 ,000 in here.

[781] And so if you want to buy out, buy me out with my 140 ,000, by going and getting a mortgage, you can do that.

[782] otherwise we're putting the home on the market and we're going to sell it so that I can get my $140 ,000 out and I'm going to go get me a place of my own.

[783] Now, which one do you want to do?

[784] You got 10 days to decide because at the end of the month I'm putting a sign in the yard and see if you can stop me. If she tries to stop you, then you're down to a court action and the circuit court will have to issue an order to sell the assets of the partnership to settle the partnership.

[785] Now this is going to get nasty.

[786] And it's going to cost you about 10 grand to get out of this ridiculous stupidity you signed up for.

[787] So, folks, don't do this stuff.

[788] If your daughter wants to live with you, that's up to you.

[789] If you want to do something else, that's fine.

[790] But when you do these deals together, then you're, you know, you had a pleasant one where you got out of it.

[791] My son was co -borrower, wanted to purchase his own home with his new wife, which is perfectly natural and healthy, thank you.

[792] And the way we fix that is we sold the house.

[793] So now my daughter's being a butt, and the way we fix that is we sell the house.

[794] Tadda, just like that.

[795] So you don't want me to live here?

[796] That's a problem.

[797] You're going to have to buy me out.

[798] Or we're going to sell it.

[799] Up to you, your choice.

[800] And then I'll decide where I want to live, assisted or otherwise, because that's what I do.

[801] I'm like a grown person and stuff.

[802] so there we go you're not getting rid of me that easy it's not good wow open phones at triple eight eight two five five two two five Zach is in Cleveland Ohio Isaac how are you hey there I'm great how are you thanks for taking my call sure what's up so I just had a question around house buying strategy and how much kind of house we can afford I've always kind of hated debt hated interest, just as a, you know, a personal belief.

[803] But that said, 29, no kids getting married soon.

[804] I take home 160K a year between two full -time jobs and then another 20K with a side hustle.

[805] Fiancee has 50K salary, and we have some investments as well.

[806] So basically, we're just looking into this starting out.

[807] And we were shocked by interest, right?

[808] So we were, you know, looking at around $350 ,000 home and then looking at interest over 30 years.

[809] How much do you, you're not going to be there at 30 years?

[810] How much do you have saved?

[811] So currently, and this, we kind of rolled a lot of stuff over into an investment account now.

[812] So we have like half of it in a money market account.

[813] I think it's about five percent back.

[814] And then the rest of it is in like S &P 500.

[815] How much is it?

[816] How much is the cash on hand?

[817] $125 ,000.

[818] Okay.

[819] When are you getting married?

[820] Uh, this September.

[821] Okay.

[822] Well, don't do anything before September.

[823] Yeah.

[824] You don't buy any rush.

[825] We're just trying to lay the framework.

[826] Yeah.

[827] You don't buy a house before then, before you're married.

[828] Don't buy a house for somebody you're not married to.

[829] Um, ever, people, ever.

[830] And then we've got, you know, what I would do is take the whole 120 minus an emergency fund.

[831] Do you have any other money saved other than that?

[832] Uh, we do have, or I do have a 401k through work that I'm looking to roll over into a Roth soon for tax benefits, but then that's about $70K.

[833] Okay.

[834] Do you have any other money in miscellaneous savings other than this $120?

[835] That's about it.

[836] Okay, all right.

[837] You need to set aside somewhere around 20, 25 of that as your emergency fund don't touch it.

[838] So you're going to have somewhere around $100 ,000 down payment, plus whatever you can save with your fabulous income.

[839] You ought to be able to save like crazy.

[840] Y 'all are making $1.

[841] Yeah, that's the goal.

[842] I'm making a quarter of a million between the two of you.

[843] Way to go.

[844] I heard you say that you were concerned about the interest rates, but I also heard you say on a 30 year.

[845] Have you looked into the 15 -year fixed rate?

[846] So I understand just by reading kind of your guys' Reddit page, actually, that end in your general information that seems to be what you guys are recommended.

[847] I don't have a Reddit page.

[848] Fair enough.

[849] Fair enough.

[850] Just general.

[851] There are some morons on Reddit that have an opinion about me, but I don't have a Reddit page.

[852] Can't stand the formats.

[853] Just to be clear.

[854] So let me tell you what we really believe, regardless of what Reddit told you, all right?

[855] What we really believe is the number one and two reason that people become millionaires, and we have data to prove it with 10 ,000 millionaires studied, is they're investing into their retirement and they're paid off home.

[856] These are the two elements of the first one to five million of net worth.

[857] So to that end, we're going to move you towards a paid -for home as quickly as we possibly can.

[858] Great news is you make a quarter of a million dollars and you're smart people, so you're going to be able to do this fairly quickly.

[859] We would tell you to put the 100 down, hold 25 back, put as much as you can down, at least 100 in your case, and then put the balance on a 15 -year fixed rate where the payments no more than a fourth of your take -home pay.

[860] And the data tells us that the typical millionaire pays off their home in 11 .2 years because they hate interest.

[861] I think I heard a guy say that once.

[862] Yep.

[863] You.

[864] Yeah.

[865] So, yeah, and so we're going to take out a 15 -year fixed.

[866] It's a lower interest rate than the 30 -year is, and it's going to be a more conservative home than they will qualify you for, but you can get in and get it paid off, and then with the kind of money you're going to be making, you can move into anything you want to move into later.

[867] But you get in there and get started and get you a fun little house, starter house, and get going with the plan that in five years we're probably going to move, and we may have it paid off in five years.

[868] because I got a feeling in five years your income will be a lot more than $250, don't you?

[869] Ideally, sure.

[870] Yeah.

[871] It would be normal if it was.

[872] Most people's, most people's household income goes up.

[873] Yeah.

[874] You're only 29.

[875] Great.

[876] You're doing really good.

[877] Yeah, I'd like you think we're doing okay.

[878] You're doing excellent.

[879] You're asking all the right questions.

[880] You're sourcing the answers in the wrong place with Reddit.

[881] But other than that, but yeah, I'm kidding.

[882] Not much.

[883] but the success pool but anyway thanks for hanging out with us today you're a sharp young man you're going to do really good I think you're amazing and you know with the kind of money you're making you're going to be in a great situation so I'd take out a conservative 15 year fixed and pay it off as fast as you possibly can that's what I would do good question thanks for joining us open phones at AAA 8255 -225 but Jade I can't buy the house with the racquetball court, the jacuzzi in the skylight.

[884] If I do that.

[885] Well, you better get your expectations settled.

[886] Get them straight.

[887] Oh, expectations.

[888] Sorry.

[889] You know.

[890] The secret to happiness.

[891] The secret to happiness.

[892] That's right.

[893] You're not going to move into your parents' house at 29 and 28.

[894] Because it took them 35 years to get their boys and girls.

[895] And they had two baskets of strawberries.

[896] That's what they paid to buy that house for.

[897] two baskets this is the ramsay shale jade walshaw ramsay personality is my co -host today vera is with us in new york city hi vera how are you i'm good how are you i'm like really okay good how can we help so i am working i've been i started listening to you about two weeks ago i would say as i was trying to work out how to pay off my debt and um i have been working at that and today my car broke And I have a really old car, 2002 bad strata, and it's been heavy repairs every couple of months, like $600 to $1 ,200 every couple of months, which has been putting a string on trying to pay off my debt.

[898] And I need to buy a car now, but I don't know what to do with what I'm working with.

[899] So I kind of need advice.

[900] What do you make?

[901] I make $52 ,000.

[902] And where do you live in New York City?

[903] I live more in Bergen County, New Jersey Okay, all right And so this car, if you were to get rid of it, it'd bring nothing, right?

[904] Yes, I looked on trying to junk it And the most I'll get is probably 400 It looks like it's the head gasket today You have any money at all?

[905] Yes, I have $7 ,500 saved in my savings account and then I have about $900 in crypto -slash stocks that I've invested a long time ago, but it's not going anywhere.

[906] Okay, that's the good news.

[907] Cash owes two out today.

[908] Okay.

[909] And now we've got $8 ,400, and I want you to buy $5 ,000 car.

[910] Okay.

[911] For cash.

[912] What a car do you recommend?

[913] Not a Dodge.

[914] Yeah.

[915] Let me ask you this.

[916] Have you got family in the area?

[917] My mom, yes.

[918] Okay.

[919] Are you in a good church by chance?

[920] Yes.

[921] Okay.

[922] Call your pastor and ask him if there is one of the elders, one of the men in the church that will walk with you while you buy this car.

[923] Okay, that's for two reasons, not because you're inept, but because some people selling cars are sexist and they think they can take advantage of a young sweet lady and they won't think that about an old, ugly man. okay and so they shouldn't be that way but they are so that's thing one thing too you may actually get some good advice now let me teach you what you're looking for when you're buying a five thousand dollar car because we don't want to drive this car forever it's till we get out of debt and we have some money and then we get a better car okay okay so it's just a stopgap just to get you out of debt and not go into debt now what you're looking for is something that's possibly very ugly I don't mind that.

[924] I don't know.

[925] I good, because that's what you need, okay?

[926] It could, it could be really ugly.

[927] It could be, and it certainly has zero sex appeal.

[928] It's probably a land yacht.

[929] You know, you can hear it coming, okay?

[930] Okay.

[931] It might not, it definitely won't have all the bells and whistles and cool stuff on it.

[932] We're just trying to get to work so we can get a better car later.

[933] That's all we're doing.

[934] Okay.

[935] So what you need is something that's very reliable and as low miles, but it could be old.

[936] It could be a Camry from the year 2000, a 25 -year -old Camry.

[937] But it's been sitting in a grandma's garage, and she only drove it to church on Sunday and all that stuff.

[938] So it's got very low miles on it.

[939] She died.

[940] Now her kids are cleaning out the house, and they're selling the car to grow.

[941] garage sale.

[942] This is a goldmine car right here for you because it'll have 20 ,000 miles on it, although it's 20 years old and ugly and is not up on the technology.

[943] Certainly doesn't have Apple CarPlay, I can promise you, okay?

[944] But that car will go another 10 years.

[945] You only need it to go about another two while you get out of debt.

[946] And the fun thing is, if you buy that car for 5 ,000, three years from now, you can still sell it for 5 ,000.

[947] Yeah, my only concern is that the past, I would say, 15 years of my life, I'm 34, but 15 years of my life would have been having those type of cars, and they always...

[948] But are you cleaning up your debt now?

[949] Now I'm cleaning up.

[950] Okay, are you going to stay in debt and keep being like it was the last 15 years?

[951] No, you told me you weren't.

[952] Yeah, because those cars aren't.

[953] I'm not concerned about the last 15 years.

[954] I'm concerned about the next 15 years.

[955] years okay you're not going to do it again are you no sir okay then get out of debt and get your better car it's very doable hey i drove a piece of crap while we were getting out of debt after we filed bankruptcy it was a horrible car yes i don't mind that the bad car it's more i'm afraid of the of the spending because in the past i'm telling you to buy something that has a lot of life left in it you won't have a lot of spending on it but it's not very not very pretty And that's why I want someone to walk with you and help you investigate the car and give it a good, hard look.

[956] You can get a lot of car for 5K right now, but it's a garage sale car.

[957] The problem is she's been.

[958] It's a state sale car.

[959] That's what you're looking for.

[960] You're not looking for anything fancy.

[961] You're looking for something that has low miles and a lot of life left in it.

[962] And you're right.

[963] It's probably not a Dodge.

[964] It's not a Dodge Stratus.

[965] Or Dodge.

[966] Period.

[967] But, yeah, I mean, you're, you know, you're looking for, yeah, there's a lot of great vehicles out there that are ugly and have a lot of life left in them and they're not stylish.

[968] The paint job is faded.

[969] That old red is kind of looking a little pink.

[970] So big red might be a little pinky.

[971] I don't know.

[972] But, you know, that's, give it a name.

[973] But this is your last time you're going to drive crap because you're going to go get your life straightened out and pile up some money.

[974] You're going to live like no one else so that later you can.

[975] can live and give like no one else.

[976] That's simple.

[977] Yeah.

[978] I think the problem with her is she's been driving those cars for the last 15 years.

[979] That's what she said.

[980] But there's a reason because she never addressed.

[981] She never addressed the reason she was in the car.

[982] That's right.

[983] If you address the reason you're in the car, the reason you're broke is all the other crap.

[984] The not handling money well, the building up all the payments and all the debt.

[985] You get all that cleaned up and you're living on every dollar budget.

[986] You can save some money and get a better car.

[987] Our car had what I call special features.

[988] Like what?

[989] Well, the motor and the windows was out.

[990] And so, you know, when the motor goes out, they just, Oh, the electric windows.

[991] Yeah, they just fall down.

[992] So we used shoelaces.

[993] They were actually old, like, dog leashes on the inside of the wall to keep them up.

[994] Oh, you had to strap them up because otherwise they'd fall down.

[995] Yeah, you open up the door and you can go in there and kind of jerry -rig it.

[996] So we had that, you know, smoke came out of the top of the car.

[997] I don't know why.

[998] Just came out.

[999] That kind of car.

[1000] It ate the CDs when you put CDs in there.

[1001] just hung on to hung on to them.

[1002] That tells you right there what you're dealing with.

[1003] Mine ain't cassettes.

[1004] What's a cassette, Dave?

[1005] What's a CD, Jade?

[1006] Special features.

[1007] That's what you're looking for.

[1008] Special features.

[1009] Special features.

[1010] So we had a guy here that bought a car that was a $10 ,000 car on Kelly Blue Book.

[1011] Okay.

[1012] Really nice.

[1013] 20 ,000 miles, perfect condition.

[1014] Wow.

[1015] Except the people left it out.

[1016] outside in the hail storm.

[1017] So it looked like it had been shot in a gang war.

[1018] I mean, it had pots all, pot marks all over.

[1019] It was like the most, it was the most horrible.

[1020] And they basically kept the money from the insurance claim and then sold the car to him.

[1021] And he bought the car for nothing.

[1022] I mean, he bought it for like $1 ,500 and it was a $10 ,000 car.

[1023] But you talk about ugly, it looked like it had been, it looked like it came out of Beirut or something, you know what I mean?

[1024] It's like it had been shot at or shelled or something.

[1025] And he drove that with great pride for a little while.

[1026] Well, he got out of debt.

[1027] We had another guy had a 1994 Ford Granada.

[1028] That's a definite land yacht right there.

[1029] But it had, he paid 500 bucks for it.

[1030] The red was pink.

[1031] It had all turned pink.

[1032] And it had, I think it had like 8 ,000 actual miles.

[1033] Oh, my gosh.

[1034] It had no miles on it.

[1035] The woman had never driven it.

[1036] They had to put a battery in it because it wouldn't start.

[1037] But it was, and he, drove big red for i he he picked me up one day and took me to my shop to pick up my car and he we drove up in big red it was great so it was hey that's pride right there man it is and you know what that guy today he still works for us he can drive anything he wants to drive now look at that live like no one else so that later you can live and give like no one else drive like no one else later you can drive like anything you want shut up that's how that works love it problem with this stuff we teach as it works it'll bother you it'll keep you up nights this is the ramsie show live from the headquarters of ramsie solutions it's the ramsie show where we help people build wealth do work that they love and create actual amazing relationships jade washaw ramsie personality is my co -host today open phones a triple eight eight two five five her best -selling book is money's not a math problem.

[1038] Check it out at Ramsey Solutions .com.

[1039] Brandon starts this hour in San Antonio.

[1040] Hi, Brandon.

[1041] How are you?

[1042] I'm doing good, sir.

[1043] I appreciate it.

[1044] Sure.

[1045] What's up?

[1046] Well, first off, I want to say thank you for everything that you and your team do.

[1047] I listen to a podcast, and I love all the advice.

[1048] Thank you.

[1049] How can we help?

[1050] So I have a question about a couple of loans that I have.

[1051] I have one loan that's an SBA loan.

[1052] It's about 43 ,000, it's $908 a month, but it's, but I figure there's nothing I can do about it because it's already a veteran loan and it's at 3 .4%.

[1053] You said it's an SBA loan?

[1054] Yes, sir.

[1055] And it's a veteran SBA loan?

[1056] Yes, sir.

[1057] Okay.

[1058] All right.

[1059] Oh, go ahead.

[1060] Go ahead.

[1061] And your other question, what?

[1062] And the other one is a stupid city bank loan that I got that the A. APR jumped to 21 % and is now at a point where no matter how much we chunk at it, the interest just overrides it.

[1063] How much is it?

[1064] No, that's not true.

[1065] I'm sorry?

[1066] I said that's not true.

[1067] If you chunk 20 ,000 out it, the interest wouldn't override it.

[1068] So how much do you owe?

[1069] So it's at 8 ,000 right now.

[1070] Okay.

[1071] All right.

[1072] So you just hadn't, if you pay minimum payments, you'll be in debt 43 and a half years.

[1073] their calculation was 19 years and we would pay $19 ,000.

[1074] Oh my gosh, you're not doing that.

[1075] Joyful.

[1076] So what's your household income?

[1077] I'm sorry, my question for the city bank loan was, would it be wise to take out a personal loan at a six, seven percent to pay it out and then just chunk that off?

[1078] It's $8 ,000.

[1079] I don't even think you need to go through all that.

[1080] What's your income?

[1081] 75 years.

[1082] for me and my wife.

[1083] Does your wife work?

[1084] Is that, or is that just you?

[1085] That's combined.

[1086] That's combined.

[1087] Split it out for me. I want to know who's doing what, and what are your careers.

[1088] It's about half and half.

[1089] My wife does scheduling for pediatric dentist.

[1090] She makes about 36 a year.

[1091] Okay.

[1092] And I have a job doing telecommunications and correctional facilities for, per 45 a year.

[1093] Okay.

[1094] All right, cool.

[1095] So you're both working 40 hours.

[1096] Yes, sir And what's your car's worth So we have a 2016 Ford Escape I don't know what the blue book on it is But it's paid off What about the other one And I actually get I actually have a work vehicle So my personal vehicle I had a Kia Rio And we just sold it off for the cash Where's the cash?

[1097] We put it into The loan Into the city bank loan Oh good Okay Any money laying around of any kind?

[1098] No, sir.

[1099] The reason that I have the SBA loan is because I actually had my own store.

[1100] I had a retail store for a couple years, and that just ate up all of our savings.

[1101] Okay.

[1102] Well, the 900 is eating your savings, eating your lunch, too.

[1103] But we've got to get rid of the 21 % first.

[1104] So I'm with Jade.

[1105] I mean, if you made an extra, let's see, $1 ,500 a month, you'd be out of debt in six months.

[1106] on the card and that would mean working extra can you pick up OT or what's kind of great side job great paying side job could you do well my my job is salary we're both of us are salaries okay um the only thing extra is I could I could do some Uber on the weekend or go sell blood or something 100 % I don't want your own blood but Uber's fine and I mean I think you could do a lot of stuff out there there's a lot of different things I mean you obviously are good with your hands, right?

[1107] Well, I'm okay.

[1108] Yeah, so, I mean, you probably could wire stuff for people, I suspect, couldn't you?

[1109] I don't know.

[1110] I've never looked into it.

[1111] Yeah, okay.

[1112] Well, I mean, it's what you do all day, right?

[1113] Yeah.

[1114] Okay.

[1115] All right.

[1116] I don't know.

[1117] Just whatever pays you the most for a short period of time to knock this $8 ,000 out.

[1118] So here's the thing.

[1119] Okay, 21 % on $8 ,000 for one year is $1 ,600.

[1120] Okay?

[1121] Mm -hmm.

[1122] $1 ,600 is not your problem.

[1123] Your problem is you need $8 ,000.

[1124] So if you got a 0 % it doesn't solve your problem, to my point.

[1125] If you rolled the card to a 0 % card and you still don't address it, you haven't solved the problem.

[1126] So $1 ,600 is a year which is a little over $100 a month is not your problem on this.

[1127] It's okay if you want to move it down to a lower interest rate if you have that ability.

[1128] But the problem with it is when you do that, you're going to feel like you did something and you really didn't do anything.

[1129] You made a $70 -80 a month move, okay?

[1130] Which is nice.

[1131] If you send it to me, I'll take it, okay?

[1132] But the $70 -80 is not going to fix this situation.

[1133] You need to clear up the $8 ,000 as fast as possible so you can lean in and knock out the $43 ,000, right?

[1134] Correct.

[1135] Because if you don't have either one of these payments, your life would be pretty sweet right now.

[1136] Correct.

[1137] Yeah.

[1138] So that's where we're headed to.

[1139] So I want to turn up the intensity.

[1140] Let's get you into every dollar or every dollar app and help you start putting together a budget on that.

[1141] And Jade and I will give you the premium version as our gift.

[1142] And you sit down with your wife and you all start laying out a budget where every one of your dollars goes every month.

[1143] And then let's figure out how we can add dollars to it, both of you.

[1144] Yeah, if I were both of you, I would make an individual.

[1145] She has a goal to bring in an additional $1 ,000 and you have a goal to bring in.

[1146] additional thousand dollars and then in four months you'd be done if you just put two thousand a month on it you'd be done in four months with that eight thousand and without that hanging over your head then you can get aggressive on the 43 it'll take you longer on that one but the trick is the actual dollars saved by you moving down an interest rate it's you know you can go out to eat on it that's about it's not it's not really going to change this situation so it's okay to do it if you want to brand as long as that's not all you do that's about five percent of the problem 95 percent of the problem is eight thousand dollars i need to go find me in my budget living on beans and rice not going out to eat working extra selling so much stuff the kids think they're next i need to go find me eight thousand dollars that's what changes the game you're exactly right jade yeah 100 percent i'd be looking around the house to see what i can sell what's the weirdest thing you and sam sold it's so funny you asked me that i just wrote a article about this.

[1147] I had some bath mats that I, yeah, like, you know, like in the bathroom, the mat that goes.

[1148] Somebody bought used bath mats?

[1149] I bought them at IKEA, so they were already cheap as dirt.

[1150] And I sold them for like four or five dollars and somebody bought them.

[1151] People will buy anything.

[1152] Wow.

[1153] Facebook marketplace, you can find a chewed up piece of gum and somebody would buy it and want to chew it again.

[1154] Nate Margatsy talks about his wife is inviting serial killers over to their house to sell something for $5.

[1155] That's a great, great, great line he does but you know you know bath mats listen where there's a will there's a way and that money adds up where there's a will there's a some folks need to sell their TV so that they can go to work and quit watching Netflix oh throw a brick through it this productivity killer this is the ramsie show jade washaw ramsay personality is my co -host jade there's still time if somebody wants to join you and me and george camel and rachel cruise and dr john delon and Ken Coleman this coming Friday and Saturday for our total money makeover weekend event.

[1156] It's a Friday afternoon all day Saturday in Nashville.

[1157] If you want to come in a little early, you can watch the show.

[1158] We do it here on the glass, and then, of course, we'll be doing all kinds of stuff at the Ramsey Event Center on the Hill.

[1159] Shortly after that, this is a weekend -long event.

[1160] It's the ultimate motivator, not only to get out of debt, not only to get on a budget, not only to communicate better with your spouse about finances, but show you how to become wealthy and show you how to become outrageously generous.

[1161] And there's going to be a live taping of the hit podcast Smart Money Happy Hour.

[1162] We have a lot of interactive Q &A.

[1163] There are tickets still available.

[1164] These events usually sell out.

[1165] This one's not.

[1166] So we'd love to have you.

[1167] It's at ramsysolutions .com slash events.

[1168] It's this coming Friday, May the 10th, Saturday, May the 11th, here in Nashville on the Ramsey campus.

[1169] Ramsey Solutions .com.

[1170] Come on out.

[1171] There's still time to get you here.

[1172] Johns, with us.

[1173] John's in Toronto.

[1174] Hi, John.

[1175] Welcome to the Ramsey Show.

[1176] Hi, thanks for having me, and I hope you guys are all doing well.

[1177] We are.

[1178] How are you?

[1179] I'm doing okay.

[1180] I'm calling because I guess I needed some advice just because everything is getting a little bit more difficult up here and looking at solutions, and I wanted your input on it.

[1181] Tell us more.

[1182] So, me and my wife currently work two jobs each.

[1183] So I'm a part -time soldier.

[1184] I work full -time.

[1185] Now I'm part -time, and now I work in construction.

[1186] I make about $80 ,000 a year.

[1187] My wife makes about $20 ,000.

[1188] We're on Baby Step 1.

[1189] We're working towards Baby Step 2, which is our car, and that's the only expense we have.

[1190] And it's 22, Toyota Corolla.

[1191] And it's going to be paid off in October.

[1192] Great.

[1193] But the issue is that the housing situation in Toronto is absolutely insane.

[1194] Yes, it is.

[1195] The 20 % down that they need is, it feels like to me unachievable, and we budget everything.

[1196] We know exactly how much money we're about to spend.

[1197] We know what we need to do.

[1198] And then when we have a little bit of money saved up, it's like, oh, $700 in groceries for, you know, two and a half weeks.

[1199] John, I would guess that if you Googled the 10 most expensive cities in the world to live in, including real estate prices, Toronto's probably on the list.

[1200] Tokyo, London, Manhattan, downtown New York, L .A., certainly San Jose, San Francisco Market, will be on that list.

[1201] And I'm guessing that Toronto would probably be on that list.

[1202] You live in one of the most expensive cities in the world.

[1203] What's keeping you there?

[1204] So the reason why we moved from New Brunswick when I was in the military up there was there was a lack of doctors.

[1205] So my wife is disabled.

[1206] She still works, but the average wait time for a family doctor in New Brunswick was seven years.

[1207] Oh, my gosh.

[1208] Yeah.

[1209] That's a free Canadian health care.

[1210] Yeah.

[1211] So we had to move from New Brunswick to Toronto because she has a heart valve replacement.

[1212] So we had a specialist in New Brunswick that would deal with it But there was another specialist she had to see in Toronto So every six months you had to fly halfway across the country to go and see a doctor That's cheaper than living there Yeah, I wanted to really stay in New Brunswick It's a fantastic province People are really friendly And then we come back here and thank God I'm living with my grandmother We're living in her basement, she's charging us 1 ,000 thousand dollars a month utilities included so she's really helping us out um so you think it's it's better to you're saying you think it's better to live there full time as opposed to have her fly when she needs the care is that i just want to make sure i understand i'd rather her i'd rather us live in new brunswick because it's cheaper just for her to fly because every six month it's like five hundred dollars uh for uh both a two -way ticket right yeah which you say more that in a week in groceries so what what keeps you from moving back then uh it's because of my occupation in the military um i'm a tanker so i was the qualified tank driver gunner loader uh there's no more tanks in new brunswick so they're all in edmonton now so if we have to move we go to edmonton so that's another reason i was talking to my wife we had uh basically two options uh three options one we stay in the situation and we just embrace the suck which is not my favorite solution.

[1213] Second option is move to Edmonton.

[1214] I'd re -enlist and go full -time again.

[1215] Or three, we moved to the United States, which is very, very enticing to me. We were thinking like Indiana or Wisconsin because my sister lives in Chicago, and I would join the military in the state, so that way we cover the health care issue, right?

[1216] That way we have coverage.

[1217] Or you can change careers and move back to New Bruns.

[1218] That's another option.

[1219] There's no real careers in your Brunswick unless you work for like oil and gas companies and even then it's not really It's not really and like so here's I don't care which one of these you do.

[1220] It's up to you guys I if I were in your shoes.

[1221] I would want a path that gave me hope Right Long -term sustainability and hope Mathematically you're probably not going to do that unless you have a giant change in your personal incomes staying in Toronto.

[1222] This is a very difficult city to live in unless you make a lot of money mathematically.

[1223] And I didn't invent that.

[1224] That's just the way it works.

[1225] I mean, it's tough to live in Manhattan if you make $80 ,000.

[1226] You can do it, but it's tough.

[1227] And your long -term prospects of prosperity, it's hard to buy real estate.

[1228] It's more expensive to do everything.

[1229] Same thing if you move to London.

[1230] same thing so um and those aren't they're not bad cities necessarily some of them are but but the but the but the but i'm just talking about the math of living in an expensive place you have to make a lot of money to have mathematical hope about the future if you're going to live in an expensive place so that that's what you're aiming at so you need to figure that out and say okay my cost of living including my real estate purchase that is a part of my good future that i want to have have best lines up with my career, my income, and her health care where?

[1231] And that's where I want to lay it out and pick out which way that is.

[1232] And I don't know, I don't know enough about Edmonton to tell you anything intelligent about it.

[1233] And I don't know enough about immigrating to the states legally if you're Canadian.

[1234] I don't know how to do that or joining the military.

[1235] You obviously know more about it than I do based on how sure you were when you said that.

[1236] But I guess that's a possibility.

[1237] I've got no issue with that at all.

[1238] But for sure, you want to be somewhere where the path that you're on is leading you to a hopeful place.

[1239] And the math indicates that not just a wing in a prayer, not just a wish.

[1240] Yeah, absolutely.

[1241] I'm almost, I should have asked him the thing in Edmonton where he becomes a full time in the military.

[1242] That might be better for him.

[1243] he might earn more money and therefore them get to their goal quicker.

[1244] They've got some options, though.

[1245] They're not in a corner, which is good.

[1246] Yeah.

[1247] But I think they figured out that if the income doesn't change, then their current situation is going to, you know, embracing the suck is not a life plan.

[1248] That's a temporary thing you do to get to a life plan, you know, to get to a good long -term strategy.

[1249] I mean, I can embrace the suck for a short period of time to get through something that's hard, but I'm getting through it.

[1250] I'm not staying in it.

[1251] That's the trick.

[1252] So, yeah, I think that's what, you know, and those of you that are living in expensive places, you don't get a pass as John has discovered, nor did he indicate.

[1253] He wasn't whining about it.

[1254] No, he wasn't.

[1255] But, I mean, you don't get a pass on math.

[1256] It just, it costs more to live there.

[1257] So you've got to make more to have the same life there, wherever there is that's expensive.

[1258] And you can fill in that blank.

[1259] And, you know, that's the same.

[1260] I've had people ask me that question for 35 years.

[1261] How do you buy a house in Los Angeles?

[1262] 35 years ago, people asked me that question.

[1263] I don't know.

[1264] I guess you make enough money to live in Los Angeles.

[1265] That's how that works.

[1266] It's freaking expensive.

[1267] So it's how it works, man. I mean, it's twice what it is a lot of other places.

[1268] It's not evil.

[1269] It's just a reality.

[1270] This is the Ramsey Show.

[1271] Jade Walshaw, Ramsey Personality is my co -host today.

[1272] Thank you for joining us.

[1273] We invite you to stop by our studios here south of Nashville and Franklin, Tennessee.

[1274] Anytime you'd like.

[1275] We do this show live on the glass in our fabulous lobby with free coffee, free homemade cookies.

[1276] Smells like Mama's Kitchen in here.

[1277] Come on in.

[1278] Yeah, we'd love to have you come by and see us.

[1279] We do the show from one to four central time Monday through Friday.

[1280] So there's at least two of us, Ramsey personality, sitting here.

[1281] And some of them are much more entertaining than me. but I serve a purpose still, so we're still here.

[1282] We're glad you're here.

[1283] And speaking of what happens in the lobby, one of the things that's there is the debt -free stage right here in the lobby of Ramsey Solutions, and Kirk and Julie are on the stage.

[1284] Hey, guys, how are you?

[1285] Good.

[1286] How are you?

[1287] Good, Dave.

[1288] Jade, how are you?

[1289] Good.

[1290] Good to have you guys.

[1291] Where do you live?

[1292] We live in a suburb of Cleveland, Ohio.

[1293] Oh, fun.

[1294] Welcome to Nashville.

[1295] Good to have you.

[1296] And came here to do a debt -free scream.

[1297] How much have you paid off?

[1298] We've paid off $110 ,437.

[1299] Love it.

[1300] How long did that take?

[1301] Four and a half years.

[1302] Good for you.

[1303] And your range of income during that time?

[1304] So we started at about $120 ,000.

[1305] And then right in the midst of COVID, I lost my job of nine years.

[1306] And so we kind of had to regroup after that.

[1307] But then I was very grateful to get a new job a few months later.

[1308] And now we're up at $148 ,000.

[1309] You got a better job.

[1310] well that was more him than me but okay still was good still worked out very good good for you guys what kind of debt was the 110 thousand Dave jade you name it we had it all 22 different credit cards uh it was probably the height of the insanity um just you name it and and we had it car leases uh we had it all okay house uh house is not paid off yet not not that's not so this is debt free except the house correct for you yes for you yes for you Okay, good.

[1311] Very good.

[1312] Congratulations, you guys.

[1313] Oh, okay.

[1314] What happened four and a half years ago?

[1315] That's before COVID.

[1316] You started this process before the Fauci pandemic and then you tore into this, right?

[1317] That's right.

[1318] Okay.

[1319] I think the thing that happened at that point, Dave, was you talk a lot in your videos and your books about being sick and tired of being sick and tired.

[1320] And I think the moment for us came when we were doing crazy things like I would tell Julie, you know, this credit card is.

[1321] is not maxed out and that's what you can use to buy some presents or we would go to a department store and say we had some space available on a card let's use that to buy gift cards at a store like that for others and you were normal we were yeah we were and it was about that time um it was a god thing and it it pointed me in the direction of total money makeover uh was it was the book I found with a guy from Tennessee that I'd never heard of, read the book, cover to cover.

[1322] And right about that time, I started talking nonstop to Julie about you and your book and your principles.

[1323] And then right at that time, our church was offering a class.

[1324] And so we took it.

[1325] And we got into it, and we knew we wanted our kids not to make the same mistakes we had.

[1326] So while we were starting to pay off debt, it wasn't with the gazelle intensity that you talk about but then they asked us to teach the generation change course so we taught that twice and um all our kids took it and and rachel is married to john and they paid off their their debt with you a few months ago um but then it wasn't until we took we did that and then we started teaching the adult class we've taught it five times that financial peace university yeah and that's what really made us get gazelle intensity you don't have a choice if you're teaching it we need to be the example And that's what's done it.

[1327] Yeah, that got it going hard.

[1328] Absolutely.

[1329] That was the accountability thing.

[1330] It was like you're teaching the class and you're making good friends in your church and you're leading by example.

[1331] It's no longer just, you know, we're going to try a little bits of this.

[1332] We're going full go.

[1333] And this is a testament to those people that have been in the class that if you stay with it, you stay with the program, you do all aspects of it 100 % you're going to get there.

[1334] Yeah.

[1335] Way to go, gosh.

[1336] Way to go.

[1337] I'm proud of you.

[1338] How's it feel to be completely free?

[1339] It's still new.

[1340] But we're thrilled because we've worked really hard and we're just glad we're finally there.

[1341] It's a long four and a half years.

[1342] Yeah.

[1343] And we don't want to see our kids make the same mistakes.

[1344] So Julie, when Kurt came home and he said, hey, I heard of this guy, Dave Ramsey.

[1345] What was your first thought?

[1346] Like was this, were you 100 % in on it or did you have a moment where you're like, hold on a second?

[1347] I just didn't know.

[1348] Sometimes he comes home with things and I'm like, what is this?

[1349] And I just didn't know about him.

[1350] And then it was truly a God thing because it was right after that that our, church said they were having the class and we took it and I was like this truly was what we were meant to do.

[1351] So once you got in the class it was okay though.

[1352] Oh gosh, yes.

[1353] And then teaching it, we've loved it.

[1354] We just taught our fifth one this wrapped up a couple months ago and we hope to keep on teaching it.

[1355] Thank you.

[1356] Thank you for doing that.

[1357] Absolutely.

[1358] That's awesome.

[1359] So you said before you said, you know, you're whatever available balance, you know, we'll use that.

[1360] Did you have one straw that kind of broke the camel's back?

[1361] was usually people had that one moment that's like that what happened that made you go this has got to change well we knew that our oldest was getting ready to go to college and um and we did not want to have credit card debt we did our student loan debt and we didn't want them to have that and it was just it we realized when you know our kids needed things for school like clothes and we didn't have money to get them except it's like oh what's left on this store's card and what's on this you can't live like that you make too much money to feel that broke.

[1362] Absolutely.

[1363] And then we were trying to sell our home out.

[1364] This was like 11 years ago, but we were trying to sell our home and we put granite countertops on the credit card that then we never got to enjoy those granite countertops because they went on the house that we sold.

[1365] So those were the things I think that we were.

[1366] Yeah, that was really the tipping point for something like that, you know, with home improvements that you'd never enjoy.

[1367] And we just said never for our kids and for their families, it's time to stop.

[1368] and get out of this and, and go, game on, full go.

[1369] Behavior change.

[1370] For sure.

[1371] Way to go, you guys.

[1372] All right, when you're teaching these classes, you paid off $110 ,000, and they say, how'd you do that?

[1373] What do you tell them the key to getting out of debt and getting control of your money is?

[1374] Go ahead.

[1375] I think the thing with it, you know, is the principal, Dave, of giving first.

[1376] You know, we talked about that with our fellow church members that we needed to set up, our budget that way where we're giving was the first thing we did you know the tie to the church um and then we felt like with that then you just you just things started to snowball after that i mean just like with the debt snowball where we could go and say every month we're going to sit down do our budget you know come up with our plan and it's just it's it's being on the same page it's working together it's having that intensity that you know like you've said in in your books and your videos you know you you need to sacrifice now and and you're going to benefit in the long run and we feel like that's where we've benefited now with you know we have our oldest daughter is married and she's married to to john who works here at ramsie and they did their debt -free screen back in october and our middle daughter she's engaged now and when when her her boyfriend came to me and asked for permission to ask her to be married i said sure you need to be the second person that takes fpU as well so he was the second one that did that and I feel like that's where we now have given that that same kind of passion toward our kids and how they're going to live their own lives with money.

[1377] Very cool.

[1378] I like his dad style.

[1379] I know that's right.

[1380] Lay it on the line.

[1381] Good stuff.

[1382] Good stuff.

[1383] You know, I've never, I've been doing this 30 plus, 35 plus years now, and I've never met a person of faith who started tithing off the top before they did anything else that regretted it.

[1384] I've never had one say, Dave, that's the stupidest idea.

[1385] It doesn't work.

[1386] Now, I've had people that don't do it.

[1387] it say it stupid but i've never had somebody who actually is a giver as a part of their faith walk before they do anything that says it's wrong and oftentimes we hear someone standing here on the debt -free stage saying it was the key it was the breakthrough for us to put generosity first put god first and trust him and then move forward how that opened up everything for him so congratulations you guys we're proud of you thank you well done well done you guys are heroes Kirk and Julie, Cleveland, Ohio area, making $1 .10, or I'm sorry, paid off $1 .10 in four and a half years making $120 to $148.

[1388] Count it down.

[1389] Let's hear a debt -free scream.

[1390] Three, two, one.

[1391] We're debt -free.

[1392] Yeah.

[1393] Woo -hoo -hoo.

[1394] Yeah.

[1395] Absolutely.

[1396] That's how it's done, ladies and gentlemen.

[1397] That's how it's done.

[1398] You change the family tree.

[1399] by making sure the new son -in -law goes.

[1400] I know that's right.

[1401] This is the Ramsey Show.

[1402] Our scripture of the day, Proverbs 2717, is iron sharpens iron, so one person sharpens another.

[1403] Bernard Meltzer says, A true friend is someone that thinks you are a good egg, even though he knows you are slightly cracked.

[1404] I love it.

[1405] Hey, guys, the best way to make the most of your monies by creating and sticking to a monthly game plan.

[1406] budget where you tell your money what to do if you don't like the budget it's your fault because you're telling it what to do we call it every dollar because you give every dollar a name it is the world's best budgeting app one of the most popular budgeting apps on the planet as well and you can keep the pulse on your spending and make progress on your money goals with every dollar download every dollar for free in the app store or google play and you can do it online at every dollar dot com as well mark is in buffalo hi mark welcome to the ramsie show Hi, Dave and Jade.

[1407] Thank you so much for taking my call.

[1408] Sure.

[1409] What's up?

[1410] So a little background.

[1411] I'm 24 years old.

[1412] I have a little over $39 ,000 in savings, about 23 to 24 in my 401K.

[1413] I owe about $123 ,000 on my house that's worth roughly $170 ,000, I would say.

[1414] Wow, good for you.

[1415] Thank you.

[1416] I appreciate it.

[1417] So I've been with my girlfriend for a little over three and a half years, and there's no question that, you know, she's the one for me. So I'm getting ready to ask the big question here soon.

[1418] Good for you.

[1419] Fun.

[1420] So she's, thank you.

[1421] She's finishing up her master's degree.

[1422] I'm actually going to our graduation this Thursday.

[1423] So we've talked, you know, many times about our future together and how once we're married, we become one.

[1424] And that being said, I know she's bringing about 61 ,000 in student loans.

[1425] So my question is, is it better to just wait until after we're married and then I can, you know, use what I have in savings to go towards that student loan?

[1426] Or should I currently take what's above my emergency fund and put that towards paying off the house, like right now?

[1427] And then depending on the answer to that question, if I could ask a follow -up question, that'd be great.

[1428] What's your follow -up question?

[1429] Go ahead.

[1430] So if I do wait until we're married and, you know, I go to put a chunk towards the student loans, should I completely go down to the babysat one, $1 ,000 in the bank account and put it all towards that just so we can pay it off as soon as possible?

[1431] Yes.

[1432] Yes, yes, and yes.

[1433] Yes, on all of the above.

[1434] No, don't pay it down on your house.

[1435] No, do not pay any of her debt until you are married.

[1436] When do you think the wedding will be?

[1437] Well, I'm getting ready to ask here soon, so I would say probably about a year and a half.

[1438] I mean, both of her sisters and my sisters were about a year and a half from engagement to wedding planned and married.

[1439] Well, there's also the price of the wedding to think about, too, to throw into the mix.

[1440] It's not just her dead and her.

[1441] Who's paying for it?

[1442] We haven't had those discussions yet.

[1443] I know her family and mine have both, you know, said that they are going to help out.

[1444] She knows she's dating a spreadsheet nerd, so she knows I'm not going into debt for a wedding.

[1445] So what is the, what's her master's in?

[1446] She's going to be a school counselor.

[1447] So I'm making about $70 ,000 alone, and then once she's working, those starting positions are typically anywhere from, like, the mid to high 40s.

[1448] Okay.

[1449] All right.

[1450] So, well, I want her to save as much or pay down her debt as much as she can prior to the wedding, and then I want you to have, I love for you to have enough saved up to write a check after the honeymoon and pay it off.

[1451] Yeah, me too.

[1452] That's the goal.

[1453] Down to $1 ,000.

[1454] If you can't, still down to $1 ,000.

[1455] and then the two of you with a $110 ,000 income attack the student loan debt.

[1456] Do you see anything else, Jade?

[1457] No, that was it.

[1458] My only thought was just make sure you guys get clear really quickly on the budget for the wedding, find out what families are contributing if they are at all, and then you guys fill in reasonably with your budgets, what you can, what's next, what's left.

[1459] And you've been dating three and a half years, a one and a half year planning for a wedding.

[1460] It's pretty lengthy.

[1461] it's not it's not necessary i mean we've had pretty big weddings at the ramsie place and they were all done in a year or less yeah and so it does not take that long and you don't have to stretch this stuff out there's no purpose in that um when it's time to get married let's get married you're not you know it's not it's not it's not a royal wedding okay it's just not and so you just yeah the uh the sooner the better as far as i'm concerned yeah the longer that length is is the more time you have to add things to the wedding that are more expensive.

[1462] Oh, is that the problem?

[1463] That's what it is, Dave.

[1464] All right.

[1465] Adrian is in Chattanooga.

[1466] Hi, Adrian.

[1467] Welcome to the Ramsey Show.

[1468] Hi, everyone.

[1469] Thank you for taking my call.

[1470] So we end up in a situation.

[1471] We've never been in debt up to this point except for a car that we had to get.

[1472] And then about six months ago, we had to move out of Seattle, Washington.

[1473] we had about $40 ,000 saved no debt at all.

[1474] We decided to buy a fixer up here since I'm in construction.

[1475] I was hoping to get it done for the cash we had and kind of move in right away.

[1476] Didn't work if planned.

[1477] So we ended up spending all the money and going $35 ,000 in debt and credit card debt.

[1478] Well, you suck at Estermade.

[1479] Well, the house had way more issues than we thought.

[1480] And since we were out of state, we're pretty much about the house side on scene.

[1481] And the inspector didn't really good, do a good job.

[1482] So you asked for it.

[1483] Okay.

[1484] You asked for this mess.

[1485] As soon as I guess so, yeah.

[1486] And then my wife, the stay -at -home mom, well, we live in an RV at the moment, parked on the property.

[1487] So she stays with her two little children, and I work full -time, and then I come home and work on the house.

[1488] And I make about, well, I make $25 an hour before taxes.

[1489] So when will the house be completed where you can live in it?

[1490] Most of the stuff that we had to purchase is purchased, and it's all about just time -wise.

[1491] I'm hoping to get it done sometime this summer.

[1492] You know, the hardest parts of it was done, and then, you know, it's just finishing stuff, but I can only manage, you know, I drive an hour to work and an hour from work.

[1493] You may need to sell this mess and move on with your life.

[1494] Well, there's one more thing that I didn't mention.

[1495] So we do own a piece of land here in Tennessee that we bought outright for cash.

[1496] And we did put it in the market, but my wife really doesn't want to sell it.

[1497] So we put a higher price than we...

[1498] This woman lives in an RV.

[1499] Why doesn't she want to sell it and get moved into your house?

[1500] That's exactly my position, but she thinks is going to keep going up in price.

[1501] Well, all land goes up in price.

[1502] That doesn't mean I'm going to live in an RV to own it.

[1503] What will you make if you sell it?

[1504] Well, we bought it for $20 ,000 and we would, well, we posted it for 45, but it would probably sell for closer to 30.

[1505] Okay, so you can make some money, and you have $30 ,000 to hire some labor and get this stupid house finished and move into it.

[1506] And then you've still got an hour commute, which I do not understand in Chattanooga, Tennessee, why you did that.

[1507] But if you want to do it, that's okay.

[1508] So how can we best help you today right quick?

[1509] well the the kind of the you know we're trying to figure out the best plan to kind of pay off the debt faster we'll first sell the land okay well it's on the market so I guess we'll put it for the right price so it sells the fair price I'm not saying I'm not suggesting you undercut it but sell it for a fair price okay and then we were thinking about getting a credit card with zero percent interest no a year Please stop borrowing money.

[1510] Stop it.

[1511] Well, it wouldn't be, it would be just transferring the balance so we don't pay the interest for a year and just focus on paying it all.

[1512] Do you think interest is your problem?

[1513] Your problem has been dumb but decisions piled on top of each other.

[1514] Bad decision after bad decision after bad decision.

[1515] Now you're getting ready to add another one to it.

[1516] Don't do that, Adrian.

[1517] I mean, you bought a house that was a mess.

[1518] You missed your estimate by double.

[1519] double you bought a piece of land with money you should have used to finish this house and now you've got your family with two little kids living in an RV and the way to be sure that that happens forever is keep borrowing money on credit cards zero percent or otherwise please stop stop sell the land probably sell the whole thing and just get fresh start move over closer to where you're working so you don't spend your whole life on the road every day that puts this hour of the ramsie 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 hey folks dave here you want to hear even more life -changing content from ramsie download the ramsie network app so you can catch all your favorite shows all in one place like the ramsie show smart money happy hour and the dr john deloney show you'll get real talk about life relationships money and your career plus the app lets you browse by topic like debt business or selling your home.

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