Don’t Be So Desperate That You Make a Stupid Decision

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[3] I'm Dave Ramsey, your host, Ken Coleman, Ramsey Personality, number one, bestselling author, and author of the brand new book that just came out this week.

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[9] exactly what you pay for it the phone numbers triple eight eight two five five two two five Emily starts this hour in Grand Rapids Michigan hi Emily how are you I'm good how are you better than I deserve what's up in your world so I just graduated college and got my bachelor I am currently not in any debt but I'm about to go into about 250 ,000 dollars worth and I won't be able to pay it off or start paying it off right away either.

[10] So I'm very, very terrified over it.

[11] I was just hoping for some advice on how I can limit the debt, hopefully, and how I can pay it off as quickly as possible.

[12] What pray -tale are you doing?

[13] I got accepted into medical school.

[14] Oh, okay.

[15] Which one?

[16] Michigan State their MD program What kind of scores did you have on all that M -CAT stuff Where were you ranked I was above average It wasn't the highest score But it wasn't bad But it was pretty darn good And my guess is that Michigan State is a pretty nice little brand name program And you should be proud of that I'm going to jump in and say the way to lessen this debt is to think about going to a medical school that doesn't cost as much, because I can tell you who doesn't care about where you went to med school, and that's your patient.

[17] I have never once asked my doctors where they went to school and what their GPA was.

[18] I probably should, but I'm just telling you what's reality.

[19] Make sense?

[20] Yes.

[21] So have you looked into less brand name schools and see what they actually cost, and then have you looked at, based on your above -average performance on the MCAT, could you get a huge, huge chunk of that paid for?

[22] Have you looked into that?

[23] Yes.

[24] This is actually, from my understanding, the cheapest medical school in Michigan, I believe.

[25] And on top of that, I've been offered a $20 ,000 renewable scholarship.

[26] So that'll take it down about from the two -futable scholarship.

[27] 50 ,000 to about 200 ,000.

[28] Yeah, you won't really feel that, trust me. So why are we staying in Michigan?

[29] This is where a family is, and then the program that I applied to medical school only allowed me to choose from schools in Michigan.

[30] Okay, but it is possible, and you're aware that it is, there are other medical schools that cost a whole lot less and could probably give you a whole lot more scholarship.

[31] You're aware of that?

[32] Yes.

[33] All right.

[34] That's reality.

[35] you do not have to go to Michigan State Medical School.

[36] Right.

[37] Well, you asked.

[38] I know.

[39] There's really no other answer, honestly, because you said, how do I limit this?

[40] Because you are going to be facing, and here, walk this out for people who are thinking about this, because you've actually done the homework, I think.

[41] How many years are we talking about before you start to make anything resembling decent money after med school?

[42] After four years of medical school, I'll have anywhere.

[43] from three to six years of residency, depending on what I go into.

[44] And you're making what in residency?

[45] 50K.

[46] Yep.

[47] Very, very little.

[48] Exactly.

[49] So that's your reality.

[50] You're choosing a name brand school to be close to family, and you're exchanging in that decision years and years and years of barely keeping your nose above water.

[51] I'm not trying to be depressing, but this is the decision.

[52] I mean, yeah.

[53] So bottom line is, I don't really care.

[54] where the school is, or where your family is, if I'm you, I'm going to go someplace that I can severely change these numbers and not just be, oh, I'm so happy I got accepted to med school.

[55] I will pay you anything because you like me. And that's what usually happens.

[56] That's exactly what's not excusing you that, Emily, but I'm just saying.

[57] Because med school is so hard to get in that when you do get accepted, it is such affirmation that you go, well, those people like me. so I should really give them all my life, my whole life for the next decade.

[58] Yeah.

[59] Yeah, I just think it's very wise to rethink this.

[60] Where you go to law school, where you go to mid -school, changes the numbers dramatically.

[61] That's right.

[62] Dramatically.

[63] And there are good doctors and good lawyers that come out of virtually any school that teaches law or medicine.

[64] There are very few hack situations.

[65] situations like almost none.

[66] And so we used to have a thing here in Nashville that was called YMCA Nashville law.

[67] And it was night school on Armory Drive to go be a lawyer.

[68] No way.

[69] And you could go be a lawyer not doing night school.

[70] And it was pretty much blue collar methodology, right?

[71] You just work all day and then you go down there to law school at night.

[72] And it took it took two years longer, but you could pay for it as you went.

[73] That's right.

[74] And then I actually had a guy that graduated from that law school that represented me one time.

[75] And he absolutely mopped the floor with the other guy.

[76] I mean, he destroyed the other side.

[77] And so, but I guess something about that whole blue collar process set him up to be a, to be a fabulous litigator.

[78] So, but yeah, that's the thing.

[79] So, Emily, you know, you just need to think through and not follow.

[80] the path of affirmation and follow the path of least resistance and because it ends up being the path of greatest resistance if you're not careful.

[81] That's what we're trying to point out to you.

[82] That's right.

[83] And so we want you to live your dream, hon. We don't want you to live a nightmare.

[84] And we talk to too many people on the other side of this coin.

[85] Oh, man. I mean, I think Dave of the dentist that we feature so prominently in our award -winning documentary, you can get it on Amazon or wherever barred future.

[86] But I just remember, I can feel it right now, the very first time I watched it.

[87] Our entire staff watched that, Dennis, talk about the debt that he has.

[88] He had a million dollars.

[89] A million dollars.

[90] And it was soul crushing for me as a consumer.

[91] He was a surgeon.

[92] Yeah.

[93] And so Dave, what's happened is.

[94] He got out.

[95] He got out.

[96] He did get out of it.

[97] And it is, by the way.

[98] But what we're actually trying to do here, Emily, is keep you from getting in the middle of that.

[99] And Dave, there's a false choice in society right now.

[100] And I'm not trying to demonize med schools or higher ed, but there's a false choice.

[101] And folks, you just heard Emily walk through it.

[102] The false choice is follow the emotion, as Dave said, of affirmation.

[103] And let's be honest, it's impressive to be a doctor.

[104] Doctors are still one of the most respected positions in society.

[105] We get it.

[106] But we are told to follow the emotion of the accomplishment of the affirmation and not exercise logic.

[107] And I just walked her through, listen, I'm as dumb as a doorpost compared to med students.

[108] That's just basic logic.

[109] And we don't tell kids there are med schools that would die to have Emily join them this fall.

[110] She doesn't even look because it's not even considered an option.

[111] It's not her fault.

[112] It's what society has done here.

[113] So, anyway, food for thought.

[114] Something to think about.

[115] That's what we're here for.

[116] To mess with you.

[117] It's our job.

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[134] Ken Coleman -Ramsey personality is my co -host today.

[135] Open phones at AAA 8255 -225 Isaacs in Sacramento, California.

[136] Hi, Isaac.

[137] Welcome to the Ramsey Show.

[138] Hey, guys.

[139] It's an honor to talk to you.

[140] You too.

[141] How can I help?

[142] Well, I feel like I'm going to be paying quite a bit of stupid tax here with this question.

[143] So my wife and I, we took out a home equity sharing agreement with one of these companies.

[144] And we had good intentions we wanted to pay off some higher interest debt.

[145] And that all got paid off, but now I'm staring at this agreement.

[146] And, you know, now that it's been a little while, I'm looking at it, and it's just becoming more and more daunting.

[147] So basically, they gave us a upfront cash investment of about $62 ,000, and any time between now and about 30 years from now, we can choose to square up with them, but they get the $62 ,000 plus 40 % of the appreciation of my house from the time we signed, there was an appraisal, to 40 % of the equity between the time we signed and the time that we settled.

[148] and we have that time.

[149] So I'm just wondering.

[150] If you did that now, how much would that be today?

[151] Well, we'd have to get an appraisal, but approximately, yeah, maybe probably around $100 ,000.

[152] Okay.

[153] So this makes a payday lender look like a sweet deal.

[154] It really does.

[155] I mean, you sold your soul to the devil.

[156] Yeah.

[157] Yeah, and so hopefully people hear this call and just never do any home equity sharing agreement of any kind.

[158] Yeah.

[159] How long ago did you do this?

[160] It was about eight months, so that makes it even worse.

[161] So you make $100 ,000 return on a $60 ,000 investment in eight months, and we don't call that highway robbery in California?

[162] Hmm.

[163] Interesting.

[164] Hmm.

[165] Okay.

[166] Yes, sir.

[167] Yeah.

[168] I don't have an answer for you.

[169] I mean, obviously the sooner you take care of this, the better, the list it's going to cost you.

[170] I might call them and beg for mercy.

[171] Like, if I get you a check now for the 60, what is the minimum you would take on top of the 60?

[172] I mean, double your money?

[173] That'd be a deal, right?

[174] for them and for you.

[175] I mean, if it only costs you 100 % interest and not 200 % interest, that's a pretty good deal.

[176] So just by talking to them compared to what you've got, right?

[177] So as far as I know, what you've done is perfectly legal in terms of, you know, is there some kind of a basis to go at them?

[178] No, I think you just signed up for a really ugly trip and are getting to take it.

[179] So the only thing I can think of is, you know, first off is try to talk them down and then go refinance and take care of it immediately.

[180] And then second off, if you can't do that, you know, you've got to end the cost as quickly as possible.

[181] Because every day you screw around with this in California in Sacramento, your house is going up in value.

[182] And every time it goes up in value $1 ,000, they get $400.

[183] I'm just curious.

[184] What did you do with the $60 ,000?

[185] He paid off the debts.

[186] Oh, I said.

[187] He paid off those debts.

[188] Oh, okay.

[189] Yeah.

[190] Yeah.

[191] Yeah, so in reality, we just made our situation worse, but.

[192] So you were just so stressed out and freaked out that you just didn't look at this.

[193] Is that what happened?

[194] I mean, you had to close, you had to willingly close your eyes to how bad this was for some reason.

[195] What do you think that was?

[196] I think it was just seeing the debt and then seeing, you know, seeing how long it would take and then, you know, kind of because I was working hard to pay off the debt, which is, you know, perfectly fine.

[197] You had to run these numbers.

[198] Right.

[199] And I just figured I'd let it grow until I was ready to sell my house and then just, you know, the values weren't going to go up.

[200] And it was a lot, there was a lot of little things and I don't, I'm not justifying.

[201] No, I'm not either.

[202] I'm just, I'm trying to, for folks listening, I'm trying to get inside the headspace of someone who's so desperate that they don't look at a deal that's this bad and go forward, you know?

[203] I mean, that's because I always talk about on here, man, that, you know, the dumbest things I've ever done in my life is when I was desperate.

[204] Right after I get desperate, I get stupid.

[205] And so that's kind of, you know, and I've done, I can look back and tell you about 10 different times where I get freaked out.

[206] I get put in a corner.

[207] I can't move.

[208] So I do something desperate and I get stupid and it's just not a good plan.

[209] So anyway, aside from that for you tactically, it's very unpleasant, but you're in a very unpleasant scenario.

[210] So best case is you talk them down and you go get some money right now and pay them out.

[211] Talk them down to 100 % return on their money in eight months.

[212] That's a sweet deal for them.

[213] And compared to the terms you've currently got, it's a sweet deal for you, right?

[214] Yes.

[215] I mean, if you call me up and I was in this deal and offered that, I'd be thinking about it if I was the other side of this.

[216] And so that's, you know, have them think about it.

[217] Then if you can't do that, then you either refinance and buy them out today and end this because you've got that option or sell the house and get out of it.

[218] And that's your most painful of the three.

[219] Staying in the property and letting this thing continue to tick, letting this bomb continue to tick in your closet.

[220] nope not doing that you're going to wake up 10 years from now and your whole life is going to be screwed so meanwhile you could have been owning a house that you owned and so forth so yeah you need to clean this up in the next six months by talking them out of it refinancing or selling one of those three and if you can come up with another idea i'd be willing to listen i just don't know what it is that's the first one that comes to me so shared appreciation mortgages samms came out in the 80s They showed up in the 80s and to try to get a lower interest rate because rates were so high in the 80s.

[221] You know, we were in 12%, 14%, in the early 80s, 18 % for a few minutes, real estate market.

[222] And in order to get a decent rate and come down like to a 10 or a 9, instead of getting your money as the mortgage maker on the interest rate only, you could also participate in the mortgage.

[223] It's shared appreciation mortgages.

[224] And actually, FHA came out with a program that underwrote Sam's.

[225] Now, they weren't as onerous as this guy's.

[226] Boy, that's a mess he got into.

[227] I was going to say, do you think this meets the criteria of predatory lending?

[228] From a legality standpoint, no, from a moral standpoint, 100%.

[229] Right.

[230] Yeah, 100%.

[231] Yeah, when you're making usurious amounts of return, you know but again they didn't the company did not mislead isa that's correct that's he walked into this straight up with his eyes open and just said sign me up for stupid you know and i've done that so i'm not picking on is he he's beating himself up enough without me beating him up that's not the point but the um yeah it's definitely predatory i mean but so is payday lender at 800 percent that's true on a two hundred dollar cash advance that's true to poor people But it's legal in most states And it's, you know, it's absolute scum It's a horrible product And how do you sleep at night Doing that to somebody You know, no I mean they're basically stealing equity out of his home No, no, they steal it They Well, okay He gave it to him I'm saying conceptually though The deal works out for them Yeah, yeah Oh, it's unbelievable I mean they're there They said we'll give you 60 ,000 bucks And you can't get it anywhere else and because you're broke and in debt and your credit's bad and everything else and here you are desperate and you know you just have to sign over you know three of your children and we're going to put them in the safe and feed them through the door until you come back and get it.

[232] I mean that's what we're doing here.

[233] It's Hanson Gretel right?

[234] So oh man some of you people need to look up Hanson Gretel you don't know who that is it'll be good for you to read a good so true.

[235] Oh my goodness the chicken bone and the whole thing look it up people look it up This is The Ramsey Show This show is sponsored by BetterHelp Hey good folks The Back to School madness is upon us It's hitting us right now We got travel and work And all these forms to fill out now And sports to travel to and on and on My family's schedule is so packed And we haven't even begun talking about things Like exercise and date nights And counseling and church and home projects And those are the things that make our life Even worth living Here's what I've learned.

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[249] Well, your graduate just spent more than 4 ,300 hours in class.

[250] We're guessing no one taught them how to handle money.

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[283] Don't you wish you got some of this kind of stuff at graduation instead of whatever it was that you got?

[284] I don't even remember now.

[285] I don't either.

[286] I think I got a tie for my grandfather.

[287] Someone gave me a very important item.

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[289] A gold cross -pin.

[290] Remember cross -pins?

[291] Let me tell you.

[292] Of course I do.

[293] Those were big.

[294] My dad used to write with those.

[295] Before the Montblanc craze.

[296] That's correct.

[297] If you were cool, you had a cross pin and a cross pencil.

[298] And you put it in your highly starched pocket.

[299] Right there in your highly starched pocket.

[300] This lady knows what we're talking about.

[301] But you got to be old to know that.

[302] That's true.

[303] Not that lady, but the other people got to be old to know that.

[304] Yeah, you aren't old, ma 'am.

[305] We are.

[306] Not that.

[307] That's like a, you go back and look at the early Dave before the Montblanc was in that same starched pocket to prove that I knew something.

[308] The two cross pins were in there.

[309] That was my greatest.

[310] Did you have a gold and a silver?

[311] No, I just had the goal.

[312] Just the goal.

[313] That's all I had was the goal.

[314] Big deal.

[315] My dad got me one.

[316] I thought that I had arrived.

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[318] Yeah.

[319] Pretty much.

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[326] Kim is with us.

[327] Kim is in Chicago.

[328] Hey, Kim.

[329] How are you?

[330] Hi, you guys.

[331] Doing well.

[332] Thank you for taking my call.

[333] Sure.

[334] What's up?

[335] Well, my husband.

[336] husband and I, thankfully, thanks to you guys, paid $180 ,000 in debt earlier this year.

[337] So we're super excited.

[338] Wow.

[339] Yeah.

[340] So it was 110 student loans and $70K and car loans.

[341] Man, you knocked it.

[342] Way to go, kiddo.

[343] I bet you feel like free.

[344] We feel really good.

[345] Thank you.

[346] Yes.

[347] Thanks to you guys.

[348] I mean, we followed the baby steps.

[349] We got really intentional.

[350] and had three babies along the way, but we did it.

[351] Very good.

[352] Good for you.

[353] So how can we help today?

[354] Well, now I'm in baby steps four, five, and six.

[355] I have a mortgage of $390 and saving for kids' college and also our retirement.

[356] So I'm doing 15 % on my 401K.

[357] And my question is, My husband's a police officer, and he is on a, he's going to receive a pension, which is 75 % of his income at retirement, and he does not have a 401k there.

[358] So I'm trying to figure out how do I fund his 15 % for retirement.

[359] Okay.

[360] It's our 15%.

[361] So we add up our total household income, and we need to get 15 % in retirement somewhere.

[362] So we do not have a 401k at his place to work with.

[363] We have one at your place to work with.

[364] And you have two Roth IRAs you could do as well.

[365] So another $6 ,000 each there.

[366] And so if you maxed out your 401k and you maxed out $12 ,000 worth of two Roth IRAs, would that equal 15 % of your household income?

[367] Well, my household is $2 .10.

[368] Okay.

[369] So you need about $30 ,000 going in.

[370] You know, you're going to get close.

[371] You're not quite going to be there.

[372] But you're probably just going to max your 401k and max two Roths.

[373] And that's about as close as you can get, unless you've got some self -employed income anywhere, do you?

[374] I do not.

[375] No. Yeah, I think you're probably limited to that.

[376] He does not even have a 403B at the police department?

[377] Yeah, I just asked them that to look into it a little bit more.

[378] He said he was not aware of anything like that, but I'm going to check in a little bit more because I've heard.

[379] of the um of that one but most of them have deferred comp most of them have a deferred comp 457 and or a 403b in addition to pension and both of those would work i would rather use your 401k and max it out and then do two roths and if that doesn't get there then i would use a 403b or a 457 one of the two they'd be my last choice though to get to the whole to get to the whole 15 But the point is we're dealing with 210 times 0 .15.

[380] So we're $31 ,000.

[381] We're trying to get $31 ,000 into something.

[382] That's the point.

[383] And that's so between those two.

[384] And it doesn't matter whose name it's in because you have marital rights to your 401k of your spouse.

[385] Whether, you know, in other words, if there's a divorce that, you know, that's an asset that's laying there that gets divided up.

[386] So if it's all in your name, it doesn't matter.

[387] uh like the big 401k load up i'm talking about here so but the point is just take your household income 15 % going into something for retirement and the best thing out there folks for those of you listening is a match you want to do that first the second best thing is roth the best thing of all is roth with a match okay but match roth traditional so match beats roth beats traditional it's rock paper scissors except there's only one way to win okay match beats Roth beats traditional and if you just go down that path then you can do that and so the 403B and 457 would fall in the heading of traditional because their tax deferred like a traditional IRA or traditional 401K same same mess there same pile of pile of fish hooks uh Dane Dainan is with us in Morgantown West Virginia is it Dainan is that correct Yes it's Dainin sir Sure how can I help Absolutely So I have about $74 ,000 worth of debt, $60 of which is my house.

[388] At the end of the year, I'll have my car paid off, which is the other 14, and then I'm getting a $20 ,000 bonus from the military.

[389] Not for sure if I should use that on buying a new house or just throw all of it at my current house.

[390] What's the bonus for?

[391] The military, it's my re -enlistment bonus.

[392] Oh, okay, okay.

[393] Thanks for serving.

[394] What branch do you serve in?

[395] The Navy, sir.

[396] Okay, cool.

[397] Good for you.

[398] All right.

[399] How long you've been serving?

[400] About six years.

[401] Okay.

[402] So you may be, you may have landed there and going to stay there, huh?

[403] In that location, are they going to move you?

[404] So, no, I'm reserves.

[405] I live out of Morgantown, West Virginia.

[406] Oh, okay.

[407] And I do, like, travel like four times a year with the military.

[408] Gotcha.

[409] It's reserves.

[410] Okay.

[411] All right.

[412] That part I didn't catch.

[413] Okay.

[414] That makes more sense then.

[415] because you're, and 100 % then I'm throwing it at the house.

[416] So you're in Baby Steps 4, what we call 4, 5, and 6.

[417] Do you have an emergency fund of 3 to 6 months of expenses?

[418] I have roughly like 2 right now.

[419] I'm currently throwing into it.

[420] Well, when you get the car paid off, let's beef up that emergency fund.

[421] Okay?

[422] And so a fully funded emergency fund and debt free, but the house leaves you in Baby Steps 4, 5, and 6, and now you're starting to attack that way.

[423] and you just throw the money at the house at that point.

[424] Let's just get this house paid off.

[425] You only owe 60 grand.

[426] Way to go, man. You're killing it.

[427] Good job.

[428] This is The Ramsey Show.

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[447] Mama said if you ain't got anything nice to say, don't say nothing at all.

[448] So try that, you little trolls.

[449] And, you know, have some fun out there, people.

[450] Hey, spread the word.

[451] We appreciate it very much.

[452] We know that we were the fourth show in history on Apple Podcasts to have a billion downloads.

[453] That was a year and a half ago.

[454] Joe Rogan was one of the first and it's one of the MPRs and then us.

[455] And now we're at a billion and a half downloads where you get about a billion minutes watched on YouTube every 35 minutes.

[456] It's crazy.

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[463] Lauren is in New York City.

[464] Hi, Lauren.

[465] How are you?

[466] Hi, good afternoon, Dave.

[467] Afternoon.

[468] How can I help?

[469] So I am at a point where I am drowning in credit card debt.

[470] I have about $70 ,000 in credit card debt card.

[471] me, and I can't really stop the bleeding.

[472] It's all due to attorney fees.

[473] You paid $75 ,000 in attorney's fees?

[474] Also moving.

[475] I was in a situation where I was married, and my husband was an alcoholic and substance abuser, and I had to get out of that situation.

[476] So what did you spend to move?

[477] I'm in Westchester, so it was about $9 ,000 to move between, like, broker fee and security.

[478] So you spent $60 ,000 bucks on lawyer fees?

[479] Yes.

[480] For what?

[481] I've had to fight tooth and nail for my child.

[482] It's been a very challenging court case.

[483] At this point, the court has ruled he cannot have access to my nine -year -old daughter.

[484] But it's been contempt orders and violation, not on my part, on his.

[485] and it's also there's an attorney guardian ad litem as well.

[486] So I'm paying both of the attorneys.

[487] It's just been a very harrowing experience that we are, thankfully, going to come to the end of hope soon by the end of the year.

[488] Okay.

[489] So the bleeding is stopping then.

[490] And what a horrible thing you've been there.

[491] I'm so sorry.

[492] What do you make?

[493] What's your income?

[494] I make $90 ,000 a year, and I'm in a very high.

[495] expensive area that I'm not legally allowed to leave.

[496] I am currently working at a non -profit organization and I can make more money.

[497] I have a doctorate in physical therapy, but I am tied to my job for the next two and a half years because I have extensive student loans totaling in the amount of $260 ,000 and I'm in public service loan forgiveness and I only pay for 14 months.

[498] So after that, my loans will be forgiven.

[499] Plus, they're very flexible.

[500] I have a daughter with special needs.

[501] So I'm really kind of stuck at that amount right now, making that $90 ,000.

[502] So the way it stands right now, I'm basically making, barely making my bills at this point.

[503] And I do not receive any type of child support or anything like that.

[504] And I'm just making the bare minimum on the credit card payments.

[505] And so I'm trying to figure out when this is all set in done and I can, you know, go and I can't touch anything right now.

[506] Is there any financial settlement that you're going to get from the divorce?

[507] No, no, there's absolutely nothing.

[508] I'll be lucky if I get child support at this point.

[509] I'm not, I'm not going to bank on anything at this point.

[510] If you, if you could, I understand the limitations based on the loan forgiveness, but could you practice physical therapy today just theoretically on paper with your current qualifications?

[511] The answer is yes, but I also have a daughter with special needs that requires a lot of my time.

[512] And if I had to pay for child care, plus finding a provider that would be able to provide that child care, I'm kind of in a very difficult situation.

[513] So no family support or friends in Westchester at all that could help out?

[514] No, no. My family is from Florida.

[515] I don't have any family here.

[516] Okay.

[517] So here's what's going to happen.

[518] Something's going to explode because you have painted a picture that says, I'm stuck in the corner and everything around me is wet paint and I can't move.

[519] And yet you're going to get your feet, you're going to get pain on your feet.

[520] Something's going to give.

[521] This is not sustainable.

[522] That's why you call us.

[523] so I don't know what it is that's going to give but something's going to happen here and it's not going to be pretty you're going to have another set of problems and anxiety -ridden mess following this anxiety -ridden mess of a divorce because you painted yourself into this corner of I don't have any choices I don't have any choices you better make some because what you're telling me isn't sustainable and you know it's not sustainable so you need to get your lawyer that's so dead -gum expensive to go before the court and get you out of Westchester County and you need to forget the stupid loan forgiveness because you're probably not going to get it and you need to go make about $200 ,000 a year and get your freaking life back or something.

[524] I don't know what it is, but something's got to change because everything that we bring up, everything we talk to you and ask you about is a trap.

[525] I'm trapped.

[526] I'm trapped.

[527] I'm trapped.

[528] I'm trapped.

[529] That was the answer to every one of your questions.

[530] I don't have any choices.

[531] I don't have any choices.

[532] And yet the math is not, working so math will not give you a pass math does not believe in grace math does not believe in mercy it's going to come for you and it already is and you're feeling it and that's why you're calling so i'm not trying to scare you but uh your process by all the stress you've been through and all the damage you've been through it has made you believe that you are trapped and don't have choices and I'm challenging that you do have choices and you better make some you better change something here because you're not going to get help from him I'm betting that the student loan forgiveness doesn't work because such a low percentage of those actually do go through and you may have sacrificed a great income for a lousy income and I don't think you're trapped there I think if you go before the judge and go your honor I don't make enough money to live in Westchester I can't live here help me out here where can I go.

[533] What can you tell me what to do?

[534] And you go before the judge with that plead.

[535] And then you go, okay, now, how am I going to work with a special needs child and give them proper care and also be able to feed them and house them?

[536] And so you can't, the math that you've given me doesn't work, doesn't continue.

[537] It's something's going to come up short.

[538] And it's going to choose you if you don't choose it.

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

[540] So you're not stuck, but, um, but you do have a very difficult situation and um part of it is um your my heart's breaking for you honey because my i hear your languages as if you have been abused in this relationship so if you were in a domestic violence situation one of the things the abuser convinces the person of is that they don't have any choices in that they're stuck you can't leave you can't afford to live without me so you have to stay and let me be a let and be my punching bag and so that's one of the lies they tell and then you start to believe that lie yourself now you broke free of this guy but your language of i'm stuck i'm stuck i'm stuck i'm stuck is breaking my heart because it still sounds like he still owns you and i want you free from him and free from this trap and free from all this i wish i had a magic one i could just say there's an instant thing here but the one thing i will tell you is you got to make some different choices.

[541] This is not, it's not working for you, hon. I'm so sorry.

[542] She can find people that can help take care of the child, but she's the only one that can feed the child.

[543] And so for that reason, I would drive this home.

[544] I would be getting into physical therapy and making the most money possible.

[545] That gives you more options.

[546] I'm stuck in a non -profit making no money in the most expensive county in freaking New York area except possibly Manhattan.

[547] This is the Ramsey Show.

[548] Live from the head.

[549] Headquarters of Ramsey Solutions.

[550] It's the Ramsey Show where we help people build wealth, do work that they love, and create actual amazing relationships.

[551] Ken Coleman, number one bestselling author, host of the Ken Coleman podcast on the Ramsey Networks.

[552] He's my co -host today.

[553] Open phones at AAA 825 -5 -225.

[554] Jordan is in Columbia, Missouri.

[555] Hi, Jordan.

[556] How are you?

[557] Hi, I'm good, Dave.

[558] How are you?

[559] Better than I deserve.

[560] what's up yeah so uh my burning question is that i'm getting married here shortly um i've got a good chunk of cash saved up we're looking at getting into the real estate market but we'd like to know before we start having kids what the lowest risk method is for what we have in front of us you're talking about your home or a rental property rental building spec and sell uh it's a toss -up I'd really like to know kind of what the best you um you but you own a home that you live in we're actually currently building a house that we're about to start living in oh okay good okay and is it paid for uh we're going to have about a forty thousand dollar note the rest we paid in cash good okay first thing i'm going to do is pay that off okay okay now then when i've done that then what type of real estate now um there's real estate investing which is a buy and keep it idea and then there's real estate speculation which is why they call them spec homes if you're building a spec home it's a speculation that you can sell it it's a short -term play it's not a long -term play it is speculation flipping houses is speculation and both are high risk because obviously if you pay cash for them it's not as much risk but if you pay cash for them it's not as much risk but if you pay cash for for a house, fix it up and flip it.

[561] If it doesn't flip, at least you're sitting there with a paid for house, right?

[562] You'll figure it out.

[563] You could rent it or do something else.

[564] But you need to separate the mentality of what is the lowest risk.

[565] The lowest risk is a buy and hold strategy because real estate goes up over time.

[566] When you have to sell that spec house or your money sitting there burning taxes, property taxes, it's burning insurance, even if you don't have a note on it, it's sitting there burning money until you sell it, whether it's a flip or an actual build of a spec house.

[567] But that's speculating is short -term.

[568] Investing is long -term.

[569] Now, when you go to investing, probably the entry point would be a good home, single -family home in a solid neighborhood, not super expensive, but also not trashy.

[570] Okay.

[571] That's the lowest risk.

[572] Okay.

[573] Okay.

[574] Can I ask you this as well?

[575] Sure.

[576] Where we live, there is a lot of inflating house prices, if you must.

[577] So there's not a whole lot in the market below the $250 ,000 range, probably within a 15 to 30 mile radius.

[578] And so with that, I actually worked for a builder.

[579] And so one of the initiatives that they've talked about, but I'd really like to do is maybe build a, you know, a cheap speculation home to sell to a lower income family, simply because I have the high confidence of it would sell quickly just because there's nothing really in the market for it.

[580] What's your thoughts?

[581] That's just, you know, it's just a side hustle.

[582] It's not an investment.

[583] Okay.

[584] It's just your side hustle is you're building houses that you flip.

[585] Okay.

[586] And that's not bad if you're paying cash for it.

[587] And if you've analyzed and said, okay, what are all the downsides?

[588] So what happens, and you've got to be able to answer this question and not throw up, what happens if his house doesn't sell for a year after you finish it?

[589] Spend a lot of money.

[590] Okay.

[591] I'm just saying you got to be ready for that because I don't know.

[592] I don't know what's going to happen.

[593] I mean, I think you probably do know the market.

[594] You're probably right.

[595] In most markets in America, if you build something less than the median house price in the area, you have a very marketable property because entry level properties are just non -existent.

[596] They're very hard to find.

[597] And so any, just about whatever the median price is, and you sit in your area, it sounds like it's $2 .50 then there.

[598] So if you build something in that $150 range that's a nice little home, man, it'll probably go fast.

[599] Yeah.

[600] Yeah.

[601] Yeah.

[602] I walk through, I walk through one that's about, let me think how far.

[603] It's probably 80 miles or something like that outside of Nashville, so it's out in the country.

[604] Okay.

[605] Down there, one of my lakehouse, there's a guy building a house on the corner up there, and I walked it one day, and he was in there, and I walked it with him.

[606] I was like, wow, this is a nice little, it's a 1750 foot, little three -bedroom, okay, three -bedroom, a bath and a half, two -car garage, and not super fancy, but it was, it was well -built, nice little brick out, a little brick and, uh, siding house, right?

[607] And it was 188 grand.

[608] It was unbelievable.

[609] I thought, Wow, this is like all these people are here.

[610] You're a cab by it.

[611] Well, yeah, you can't.

[612] But, I mean, it's out there.

[613] It's out in the country.

[614] You know, it's not.

[615] And where you are, you're probably in a similar feel.

[616] You know, in the Columbia.

[617] Columbia is not a huge town.

[618] And, you know, there's not a, there's a whole bunch of Columbia -esque -sized towns around you.

[619] But you got to get all the way to St. Louis or Kansas City or even Jeff City before you get to a major town, right?

[620] Right.

[621] And so you got a lot of rule, uh, rings.

[622] around you, if you will, that could fall like that little house I'm talking about.

[623] But that was a sweet little house.

[624] And not a bad, I mean, I'm thinking a young couple coming in there or somebody wanting to downsize is brand new, everything, of course, dishwashers and all that stuff.

[625] And it's like, man, I could live there easy when we first got married and called that a palace, you know.

[626] Um, but again, it was, it's freaking hour and a half or more to Nashville.

[627] So, and in this area, that's, that's considered a crazy commute.

[628] So, uh, But my point is that if you get below that median house price, and that house sold it, I mean, before he broke ground on it, probably.

[629] I mean, he sold that thing so fast.

[630] But that's a, it's a, that's a great place in the marketplace.

[631] So I think what you're talking about makes sense, is my point.

[632] But I'm not an expert on your particular market.

[633] But the, but that's a, that's a good place to be.

[634] If you told me you wanted to build million dollar houses in a 250 market, As spec, I tell you don't do it because you're going to get end up with a million dollars sitting there.

[635] But that's not what you're talking about.

[636] So do you have a temperature for him, whether it be renovate something or build something brand new?

[637] He's in the home building business.

[638] He's got the it.

[639] He's going to build.

[640] I think you're right.

[641] I would tell most people not to do it, but he's in the business.

[642] I agree.

[643] And to your point, at that price range, I would imagine they're going to have a lot of people trying to get in that house if he builds it at the right price.

[644] Oh, yeah.

[645] Yeah, I mean, there'll be a line around the block, I suspect.

[646] So that's, again, the point is this, it's not really starter housing, but it's, you know, anything below the median price point.

[647] Median meaning middle, okay, the middle of your market.

[648] The median house price nationally right now, I think is about, it's bumping up close to 400.

[649] And so forever, what's it saying?

[650] It says 394.

[651] Oh, there we go.

[652] almost like I knew what I was talking about.

[653] Yeah.

[654] That's impressive.

[655] Yeah.

[656] So let's call it 400.

[657] Well, that was the listing price.

[658] The median sold price was 288 in Columbia as of April.

[659] Oh, no, that's Columbia.

[660] Columbia, Missouri.

[661] Oh, I was talking about nationally.

[662] Oh, sorry, I was pulling up his area.

[663] Nationally would be over 400.

[664] Okay.

[665] I'm probably wrong.

[666] Sorry, I went to Columbia.

[667] That's okay.

[668] It's good.

[669] Good place to go.

[670] This is the Ramses Show.

[671] May 21 and 22, I'm going to be doing a two -night virtual event, meaning you have to be there both nights.

[672] or you won't see everything, and I'm going to unpack my personal playbook on buying real estate and on investing.

[673] And it's an advanced investing class.

[674] Dave Ramsey's Investing Essentials.

[675] I've never taught this stuff before.

[676] It's stuff I do and have learned over the years, but it's not stuff I have taught.

[677] So if you want to do an advanced investing class, it's $199.

[678] We've got, I don't know, $3 ,000 or $4 ,000 already signed up for it.

[679] Thank you for coming.

[680] We appreciate that.

[681] And if you're interested, it's ramsysolutions .com slash events, and that's Dave Ramsey's investing essentials.

[682] We'll be taking questions live throughout this class as well, and George Campbell's going to help me with the whole process because he knows how to interrupt me. And so, and answer a question and all that.

[683] So we're going to do that.

[684] It's going to be fun.

[685] We've already been talking about it and laughing out loud as to how much fun it's going to be.

[686] But George is always fun.

[687] Oh, he's hysterical.

[688] Yeah.

[689] Diana is in Philadelphia.

[690] Hi, Diana.

[691] How are you?

[692] Hey, guys, I'm good.

[693] How are you?

[694] Better than I deserve.

[695] What's up?

[696] So my question is, my husband and I are deciding whether we should buy a new car or not.

[697] We are looking at use.

[698] The situation basically is right now we both have vehicles.

[699] My car, I have a $350 car payment on.

[700] My husband's car is paid off.

[701] it has about a hundred thousand miles and it is out of inspection it has no air conditioning it needs about four thousand dollars worth of work we do have two young children um so you know we do rely on that vehicle as well for transportation um so my question basically is we're if if it's out of inspection does it have a tag on it um yeah so it's when i say it's out of inspection it's of this as of this month so it's something where we're coming up on about you know should we pay to have all this work done um to keep it you know inspected and legal after this month is up or um do we go ahead and and proceed with starting the process of looking for a new car a used car or something along those lines okay you don't have any money do um so So we have money and savings.

[702] How much?

[703] We have about 20 ,000 savings.

[704] Okay.

[705] All right.

[706] So the first thing is I'm just calling BS on the 4 ,000.

[707] I think you cooked that number because you wanted to get rid of the car.

[708] So I think you can actually get that car fixed for probably half of that if you started working on a little bit.

[709] But you jacked it up because you're sick of it and you're trying to figure out a way to justify getting a car.

[710] If you want to get a car, it's okay.

[711] Get a car.

[712] but I don't think it takes $4 ,000 to get that car back up and get it running to where it should be to pass inspection.

[713] I think you can get a different mechanic to look at it.

[714] Somebody that's not, I don't know where you went.

[715] So don't go the dealer to get a car like that worked on for sure.

[716] But anyway, let's figure out exactly what's wrong with it because here's the problem.

[717] If you don't get it where it's passes an inspection, it's going to sell for $4 ,000 less.

[718] Okay, right.

[719] You can't give it away.

[720] Yeah, because that was the other thing is if we traded it into a dealership versus sell it privately to have that funds as a down payment.

[721] Yeah, you can't, you can't.

[722] Well, you've got $20 ,000.

[723] So, you know, I think you probably get the car up and running and where it'll pass inspection for a couple grand and then sell it.

[724] And then if you want to sell it and move up in car a little bit with some cash, that's fine.

[725] But buying a new car, no, you're broke.

[726] You know the money for a new car, and you certainly don't need a car payment, and you need to get your car paid off as fast as you can.

[727] Okay.

[728] Yeah, you've got to get out of the car payment business, kiddo, if you don't want to be broke your whole life.

[729] If you want to, folks, if you want to be middle class, the rest of your whole life, keep a car payment.

[730] Mathematically, it'll just hold your butt right there.

[731] It'll just keep you from succeeding.

[732] It'll keep you from prospering and just go, well, everybody's got a car payment.

[733] It's just the way it is.

[734] car payments are just a way of life.

[735] And that's exactly how people that are middle class speak and talk and think.

[736] And it just keeps you right there.

[737] It just locks you in.

[738] You cannot get it.

[739] You can't break free from it.

[740] And so you've got to go, nope, I've had it.

[741] Not paying payments on a stupid automobiles ever again.

[742] And these are the words of rich people.

[743] People that become wealthy are the ones that get rid of car payments.

[744] And I can get rid of my car payment if I was wealthy.

[745] No, you missed the point.

[746] You could be wealthy if you got rid of your car payment.

[747] You got that backwards.

[748] So.

[749] Now, Diana, that's the cycle I want to break in your whole discussion.

[750] I don't care if you fix this car up and sell it and move up into a little better car.

[751] It sounds like it's a piece of junk.

[752] I don't disagree with you on that.

[753] But then we need to get your car paid off as fast as we can.

[754] And we need to get in a game plan here where we stop talking about cars as if they're a constant crisis.

[755] And instead, get around in front of it and start managing the vehicles in a way where they don't own us.

[756] we own them.

[757] And that requires a different thought pattern then, oh, well, we're screwed.

[758] We've got to go get a car payment.

[759] And we're stuck.

[760] Can't get an inspection.

[761] Got to go get a car payment.

[762] And that's kind of how your question sounded.

[763] Maybe you didn't mean it sound that way, but that's kind of how it sounded.

[764] And you want to break that cycle.

[765] And I'm old school.

[766] I didn't have time to pick it apart, but I'd want to know what repairs are necessary just to pass inspection.

[767] Tennessee is a whole lot different than Pennsylvania, so it could be sizably different.

[768] But if I was worried, I wouldn't be worried about the air conditioning.

[769] I think kids these days need to stink and have the windows down and let it blow in their eyes and their hair.

[770] My goodness.

[771] I mean, I drove a car without air conditioning for a year and a half when we say I first got married because it was a cash car.

[772] And I drove in the morning and I drove in the afternoon.

[773] It was like, come on.

[774] So some of these things are about saving up money, suffering a little bit and how big of a deal is it to suffer and have your kids have the summer air blow through the car.

[775] You know, I wouldn't fix the AC on that car.

[776] You sound like a boomer.

[777] I am on this issue.

[778] Here's my point, because then I would say, I'm with Dave.

[779] I would spend the minimal to get the inspection and then sell it and then buy a $10 ,000 car.

[780] And they get a car with air conditioning for God's sakes.

[781] Well, then, yes.

[782] But until then, you tell people not to see the inside of a restaurant.

[783] I know.

[784] I know.

[785] For telling them to let the wind blow through their kid's hair.

[786] I'm just, well, I mean, I don't have any hair.

[787] So it doesn't matter.

[788] So there you will.

[789] My mom always called our air conditioner on our old car when I was growing up at 240, two windows down 40 miles an hour.

[790] That's what she called it.

[791] I get them a full cup of ice and roll the windows down.

[792] Just blow right over the car.

[793] A couple of dinosaurs here giving out advice to non -dinosaurs.

[794] But, you know, honestly, you drive like no one else so that later you can drive like no one else.

[795] So, yeah, if you need to go without the AC for a little while to get your goals hit, fine.

[796] I've done that too.

[797] Act like it's a convertible.

[798] The kids will never know.

[799] not a it's not like this is like this is somehow better you know they don't build them like they used to thank god they're a piece of crap yeah oh thank god they're better now but yeah check all that out but yeah but do the minimal and get the inspection get the car run keep your family going get your car paid off then save up and buy up in car and save up and buy up in car and save up and buy up in car as you build wealth move into better and better cars never never again a car payment and never again a new car until you have at least a million dollar net worth.

[800] There's some good rules for you guys.

[801] Okay.

[802] And for you, Diana, as well.

[803] Thank you for calling.

[804] We appreciate you joining us.

[805] Open phones at AAA 825 -5 -225.

[806] Here's the numbers.

[807] A new car loses, according to Kelly Blue Book, and according to Yahoo Finance and about three other sources, a new car loses 60 % of its value in the first five years.

[808] So that means if you buy a $40 ,000 car, when you drive it off the lot and you hear that sound going over the curb when you went into the street, that was, that sound was $10 ,000.

[809] That's the first drop.

[810] As soon as you get it as soon as it's titled to an individual and it touches the street, it's going to drop 20, 25 percent that day.

[811] Okay.

[812] Then from there, you're going to lose the rest of that 60 percent.

[813] So $40 ,000.

[814] That means you're going to lose.

[815] 24 ,000.

[816] That means your $40 ,000 car in five years is going to be $16 ,000 car.

[817] Okay.

[818] And that's a new car.

[819] Now, if you lose $24 ,000 every five years, don't be scratching your head and wondering why you're not, don't have wealth.

[820] It's because you're driving it down the sewer.

[821] Okay.

[822] You're causing this.

[823] And so you can afford to take that hit if you got a million dollars.

[824] You can't afford take that hit if you're broke.

[825] This is the Ramsey Show.

[826] Ken Coleman, Ramsey Personality, is my co -host.

[827] Thomas is in Jacksonville, Florida.

[828] Hi, Thomas.

[829] How are you?

[830] Hey, Dave, how are you?

[831] Better than I deserve.

[832] What's up?

[833] So I've been following you for quite a while, and me and my wife have been treating debt like it's cancer.

[834] We've been living kind of frugally, and I'm left with about 15 to 20 credit cards.

[835] that are completely paid off, and we can't decide what to do with them.

[836] Because our credit score is so good, we can't decide whether we want to close them or just hold on to them.

[837] Okay, I'm confused.

[838] I thought you said you were following us.

[839] I am following.

[840] And that you said you hated debt.

[841] Is that the same guy?

[842] Yes, sir.

[843] Okay, so if you hate debt, why do you need a credit score?

[844] And that's where I'm at, but I don't, this is where the contention comes from.

[845] I don't think my wife's quite where I'm at as far as...

[846] So she doesn't hate debt.

[847] She wants more debt.

[848] It kind of feels like that, yes, sir.

[849] Okay.

[850] Well, that's a different issue.

[851] Sometimes it feels that way, yes, sir.

[852] I mean, if you want debt, you do need a credit score.

[853] If you want to go into debt, credit score is a good thing.

[854] Yes, sir.

[855] But it's the antithesis of building wealth, because your most powerful wealth building tool is your income.

[856] And when you give all your income to other people because you stay in debt all the time, then you're going to be broke your whole life and build other people tall buildings, not your own.

[857] And, you know, so our goal here is to get you out of debt so that you can become wealthy.

[858] And the only way a credit score is built, it's 100 % based on how you interface with debt.

[859] And it's for the purpose of getting in debt.

[860] And the way you get a good score is get in debt so that later you can get into more debt so that you run your score up so you can get into more debt so that you run your score up.

[861] so you can get into more debt.

[862] And that's the essence of the FICO score.

[863] It's the we worship at the altar of the great Fico.

[864] We bring him offerings of interest.

[865] And so, oh, great Fico, thank you for being my provider and letting me buy crap.

[866] I can't afford with money I don't have to impress people I don't really like.

[867] And that's the whole purpose of FICO.

[868] Yeah, it's like a generational curse almost.

[869] Yeah, if you, it is, it's exactly what it is.

[870] And it's designed to prosper the bank.

[871] It's not designed to prosper you.

[872] But people, you know, people get caught up in this false measure of success.

[873] It's not a real measure of success.

[874] So, you know, that's what you guys have to decide at your house.

[875] And then once you decide that, it's an easy fix.

[876] You just close the accounts and chop up the stupid cards, have a plastic surgery.

[877] Now, do you recommend keeping any credit cards?

[878] I don't have any.

[879] I haven't.

[880] My credit score is indeterminable, known as zero.

[881] Wow.

[882] Just like the interest I pay, zero.

[883] it's almost hard it's almost hard to imagine because I've spent the past 10 years building my credit you know focusing on you know I've always known once you belong to the FICO cult it's hard to get out because they brainwash you you know but because you you know what you have to actually do is intellectually decide is this a measure of success and my contention is it is not a measure of success that net worth and income are measures of financial successful success, not a score that says I've borrowed money a lot.

[884] Right.

[885] And made them success.

[886] I told my wife today, I said, I'll be a millionaire by the time I'm 35.

[887] No, you won't.

[888] By the time I retire, I'll have a million dollars.

[889] No, you won't.

[890] You're not going to.

[891] Not unless you fix this problem.

[892] Oh, I'm going to cut those credit cards up today.

[893] Okay.

[894] And call those companies and close the accounts.

[895] All right.

[896] And close the accounts.

[897] All right.

[898] Well, and you better get, you better be on board with your spouse and doing this.

[899] I'm not trying to cause a divorce here, okay?

[900] I mean, the two of you need to sit down and talk about where you want to be.

[901] But if that's how you're going to live, you are going to be a millionaire.

[902] Because that's the secret.

[903] I mean, it's not a secret.

[904] It's that you keep your money and invest it instead of giving it to Ford Motor Company and MasterCard and Amazon freaking Prime.

[905] And everybody else is profiting off your butt.

[906] all you do is work for other people and give your money to them all your life and that is the essence of debt and so when you quit doing that it's magical how much money you have it reminds me of one of my favorite lines from a movie forest Whitaker's the actor it's called the great debaters about a truth it's a true story and at some point in the movie his son who's all into debate he's a great student but he's sitting all of his time in debate club and he's letting his studies starting to slip and his dad's getting on him and he runs out with an attitude and his father follows him out on the porch and Forrest Whitaker says, son, do what you have to do, then you get to do what you want to do.

[907] And that's the essence of the matrix that everybody's in because the credit cards say, do what you want to do.

[908] But wealthy people, they've already figured it out and they go, I'm going to do what I have to do so that later I can do what I want to do.

[909] And this up to buy something if I have to wait to do the vacation I want to if I have to wait to pay off my debt my student loan you know the idea here is is that there is a difference there's two very clear paths one is the path to average and the other is the path to excellence and really wealthy people it's a much smaller path and they figure that self -delayed they can delay gratification they can figure out discipline because they got their eye on the prize they're thinking 30 years from now that's what they're thinking and you got to pull yourself out of the matrix.

[910] But I don't want to wait 30 years to live my life.

[911] Well, it's not going to be 30 years, dupor.

[912] I mean, it's going to be 30 months for you to be debt -free and start to have an emergency fund and start to get control.

[913] It doesn't take that long.

[914] But, yeah, after 30 years, you're going to be really wealthy.

[915] You have to have that long view.

[916] You know, if you live like no one else later, you'll get to live like no one else.

[917] Zig Zigler and the great motivators used to say, if you want the things that other people don't have, you have to do the things that other people won't do.

[918] Yes.

[919] And so decide, you know, decide.

[920] What does it look like?

[921] What does your life look like to be different than average?

[922] Because average is broke with a car payment and a student loan that's been around so long you think it's a pet.

[923] Average is credit cards are necessary.

[924] I'm going to get rich on airline miles.

[925] The dumbest butt statement I've ever heard in my life.

[926] I'm going to make my money on discovery.

[927] points.

[928] Let's do the calculation on that one, okay, shall we?

[929] You run $100 ,000 on your Discover card.

[930] They give you 1 % back.

[931] That's $1 ,000.

[932] In what school of thought does turning $100 ,000 into $1 ,000 cause you to be wealthy?

[933] What logic is in, I mean, how much drugs did your parents have to do for you to believe that turning $100 ,000 into $1 ,000 is a path to wealth.

[934] I mean, the 70s were good to your folks.

[935] I'm just saying, oh my God.

[936] Wow.

[937] I mean, that's about as dumb as a rock right there.

[938] But people, they look at me straight in the face with this sincere thing that this is a methodology for building wealth.

[939] I'm going to take a hundred grand turned into one grand, and that's wealthy.

[940] Huh?

[941] That's just dumber than it's hard.

[942] It's hard to get my head around.

[943] So, but this is, these are the mythology that, that average normal people believe.

[944] And don't, for God's sakes, don't challenge their little myth, because they get all pissed off if you challenge their falsehood that they're living right square in the middle of him believing.

[945] Yeah, they get all, they get all TikTok on you then, man, and just turn you into a meme.

[946] I'm just saying, I know a guy that happened.

[947] Yeah.

[948] Oh, man. It really is funny, though, the cultural, like you've got to have the credit score.

[949] You heard it right out of his mouth.

[950] By the way, There's the wrong with him.

[951] He's literally repeating what nine out of ten people repeat, which is I've got to have the credit score to actually be a functioning human being.

[952] So what are we got?

[953] Just under 400 million people in America roughly now, right?

[954] I think that's right.

[955] There's 26 million millionaires.

[956] 26 million millionaires out of 400.

[957] So what is that?

[958] That's, uh, well, just, what is it, 5 %?

[959] A little over 5?

[960] Right around 5%.

[961] so that means that if you are doing the things that we're talking about you're in the top five percent of people in america and then there's the rest of you that's right that are just going keep doing the stupid butt stuff over and over and over again until somebody yells at you enough that you'll get your attention it's like oh i have my plan well good good luck with that look at how it's working for you you 1200 car lease dumber than a rock this is the ramsie show Ken Coleman, Ramsey, personality is my co -host.

[962] Perfect question of the day for you with your frustrated sports announcer voice.

[963] I solved this.

[964] I'm a little excited.

[965] Today's question comes from Nathan in Michigan.

[966] By the way, I should point out that Nathan is from the state that has the national championship undefeated Michigan Wolverine football team.

[967] Just want to point that out.

[968] Just like you're trying to say go blue is what you're doing.

[969] I really am trying to get away with it.

[970] All right, here's the question from Nathan.

[971] What is your opinion on the recent changes?

[972] is allowing college athletes to profit from their name, image, and likeness for sports fans.

[973] You know this as NIL for non -sports fans when you hear that.

[974] We'll explain that in a second.

[975] Do you believe this is a positive development for college athletics, providing athletes and with more opportunities, or do you have concerns about potential implications for the integrity of collegiate sports?

[976] Well, let me address that first.

[977] The irony is that NIL has actually probably brought more integrity to collegiate sports because now it's removed all of the edges and all the cheating that's involved.

[978] recruiting, which would have been always cash to families or cash to athletes.

[979] And since the adoption of NIL, where college athletes can be paid for their name, image, and likeness, it was an adoption.

[980] It was a court mandated.

[981] Yeah, but I'm just saying.

[982] Yeah, but it said they had to.

[983] That's right.

[984] And so now that is the law of the land.

[985] So what that has done is really removed a lot of the cheating and the backroom deals where you saw boosters causing a lot of problems.

[986] On the other issue, what is my opinion of it?

[987] I'm not a fan of it.

[988] I certainly understood that there was a case to be made that colleges and their athletic departments were profiting mightily from these athletes.

[989] But what has happened is I think it swung too far the other way.

[990] And that with the transfer rules has now made it free agency.

[991] And so college sports mirrors professional sports.

[992] But in fact, it's even crazier.

[993] It's the Wild Wild West.

[994] There are no contracts.

[995] An NBA or an NFL free agent is under contract for X amount of time.

[996] the team and the athlete and the agent all know that the contract is coming up.

[997] In college sports now, kids can just simply declare via the transfer portal.

[998] My coach hurt my feelings.

[999] It's right.

[1000] And then they leave.

[1001] So I think we're in the wild -while west of the early days.

[1002] I think this will continue to morph.

[1003] But to answer the question, I'm not a fan of NIL.

[1004] I think it has just made the sport a little bit wackier.

[1005] And I think it's made prima donnas out of high school kids.

[1006] Who, by the way, are showing up at signings for their college.

[1007] in Lamborghinis University of Alabama that happened this year kid showed up at his high school Dave to declare he was going to Alabama and he was driving a brand new Lamborghini so that can't be good there is something wrong with this picture ladies and gentlemen I knew that would load you up yeah yeah this is the equivalent of me putting a golf ball on a large brush tea so that you can hit it right down the middle Dave thank you thank you for what say you sir well i um i agree with you that the kids they were due something but uh the court ruling completely took a hand took it out of the hands of the colleges to develop something because the court the colleges screwed up i mean if they had come forward if the NCAA had come forward and put together a plan where the kids could make some money and managed it and adopted that then it never would have gone to the supreme court but the supreme court just kicked the door completely open there's absolutely no rules like you said why wow west it's um It's chaos.

[1008] And the problem is severalfold then.

[1009] We've got, I don't mind somebody profiting off of their efforts, okay, regardless.

[1010] That's called a meritocracy, and I'm a big fan of meritocracies.

[1011] I believe if you work hard, you should get something for that.

[1012] And if you have talent, you should get something for that.

[1013] I'm fine with all of that.

[1014] The problem is with it being completely out of control.

[1015] Like I've had athletic departments call me and say, hey, would you come speak to the team?

[1016] And I'm like, sure.

[1017] What about?

[1018] Well, we've got a quarterback that makes $2 million a year, and the guy blocking for him makes nothing.

[1019] How do we build teamwork in that?

[1020] I'm like, I can't help you with that one.

[1021] Good luck.

[1022] That's like known as can't be done.

[1023] And so, you know, you need to restructure the whole thing, but they don't have that option because the court took it away from them.

[1024] You can't structure it.

[1025] You'd have to, you know, you'd get sued again.

[1026] If you said, okay, we've got to put some of this money in a pool and the whole team benefit so we can build a team character and then you add to it the portal which every time you piss somebody off they just hit the road and if you want to piss somebody off piss off a highly aggressive 18 year old who you are training to run over other people and then piss them off and be surprised that they're pissed off because what you do all day long is teach them how to run over other people and then guess what as soon as you hurt their little feelings they're gone And so it's very difficult to build a college team now in this environment.

[1027] It's very difficult for, because the kids, there's this disparity of income.

[1028] And then the last problem is the same problem we've been facing when you and I've been working with the NFL.

[1029] And our team's been working with the NFL for years.

[1030] Going to these rookie camps and we tell these young guys, you know, you just got a $10 million signing bonus.

[1031] And I understand, but, you know, $10 million is not enough to buy everyone in your, in your, You know, in your entire family a $2 million house, that's not $10 million, okay?

[1032] That's $100 million, and you did not get $100 million.

[1033] Besides that, you're in the NFL, which stands for not for long.

[1034] 3 .2 years is the average career.

[1035] 88 % leave the league permanently physically disabled in some manner.

[1036] The divorce rate, 10x the public.

[1037] Okay?

[1038] This does not spell out well for wealth building.

[1039] Okay, it doesn't.

[1040] So let me tell you what happens to your $10 million.

[1041] It's gone.

[1042] That's in that situation.

[1043] That's what happens to it.

[1044] It's gone.

[1045] You don't have it.

[1046] And so, but you, but, you know, you got bling and you got a lot of friends right now that aren't really friends and you're taking them to the Bahamas and go swimming.

[1047] Well, good for you.

[1048] That's dumber than crap.

[1049] And, you know, and so this is me talking to NFL people.

[1050] And guess what, guess how far popular that is?

[1051] It's not popular.

[1052] So, but it, you know, and now.

[1053] Now it's worse because now you're dealing with a 16 -year -old.

[1054] Because the NILs drop down into high school now.

[1055] A hundred percent.

[1056] There are actually no limits now.

[1057] We're seeing it show up in high schools and we're going to see it in junior highs.

[1058] We're going to see nine -year -olds, 10 -year -olds start to get payment to lead them through because we, you know, we worship these sports figures and it's just, guys, it's not good for the people.

[1059] You know, that kid that gets $10 million and doesn't manage it well and it leads to horrible things in his life, it's not good for him.

[1060] You know what it's done?

[1061] It's really killed amateur athletics because the very word amateur is now completely defunct.

[1062] I mean, once you collect a check for doing something, you are by default a professional.

[1063] But it is pretty cool if you can show up for signing down a Lamborghini.

[1064] I don't judge the kid but my goodness.

[1065] Hey, there's a defensive Alabama in here who said it's actually, it was Old Miss, not Alabama.

[1066] Oh.

[1067] I don't know if that's true.

[1068] We've got it.

[1069] We've got to pull up here.

[1070] It was an Ole Miss player.

[1071] All right, I have no problem being wrong because I was still using a great example.

[1072] So I apologize all you roll -tied people.

[1073] You got to be careful.

[1074] You big blue people.

[1075] We beach in the Rose Bowl.

[1076] There's that, yeah.

[1077] Oh, it feels good to say.

[1078] But anyway, the point is, you got an old Miss kid, all right, showing up.

[1079] Oh, that's a Kiffin kid.

[1080] Yeah.

[1081] Oh, that does make sense.

[1082] Careful, Dave.

[1083] That makes total sense now.

[1084] Yeah.

[1085] Okay.

[1086] That was a little close to home.

[1087] Lane Kiffin left the balls at the altar, folks.

[1088] And so Dave's not over that yet.

[1089] No, I'm definitely over it.

[1090] Yeah, you've got a good coach.

[1091] But here's the deal.

[1092] This has absolutely changed college athletics forever, and here's the other thing.

[1093] You're going to see this begin to affect the non -revenue -generating sports.

[1094] If you like college, when I was dealing with college coaches and we're sitting down talking to college football coaches and they say, hey, it's not unusual at all for some of the young men on my team for me to be the first male figure in their life to lead them well and to love them well and regardless of race and he goes it's not unusual at all for me to be that guy and guess what he's not anymore he doesn't have that he doesn't have that capability to love those kids well because they make more than he makes yeah and they will leave as soon as he challenges some of their mythology that they're living their life based on and are their behaviors or whatever tries to make them sit on the bench and don't have to sit on the bench and he'll have to sit on the Here's one other unintended consequence.

[1095] It's driving some of the great legendary leaders out of the game.

[1096] The last two years, Entree Leadership Summit, I think it's the best leadership event in the world.

[1097] It's our signature event here at Ramsey Solutions as part of Entree leadership.

[1098] We've had on the stage, arguably two of the top five coaches of all time, any sport, Nick Sabin in football, and Coach Kay just this last couple weeks, and both of them left, and they've told Dave and I, we were both around them.

[1099] NIL was one of the reasons that drove them out of it.

[1100] It's just changed the landscape.

[1101] and Porter together is just both of them yeah it's not good it's not good for the kids it's not good for the sports that's the summation of it and yet I would never deny someone the right to earn money there's nothing wrong with that at all so you just got to figure out some way that it's done in a wise way that's a blessing to everybody involved 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.

[1102] Ken Coleman, Ramsey, personality, number one bestselling author, is my co -host.

[1103] The phone number is AAA 825 -5 -225.

[1104] Denise is in Syracuse.

[1105] Hi, Denise.

[1106] Welcome to the Ramsey show.

[1107] Hi, Mr. Ramsey and Mr. Coleman.

[1108] It's nice to talk to both of you.

[1109] Thank you so much for taking my call.

[1110] Sure.

[1111] What's up?

[1112] Well, my question is, I guess I'll start there.

[1113] do I keep putting or do I stop putting money into my 401k until my 401k is paid off along with my car and a six -month emergency fund?

[1114] So next month, I'll be 57, was a single mom, took care of the kids, all that.

[1115] They've all got one's married, gave them $10 ,000 for a wedding, the other one got engaged, bought a house, gave them $10 ,000.

[1116] and I'm at 176 ,000 in my 401k, 25 ,000 in a Roth.

[1117] How much other money do you have saved, not counting retirement?

[1118] Well, here's a thing.

[1119] That's why I don't even know what baby step I'm in.

[1120] I paid my house off already.

[1121] Good for you.

[1122] How much money do you have saved other than your retirement?

[1123] $1 ,000.

[1124] Okay.

[1125] All right.

[1126] So you got things all that.

[1127] You're a little bit discombobulated, but I think you've done a good job overall.

[1128] We can just work on a little bit of smoothing the wrinkles out if that's okay.

[1129] Oh, my God, yeah.

[1130] Yeah, baby step one is $1 ,000 saved.

[1131] Two is don't do anything until you clear all of your personal debt.

[1132] Now, you have personal debt that's a car and a 401K loan.

[1133] Did I hear that right?

[1134] That's right.

[1135] My 401K loan, they take out $800 a month.

[1136] What's the balance?

[1137] And in July, what's the balance?

[1138] 27 ,000.

[1139] What's owed on your car?

[1140] $6 ,200.

[1141] Good.

[1142] And I can have that paid off at the end of June.

[1143] What do you make?

[1144] I bring home about $6 ,500 take home a month, but I also have an Airbnb in my house.

[1145] Mm -hmm.

[1146] And I can average, like May and June, I already booked, and I'm getting $1 ,000 extra for each month.

[1147] Excellent.

[1148] So that's how I'm paying the car off and stuff.

[1149] So that is the right goal.

[1150] We're going to list your two debts, smallest to largest.

[1151] We're going to pay 100.

[1152] And I do have a credit card.

[1153] And balance on that is what?

[1154] $1 ,800.

[1155] Okay.

[1156] Let's pay that off before you do anything.

[1157] That's your first thing.

[1158] Okay.

[1159] And then we're going to stop your investing temporarily into your 401K.

[1160] The word is temporary because you're going to knock these debts out fast, okay?

[1161] Now, and I want you, we're going to get you on every dollar budget, which is the budgeting app.

[1162] I'm going to give it to you as my gift, okay?

[1163] Oh, my God.

[1164] And I want you to lay out every dollar having a name.

[1165] You kind of are doing this because you've got a game plan.

[1166] It's just rumbling around in your brain instead of down on paper, okay?

[1167] If you put it down on paper, it gets much more efficient, meaning into the app, okay?

[1168] So we're going to put it into the app and make every dollar behave, stop all of anything going on, and point all your guns, every dollar you can squeeze out of your whole life at these debts.

[1169] First, the 1800, then the 6200, those will both be gone by August for sure.

[1170] Then we're going to tear into that 27 ,000.

[1171] Now, you're not allowed to pay extra on a 401k loan.

[1172] They only withdraw, or you can pay it off in a lump sum.

[1173] So what you've got to do is just pretend like you're paying it off and put the money into a savings account.

[1174] No, I actually called them.

[1175] I called them, and yes, I can make extra payments.

[1176] and I can pay it off in full.

[1177] I can make extra payments.

[1178] Very unusual to the point.

[1179] I'm not sure that's right.

[1180] But if you can, that's great.

[1181] I don't care.

[1182] We're going to chunk money at it after these other two are gone until it's gone.

[1183] And so basically what we're saying is we've got $35 ,000.

[1184] We're going to clear up pretty quick here.

[1185] Like by spring, you're going to have no debt.

[1186] That is correct.

[1187] I'm hoping by February or March.

[1188] There you go.

[1189] So you've already run the numbers out.

[1190] You're doing the same thing I'm doing.

[1191] Now, when you're 100 % debt -free, house and everything, yeah, that puts you at baby step seven, except that you don't have your emergency fund at that point.

[1192] So you need to go back to your $1 ,000 account then and raise it up to three to six months of expenses.

[1193] So we'll just make up a number right now.

[1194] Let's call it $15 ,000.

[1195] That money is sitting there just between you and life.

[1196] You never touch it for anything unless life comes and knocks you over.

[1197] It's not a wedding fund.

[1198] I need a car fund.

[1199] It's not a vacation fund.

[1200] It's only for emergencies.

[1201] Everything else you save for separate from this fund.

[1202] So you get that emergency fund in place.

[1203] Then we restart the 401K.

[1204] And you're going to do that by about this time next year, roughly.

[1205] After that, then start investing.

[1206] Yeah.

[1207] And you'll be able to easily invest because guess what?

[1208] You don't even have a house payment.

[1209] Yes.

[1210] I mean, you can load that 401K.

[1211] up you're going to be so rich it's going to be unbelievable but can I be at um 57 and starting so late with 176 in my 401k and what did you say you made um I average right about 6500 yeah a month okay that's take home so you're making like you're making like 80 85 thousand dollars a year right yeah okay yeah yeah so if you invest um you know 10 ,000 a year, $15 ,000 a year, which you should be able to do pretty easy.

[1212] Right.

[1213] You're going to have a lot of money.

[1214] The 176 will double every seven years.

[1215] Have you got it in good mutual funds?

[1216] I have it through work.

[1217] I know, but it's in mutual funds.

[1218] It's Vanguard.

[1219] I don't know.

[1220] I know, because I really don't know.

[1221] Vanguard's got bad mutual funds, and Vanguard has good mutual funds, and Vanguard has all kinds of crap that you don't want it in.

[1222] Okay?

[1223] So Vanguard's a fine company, but not every one of their instruments.

[1224] are good for you.

[1225] You need to be in growth and income, aggressive growth and international, and that's the four categories.

[1226] I'm going to teach you every bit of this.

[1227] I'm going to plug you into Financial Peace University and show you how to do every bit of this.

[1228] If you've got it in good mutual funds, if it's averaging 10%, it's going to double about every seven years.

[1229] So when you are 64 years old, you are going to have 400 ,000, you're going to have 550 ,000.

[1230] We'll count the 15 ,000 we're putting in over the next seven years.

[1231] Okay.

[1232] and yeah you're going to be a millionaire when you're 70 I think you're okay I think you're going to make it and we don't know how much your house is worth so not counting there's that not count in your house you're going to have it should have a million dollars in your mutual funds by the time you're 70 with what we're talking about here that's 13 years so double double twice and um and you're going to be adding to it all that time and you're never borrowing money again for anything ever you're paying cash for everything for the rest of your whole freaking life and you did it you're going to be a millionaire single mom isn't that neat i think that's pretty neat hang on we're going to sign you up for every dollar and sign you up for financial peace university and give it all to you just to say thank you for being a new listener and then we can get your baby steps discombobulated because they're did they're combulated right now so they need to be discombobulated that's how that works right i'm going to write that down and remember that that's a classic bad joke right there this is the ramsie show ken coleman ramsie personality is my co -host today number one best -selling author of the book paycheck to purchase purchase purchase yeah we'd like you to purchase something if you had a paycheck but like that book maybe there you know uh the best way to make most of your money is by creating and sticking to A plan.

[1233] It's called a monthly budget, the dreaded B word.

[1234] Yeah.

[1235] Why do people dread it?

[1236] Because you get to tell your money what to do.

[1237] If you don't like it, it's your fault.

[1238] You get to decide what it says.

[1239] If you hate it, why would you design a plan you hate?

[1240] Design a plan you love.

[1241] I can't have any fun.

[1242] Well, that's your fault.

[1243] You decided not to have any fun.

[1244] You could do that.

[1245] But that's okay.

[1246] You could live like no one else so that later you could live like no one else.

[1247] You can keep a pulse on your spending, make progress, work with your spouse, make your money behave.

[1248] This is why millions and millions and millions, that's a lot of millions, are now using every dollar.

[1249] It is one of the world's largest budgeting apps, but it's definitely the best budgeting app out there, and it's ours.

[1250] We love it.

[1251] Download every dollar for free at the app store or Google Play today or at every dollar .com.

[1252] Every dollar premium you pay a little for, and it connects you to your bank and does all kinds of good.

[1253] he's like set up your net worth it'll get you going on the whole thing yeah track you through your baby steps right there oh yeah baby it does all of that check it out tracy's with us in canada hi tracy welcome to the ramsie show hi hey what's up taking my call i'm super excited to be on we're glad to have you how can we help thank you um so we recently well about a year and half ago we bought a house and we were slowly, we were living in it and slowly renovating it and kind of using it to be also an in, like we were planning on selling it in a couple years once we were done renovating it.

[1254] And then in the middle of renovating it, we found out we had asbestos in all the drywall.

[1255] And so we quickly moved out and we're living with my father -in -law and we're trying to renovate it now super fast, but definitely incurring a ton of debt on our home equity line.

[1256] credit um because you're using asbestos removal companies yeah yeah we have it all like all the all the all the best that has been removed and we're just now in like kind of the rebuilding phase yeah you're down to the studs on the whole stinking house face yeah totally so now we're drywall up on this when you're done well we've had a realtor come out and she gave us the number and I mean it's I don't know acreages it's an acreage so it's a little trickier than like a home in town I wasn't what I asked I asked what you're going to be able to sell this mess for when you get it completed I'm hoping 1 .1 okay and how much will you have in at that point probably 350 and you're going to make some money yeah we might well I mean 1 .1 over 350 you're going to have to screw it up bad to not make some money yeah Yeah.

[1257] Well, let's get it done and get it sold.

[1258] What's the question?

[1259] Oh, I just, I feel terrible about going into debt and using our line of credit to do it.

[1260] Good.

[1261] Good.

[1262] So get done and get out of it.

[1263] Get it done and get out of it.

[1264] This dream has turned into a nightmare, but it'll, I mean, you're going to end up with some, this fertilizer is going to grow some stuff.

[1265] So, I mean, you stepped in a big pile of poop, right?

[1266] Yeah.

[1267] But, you know, you're going to get out of it with growth.

[1268] showing some stuff.

[1269] $350 is what we're putting into it, like out of pocket, into the house as a renovation cost.

[1270] Okay.

[1271] You're not answering my question then.

[1272] Would you pay for the house?

[1273] $5 .35.

[1274] Plus $350.

[1275] Yes.

[1276] So you're going to have, I ask how much you're going to have in it.

[1277] So you're going to have eight something in it, not $350.

[1278] Okay.

[1279] So you're barely going to get out by the skin of your teeth.

[1280] Good.

[1281] At least you're going to get out.

[1282] Yeah.

[1283] Yeah.

[1284] It's not as sweet as I thought it was a minute ago.

[1285] I was confused, but you confused me. So there we go.

[1286] But okay.

[1287] Yeah.

[1288] All right.

[1289] Yeah.

[1290] We also have a rental property that we own, and I'm just curious if it would be wise to sell that and use that to not have debt, I guess.

[1291] Yeah.

[1292] Yeah.

[1293] Sure.

[1294] Because here, at the end of the story, you're going to have the money from that rental back in your hand, right?

[1295] Yep.

[1296] If you don't run up dead instead of, instead use the rental money.

[1297] So, yeah, I'll sell it.

[1298] And that gets you out of this poopy mess again.

[1299] And then lesson learned that all renovations are not quaint and fun and cute.

[1300] As a matter of fact, most of them aren't.

[1301] They suck.

[1302] I've done a bunch of them and they ain't no fun.

[1303] I'd rather build a house any day from the ground up than I would try to renovate an old piece of crap.

[1304] Oh, man. It's awful.

[1305] It's just awful.

[1306] and so yeah man I was doing one over in one of the areas of town that's now cool you know the cool ends used to be the hood now it's cool yeah you know what I'm talking about and yeah that thing man every time we opened up a wall there was a whole another problem money pit it's like yeah I mean it's just like god man they don't build them like they used to thank God you know it's just it was awful and so yeah you just I'm I have no romance for historic renovations.

[1307] I call them hysteric renovations.

[1308] They're hysterical anymore after you're doing it.

[1309] I did enough of them.

[1310] So you're telling me you don't like to watch Fixer Upper shows on HGTV.

[1311] Oh, that's just not even close to what really happens.

[1312] Reality TV has so little reality in it that it is so scary.

[1313] But yeah, no, I don't watch any of that.

[1314] I don't even watch TV.

[1315] But, yeah, that's, but still, it's just the cute little, oh, it's cute.

[1316] Yeah, it's cute.

[1317] Yeah, it's no idea.

[1318] No, thank you.

[1319] No, thank you.

[1320] A little PTSD, folks.

[1321] Yeah, I did.

[1322] It's just coming out right now.

[1323] On her behalf, it's, um, yes.

[1324] It's a sympathy, empathy fit.

[1325] You can absolutely feel having a sympathy, empathy fit right now for her with her as Vestis discovery.

[1326] Yeah.

[1327] Back when we used to kill ourselves trying to stay warm.

[1328] Yeah.

[1329] Uh, that was insulation is what they're dealing with.

[1330] there.

[1331] Okay, Liz is in Columbus, Ohio.

[1332] Hi, Liz.

[1333] How are you?

[1334] I'm so excited to talk to you guys.

[1335] Thank you so much for taking my call.

[1336] Sure.

[1337] What's up?

[1338] So my husband and I are in Baby Step 2, and the next loan that we're kind of chunking away at is my car loan.

[1339] And in the month of May, we're going to be able to make a $7 ,000 payment on it.

[1340] And I'm kind of just wondering if I should stockpile the remaining balance of the loan, including that $7 ,000.

[1341] Why?

[1342] Because I went and looked at the loan, and if I paid off in one payment, they reduce it by, like, $2 ,000.

[1343] So I was confused by that, and I just wanted to call in and see if you guys had any insight there.

[1344] Give us a few more details.

[1345] That doesn't make sense.

[1346] Yeah.

[1347] And what's the interest rate on this loan?

[1348] So I called and asked, and they didn't give me a rate that they said it's earning $3 .22 in interest a day, which is so painful and horrible.

[1349] but they would not give you the interest rate yeah but they told me how much it was earning a day no I know but why won't they give you the interest rate because they're screwing you that's why you got a very high interest rate because you have a bad contract called rule of 72s and yeah that thing is uh it's nasty bad or 78s or whatever it is it's uh it's got a prepayment penalty in it yeah that's what it's got it's what it's got And so what you're probably better off doing, and you're going to have to dig into this and learn some more about it, but I think you need to pay it down to the last little bit and then take one hit on it because the prepayment penalties calculated on the outstanding balance.

[1350] So reduce the balance down to about 2 ,000 and then do 2 ,000 all at once.

[1351] So I think they're telling you exactly backwards of what you need to do, but that doesn't surprise me because they're screwing you.

[1352] Yeah.

[1353] Okay, cool.

[1354] That makes a lot of sense.

[1355] I'm pretty sure you had bad credit and bought a car you couldn't afford and they jacked the rate on you.

[1356] Does that sound right?

[1357] Yeah, it was like a car lease for I was in college.

[1358] It was a horrible decision, but I'm just clean it up and just move it on.

[1359] But yeah, yeah, get her done.

[1360] Get her done and get it knocked out as fast as you possibly can.

[1361] And yeah, Lump Summit.

[1362] I mean, throw as much at it as fast as you can, but you need to dig into it.

[1363] You might want to just do one little big, one little lump at the end, like instead of like $500, make it like $2 ,000.

[1364] and I think that might be the way to trick the math on the thing, but look into it and figure it out.

[1365] They'll walk you through it once they figure out they're not able to screw you anymore.

[1366] This is the Ramsey Show.

[1367] Ken Coleman, Ramsey personality is my co -host today in the lobby of Ramsey Solutions on the debt -free stage.

[1368] Ryan and Courtney are with us.

[1369] Hey, guys.

[1370] How are you?

[1371] Good.

[1372] Where do y 'all live?

[1373] Northeast of Champaign, Illinois.

[1374] Oh, fun.

[1375] Welcome to Nashville.

[1376] Good to have you.

[1377] And how much debt of you guys?

[1378] paid?

[1379] 133 ,000.

[1380] Wow.

[1381] How long did that take?

[1382] About 35 months.

[1383] Good for you.

[1384] And your range of income during that time?

[1385] We started around 115 and we've ended about 170.

[1386] Excellent job.

[1387] Very good guys.

[1388] Love it, love it, love it.

[1389] What kind of debt was the 133?

[1390] One credit card, one truck, and our mortgage.

[1391] Yay!

[1392] No mortgage!

[1393] Looking at weirdos.

[1394] Weird people have paid for houses.

[1395] That's so weird.

[1396] I love you.

[1397] Excellent job.

[1398] Houseworth?

[1399] We just had it appraise a couple weeks ago.

[1400] It appraised at $420 ,000.

[1401] Love it.

[1402] And how much in your nest eggs in your 401k's in retirement?

[1403] Well, we both have pensions.

[1404] I work for the state of Illinois.

[1405] He works for the county that we live in.

[1406] And then we have around $60 ,000 in Roth IRAs.

[1407] And then we have around 40 in $5 .29s.

[1408] Excellent.

[1409] Excellent.

[1410] So you're over a half million net worth.

[1411] Way to go.

[1412] Congratulations, y 'all.

[1413] Whoop, whoop, who, yep.

[1414] Yeah.

[1415] All right.

[1416] Tell us the story.

[1417] What happened 35 months ago.

[1418] years ago, something changed.

[1419] Well, my husband is a sheriff's deputy, and he has many other talents as well, and so I had always hoped that he would just kind of do 20 years and get his pension and move on to something different.

[1420] And he always said, well, I can't draw my pension until I'm 50, so I'm going to work until I'm 50.

[1421] But law enforcement got a little crazy in 2020.

[1422] Heard the rumor.

[1423] Yeah.

[1424] And so one day he called me on my way to work, and he just said, I'm done.

[1425] I don't want to do this anymore.

[1426] I'm going to do 20 years and I'm going to be done.

[1427] Wow.

[1428] And my first thought was, I'm so glad that he finally came to his census.

[1429] Wow.

[1430] At the same time, oh, crap, how do I tell him if we owe money on a truck and a credit card, he's not going to be able to do that?

[1431] And so that day I just decided I'm going to make it so that he doesn't have any excuses.

[1432] When that date gets there, he can retire, he can retire with dignity and he can do whatever he wants to do.

[1433] So you just said we're going to get out of debt then?

[1434] I did and he was initially not on board.

[1435] It took a couple days and some tears but I got him there.

[1436] Okay.

[1437] And how did you connect up with all this Ramsey stuff?

[1438] I actually found it through the minimal mom, Dawn.

[1439] I was watching a video of hers and she was talking about the debt free screams and so I have about a 30 minute commute to work and so I pulled them up on my way home and listened to them.

[1440] finished up the next morning and I sent the link to him and he called me and said is this a joke and I was like no we can do this why not and so I sat down that day when I got to work and just immediately wrote everything down in a little red book that I still keep all my information in and we did a budget about 6 a .m. a couple days later I said we're going to do this before the kids are up and it's quiet.

[1441] We didn't have any battles.

[1442] It took us about an hour.

[1443] We got everything together and we just stuck to the plan.

[1444] Wow.

[1445] Well, we were in agreement.

[1446] We need to do this and game on.

[1447] Yes.

[1448] And then here you sit 35 months later.

[1449] Now, did you hit your 20 year?

[1450] September of this year.

[1451] Yeah, coming up fast.

[1452] Yes, it is.

[1453] Wow.

[1454] Okay.

[1455] What was the reason for the bump in income?

[1456] It was a pretty nice little bump here.

[1457] He got a really good raise last year.

[1458] The county gave them their wages were.

[1459] About a 25 % raise.

[1460] Yeah.

[1461] And then I got raises along the way too.

[1462] And also I teach court.

[1463] I'm a court reporter.

[1464] and I teach court reporting online, so that was an extra job that I picked up.

[1465] Nice.

[1466] And for about three years, we owned a small business that we just sold in December.

[1467] Oh, wow.

[1468] We were both working, and he also does IT on the side.

[1469] So, like I said, he's very talented.

[1470] So we had a lot of streams of incomes coming in.

[1471] That's awesome.

[1472] So they jacked your income up.

[1473] They're trying to retain the officers.

[1474] Yes, they are.

[1475] It's still hard to do.

[1476] Do they know that you're out?

[1477] They have a general idea, yes.

[1478] I have not given any paperwork on it.

[1479] I need another job.

[1480] But if they happen to be watching YouTube, I'm just saying.

[1481] The cat is out of the bag.

[1482] Yeah, way to go, guys.

[1483] How's it feel to not have a payment in the world, not a house or anything?

[1484] It feels awesome.

[1485] It is a great feeling.

[1486] Just free.

[1487] How old are y 'all?

[1488] Go ahead.

[1489] I'm 39.

[1490] I'm 45.

[1491] Okay.

[1492] Very good.

[1493] Very good.

[1494] And you're free.

[1495] Yes.

[1496] We are.

[1497] Already a half million dollar net worth and you're going to be millionaires in no time.

[1498] Way to go, you guys.

[1499] And Ryan's actually currently recovering from a neck surgery that he had to have back in March.

[1500] And so he's on temporary disability through the department for that.

[1501] And, you know, like we told our kids on the way here that if our circumstances financially had been different, it would really be a struggle.

[1502] But now it's just an inconvenience.

[1503] It's not the end of the world.

[1504] Yeah.

[1505] Amen.

[1506] Well, congratulations, guys.

[1507] Who was cheering you guys along?

[1508] Anybody?

[1509] Not really.

[1510] I mean, our parents knew that we were doing it.

[1511] and our kids knew that we were doing it.

[1512] They were not happy about the grocery budget, but we got through it.

[1513] It's a rough in the law enforcement community.

[1514] They're against this kind of thing, being debt -free.

[1515] Why do you think that is?

[1516] I'm not sure.

[1517] Everyone wants the best -looking truck and the best -looking house, and they don't care what it takes.

[1518] But here you are completely free.

[1519] Yes, definitely.

[1520] Way to go, guys.

[1521] Way to go.

[1522] What do you tell people the secret to get?

[1523] getting out of debt is?

[1524] I think being on the same page and just coming up with a plan and just sticking to it no matter what you can't make excuses you just got to stick to it.

[1525] At times it's hard but it's in the ultimate goal that you're going for.

[1526] What do you think the hardest thing was?

[1527] For me it was paying off the mortgage because no matter, it seemed like we were throwing so much money at it and I would call every few months and say you know what's the balance and they would tell me and I'd be like that's still so much money but then I got to the point where we were where I started thinking of it like, well, some people owe that on a car.

[1528] And, you know, also like Dr. John Deloney says, you start looking at that new front number.

[1529] And so when it got below 100, I was like, okay, now we're getting somewhere.

[1530] Yeah, now we can feel it.

[1531] Now the momentum's coming.

[1532] And then I would always text him, like, this is the new balance.

[1533] These are the payments we made.

[1534] This is what the balance is.

[1535] And so just cheering each other along, too.

[1536] Yeah, you got to see that progress.

[1537] You've got to feel something.

[1538] If you feel stuck, you quit.

[1539] Yes.

[1540] Yeah.

[1541] So way to go, you guys.

[1542] Very proud of you.

[1543] All right.

[1544] Bring the kiddos up.

[1545] What are their names and ages?

[1546] Briley is 15.

[1547] She gets her driver's license at the end of the month.

[1548] All right.

[1549] And then Ace and Wyatt are twins and they're 11.

[1550] All right.

[1551] Very fun.

[1552] Very cool.

[1553] Well, good to have you guys.

[1554] We're so proud of you.

[1555] Beautiful family.

[1556] You're amazing.

[1557] What you've done is inspiring.

[1558] And so now you're one of those debt -free screams.

[1559] Or in a minute you will be.

[1560] Yes.

[1561] Yeah.

[1562] Well done.

[1563] We've got a couple of years of one -year subscription.

[1564] to every dollar premium.

[1565] We'll give them to you in a few minutes, and you can use one, give one to a friend and pass them along.

[1566] Who knows, you might even convert one of those law enforcement guys.

[1567] You never know.

[1568] I hope so.

[1569] We're hoping.

[1570] I love it.

[1571] So, well done.

[1572] All right, Ryan and Courtney, Briley, Ace, and Wyatt from Champaign, Illinois, 133 ,000 paid off house and everything 35 months, making 115 to 170.

[1573] Count it down.

[1574] Let's hear a debt -free scream.

[1575] Three, two.

[1576] one we're debt free yeah love it way to go you guys congratulations very very well done you know there's something uh i think sometimes the career piece that's why you know what you do with careers makes so much difference the career piece when it gets tied up and something comes along and shakes you in your career uh and certainly that happened a lot of different people around pandemic time but law enforcement's faced a whole different set of issues.

[1577] And you go, wait a minute, this doesn't, I know.

[1578] And then you got to go, okay, what's got to be true?

[1579] And she said, what's got to be true is we've got to get out of debt.

[1580] And then you go, okay, how are we going to do that?

[1581] Well, now we're going to, you know, here we go with the Ramsey stuff.

[1582] And those crazy Ramsey people suddenly start sounding sane.

[1583] And then you watch about 100 debt -free screams.

[1584] And then you go, I want to be one of those when I grow up.

[1585] And then 30 months, 35 months later.

[1586] not even three years later, house and everything is gone from the moment of being shook to there.

[1587] And for a lot of people listening that are feeling stuck professionally, the key to getting out many times is getting free financially.

[1588] And in this case, this is Exhibit A. If I get financial margin where I can actually breathe and move and actually get qualified to do something.

[1589] So sometimes it's getting your financial house in order that will allow you to actually make that pivot.

[1590] And this is a classic example.

[1591] Thank you for your.

[1592] service, by the way.

[1593] You're a great American and excited about your future, my friend.

[1594] Amen.

[1595] Very cool.

[1596] This is the Ramsey Show.

[1597] Our scripture of the day, Proverbs 1632, better to be patient than powerful, better to have self -control than to conquer a city.

[1598] Albert Einstein said we cannot solve our problems with the same thinking we used when we created them.

[1599] Thanks for being here, America.

[1600] Dalton is with us in Austin, Texas.

[1601] Hey, Dalton, welcome to the Ramsey Show.

[1602] Hi, Dave.

[1603] How's it going?

[1604] better than I deserve.

[1605] How can I help?

[1606] Well, I'm self -employed, and I was doing really good financially.

[1607] I had gotten debt -free almost besides the mortgage, and then I got six -figure income one year, and I got kind of, I lost my humbleness, and I got into a lot of debt, and now I can't even hardly feed my family, just trying to make the minimum payments.

[1608] What kind of debt have you got?

[1609] So we have 220 in mortgage, I'm sorry, 220 in mortgage, 36 in car, 185 in American Express business credit card, 16 ,5 in a trailer that I use for work, and about 10 ,000 on a personal loan, about 6 ,000 on several other credit cards that is personal debt, and, and about $5 ,000 in truck repair, like a high interest, like on -site loan that they give you there.

[1610] What are you making?

[1611] So my income is varied week -to -week.

[1612] It's between $1 ,100 and $4 ,500 a week.

[1613] What are you going to make this year in total dollars?

[1614] Net profit, taxable income.

[1615] So I switched fields, so this is going to be my first year in this field.

[1616] Why did you switch fields?

[1617] You were making $100 ,000 a year?

[1618] Because it completely dried up.

[1619] What were you doing?

[1620] So I was in construction.

[1621] I had a construction company, and I had lent a house, and I built a house.

[1622] And then right after that house, I took on all this debt.

[1623] I'm sorry, construction in Austin, Texas, dried up?

[1624] No, it didn't.

[1625] Oh, for me. For me, yeah.

[1626] No, it didn't.

[1627] Why did it drive for you?

[1628] I mean, I stopped getting calls.

[1629] It's a boom town.

[1630] Well, I mean, what did you do?

[1631] Did you not build well or did you not do the work good or what?

[1632] I think what happened was, while I was building this house, I wasn't available to all my other customers.

[1633] Oh, you built yourself a house and you quit working.

[1634] No, I built it for a customer, but it was for one customer.

[1635] So you got overextended.

[1636] You got overextended.

[1637] Yeah, for that like three months, I was only focused on that one customer.

[1638] And before that, you were doing just repairs, handyman stuff?

[1639] Yes, sir.

[1640] Yes, sir.

[1641] And now what have you switched to now?

[1642] So now I'm driving truck, hauling rock, and I own the own, I took out from my retirement, and I bought the truck outright, so I own the truck.

[1643] How old are you?

[1644] 32 Okay All right Well Okay How can what you're saying you're having trouble paying your bills is what you're asking okay What do you make and drive in the rock truck 1 ,100 or 4 ,500 Okay so that is the numbers That's the new numbers Okay Why is it fluctuating so much We're heavily dependent on the rain And other variables And then And some loads pay more than other loads.

[1645] So it's just really kind of all over the place.

[1646] The money is really good, better than I've made anywhere else, but it's not dependable.

[1647] All right.

[1648] So let me ask you this silly question.

[1649] This may be silly.

[1650] Is that meaning that there are times where you have time on your hands because there's no rock to transport?

[1651] Not necessarily.

[1652] So some of the loads that you have to take just don't pay very well.

[1653] But you're busy all the time But the phone's ringing and you've got stuff to haul all the time For the most part, yes, except for the weekends Well, the weekends, you need to be working, my friend A lot Yeah, I still try to do handyman jobs on the weekends And construction job on the weekends Yeah, there's no try I mean, in Austin, Texas, you were successful before If you traced the story you just gave us You were really crushing it when you were doing Handyman jobs, smaller projects, where you could be flexible and move and be a little bit more, you could pivot, you could do that.

[1654] You got all locked up in that house, and you had to ignore everybody, and that turned off the spicket of business, correct?

[1655] Exactly.

[1656] All right.

[1657] And I would go back to where I had success before, and I would learn something from this and go, I am a lot more nimble when I'm doing a bathroom here, a kitchen there, a fence, backyard fence, there.

[1658] I would be making money, and I'd be working like crazy.

[1659] income my friend now and the the 36 ,000 dollar car yes sir what is that I'm trying to get rid of it yeah I bought it for the company and after I built that house I told my wife you know I'm on big time now and I need a professional looking car professional looking vehicle yeah and she told me that that was not smart and she's a smart woman yeah he's very smart and I should listen to her more sell the car what's the housework the house is worth about 480 and we owe 220 so here's the solution all right here's your motivator you want to get motivated here you go you either get your butt in gear and get your income up to clean up this mess or you're going to have to sell your house one of the two well that was one of the questions that I had too this house is too small for our family because we have five kids and this is a three -bedroom house it's really a two -bedroom house that we made into a three -bedroom house, would it be wise to just try and sell the house and get into something a little bit further out in the country?

[1660] If you go down and cost?

[1661] Yeah, yeah, so that's what I...

[1662] You don't use this as, you know, the way you set all that up, it sounded like you were going to go up.

[1663] No, no, we can't go up.

[1664] We need to go up in space, but down in cost.

[1665] 100 ,000 range, yeah.

[1666] Yeah, if you go from a $500 ,000 house to a $300 ,000 house, You can free up some money to clean up this mess, yeah, and you sell the stupid car.

[1667] Yeah.

[1668] How do you do that with a family, though?

[1669] Like, I'm not sure how to sell the house and keep my – because it's very hard to show a house when you have five kids running around.

[1670] No, it's not.

[1671] They make their bed, and you all get in the truck car and leave when the agent comes to show it.

[1672] It's so true.

[1673] I did it with three kids and two dogs.

[1674] I don't want to hear it.

[1675] My house is being shown right now as we speak.

[1676] And the dog and the wife left for the agent to come.

[1677] That's how life works, dude.

[1678] Yeah, you get your crap together, you know, because the family needs to get out of this mess.

[1679] Now, more importantly, though, I don't want you to sell this house and feel like you straighten everything up.

[1680] Because you still have this wandering mess of a career that you've got to get dialed in.

[1681] I think you fell backward into this rock truck thing because you were scared, not because it was a plan.

[1682] And I don't think you, I don't think this is what you want to do 10 years from now.

[1683] I don't think it's your career.

[1684] I don't think you said, you know, this is what I want to do.

[1685] I want to drive a rock truck for the next 10 years.

[1686] I think you just jumped into it because you heard you can make some money and you were so hungry and scared.

[1687] So you need to be rethinking about where you want to be with a business or with your career or both over the next 10 years.

[1688] And what are the steps to get to get to that?

[1689] And that would be your Ken Coleman answer.

[1690] No, it's giving me a assessment to get clear assessment in this.

[1691] book find the work you're wired to do but he may need to at this point Dave consider going into work for some contractor and maybe if he can really pull some good money right now and then do stuff on the side you know I'd be looking to upgrade that salary quickly with your skill set I know this this is a this is a published fact you can Google this and get 20 articles on this there is a massive shortage right now for carpenters in America and it pays a premium and if you can show up on time and not be on drugs or DUIs and actually sling a hammer and do it quickly, you can crush it as a carpenter.

[1692] Now, that's a fact.

[1693] Yeah.

[1694] And that's just one piece of the accident.

[1695] That's just one piece.

[1696] Yeah.

[1697] And so the same thing's true.

[1698] I mean, we've got people in Andre leadership that are making $300 a year as handymen.

[1699] Electricians and plumbers.

[1700] Or handyman.

[1701] I mean, they just got a handyman service.

[1702] It's all they do.

[1703] That's right.

[1704] And they just go in do small jobs, small jobs, small jobs.

[1705] And they bid them nice with a nice margin to, you know, do stuff for rich people they don't want to do.

[1706] Get you a leaf blower.

[1707] rich people are afraid of leaves you know it's like it's a sound of prosperity right there that's it so that kind of stuff that's really good i've ever heard that i'm stealing that one too that puts this hour 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 dr john deloni here mental and emotional health challenges broken relationships It's all just part of life, but they don't have to define you.

[1708] The Dr. John Deloney's show is here to help.

[1709] It's a caller -driven podcast where you can get practical advice on dealing with anxiety, loneliness, depression, relationship challenges, your kids, and so much more.

[1710] Listen to questions from our callers, or if you're walking through a tough situation and need some help, give me a call.

[1711] You are never meant to do life alone, and that's what this podcast is all about.

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[1713] Remember, your worth being well.