Today's Lesson: Stop Taking Out Loans

[0] Live from Nashville, Tennessee, this is the Ramsey Show.

[1] I'm John Deloney joined by Jade Warshall, and we are talking about your relationships, your money, your retirement, building wealth, the work that you do that you may or may not love.

[2] We're talking about everything.

[3] If you want to be on this show, give us a buzz.

[4] A, 825 -5 -2 -25.

[5] It's AAA 825 -5 -2 -25.

[6] Let's go out to the home of Allison Chains in the Great Soundgarden, Seattle, Washington, talk to Mike, Mike, Mike.

[7] What's up, Mike?

[8] How are you doing, guys?

[9] We're good.

[10] What's that with you?

[11] All right.

[12] So I'll try to keep it real brief.

[13] So I make really good money out here out in Washington, but super, super unhappy.

[14] With the union, got good pension, benefits and all that stuff, but super unhappy.

[15] So is my wife.

[16] She homeschools because a school suck out here, and she wants to actually move out to Tennessee, not sure what area, but I know I'll make less money.

[17] I'm wondering if that's the right move to make me happy, even though I'll make less money.

[18] How much is your happiness worth?

[19] You can tell me, what's the dollar amount?

[20] Well, I currently make about $42 an hour out here, and so you went all the overtime, a double time.

[21] It's really good money, but I'm stuck in two hours of traffic every single day, only driving 38 miles to home.

[22] The politics suck, the school suck, and there's nothing to do out here.

[23] So, dude, go back to my original question.

[24] You give me a dollar amount, dude.

[25] Because let's be honest, like, for a million dollars, not, I mean, objectively, there's not a lot I won't do.

[26] But, like, for $20, there's a lot I won't do, right?

[27] So you tell me, what's your number?

[28] Well, I mean, if I could make $30 an hour out there, I'd be happy because I know the cost of living is cheaper out there.

[29] Well, that you're probably wrong on, but listen.

[30] I don't know.

[31] I've never been out there yet, so.

[32] Okay.

[33] Go ahead.

[34] No, you go, John.

[35] Bro, get on a plane and come over here.

[36] Well, actually, we are in February or March.

[37] It's too long.

[38] It's too long.

[39] Because here's why.

[40] You've already broken up with your girlfriend that is where you live.

[41] No, no, no, no, no, no. No, no, no. I'm my wife.

[42] I'm making, I'm making a metaphor, okay?

[43] Pretend you're dating where you live.

[44] You've already broken up with her.

[45] She just doesn't know it yet.

[46] You hate there.

[47] and there is no price to pay for a husband and a father who hates his life because his kids absorb that, his spouse absorbs that, and there's not a dollar amount for that.

[48] Leave.

[49] Leave.

[50] The question is twofold.

[51] Number one, get on a plane, get on a Southwest flight, you and your wife and come spend a weekend in Tennessee.

[52] It will confirm what you're thinking.

[53] It's amazing here.

[54] And do some research on the interwebs on how much all of this caused.

[55] us and look for jobs.

[56] You're just sitting at home stewing and stewing and doing it.

[57] Work on the things you can actually control and beware because the day you land here and you sign on the dotted line and you buy a home and you start your new job, you're going to walk by your rearview mirror and realize that you came with you.

[58] And so if you're a person who's just kind of miserable and kind of hates everything, you're going to be kind of miserable and hate everything here.

[59] If you're actually like a guy who's oriented towards positivity, you love your family, you love your kids and you have some values that you want to be surrounded by and you're just in a sick system that yeah man you're going to be unleashed out here yeah and that's what i want because i'm i'm truly not happy out here but i do love the money how'd you end up in seattle where were you before seattle and how'd you end up there i was in arizona and my daughter from my ex was out here and so we moved out here because i could make better money and so and i just been stuck here because of the God, dude, hey, did you grow up with not very much?

[60] Yeah, kind of.

[61] Tell me about, how'd you grow up?

[62] I grew up in a crappy family.

[63] I had to start, God, so I joined the military right after I graduate high school and just been working job to job, job, making low -end money.

[64] And now that I'm making really good money, it's really hard for me to just let go of that.

[65] It's hard because you attach your worth to a dollar amount.

[66] Because since you were a little kid, that's been your ticket out.

[67] out.

[68] And what you've got in the meantime is a family who loves you.

[69] And you haven't internalized that that's worth way more than a dollar per hour amount.

[70] Very true.

[71] But I also have to pick, but I still got bills.

[72] I mean, granted, we can sell our house.

[73] And we are coming out there in February or March.

[74] That's too long.

[75] Don't make your kids.

[76] Bro, don't make your kids have an angry, frustrated dad for six more months.

[77] I mean, it's summertime they're, you know, I provide, you know, they're able to do certain things during the summer and keeping busy.

[78] But, you know, so what I'm doing is that I'm cashing out my vacation.

[79] So I'm like to take vacation at all this year.

[80] I'm cashing it all out using that money to provide for the flight and the hotel.

[81] Okay, Mike, why did you call us?

[82] You already know what you're going to do.

[83] Why'd you call us?

[84] I just want to know if happening, you know, it's just, is it the right thing to do financially?

[85] Or am I putting a mental block in it to stay here to provide or go out there to be.

[86] I think your arms are wrapped around the dollar per hour amount you make like it's a snuggy.

[87] Like it's a pacifier and a blanket.

[88] And that's what my wife says.

[89] That's the only thing that you look in the mirror and say, I have value and worth.

[90] And you have a wife and kids looking at you saying, we love you.

[91] And you're like, yeah, y 'all shut up.

[92] I make 42 bucks an hour.

[93] And until you cross that great divide, bro, I don't even know how much money you, I don't even how much debt you have.

[94] We'll get to that.

[95] But none of that matters because you don't think you're worth a damn other than that.

[96] dollar amount.

[97] And I can't convince you of that on a 10 -minute phone call.

[98] Oh, I know.

[99] I agree.

[100] I agree.

[101] But that's your cancer right now.

[102] And until you detach from that, you're going to live in a house where you hate driving to work.

[103] You hate the job.

[104] You do.

[105] You hate driving home from work.

[106] You hate where your wife and kids live.

[107] But God bless us, we make 42 bucks an hour.

[108] That's madness.

[109] It's insane.

[110] I know.

[111] I know.

[112] It's an illness.

[113] Yeah.

[114] I mean, plus our house needs so much work.

[115] God, shut up with all that.

[116] It doesn't matter.

[117] Doesn't matter.

[118] I know.

[119] all right jade i'm i'm i'm gonna be less than nice and i like seattle so go ahead you know what i don't know why i don't my mind is going on another train right now and i think i don't know if this message is really for you or for the folks listening because you called in but i think sometimes we really get we cling to the best scenario that we've ever had thinking nothing like this will ever come along again and in this case maybe it's a money or a paycheck and i think sometimes it's like listen you got to you got to you got a there's more where that came from do you know what I'm saying like there's more where that opportunity came from and I'm going to just say it because I feel like it's it's in me to say it like gifts come from God like every good and perfect gift comes from God so if you had this opportunity that was there before before you it's because it came from God whether you believe in them or not and that means there's more where that came from and if you hold on to something so tight and don't believe that there's more where that came from you lose track of really what the source of that is.

[120] And Seattle wasn't the opportunity.

[121] Arizona wasn't the opportunity.

[122] God provided the opportunity.

[123] And so wherever you go, there's opportunity.

[124] And so I just really want to let you know that.

[125] I don't know why.

[126] I know usually I'm here talking about dollars and cents, but that's what I feel like I'm supposed to tell you.

[127] So that's what I'm going to tell you.

[128] And I feel like I'm supposed to follow that up with.

[129] How do you like them apples, Mike?

[130] No, I know.

[131] I agree.

[132] You don't agree.

[133] You don't agree.

[134] You don't agree.

[135] Because as soon as you get up your last pay stub and you're going to go, oh, $42 an hour.

[136] Don't.

[137] Aren't we beautiful?

[138] You can make it again, and you can make more.

[139] What if you made $52 an hour out here?

[140] But right now?

[141] What if you made $52?

[142] Yo, what, what, what, what?

[143] What if you made $50 an hour out here?

[144] Oh, I would love to.

[145] It's just my job, if I would have to transfer, I know my pay would be cut in half.

[146] I've already looked into it.

[147] Granted, I could do other things.

[148] Okay, listen, listen, here's your choice.

[149] Choose misery or choose joy.

[150] That's your choice.

[151] Choose misery or choose joy?

[152] T -da.

[153] That's your choice, brother.

[154] And you've got a wife and kids sitting in the wings waiting on you to make the call.

[155] This is The Ramsey Show.

[156] We'll be right back.

[157] Hey, you guys, emergencies happen in life.

[158] Your dishwasher breaks and floods the kitchen.

[159] Your AC goes out in the middle of the summer.

[160] Situations like those are why we teach people to have an emergency fund.

[161] And when it comes to medical emergencies, there is a medical emergency kit from the wellness company.

[162] They're great for when you need medicines right away and can't wait for the pharmacy to open.

[163] and who has time to wait in line at urgent care.

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[165] Your medical emergency kit has antibiotics and medicines for over 30 common illnesses like strep throat, pneumonia, UTIs, and more.

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[167] So they're like having an urgent care in your home.

[168] Just answer a few questions at urgent care kit .com.

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[170] I have one and you should too.

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[172] Use the promo code Ramsey.

[173] This is the Ramsey show AAA 825 -5 -225.

[174] I'm John Deloney joined by Jade Warshall.

[175] The best way, the best way to the most of your money is by creating and sticking to a monthly budget.

[176] I hate budgets.

[177] Well, well, listen, they'll save your life.

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[179] Keep a pulse on your spending and make progress on your money goals with every dollar.

[180] Download every dollar for free in the app store or Google Play today.

[181] It's free.

[182] Why would you not try it out?

[183] It's free.

[184] Every dollar.

[185] app in the app store, every dollar the app in the app store or Google Play today.

[186] All right, let's roll out to, roll out to Lexington, Kentucky and talk to sweet Caroline.

[187] What's up, Caroline?

[188] Hi, close, Carolyn.

[189] Oh, my bad.

[190] So close.

[191] Not sweet, Carolyn, not sweet.

[192] What's up?

[193] We had a very bad situation last year.

[194] We had just moved to Kentucky.

[195] My husband and I were out walking on our property with our little eight -pound top yard.

[196] our dog was attacked like nine feet away from us from by the Belgian Melanua next door we had to deal with well hold on is it the Belgian what Melanua Melanua what is that I only know of Belgian waffles yeah what is that it's a police dog that the neighbor next door had oh wow okay so it's a big giant dog it's a very big dog and he got over the fence and attacked our pet our boy okay um four days later he died but it was nine thousand dollars in veterinarian bills yeah it's awful in fact there are no words to describe it um the neighbor paid all but 1500 because we were well we felt sorry for him so um he paid all but fifteen hundred of the vet bill which was good but that was as you can see it was extremely expensive as well as being the worst thing never happened now my My husband is saying that we need pet insurance in case, you know, God forbid something like that happened again.

[197] The neighbor got rid of the dog, by the way.

[198] But we didn't know things like this could happen having moved from a condo in California.

[199] Well, the insurance is $30 per month per dog.

[200] And we lived on a fixed income now, and we're halfway.

[201] He wants to get the insurance.

[202] And I'm thinking we ought to just save up the money.

[203] How many dogs do you have?

[204] And we currently have two other papayones.

[205] Okay.

[206] And you told me, I just want to make sure I'm clear.

[207] You said out of the 9 ,000 of vet bills, he paid all but 1 ,500?

[208] Yes.

[209] Okay.

[210] Hey, I hate that you lost your pet.

[211] That really does.

[212] That sucks.

[213] I can't imagine coming home and knowing that something like that happened to my dog.

[214] So for the money side of it, here's what my Britain thinks of.

[215] This is something that happened.

[216] It was a random occasion.

[217] You went your whole life probably with pets and nothing like this ever happened.

[218] So I wouldn't let this one terrible thing happening inform how you do things going forward, thinking this could happen again.

[219] And then, so I would not do the insurance, but I would say, okay, what would happen if I just put $30 aside per pet each month and just I always had an emergency fund for my pets?

[220] What would that look like?

[221] That would be about $700 that we would have to save per year.

[222] Now, that's a great amount of savings, but we are living on a fixed income where even, then that, you know, whether I spent it on saving it or pet insurance.

[223] Well, what's the difference?

[224] The money out of our...

[225] I guess what I'm saying is the fixed income part doesn't matter.

[226] You're either saving the $30 or you're not.

[227] Or the deeper question is, you can't afford this.

[228] I mean, even if we said, yeah, go get pet insurance, you all can't afford it.

[229] Yeah, that's what I'm thinking, but he's thinking anything to avoid...

[230] to be prepared, actually, to be prepared for something happening.

[231] Do you guys, do you guys have any money saved?

[232] Oh, we have about 13K in the three to six months.

[233] Okay.

[234] And do you not feel like if something, you know, like I said, something bizarre, like what took place happens, something that you're completely not expecting, like a dog attacking your dog, do you not feel like that, what kind of falls under the umbrella of an unforeseen emergency?

[235] I guess I'm just trying to figure out why what you have in place is not enough.

[236] well I guess we haven't figured that that could have been used for an emergency like that of course that would wipe it out if something god forbid happened again yeah but you're living in you're living in a state of what ifs and I do feel like if I think there's two things that you can have financially in place that will help you and then I do want to turn it over to John because I think for you having a sinking fund that's always there for pet maintenance whether it be you know their yearly checkup or things like that whatever you take them to the vet having a sinking fund there for that that's not part of your emergency fund is a good thing probably for you to get for you guys to have and maybe that's you just putting aside like I said 30 bucks a month or and not or and you have your emergency fund for the things that are truly emergencies that pop up and maybe you say you and your husband maybe you decide hey when it comes to pets this is what we're willing to spend and this is where the buck stops because there is something about that that you don't want to put your own well -being at risk for the risk of a pet.

[237] Well, okay.

[238] It's a hard truth.

[239] Here's the other side of it, or the extended side.

[240] I just had one of my professors and mentors, Andy Young, Dr. Andy Young was on my show this morning and he was just here in town.

[241] He's actually the guy that gave me the language, facts are your friends when you're dealing with trauma.

[242] He's the guy who trained me on crisis intervention, okay?

[243] And so under that guys, I want to walk through, like, we know that when you experience a big, nasty, messy trauma like you experienced, it was terrifying, it was scary, it was bloody, it was a mess.

[244] And then there's a couple days of touch and go, and then your sweet dog passed away, okay?

[245] We know that happened.

[246] But if we back all the way out, financially speaking, this is just facts of your friends, underneath the trauma, what's reality?

[247] Reality is there was a $9 ,000 bill that the person who was downstream, no one's responsible for that kind of freak accident, but he paid for it.

[248] So you guys were out $1 ,500.

[249] The reality is you're not in a position where you've got an extra $60 a month.

[250] The reality is I've grown up with dogs my whole life.

[251] Jade's grown up with pet dogs.

[252] Everyone I know is growing up with pet dogs.

[253] And I've lived in the country, I've lived in the city, I've lived in the suburbs.

[254] I've never heard of this happening like this.

[255] Well, of course, you know, it's one of those things you really can't plan for.

[256] Who would have known?

[257] Well, exactly, but that's when these, what I would call very, very fringe programs will swoop in.

[258] It's the same as if you buy a lamp at Best Buy, and they're like, you want the $9 insurance plan.

[259] It's like, no, I don't want the, like, so it's a just in case.

[260] And you're in a moment where things are sensitive.

[261] And you still have that picture of what happened in that experience and that feeling.

[262] and so I don't ever want to feel like that again.

[263] So I'm going to make purchases that don't make financial sins that actually don't make realistic sense because the final facts of your friends is you have $13 ,000 in the account.

[264] God forbid something else happened that cost $9 ,000 and you were totally on the hook for it.

[265] You can write that check tomorrow.

[266] And so what we're telling you is I want you to begin to uncouple the feeling of what happened then that's happening in the present.

[267] That's what trauma is.

[268] It's when your body re -imagines in the present, re -experiences in the present, something had happened in the past.

[269] What you went through was hell on earth.

[270] It was hard and it was scary.

[271] It probably will never, ever happen again.

[272] And we're going to grieve it, and we're going to be sad, and then we're going to go make the next right move.

[273] And the next right move is we're going to love our little dogs.

[274] I'm stunned by your neighbor.

[275] Sounds like she was horrified, paid $7 ,500.

[276] got rid of the dog, right?

[277] Like, went through a lot to do the right thing after an awful accident.

[278] So it sounds like everything in the world that could have happened after this thing happened in your favor.

[279] It's just hard to see it because of the trauma you went through, the experience you went through.

[280] And so what we're telling you is the next right move is not just to spend, to throw money at, I want to feel like I'm doing something so that I don't feel bad again because I'm telling you, if, God forbid, this does happen again, you're going to feel bad too.

[281] and so let's don't try to mitigate our feelings of what's going to happen in the future let's look at data and if insurance life insurance car insurance home insurance that's math we need that this is just kind of out there on the fringe and all that's buffered by the fact that you have an emergency fund already I think you and your husband go sit down and I want you to write this dog a letter and tell your dog how much you miss it and know people who don't have dogs will roll in their eyes right now and I just said that only all to write that dog a letter and let that dog go run and play a doggy heaven and tell your dog you have a little bit of dogs and wherever that dog happens to be right now.

[282] And then let's start looking at the math and looking at the real world that we have right in front of us.

[283] We'll be right back.

[284] I've been doing this show for over 30 years and some of the saddest calls I have taken are from situations that are completely preventable.

[285] Yeah.

[286] And what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible.

[287] People that call in and their spouse has passed away suddenly and they don't have life insurance.

[288] When you have to think through how am I going to pay?

[289] my bills.

[290] I'm going to eat next week.

[291] Yeah, in the middle of all that grief.

[292] Like, it's just, it is.

[293] It's terrible.

[294] And so life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive.

[295] Zander is the place that Winston and I actually get all of our life insurance.

[296] And it doesn't cost much because Xander shops among a gazillion different companies.

[297] It doesn't cost much.

[298] You just have to admit that someday you're not going to be here.

[299] You got to say it out loud and you got to say, I'm going to say, I love you to my family by taking care of them and taking the time to put the stuff in place.

[300] The cost those stinking pizza.

[301] To get a free quote, call 800 -356 -4282 .82.

[302] That's 800 -356 -4282, or go to Xander .com.

[303] AAA 825 -5 -2 -2 -5.

[304] This is the Ramsey Show.

[305] Let's go out to Cleveland, Ohio, and talk to Tyler.

[306] What's up, Tyler?

[307] Good afternoon.

[308] How are you today?

[309] Outstanding, brother.

[310] What's up?

[311] So, a bit of a predicament I'm in.

[312] I currently have four kind of high interest loans that I've been making monthly payments on with an additional loan that was sent to collections for $20 ,000 unsecured loan.

[313] Recently negotiated with the debt collectors to get a reduced payment of $12 ,000, which I was fortunately able to come up with through some very caring family and selling off a few personal items.

[314] and in my research, watching your guys a show and everything and reading online, it's usually suggested to pay off the active debt first.

[315] I'm curious what your opinion would be in this scenario.

[316] I've already got them to agree to the lower amount.

[317] Should I use that $12 ,000 to just pay it off and be done with it?

[318] Or should I dump that into my active loans, which would free up a significant amount of cash in my monthly budget?

[319] So to make sure I understand, you have these four loans you were able to secure a deal on one of them?

[320] So I apologize.

[321] Five loans, one of them's in collection, the other four active.

[322] Okay.

[323] The one that's in collections, I was able to negotiate a deal on.

[324] Okay.

[325] Yeah, the one that's in collections, you need to clear that one up, especially since you were able to secure a deal.

[326] The only thing that I would tell you is make sure you get it in writing first.

[327] Like, don't pay the payment until you get them to either email you or snail mail you a copy of what will happen.

[328] in when you pay the $12 ,000, the balance will become zero, like, make sure it's very detailed what the deal is, and don't pay the money until you get that.

[329] Have you asked for that?

[330] I did already get it in email from them, from the debt collector.

[331] Over the phone, they had specified, I asked them how it would be reported back to the credit agencies, and stated that it would be reported as paid in full.

[332] Okay, good.

[333] However, in the written deal, I see that it says, if I pay the $12 ,000 on it before the 31st, it will be accepted as a full and final settlement of the account.

[334] Now, that doesn't sound quite like paid in full to me. I think the second one's better, full and final settlement of the account.

[335] That means it's over.

[336] The word settlement just kind of struck as this was settled for a lower amount, which I don't really want on my report if I can.

[337] But it was settled for a lower amount, and it's going to be, they're reporting it that way, so that's, that is the way it is, unfortunately.

[338] I just want to make sure.

[339] Yeah.

[340] Two more things I want to add to that real quick.

[341] You got a second?

[342] Yeah, sure.

[343] Go ahead.

[344] Do not, do not, do not, do not, do not let them do an automatic draft or automatic withdrawal of this money.

[345] Okay.

[346] Would you, now I was thinking about doing a wire transfer, I got the information from them, would paying through their online portal be advised or don't do that either?

[347] if I'm just telling you what I would do in my house okay I would go to my bank and I would open up a secondary account and you can open an account underneath your main account right right and I'd open an account and I would move that money into that account and I would give that number and then zero it out okay because what I don't want them to do is have any path back to my original checking account in any way shape or form or fashion okay the second thing is with with oh go ahead With that secondary account, but you say to open up, zero it out.

[348] And once they take that $12 ,000, close that account, I would.

[349] Because I know that automatic drafts, like pre -authorized drafts that are done through like lenders and stuff like that, they can set it for an amount and there's not really anything I can do to stop it and it can potentially overdraft an account.

[350] would you suggest putting on or removing the overdraft protection so they can't you know say they said they'll do 12 ,000 but then they try to charge you know 15 ,000 you know you will use their online portal and you'll put the dollar amount in there we're not doing a draft oh I got you I understand yeah not not yeah never let them let never open the door and say you go in there and get what you said you were going to get because they're going to get more got you the second thing is can we learn a lesson here um you stop taking out loan yes and so the the the downstream effective that is who cares what's on your credit report all your credit report is it's a register for how your relationships have been with debt and at some point you got to decide i'm done so i don't care what five ex -girlfriends before said about you you're married now who cares gotcha understood so i don't care what somebody's putting on my credit report we're done dancing with debt and so i'm going to get these other four things paid off ASAP and then I'm going to be finished borrowing money so put whatever you want on there awesome man thank you guys so much I appreciate advice all right brother appreciate your call man it's got to Toledo Ohio holy Toledo and talk to Carly hey Carley what's up hey how are you could not be better what's up oh so I was looking into investment strings because I was wanted to retire like when I was like 50 or like younger than 59 like the normal retirement rate.

[351] And so I was reaching out to like financial advisors and I came across one person and they said to get an index universal life insurance where I can pull against like when I'm 50 and it like almost seems too good to be true.

[352] How old are you?

[353] I'm 21.

[354] Okay.

[355] I really love the fact that at 21 you're thinking about ways to build.

[356] wealth and thinking about just, I mean, thinking about when you're 50.

[357] When I was 21, I was not thinking about the day.

[358] I was 21.

[359] I could care less.

[360] That I would turn 50.

[361] So I really, I applaud you on that.

[362] I think that shows that you're just a mature person and you want to do what's right with your money, which is great.

[363] I think also what you're learning here is that you have instincts.

[364] And when your instincts tell you that something's not right or too good to be true, that's generally the case.

[365] And so I would agree with the way you feel.

[366] Yeah, this is too good to be true.

[367] And I would run, run, run, run, run, run, run, run away baby from this, like, in the words of Bruno Mars.

[368] So what I would do is tell me a little bit more about your financial situation and then I can kind of craft what I think you should do.

[369] So I have a 401k and a Ross IRA that my old job used to pay into and now I'm just depositing into it now, like about $100 a month, about like up to like $10 ,000 combined.

[370] Okay.

[371] And then my current job gave me a pension that I pay 10 % they pay 14 % and I could touch that when I'm 55 so I was wanting something to bridge that like five year gap so I can retire earlier okay so do you have any debt I own a house so that's like the only debt I have okay who are you a 21 year old with all these retirement accounts who owns their own house who doesn't owe any extra money you're amazing I I love Dave Ramsey.

[372] I've been listening to him forever.

[373] So what percentage of your income total are you investing at this point?

[374] Probably less than, probably at like 15%.

[375] About 15%.

[376] Okay.

[377] And I also want to know, do you have any other non -retirement savings?

[378] Like, do you have three to six months of expenses liquid?

[379] Yeah, I've an emergency fund and like a high -year savings account that I can sold.

[380] Listen, very good.

[381] Very good.

[382] I want to know who your parents are.

[383] This is excellent.

[384] Okay, very good.

[385] So here's what I would tell you.

[386] I like what your goal is.

[387] I like that you're thinking about the fact that you need a bridge into retirement.

[388] Again, you're on the right path.

[389] The only thing is at this point, since you are investing 15 % already, my next focus for you would be to get your house paid off.

[390] Like, let's walk the baby steps in order.

[391] And then once you do that, obviously, your building equity there, which I don't, you know, I don't know what your plans are.

[392] I mean, you're 21.

[393] At some point, you're probably going to sell that house.

[394] You'll meet somebody that you love and, you know, but that would be my next move is to start paying that debt down.

[395] And then when you're done with that, you can go to the moon.

[396] Like, you can invest as much as you want.

[397] I'd probably finish up if you're not already maxing those 401ks and those Roth IRAs and those pensions.

[398] I'd max that.

[399] Then if you can move into something just like a brokerage account, like you said, for a great bridge, just a normal brokerage account.

[400] You can invest four ways.

[401] Growth, growth and income, aggressive growth in international.

[402] You can do that in mutual funds.

[403] And that's what I would do if I were in your shoes.

[404] Dave Ramsey says did a life insurance policy.

[405] That's not like the full life insurance policy.

[406] You need term life is what you need and it's for people who depend on your income.

[407] That's what that's the purpose of having life insurance.

[408] It's to replace income for people who depend on it.

[409] And you can find that at Xander Insurance, by the way.

[410] There we go.

[411] This is the Ramsey show.

[412] We'll be right back.

[413] This show is sponsored by BetterHelp.

[414] Hey good folks.

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[435] Welcome back to The Ramsey Show.

[436] Today's question from Madison and Wisconsin.

[437] It's the Ramsey Show question of the day.

[438] I'll read it here, Jade.

[439] Sorry, I made that intro kind of weird.

[440] It was a little weird.

[441] I got you, though.

[442] Thank you.

[443] All right, you read it.

[444] Several years ago, my husband was accepted into an out -of -state college program.

[445] We had just had a baby, so I had to continue working to support us, even though my goal in life was to stay at home and be a stay -at -home mom to raise our kids.

[446] Last year, he failed all of the board exams, and now I'm left feeling I gave up everything for nothing.

[447] I worked so hard to put him through school, and he didn't take it serious enough to pass.

[448] I lost time with my two kids when they were babies, and I resent that he was able to do what he wanted to do while I put him through school.

[449] How do I get over it?

[450] I love him and he is the best father to my kids, but it just eats at me. I have thoughts.

[451] What do you say, Mama?

[452] You know, here's the thing.

[453] You had to have gone into this knowing that there's always more options than what you're hoping will happen.

[454] That's my first thought.

[455] My first thought is you say, okay of course yes the idea is you'll work even though you didn't really want to it'll help pay for school he'll go to school the hope is that he'll pass the boards and everything will go swimmingly but you also have to plan and mentally have a space for if that doesn't happen and I think that's probably where things started going awry is there was only one path and that was the way and that's what's going to make it all worth it and when that didn't happen I think that was really a big blow I want to know I wish I could ask questions because I want to know more about the he didn't take it seriously enough to pass and I want to know is there another like can you keep going like this is not the end of the road so there's more to the story I don't know it John anytime you start keeping score in a relationship especially in a marriage it's over it's over well you got to do this so I get to do this and I get to do this it is a group decision that we all make together that someone's going to school.

[456] It's a group decision that we're going to move.

[457] It's a group decision that I'm going to quit this job and take this new job.

[458] And that means your role at home is going to shift.

[459] And when it doesn't go your way or when it doesn't work out like we planned, then we have to be adults and plan for the next thing.

[460] We can't go back and be like, well, you said you can't live like that.

[461] Yeah.

[462] It's a choice to be miserable in the present.

[463] Can I bring something else up?

[464] I might be wrong.

[465] And you tell me because this is your area.

[466] she said yes maybe she should have said no yeah said you haven't proven that you're like you've never been a good student i've known you forever you don't like school you don't and i've had some wild hair adventures that my wife has said my vote is not a good idea yeah right yeah and we don't say like no you can't that's not just how we talk to each other but i trust her wisdom and i powdered about it for a few days and then i look up and she was right so I kind of wonder then.

[467] This is just me because I'm, you know, when you guys call in or write in, I'm filtering things through what if this happened in my life?

[468] I think part of the resentment could be, and I'm just, I'm throwing a long shot here just based on Jade.

[469] It might be me really feeling like I'm mad at myself because I know I should have said no, but I said yes.

[470] And it's hard, it's easier for me to be resentful of him than to be mad at my own self.

[471] That's me. All day.

[472] And it's easier to blame somebody for the choice that.

[473] I made or I didn't speak up or maybe this isn't a safe relationship and she felt like she couldn't speak up.

[474] That's also true.

[475] But here we are two years later, three years later, however many years later, he failed the boards.

[476] My first question is, can you go back and take him again?

[477] Can you go back and take him?

[478] Second is we all agreed on this.

[479] Yeah.

[480] We agreed.

[481] And you don't just not take it seriously at the very end.

[482] You don't take it seriously throughout, right?

[483] So there was some conversations that weren't said and weren't had.

[484] And I think you might be into something.

[485] I will say this till I'm blue in the face.

[486] In marriage, especially, secrets will destroy your marriage.

[487] And if you keep them, they'll destroy you.

[488] And so if something is quote unquote eating at you, you have to have the courage to put it on the table.

[489] And I want you to put it on the table, Madison, with eye language.

[490] Anytime you start a conversation, a hard conversation with the person you're married to, and you start with a finger pointing, you say you, you didn't take this seriously.

[491] You cost me two years of my life with my babies or whatever he's going to wall up because he has to go to war and now he's being attacked yeah if you sit down and say i'm struggling with regret and we're struggling with resentment i didn't speak up and now here we are two years later we are in the hole we left our families left our friends i missed time with the babies and i'm not doing good this whole thing's eating at me that's an invitation yeah and that's the way you got to have that conversation but if you just sit there and let it eat at you for things that happened in the past you're you are affirmatively choosing to burn your current relationship to the ground.

[492] So is this a point, John, where, you know, I hear you say all the time, guilt over resentment?

[493] Like, should she have felt guilty for saying, no, I don't want to do that?

[494] I don't want to sacrifice this time with the kids.

[495] And I'd rather feel guilty for, quote, you know, air quotes, not letting you do your dream than me be resentful of missing that time in it not happening.

[496] Speak up.

[497] Everybody's got to speak up.

[498] There's just, I could go on this letter I could go on about all day.

[499] because there's a lot going on here.

[500] The fact that what glaringly is obvious to me that I put him through school, that hurt me. I was like, yikes.

[501] Because he's probably thinking I missed out on X, Y, and Z because I was in classes in school.

[502] I missed out on time with my kids because I was in school day and night, right?

[503] And by the way, for almost all of these type of situations, the question, how do I get over it?

[504] Starts with, I'm going to choose to move on.

[505] And she won't make that choice to move on.

[506] Can I highlight something else?

[507] Yeah, she feels powerful right now.

[508] He failed.

[509] She feels powerful.

[510] And it's good, it feels good just to sit in it.

[511] I want to highlight something else.

[512] And the comments might badger me for this.

[513] It's okay.

[514] So whenever somebody says, this is wrong, this is wrong, this is wrong, this is wrong, this is wrong.

[515] But he's such a great father to my kids.

[516] Yeah, shut up.

[517] Shut up.

[518] It makes me, there's something there that I'm like, it just, for me, it's a little bit of a flag as to, yeah, but you're not saying anything that he is to you.

[519] Yeah.

[520] Does that make sense?

[521] Absolutely.

[522] Yeah.

[523] I'm just throwing that out there.

[524] Seat council.

[525] Seat council.

[526] Let's go out to Fort Lauderdale and talk to Eddie.

[527] What's up, Eddie?

[528] Hi, good afternoon, guys.

[529] Thank you for taking my call.

[530] You got it, man. What's up?

[531] So I've done the Ranzi -ish.

[532] I'm planning to do retire in December.

[533] And my next egg is really good.

[534] I have $50 ,000 a worth of a credit card.

[535] I'm planning to pay off at least $20 ,000 of it and the balance of $30 ,000.

[536] I have $1 .1 in my next gate.

[537] Do you think it's wife just to take out that $30 ,000 for my O1K, pay it off, and get rid of it?

[538] And that's it.

[539] That's my only debt.

[540] My house is paid off.

[541] It's worth close to $800.

[542] um has no more debt no nothing and um that's that's it hey good job you know how old are you yeah i'm 60 right now okay very good um i love i love that you've been diligent you've paid off the house you've got 1 .1 million tell me a little bit more where'd this credit card debt come from and are you done with credit cards i'm done with credit cards um are you um yeah well doesn't sound like Well, I'm a very generous guy.

[543] So when I go out with my kids and all that stuff, I got a guy, so I'm a young good dude.

[544] So I'm a bad guy.

[545] I'm that guy.

[546] So lately my wife has found me, you said, no, you don't need to be that nice.

[547] Okay.

[548] Well, you're about to be on a fixed income.

[549] You're about to be on a very fixed income here.

[550] So I want to make sure that you understand that part of it.

[551] Yeah, no, I know we have done the numbers, me and my wife, And this is only my side She has no debts whatsoever I know what you guys teach Is your debt It's our debt But I wanted to fight this Because she's really good And I'm really horrible So I'm like, don't honey I take I got this I have to do this Eddie that ego's going to drown your brother That is 100 % male ego Let it ride I know Let it ride Homie That is going to bury you Eddie Okay.

[552] If I told you could go onto the bank and take out a loan at 30 % Would you do that?

[553] Oh, hell no. Okay, that's what borrowing from your 401 is.

[554] Hey, before you make this decision, I want you to sit down and work with one of our Ramsey trusted advisors on this because you don't want to make this decision alone.

[555] I truly don't trust that you're ready to make this decision alone.

[556] You need somebody to look at the numbers.

[557] We'll put the information in the show notes for you to make sure you're talking with somebody who can tell you if you're truly ready to retire, considering your numbers and your wife's numbers.

[558] Thank you so much for listening to us.

[559] This hour is in the books.

[560] We'll be back soon right here on the Ramsey Show.

[561] Hey, folks, Dave here.

[562] And I know some of you listen to the show waiting for a call that answers your specific question.

[563] Maybe you need help with budgeting or investing or saving your emergency fund.

[564] But wouldn't it be great if you could get the answers you need right when you need them?

[565] Well, I got great news for you because you can when you download the Ramsey Network app, you get our advanced AI search that lets you easily find the calls that matter to you.

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[570] Live from Nashville, Tennessee, this is the Ramsey show where we talk about your money, talk about building wealth, we talk about your mental and emotional health, the work you do, all of it.

[571] I'm John Deloney joined by Jade Warshaw, and we are taking your calls live at Triple -8 -8 -25 -5 -2 -2 -25.

[572] It's AAA 825 -5 -2 -2 -5.

[573] Whatever you got going on in your life, give us a buzz.

[574] And if we don't have an answer, we've got an opinion that we will make up on the spot just for you.

[575] It's got to Fargo, North Dakota.

[576] Fargo.

[577] So many things I want to say about Fargo, but I'm not going to.

[578] Let's talk to Amanda.

[579] What's up, Amanda?

[580] Hi.

[581] Am I on or not?

[582] You are on in front of all dozens.

[583] of our listeners.

[584] What's up?

[585] So we consistently create some financial gains, and then we consistently fall back down into the pit, a lot of usually due to our layoffs.

[586] And I guess I just, I don't know how to break this cycle and trying to figure out what to do.

[587] Should we continue in what we've been doing financially?

[588] Should we, or should we make some changes?

[589] I don't really know what to do.

[590] How many layoffs?

[591] How many times has this happened?

[592] It happens twice a year.

[593] So we have a week off in July and two weeks off, December, January.

[594] So you know that they're happening every time?

[595] Yes.

[596] Okay.

[597] So that actually makes me. Say again?

[598] We plan for it.

[599] We have enough money to make it through.

[600] We reach the point where we no longer have to take out debt in order to survive the layoff.

[601] uh -huh um we just so if you're planning for it where's the problem because i'm i'm tired of falling back down into the same no savings no like it just doesn't seem to end so okay so then i think i think we have a situation of we have different definitions because for me if you're planning for it then there's no loss of gain but you're saying that every time it's taking you down to zero so whatever progress you made, there is no progress.

[602] And I'm saying, is that right?

[603] Because I'm thinking, okay, if I know there's going to be a layoff in July, how long is the layoff in July again?

[604] It's a week.

[605] One week.

[606] Okay.

[607] And then I've got a two -month layoff January and December, right?

[608] So I'm thinking, okay.

[609] Yeah, the last week.

[610] I'm thinking throughout the next 10 months, basically, I've got to make sure in 10 months, I'm planning that I have enough for two months.

[611] So I'm always kind of like packing it away like a squirrel.

[612] And I've got it there waiting.

[613] And that's on top of and aside from emergency funds and all the other things that we're doing.

[614] It's almost like a sinking fund that you're creating.

[615] So what I'm thinking is that the income that you guys do have, it might be tight as it is.

[616] Am I right?

[617] Yeah, it's pretty tight.

[618] Okay.

[619] So what's your husband?

[620] I've never, what's what are you and your husband earning um i have not had a real job in 12 years why i'm a state old mom when i homeschool my children okay um he makes 45 dollars an hour with zero benefits no pto no sick time um no dental no vision what type of work is it a lot is sir what type of work is a contractor at a in a factory he's a contractor and no benefits Okay, what, tell me more about Fargo, North Dakota.

[621] Why are you guys staying there?

[622] That's where the Lord has called us.

[623] My husband is very involved in the ministry.

[624] We're in the process of starting a church, and we just were very involved in our home life.

[625] Okay.

[626] And I don't know, that's why we're there.

[627] So you think the Lord calls you to a situation where you're terrified of your ability to feed your family every month?

[628] well we're not that bad i have at least three months supply of food in my house at all times it never goes below that but i don't really feel like it's time to leave the town that we're in we're in a small town near fargo is he working 40 hours a week um right now he's doing 50 to catch back up and put more enough okay so so before taxes i'm looking at the numbers before taxes and not really that bad.

[629] What is he actually bringing home?

[630] Because there's no medical.

[631] There's no...

[632] Today was $2 ,168, I believe, was today's paycheck.

[633] Yeah, but I mean for the month.

[634] It varies.

[635] What was your household income last year?

[636] I don't really know.

[637] Okay.

[638] Okay.

[639] I think that's part of the problem.

[640] That is a big part of the problem.

[641] So the first thing here is if I ask somebody what they're making and they don't really know, then I know they can't be keeping a clear budget and a tight budget, because that's just part and partial to it.

[642] I do a month to a bunch, month's budget.

[643] I don't do a year budget.

[644] And I wouldn't, I wouldn't advise you to.

[645] I would advise you to do a month to month, but when you're doing a month to month, you still have an idea of here's about what we bring home.

[646] Here's a good month.

[647] Here's a bad month.

[648] Right?

[649] And so I think that you guys could tighten up a little bit on that, unless you just were like, Jade, I got nervous.

[650] We're on live radio.

[651] Like, I get that.

[652] Um, I am nervous.

[653] I I do know the numbers, if not in front of my computer.

[654] I got you.

[655] And it's also hard because he just, he just got fired from his job.

[656] I know he's had a different job.

[657] So he's got $5 an hour less pay.

[658] So I don't really know.

[659] Okay.

[660] We've had a big change.

[661] Are you doing an every dollar budget every month?

[662] I don't know what that.

[663] So here's how I run my budget.

[664] My budget is everything is in a spreadsheet.

[665] Every bill we have is in.

[666] my spreadsheet, I have the total at the bottom, and then I have that divided by four, because that's how many paychecks we get in a month.

[667] It's a week to week.

[668] And then every single week, I take that divided number.

[669] So today with $670 approximately.

[670] Okay, I'm going to simplify your life.

[671] I'm going to simplify your life.

[672] Before we get off this call, I'm going to make sure you get set up with every dollar.

[673] It's going to make it so simple.

[674] It's going to be at your fingertips.

[675] So much of it is going to do the work for you, which I think could be helpful for a stay -at -home mom who's homeschooling, right?

[676] Anything to take something off of your plate.

[677] So I think that's going to give you a clearer picture just on a daily basis on what's going on with the numbers.

[678] The transactions can automatically come into every dollar and you can see it at a glance, which I think is something that will help.

[679] And it will help you come up with how can we create a line item where we're always putting away for those off months so that it's separate from everything else.

[680] Yeah?

[681] Yeah, I put $300 away every paycheck.

[682] Right.

[683] But we want to make sure what you called in and said is, even though we're doing that, I still feel like we're going backwards.

[684] And so I want to make sure that that doesn't happen anymore.

[685] So do you guys, on top of the money that you put aside for his off months, do you guys have three to six months of expenses?

[686] No. Okay.

[687] That's not even, cost that's the that's the goal that's what we want to get to because if you have both of if you have three to six months of expenses if you have a another fund set aside for when he's laid off then you're not going to feel that way and by the way if you haven't started paying off debt that's probably going to be a step in this process too so hang on the line we're going to get you set up with financial peace university because i have a feeling that you're doing a lot of the right things but they may be out of order and there may be a way that we can really optimize this for you and it got help really help you get to a point to where you feel like you're only going forward and you're never going backwards.

[688] This is The Ramsey Show.

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

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

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

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[703] Thank you so so much for being in our gang.

[704] Let's go to Knoxville, Tennessee.

[705] to the K Knox and talk to Kat.

[706] Hey, Kat, what's up?

[707] Hey, hi, Jade and John.

[708] So I'm trying to figure out how bad or how good my situation actually is.

[709] I'm 68.

[710] I'm retired.

[711] I have a decent fixed income.

[712] I have a mortgage, but no other debt.

[713] And I have three months of emergency savings and nothing else.

[714] Okay.

[715] Okay.

[716] So you're on the fixed income.

[717] Right now, is that fixed income enough?

[718] It is just enough.

[719] I have to type my, I don't have a complete handle on those annual expenses that pop up.

[720] Okay.

[721] And so I've been a little overspending, but I feel like with what I have, I can get a handle on the annual.

[722] And I can definitely cover my basics.

[723] Okay.

[724] And the mortgage, how much do you owe?

[725] on it?

[726] $350 ,000.

[727] Okay.

[728] And I will say I am committed to keeping this house because of an obligation to a family member.

[729] Okay.

[730] And so that that's and plus my whole life, my whole retirement is built around this land here, which has a small farm and income potential.

[731] So I just want to say that's, that's not on the chopping block at this point.

[732] Okay.

[733] I'd have to be going into foreclosure before that would go.

[734] Listen, that's your choice.

[735] And I'm not opposed.

[736] I'm not saying I'm opposed.

[737] I'm not to it.

[738] I just was wanting to get an idea of your whole picture.

[739] I'm assuming it's on a 30 year?

[740] A 30 year fixed under 3%.

[741] Okay.

[742] And how many years have you been paying?

[743] Basically, when do you paid off?

[744] Like two.

[745] Oh, gosh.

[746] Okay.

[747] Yeah.

[748] So I'll be quite old.

[749] 88.

[750] Okay.

[751] So with your fixed, here's where I'm at.

[752] With your fixed income, you're, like you said, you're getting a handle on the annual stuff, but it's not allowing you to make extra payments to pay this off any faster.

[753] No. And it's not an order to save money.

[754] I mean, one of my questions is, assuming I can make some more money, I think I have some ways to bring in a little extra money, maybe even a lot.

[755] And I would do that.

[756] And if I did that, would I invest it or would I pay off this mortgage that doesn't have much of a chance of ever actually impacting my monthly experience?

[757] I would invest it because walking through the baby steps, the next baby step for you would be to be investing 15 % of your income.

[758] And in this case, probably anything that you get above and beyond, right, would go towards that.

[759] So for that reason, I would.

[760] And the truth is, I mean, like you said, this, most of us plan on living, right?

[761] And so if you plan on living, then you're going to look up 20 years and that money will have grown and it will be money that you can have and pull from.

[762] So I would do that.

[763] I would do that.

[764] I mean, I think for you, because you said the house is not on the table, then that's really your only option is to say I'm going to live a life that's on this fixed income.

[765] And I'm going to, the only other thing I might do and I would do is get your emergency fund up to six months of expenses.

[766] I would do that.

[767] And then past that, I would just start investing 15 % or whatever above and beyond, you know, whatever you're side hustle brings you.

[768] Okay.

[769] And the other part of this question is, how bad off am I?

[770] Should I be like my feet are on fire?

[771] I have to make more money.

[772] I would because like you said, you don't have much wiggle room.

[773] And all it takes is for something to go wrong and you're like scrambling.

[774] Like you're in this house.

[775] Hopefully everything's good, but you also have a lot of land.

[776] And when I see that, I'm like, okay, there's a lot of opportunity for things to require money.

[777] And so even though you have six months of expenses saved, if something happens and whittles it down to three months, well, how long is it going to take you to bump it back up, right?

[778] You don't want that to take forever.

[779] So for that reason, as much money as you can pack away, you know, obviously whatever you can, you know, invest and have compound interest working on your side is a good thing.

[780] So that's what I would do if, I mean, I can just tell you if the house was on the chopping block, I might suggest downsizing, but in your case, I don't think that it is something that you're going to do, so we won't even talk about it.

[781] Tell me about this family obligation.

[782] I finished this house with three living spaces and with a promise that my cousin could retire here and save for life, and I'm not breaking that promise, and she's here, and we both want to be here.

[783] for life, you know.

[784] So it's, I, I, all the activity and the way I plan to live my retirement is tied up in this land.

[785] Is she, um, contributing in any way?

[786] She has, but it's not a monthly cash.

[787] So the, the contribution is done.

[788] So it doesn't, it does not help me in a monthly way.

[789] Okay.

[790] Yeah.

[791] I just have to be honest with you.

[792] You're, you say you were 68?

[793] Yeah.

[794] Okay.

[795] It scares me for you.

[796] Yeah.

[797] It scares me for you simply because you're entering into a space where you don't have the flexibility financially to have the lack of flexibility in all areas of what you want to be true.

[798] Right.

[799] and so it's it's um i've got some acreage out here outside of nashville and i feel like every month something comes up i got to pay for that i didn't expect right there's something with the well or something with the power or something with something right and man you get into thinking it's going to be a farm producing and we're going to grow grass we're going to have people it is a thing after a thing after a thing after a thing after a thing and in a million years i wouldn't have expected that.

[800] But beyond that, here's the, here's the part that makes me the most nervous.

[801] And we talk about financial peace and we talk about like, I want to be a millionaire and all that.

[802] For me, personally, that's never really spoken to me. Here's what spoken to me. I think it was two years ago now, one of my cousins who I loved, he suddenly passed away.

[803] You know what?

[804] I'll give you a more realistic example.

[805] Today, one of my closest friends in the world's mom passed away after about with Alzheimer's.

[806] And he said, here's the date of the funeral.

[807] I'd love if you could be here.

[808] And I checked on nothing.

[809] I said, I won't miss this.

[810] And it's because I have an emergency fund and it's because we have built these things up over time that I don't even have to check.

[811] I know I've got the money to go be with my friend and his family during this time of pain.

[812] And so my concern for you is you've locked yourself into this thing.

[813] I will never change this, no matter what, come hell or high water.

[814] I made a promise, even one that I didn't even know I could financially keep, but I made it.

[815] And so I'm just going to, I'm going to live a life on a fixed income.

[816] And that just makes me nervous for you because life doesn't work like that, generally speaking.

[817] If it did, we wouldn't have this show, right?

[818] Right, right.

[819] Yeah.

[820] And there are definitely situations that could lead to changing that.

[821] And then, you know, maybe in 20 years, will, you know, we'll both be ready for something different.

[822] Maybe, yeah.

[823] But to back up what Jade said about the investment, if I were you and you still have the ability, I would be out there hustle and work tomorrow.

[824] I think you have to.

[825] I'd get one job, two job, and I would dump that into investments.

[826] It'll double every seven years.

[827] And so think 21 years from now, they will have doubled and then doubled and then doubled again, whatever amount you put in there.

[828] Yeah, you have to think of this as you've made two choices.

[829] If you've made the choice to keep the house, then you've also made the choice that you're going to continue working.

[830] And I think as long as you do it like that, you'll be okay.

[831] And to answer your question, if you're on fire, I would say, you know, Scoville meter, you're probably pretty far up there.

[832] It's pretty hot.

[833] It's pretty hot.

[834] But you got to work.

[835] As long as you work, you can keep the temperature down.

[836] As long as you work and you put that money away.

[837] This is the Ramsey Show.

[838] Here's the hard truth.

[839] Your investment dollars could be winding up in the pockets of companies that hold positions that you don't agree with.

[840] Yes, that's right.

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[853] This is The Ramsey Show.

[854] I'm John Deloney, joined by Jade Warshaw.

[855] all right so this is uh deloni vulnerability time over the last few years i've been sitting by dave i've been sitting by jade i've been sitting by george never with rachel but with all my fellow personalities and they will say something about money because i don't know much about it they'll say some kind of uh you know retirement vehicle or they'll say like five oh whatever and i will be thinking in my head i don't know what that that is.

[856] And I'm on the radio in front of millions of people.

[857] And so off air, I'll ask them like, hey, what was that?

[858] And sometimes I just ask him on air.

[859] Like, hey, real quick, stop.

[860] So we're doing a new segment called asking for a friend because we know that you are out there listening and we're talking about retirement investing.

[861] We're talking about 501, talking about 401's, talking about all these different things.

[862] And you're wondering, I don't know what that is.

[863] And I just Googled it.

[864] I put it in chat, GPT, but I don't fully get.

[865] So we've got you.

[866] We've got you.

[867] So today's asking for a friend's segment is on what is retirement investing?

[868] It's such a good question.

[869] And no one wants to admit that they maybe don't know.

[870] Right.

[871] To your point.

[872] So a lot of people hear the term retirement investing or my retirement account.

[873] And they're afraid to ask really what this means.

[874] Why is it different from other investing?

[875] Because it's something that as adults we feel like we should know, right?

[876] You don't want to be today years old when you find out about it.

[877] But luckily, it's really not you who wants to know.

[878] It's your friends.

[879] So take a look at this.

[880] You don't have enough money.

[881] Okay, right here.

[882] It says right here in this account, we have $401 ,000.

[883] Checkpot.

[884] You missed it?

[885] Nope.

[886] That says you have a 401k account.

[887] If you liquidate that right now, you'll have, you know, maybe $5 ,000.

[888] So what happened to the other $396 ,000?

[889] Boom.

[890] Gotcha.

[891] What is wrong with the two of you?

[892] that sounds like me and Dave on a regular basis oh my gosh listen you know we're laughing at but it's very true I remember talking to somebody and I said well are you investing at all and they said no I mean I have my 401k but no and I was like oh you are investing so do you have any debt no I don't have any debt I mean except for my car my student loans and my mortgage and that loan it took out on the pony you're like what are you talking about well I mean the truth is a lot of people you know you go you go to your job and they get you set up and it's like do you want to invest, do you want to put money into your 401k?

[893] Okay, you know, but they're not really explaining to you what's going on.

[894] Okay, so let's learn about this today.

[895] Let's talk about what retiring investing actually means for your friend who is confused.

[896] Um, so really there's really two vehicles.

[897] When we talk about retirement investing, this is money that when you are of retirement age, it's there for you because after a while, you're not going to be working your job, getting your normal check, right?

[898] And so you want to make sure that when you get that age, there's money for you so for most people you know retirement age is 59 and a half so these accounts you once you put the money in you can't get to it until you're 59 and a half okay so there's really two vehicles that most people will see you see a 401k um and that's it comes in a traditional form where you pay the taxes right when you put uh it comes in a traditional form where you put the money in and you pay the taxes on it later or it can come in a Roth form where you pay the taxes now so that when you pull the money out later you don't have to pay the taxes, right?

[899] And these are all, this is employee sponsored.

[900] When you go to work at a job, they say, hey, we've got this account for you.

[901] You can put money into it and invest it and it'll be there for you when you need it.

[902] Okay.

[903] Then you could do another type of account that has absolutely nothing to do with your job, right?

[904] Maybe you're self -employed or you're just, you know, not there.

[905] Are you taking notes?

[906] I'm taking notes.

[907] I'm getting my learn on.

[908] Anything, any kind of earned income you have, you could say, well, I'm going to go out on my own and do my own retirement investing.

[909] And if that's the case, you would do an IRA, right?

[910] It's basically an individual retirement agreement, I think is what it stands for.

[911] And so that's you, aside from your job saying, I want to invest for retirement.

[912] And it's the same idea.

[913] You've got the traditional option where you put the money in and then you pay the taxes later when you take it out or the Roth version.

[914] You put the money in.

[915] You pay taxes on it when you put it in.

[916] And then when you take it out, you don't have to pay the taxes, right?

[917] That's what we're talking about.

[918] And so that's really what it looks like.

[919] If you're a school teacher, you might have a 403B.

[920] If you're in the military, you might have a, I think it's a 459, 559.

[921] I can't remember.

[922] But they take different, those are the tax treatments, those different numbers.

[923] And so everybody's got access to one or the other.

[924] But that's the point here.

[925] It's money that you're putting aside so that later it's there when you're ready to retire.

[926] That's the whole point.

[927] So if you're not investing and it's time for you to invest, I would say you need to do it.

[928] So then most people are like, okay, how do I know when it's time for me to invest?

[929] So let's talk about that a little bit.

[930] John, you got your notes ready?

[931] I'm ready.

[932] Let's do this.

[933] All right.

[934] You do the first one because you know this.

[935] What's one thing that you should have in place first before you start retiring?

[936] An emergency fund.

[937] Yay, yay.

[938] I got to take care of my today before I start trying to plan for my tomorrow.

[939] I love that.

[940] That is just like something that would be hanging on.

[941] Yeah, that's like stitch into a pill.

[942] You get it at like at like at Michael's or something.

[943] That's like in Michael Scott's office like hanging in frame.

[944] All right.

[945] So what I was testing John on is basically the baby steps, right?

[946] So this is a format to know if you're ready to invest.

[947] First, if you have debt, we're going to walk you through it.

[948] First, you need $1 ,000 saved.

[949] That's your emergency fund.

[950] It's just there as a cushion.

[951] And then Baby Step 2, we want you paying off all of your debt except your mortgage, right?

[952] Once that debt is clear, because remember, debt is risk.

[953] Once that's clear, you're going to save up three to six months of a fully funded emergency fund.

[954] This is making sure that you are set.

[955] Like, come hell or high water, you are ret to go.

[956] okay that's what that's about then when that's done now we start investing 15 % of our income every single month into that retirement vehicle for most of us it's a 401k for a lot of us it might be been going to a Roth so that's the framework some of you are now saying well jade 15 % like that's great but how do I know do I do the 401k what can I do beyond that let's talk about that all right john so let's say uh you're asking the question question.

[957] Well, Jade, I looked and my employer is offering a 401K.

[958] Do I invest there or do I go to the Roth IRA?

[959] This is how you want to think about it.

[960] Most employers offer some sort of match, right?

[961] 3%, 4%, whatever that is.

[962] If you have a match, that's the best thing you can get because it's free money.

[963] So you always start there.

[964] You invest up to your match.

[965] And then for most of us, unless your 401k is a Roth, because that's the best option there is, unless it's a Roth, then you would say, okay, I'm up to my match, now I'm going to go over and do a Roth IRA.

[966] Max that out.

[967] And then once that's gone, then you can come back to your traditional 401k.

[968] Finish that up.

[969] And that is really, really good.

[970] If you still have money that you can invest, then you could go and go into another type of account.

[971] That's a non -retirement account.

[972] You could do a brokerage account or something like that.

[973] So like, just to break it down for a simpleton like me. Go for it.

[974] Let's say I work at a company and they give me a 5 % match.

[975] And so I'm going to put 5 % of my income into that account and take their free money.

[976] That's right.

[977] Right.

[978] Yeah, the 5 % is usually on income.

[979] Five percent of your income.

[980] And we get this question a lot.

[981] So that adds up to 10%, but we're going to put 15 of our own money in that account.

[982] So I put in five.

[983] Now I'm going to loop back over here and let's say I can put up up to 7 % of my income and max out a Roth IRA.

[984] So now I got 12%.

[985] Now I'm going to come back and say, okay, I'm going to up my original by another 3%.

[986] That's right.

[987] And so I'm going to have 8 % and they're matching five and then I'm going to have 7 % of my income in a Roth and I'm walking away.

[988] And that sounds complicated, but I've taken 15 % and I don't care what the match is.

[989] I'm not including that.

[990] It's just gravy money on top.

[991] That's right.

[992] And then I'm going to put 8 % of my income into this account and I'm going to put 7 % in that and then I'm walking away.

[993] Yeah.

[994] And you bring up a good point.

[995] So we teach 15 % of your income goes away until you've paid off your house and then you can do whatever you want beyond that.

[996] But some people say, well, Jade, man, my match is amazing.

[997] I guess 7 % match or a 10 % match or even, you know, 4 % fine, does that count towards the 15 % and you're right?

[998] It does not.

[999] It's on top of that because here's the thing, life changes and you want to be in the rhythm of investing 15 % regardless.

[1000] Because let's say you move away and now this employer doesn't do that same match or you decide to go into business for yourself.

[1001] So many things can change and you want that muscle built that you know, it's like when you get the money, 15 % goes.

[1002] Like you don't even have to think about it.

[1003] So it's good.

[1004] And also multiple jobs.

[1005] multiple jobs I've worked they've come in and said hey we're having tough times financially we're not going to lay people off but we're going to drop the match to X percent and if they drop the match to X percent and you've built that in not a lot of people can then go okay during tough times well then I'm going to have to increase X percent of my salary that's already part of our life and so it just makes the gravy a little bit less very true it doesn't hurt you financially in your bigger picture that's so true and hey if you have more questions about investing you can check out one of our SmartFester pros, and they can help you out.

[1006] This is The Ramsey Show.

[1007] All right, here's the deal.

[1008] I need your help.

[1009] Jade and I need your help.

[1010] We have this amazing Live Like No One Else Cruise, and it is almost sold out.

[1011] We've been talking about it for a few weeks now, maybe a couple of months.

[1012] It is almost sold out, and there is now a quiet competition for who is going to get credit for the last seats sold.

[1013] And Jade and I are on together, and so I am shamelessly asking.

[1014] asking, if you are thinking about coming on this cruise, if you know we're going on this cruise, I'm a surprise the loved one, I'm a surprise my wife, I'm a surprise my husband, we're doing this, $600 deposit.

[1015] That's all it takes, and these cabins are gone.

[1016] We are running out of cabins and you can help me and Jay defeat George and Rachel and Ken, which is really what we want to do here.

[1017] Here's the deal.

[1018] It's the ultimate debt -free celebration.

[1019] The vacation is for those of you who are on baby steps four and above.

[1020] seven days March 22nd through 29th we're going to be stopping in some amazing places and by we I'm talking about me Jade Rachel Cruz George Camel Ken Coleman Dave Ramsey and a bunch of Dave's rad musician and comedian and other entertainers friends magicians the whole thing we're going to Turks and Caicos we're going to St. Thomas we're going to Puerto Rico we're going to the Bahamas and we are going to eat well we're going to have events We're going to have music.

[1021] We're going to have all kinds of chaos on this boat.

[1022] Are you going to play your guitar?

[1023] I might play the guitar.

[1024] If George does, I will because they're going to need to get that taste out of their ears.

[1025] And so, yes, are you going to sing.

[1026] You're singing, aren't you?

[1027] Me and George are going to do a duet of more than words.

[1028] Well, then we're duetting.

[1029] We're duetting.

[1030] Say, and I love.

[1031] All right, here's the thing.

[1032] We're almost out.

[1033] We're almost out.

[1034] The VIP upgrades and many of the cabin types completely sold out.

[1035] They're already gone.

[1036] If you're trying to get your pick of the last few cabins, like the one with an ocean view, I think there's a couple left.

[1037] Get your deposit in right now.

[1038] $600 deposit.

[1039] Book your cabin today at ramsysolutions .com slash cruise.

[1040] Not Tom Cruise, Cruz, Cruz, C -R -U -I -S -E.

[1041] Ramsey, maybe how you spell Tom Cruise, I don't know.

[1042] That's correct.

[1043] Ramsey Solutions .com slash cruise.

[1044] It is going to be a party.

[1045] Come join us.

[1046] All right, let's go out to Edmonton, Alberta.

[1047] and talk to Amber, like the light.

[1048] What's up, Amber?

[1049] Hey, how's it going?

[1050] We're partying.

[1051] What's up?

[1052] Right on.

[1053] I just wanted to ask if you feel that we're in a position to increase our mortgage to buy our forever home, or if we should be seeing input and getting the mortgage gone.

[1054] Okay.

[1055] Yeah, I want to help with that.

[1056] Maybe give you a rundown of where we're at financially.

[1057] Yeah, I love that.

[1058] We've been doing the debt paydown, but.

[1059] backwards.

[1060] So I started with the mortgage.

[1061] So I stopped that.

[1062] We got the emergency fund in place.

[1063] Kids college funds were fully funded beforehand.

[1064] I stopped retirement savings.

[1065] The only thing we owe now is $9 ,000 on a travel trailer that will be paid off by the end of next month.

[1066] So then I have a bonus coming that's guaranteed that will put us into baby step six basically.

[1067] Okay.

[1068] And we owe a house, or own a house that's worth about 685.

[1069] We owe 149 on it.

[1070] The perfect property just came up for us that we feel will be like long term.

[1071] And we have to increase our mortgage by $105 ,000 to take that mortgage on.

[1072] Okay.

[1073] So let's think about it like this.

[1074] I love that you're kind of getting back on track.

[1075] You're paying off the debt, getting the emergency fund in place.

[1076] Is it, is it three months or six months?

[1077] that would be four months first four months okay are both you and your spouse working yes okay i'm fine with four months kids college is on track so when you sell this house what will it bring you all said and done we've got about 500 in equity on it okay and then the house that you're wanting to get um it's a hundred thousand dollars more yeah okay it'll make our mortgage about 255 instead of 149.

[1078] Okay.

[1079] And what's the monthly payment?

[1080] Have you looked at the percentages?

[1081] Well, I wanted to do it on a 10 year and that puts us at 22%.

[1082] Listen.

[1083] I'm like, why not?

[1084] Today, kid, today.

[1085] Instantly.

[1086] I love that you're doing a 10 -year mortgage because you want to get this thing out of your hair.

[1087] I love that it's only going to be 22 % of your take -home pay.

[1088] I mean, you're meeting all the parameters.

[1089] And as long as you have peace about it, that's the final parameter.

[1090] And so there you go.

[1091] My only challenge to you, Amber, is to, unclench your fist around the words forever home.

[1092] Yeah, fair.

[1093] Because there's just no such thing, and life just has a bunch of twist and turns, and it's the coolest home for this season.

[1094] And same as I've got a cool jacket that I got one time from Philson that I love, and I have some cool hunting gear that I got from Sica.

[1095] I don't wear those in the summer because it'd be 1 ,000 degrees, right?

[1096] And so for that season, it's the best, and then we roll into spring, and then we just do what's right in front of us.

[1097] So I don't really believe in the Forever House kind of thought.

[1098] But when it comes to numbers, you are right on.

[1099] Good for you.

[1100] Okay, awesome.

[1101] Good for you guys.

[1102] Congratulations.

[1103] All right, let's roll out to Kansas City, home of Patrick Mahomes, and talk to Jennifer.

[1104] What's up, Jennifer?

[1105] Hi, thank you for having me today.

[1106] Of course, what's up?

[1107] So we have a incoming senior, she's going to be a senior in high school.

[1108] just trying to help her kind of figure out what the next step will be.

[1109] So she's kind of a clean slate.

[1110] Just started working as a part -time job, but really doesn't have a lot of money saved, you know, anything.

[1111] The vehicle that she drives right now is one that my husband and I purchased with cash, with the idea that that would be all of our children's car as they get 16.

[1112] You know, she's kind of an old beater, AC doesn't work, that kind of thing.

[1113] My in -laws have offered or said they want to give her 10, thousand dollars cash as a senior present um whatever it is total gift um but they have stated that they would really like for her to use this on a vehicle um we would like for her to get a vehicle we have been kind of in the uh starting to get her to bring from without ways to do that um save money what are you going to be able to afford that kind of thing is that wise what's your what your hesitancy yeah do what what Why does it bother you?

[1114] What's your hesitancy?

[1115] I just think that's a lot of money that she could also have some of it in her savings to help her get started.

[1116] Should we discourage the full 10 ,000 to go to a vehicle?

[1117] Here's the deal.

[1118] Once they give you the money, it's your money.

[1119] Right.

[1120] And if your apprehension is coming from the fact that you know that they have a record of giving and then those gifts come with strings, don't take the money.

[1121] No. No, no strings.

[1122] If they're going to give you $10 ,000 and they're going to recommend that you use it to buy a car, if it was in my house, I might buy a $7 ,000 car and put $3 ,000 in savings.

[1123] Interesting.

[1124] Or I might buy all $10 ,000.

[1125] I don't know.

[1126] I think I push back on that a little bit because if I'm thinking, I'm just, again, putting myself in these shoes, if I'm like, hey, my cousin could really use a car, I'm going to give them $10 ,000 to get a car.

[1127] And I say, hey, I know you need a car.

[1128] This $10 ,000 is for a car.

[1129] and they kind of do something else with it, I think you can put something on a gift and say, but you just get to decide whether you want to take that gift or not.

[1130] Right.

[1131] And in this case, I take it.

[1132] Okay, when we were starting the conversation about her getting a car, we were wanting her to stay more in like the 6 ,000 range, you know?

[1133] So now that she has the opportunity to 10, do we still say take the 10 and go or do we say?

[1134] I would because before it was you saving up or you guys helping her, but now you really do have a free gift.

[1135] it gets I mean a $10 ,000 car it's going to get her a great vehicle.

[1136] That'll get it through college and beyond beyond and then that frees up more because you're not you're no longer saving for that that frees up more of the money to do what you want to do which go towards savings whether it be you know for college or whatever what have you okay and so if you're yeah if you don't want to do the savings spend you know 7 ,000 on a car put 3 ,000 savings or whatever ratio you want to come up with let's say you spend all 10 grand on a car I would put a dollar amount I might show her here's what semester one of college costs and we're going to be in saving towards this dollar amount because a lot of kids say I'm going to start saving for college and it's kind of an amorphous thing but here's what semester one is going to cost we're going to start saving or here's what your books are going to cost at college or however you all have that worked out and so she can have a target a dollar amount that she can begin to see I earned this and I only have to earn this much more to get this number but it helps her work towards a project, but a gift is a gift, and if it doesn't have strings to it and you're raising a kid of character, I'd say go for it.

[1137] What do you think, Jade?

[1138] I'm with it.

[1139] I'm with it.

[1140] I think giving them a target is good for college.

[1141] That was really, really important.

[1142] Thank you so much for joining us.

[1143] We'll be back very soon right here on the Ramsey Show.

[1144] What up, what up?

[1145] This is the Ramsey Show live from Nashville, Tennessee.

[1146] I'm John Deloney joined by Jade Warshaw, and we are taking your calls on your relationship.

[1147] your emotional mental health, your money, building wealth, retirement, all of it.

[1148] We're talking about work you love, anything and everything going on in your life.

[1149] AAA 825 -5 -2 -2 -25.

[1150] It's AAA 825 -5 -2 -25.

[1151] Give us a call.

[1152] We're taking live calls.

[1153] Let's go out to Green Bay, Wisconsin, formerly home of Aaron Rogers, and talk to Adam.

[1154] Hey, Adam, what's up?

[1155] We're doing.

[1156] How about you guys?

[1157] We're doing fantastic, man. What's up?

[1158] Um, well, let's start with the good.

[1159] I don't have any personal debt between me and my wife.

[1160] Um, we run a business and I'm drowning.

[1161] Business is drowning.

[1162] Tell me about it.

[1163] Well, we're the last of a dying breed, I'd say.

[1164] We're still here trying to eat out of living, milk, and cows.

[1165] And I just can't make it scale.

[1166] I can not make, I mean, I've worn out several pence.

[1167] and I just can't I can't make it work can I ask a question you made the the point of saying you don't have any personal debt do you have what you're considering business debt yep okay how much all in an LLC okay it's an okay but how much uh mortgage is 1 .2 and there's 300 in open accounts cool man okay you can't breathe can you Nope.

[1168] How long you've been farming?

[1169] Forever.

[1170] So for those listening, normally this is where someone calls and says they took out $1 .2 million loan for their business and they're running a $300 ,000 revolving account.

[1171] And we get all fired up and holler at them.

[1172] And I want everyone listening to hear me slow down because my heart's broken for you, Adam.

[1173] because as a farmer who's been a farmer forever you generational farmer I'm fourth 139 years this is you standing back and looking at a family legacy that's going to be different after today and that's a that's a death and I'm sorry I'm heartbroken for you tell me about the challenges you're having when you say you can't scale it is it the size of the debt Is it the fluctuating prices?

[1174] What is it?

[1175] I mean, price doesn't help anything for sure.

[1176] In 2015, I took over from my dad, and I looked at the spreadsheet, and it wasn't going to work how he was doing it.

[1177] So I borrowed, you know, I signed the paper and borrow the half a million bucks.

[1178] And some stuff happened, and it didn't cash flow.

[1179] the first two, three years of it, cash flowed excellent.

[1180] I was doing $700 ,000, $750 ,000 a year and that's rules.

[1181] And the price fell, and as soon as I couldn't cover my payment completely, my bank was not willing to work with me at all.

[1182] And in the last year, no, going back at fourth, they sold me to an investment company in New York.

[1183] And I have till the end of this year to either figure out how to make a full payment, or they're going to foreclose on me. Come to take her farm.

[1184] Family land?

[1185] Yeah, 520 acres.

[1186] Golly, dude.

[1187] What's...

[1188] Yeah, what's the payment?

[1189] 16K a month.

[1190] Right now I'm paying the interest, just a 10.

[1191] Okay.

[1192] What are you going to owe them at the end of this year?

[1193] What check do you have to write?

[1194] It would be 1 .2.

[1195] You have to write them for the full amount?

[1196] They're calling the note?

[1197] they would be calling no yeah either they call the note or it would get re -signed for seven years at 16 ,000 a month and you can't make that not with the current amount of cows I have right now what would it take 100 cows what do you got I'm milking 100 currently I'd have to be 200 plus Jeez, man. So what's the worth of this land?

[1198] Pardon?

[1199] What's the worth of the land?

[1200] Um, over $1 .2 million.

[1201] So can you, I mean, I, I don't want to be the one to say this, but I think selling it is worse than foreclosing on it.

[1202] You're in a hard mess, brother.

[1203] Yeah, it's, I mean, I can, if I had, Are you breaking up or are you thinking through this?

[1204] Sorry, I was getting away from my phone.

[1205] You know, if I could get into 100 cows...

[1206] Adam, Adam, Adam.

[1207] But that causes you going into debt, right?

[1208] You've been doing this dance for a long time.

[1209] I have.

[1210] Yeah.

[1211] Hear us sitting with you, man. We're not running from it, but we're not going to lie to you either.

[1212] Right.

[1213] You've been waiting for the next thing and the next thing and the next thing over the hill.

[1214] and now you owe a million dollars and you have become and you've read about these farmers you probably know a few farmers like this they get looped up in the debt cycle and what the big investment firms want is your dirt and they find farmers like you who are generational farmers who are trying to keep up with technology and the cratering prices and they see 500 acres that's about to be theirs can you sell your way out of it the back way and keep the land at least?

[1215] Do you have equipment in cows you could sell?

[1216] Yeah, my total assets is like $2 .3 million with everything.

[1217] Okay.

[1218] What happens if you would go that route and you at least get to keep the land and keep your home?

[1219] Turn your land into a grazing property or get with these guys who I just love the carbon cowboys and just run cattle for a while.

[1220] It's better than losing 500 acres of generational property.

[1221] Yeah, it'd be better than losing it.

[1222] I mean, that's my biggest fear.

[1223] I've toured old dairy farms man It's staggering But here's what I know I've toured old dairy farms I've got one in my family And it's It's so hard to part with it So that's why I'm just heartbroken for you But you're about to lose all of it And if you've got enough equipment And cows and tractors To walk it out the back door And keep a small amount of cows And get with the carbon guys Cowboy guys And learn how to farm without all the fertilizer and slowly rebuild this thing from scratch, you at least are hanging on to 500 acres of generational property.

[1224] And they quit making that dirt a long time ago.

[1225] That's what's most important in this whole equation.

[1226] Otherwise, your pride's going to end up losing all of it.

[1227] And you and your wife are going to be in a two -bedroom apartment here this time next year.

[1228] Yeah.

[1229] I just, I don't, I don't know how to deal with the shame.

[1230] I know.

[1231] I got you.

[1232] I got you.

[1233] Hey, hey, we're coming up on a. commercial brother.

[1234] I'm going to hold you over because I want to keep talking to you for a minute, okay?

[1235] So hang on.

[1236] We're going to run to commercial and we'll be right back.

[1237] And your bravery and vulnerabilities is a gift.

[1238] And I'm grateful for you.

[1239] Stay on the line.

[1240] We'll be right back.

[1241] Welcome back to the Ramsey show.

[1242] We are talking to our friend Adam in Green Bay, Wisconsin, and Adam is a fourth generation dairy farmer who, like countless other farmers across his country is, to quote Adam, burned up several pencils trying to make the math work on keeping this farm alive.

[1243] And as in many businesses, there's always another opportunity if we can just get to this next level and get to this next level.

[1244] And Adam has found himself over a million dollars in the hole.

[1245] And he's staring at a foreclosure at the end of this year that would take over 500 acres of generational property away and handed to an investment crew out of New York City and right there at the end of the calls we're navigating what do we do next and Adam you're here does that sound about right?

[1246] Yep.

[1247] Yeah, and at the end of the call you asked a really powerful question that I think every single one of us wrestles with and we as a culture do a terrible job of talking about out loud which is how do I deal with the shame I don't deal with the shame of being the bottom of the fourth generation saying I'm the guy that had to call it.

[1248] Tell me about the shame you're feeling right now, man. It's terrifying.

[1249] It's all encompassing.

[1250] It's all I think about.

[1251] You can't wash that at all.

[1252] It's not like I'm an electrician and I can go pick up another job.

[1253] It isn't what I do.

[1254] It's who I am.

[1255] I don't know how else to explain it.

[1256] Are you a husband?

[1257] Yeah, father to two little girls.

[1258] You're a father, yeah.

[1259] So I know this is a little bit countercultural to a fourth -generation farmer, but I'd like to challenge you that you're a husband and you're a dad.

[1260] And then down the road, you, and if you're a person of faith, you're a child of God, and then down the road is what you do.

[1261] And I think what you do now creates what happens for the next four generations.

[1262] and those little girls get to see dad faced with a reality not by his hand but in his lap and they get to see dad make choose his hard right is you going to choose the path of we lost at all um and i'm saying this because i love you because i had some ego i don't want to sell all my equipment and and net out of this thing or they get to see dad weep as people come by the tractor and they buy the pumping equipment and they buy the tanks and they buy all the stuff but they got to see dad go for a walk with the few cows that he had left through the field that will still be our family field.

[1263] And unless I'm crazy, I don't know another path in front of you.

[1264] And you decide, okay, I'm thinking about the family I have that was on my wife's side, that was dairy farmers, and now they've got some kind of grasses growing where it makes a, I don't understand what they pivoted to, but they're still farmers, they're still got, they still got fields out there.

[1265] They're just not doing the thing they were doing for a long time.

[1266] And that seems like the choice ahead of you.

[1267] And, man, I just, it, it, it, I, I could start crying here thinking about some guys in suits showing up from New York to take your 500 plus acres from you and your little girls.

[1268] That can choke me up way more than get rid of a tractor.

[1269] You know what I mean?

[1270] Right.

[1271] And I know I'm being dismissive, but I'm trying to say, you, you don't have an easy path ahead of you.

[1272] You got two hard paths.

[1273] And if you've ever heard me talk about shame, Guilt is I did something dumb when I took out that extra $600 ,000.

[1274] That was dumb.

[1275] I did that.

[1276] Shame is I am dumb.

[1277] I'm stupid.

[1278] I crash this farm.

[1279] And I don't think you crashed the farm.

[1280] I think you were about in cleanup on a lineup that kept handed you a tough situation to try to win that game.

[1281] We'll say both columns.

[1282] Okay.

[1283] So fair enough.

[1284] So what's your next right move?

[1285] The good news is you have an opportunity.

[1286] You have an opportunity to do what John said, and although it's going to be painful for you, you have the opportunity to start something brand new and do it the right way.

[1287] And I think that that's what your daughters are going to take away from this is plenty of us make mistakes.

[1288] We do it the wrong way.

[1289] But what differentiates it as a win is you get back up, you start again, and this time you learn from your mistakes and do it the right way.

[1290] Yeah.

[1291] Adam, this is a big one and we're not going to be able to solve this one here.

[1292] Hang on the line.

[1293] I'm going to hook you up with both of my books here for free.

[1294] I want you to have something that you can read while you're sitting there on the back porch looking out over the field and distract yourself a little bit so you know just spinning out and spinning out but you've done the math you've sat with the bankers you've sat with the the debt repayment note right in front of you you know that the math doesn't work and the next step is going to be pivotal to what comes next for again the next few generations and given what you've told me in this in this short conversation and I'd tell you to sell the equipment and unload as many cows as you can and clear that 1 .2 and get the banks paid off and you're sitting on family property and then when the dust settles, you figure out what you're going to do next.

[1295] But, man, I would encourage you, don't because of ego and pride and shame, don't let them come take everything because God knows they will.

[1296] Thanks for the call, man, and thanks for your bravery.

[1297] Thanks for being vulnerable in front of all these people.

[1298] There's countless men and women sitting right where you are at their home, trying to figure out what to do next and it's pride and ego and fear getting in the way of choosing the next hard right move so i'm proud of you man call anytime and we'll be with you so that's at denver colorado and talk to andrew hey andrew what's up ma 'am how are you thanks for taking my call we're good what's up hey a little backstory about six months ago i took a new job went from about $150, $150 ,000 a year down to $120 ,000 a job I took didn't quite work out, unfortunately.

[1299] And so I've been looking for the next move, and my wife and I have explored moving to a state away and going to work for an old customer, my old employer, and I'm talking to this morning, actually, and we talked a little about what it would take to move out there.

[1300] And then about an hour after I hung up the phone, I got a call from a competitor here locally for a pretty generous offer about $200 ,000 a year to stay.

[1301] And so I made a, my wife and I have kind of gotten jazzed about the idea of moving, I stayed away, going to a little family adventure, and then I got a call saying, hey, we'll pay a bunch of money to stay.

[1302] So my question is, is it, you know, okay to go back to the company I'm talking to and stay away and say, hey, I just got another offer to stay here.

[1303] And you match it, or is this just a decision we've got to make as a family saying, hey, are we going or are we staying?

[1304] I would definitely go back.

[1305] I mean, you're seeing what your value is in the marketplace.

[1306] And so I think that it's fair.

[1307] I mean, this happened, and it's great that your current position offered you more.

[1308] So yeah, go back to who you were talking to and say, listen, I just got this offer and I'm not, you know, I'm not trying to play you, but it's enough to make me stay.

[1309] And I'd really want to come work for you if you can match it.

[1310] and just start talking because there might be other ways that he can match it in value maybe not so much in salary right there might be creative ways you can make this work that's a great point okay and just frame it just like that call him right back and say hey you know i know i know it sounds uncanny but i just got a call 10 minutes after we hung up i would honestly i'd call him laughing like you're not going to believe this man i just got one dropped out of the moon and they're often bananas money and so me and my wife have to work through it tell me where your final final is okay and listen that's good if he looks at i mean if he talks on the phone and says how dare you you're playing me punk then you just dodged a bullet like the matrix that's true and if he laughs with you and goes guy I hate business let me go back and see what i can do man because we really want you here that's a guy i might take less money for to go have a family adventure with rock on i love it Does that make sense?

[1311] Absolutely.

[1312] Yeah, absolutely.

[1313] Awesome.

[1314] And Andrew, I'll tell Andrew, Jade, what we tell everybody.

[1315] If you're good at what you do, there's always going to be somebody calling.

[1316] There's always going to be opportunities.

[1317] And so at some point, you have to settle into what kind of life do we and our family want to live.

[1318] And the dollar amount is a part of it, but it can't be the end all be all.

[1319] Yeah, it's a goalpost.

[1320] The goalpost is always going to move.

[1321] And you have to make the decision at some point to go, I'm content.

[1322] Yeah.

[1323] And I'm good with this.

[1324] Or what field do we want to put that goalpost on?

[1325] But man, we got to make a life that we want to have.

[1326] Yeah.

[1327] And an extra 20, 30 ,000 bucks.

[1328] When you have enough, it's not worth it.

[1329] This is The Ramsey Show.

[1330] Welcome back to the Ramsey Show.

[1331] And I'm looking out into the lobby at all the beautiful people.

[1332] And on the debt -free stage, we have Taylor and Meredith from Huntsville.

[1333] Alabama on the debt -free stage.

[1334] That means you must have paid it all off.

[1335] How much you pay off?

[1336] Oh, yeah.

[1337] We paid off about $220 ,000.

[1338] Whoa.

[1339] How long did that take you?

[1340] So a little bit over seven years.

[1341] How about that?

[1342] Gosh, you all kept going and going, huh?

[1343] Yeah, it was a while.

[1344] All right, so what kind of debt was this $220?

[1345] It was our house.

[1346] Touchdown!

[1347] Dude, congratulations.

[1348] And student loan.

[1349] Student loans and, was the mortgage bigger than the student loans or the other way around?

[1350] The mortgage was bigger, yes.

[1351] Wow.

[1352] Very, very cool.

[1353] What's the house worth?

[1354] So the house now is probably worth a little bit under 400.

[1355] Let's go.

[1356] I love it.

[1357] I love it.

[1358] All right.

[1359] What in the world was going on in your life seven years ago that you said, let's just suck it up and get this thing done?

[1360] Yeah.

[1361] So we're recently married probably a little bit over seven years ago, bought a house, had some student loans.

[1362] I'm an engineer, a little bit of a numbers person, and just saw what we would pay an interest over time and really just wanted to attack the loan to give us a little bit of financial freedom eventually.

[1363] It's a lot of financial freedom eventually.

[1364] When you said, I'm a little bit of a numbers person, your wife smiled a bit as though your bedroom is wallpapered and spreadsheets.

[1365] Big Excel guy.

[1366] you said that in a it's not great lots of excel lots of excel all right so you sat down and like like a good engineering nerd you said honey look how much interest we're going to save and how did you receive that um not so well at first i agreed with everything he was saying but it was more difficult putting it into practice for me i think just not spending money and saving and putting it towards the house versus maybe going shopping sometimes.

[1367] Sure, because that's not normal, right?

[1368] Like, it's not a normal practice.

[1369] Most Americans aren't saying, you know what, I'm going to actively pay off my mortgage today.

[1370] So in that way, you're kind of going against culture.

[1371] What were you earning when you were doing this?

[1372] So we started out probably around 80 ,000, kind of first out of school.

[1373] And Meredith graduated a couple of years after I did.

[1374] and now we're around 2 .30?

[1375] 2 .30?

[1376] Wow.

[1377] Wow, you guys kicked it into the highest gear.

[1378] Oh, yeah.

[1379] I mean, just one thing with that, during this period of time, Meredith's had multiple jobs.

[1380] At one point, I think she had three jobs.

[1381] Wow.

[1382] Currently, she has a full -time job and then also a side gig, so she's really just attacked this and, I mean, done a lot with two kids as well.

[1383] I was going to say there's also two little ones over there also.

[1384] Oh, go ahead.

[1385] I was going to say, how did you guys play this?

[1386] Because part of it was a student loan, which, by the way, how much was this student loan?

[1387] I think it was around 40 ,000 total.

[1388] So you guys went into high gear for the student loan.

[1389] And then usually people would kind of take their foot off the gas and kind of be like, okay, we've done this.

[1390] We're going to save up our emergency fund.

[1391] And then we're going to kind of lay back a little bit and kind of be more intentional about paying off the mortgage.

[1392] something tells me you guys were like no we're going we're going even harder yes we I think we definitely took our foot off the gas a little bit yeah when we had them we we kind of halted a little bit on the extra payments so it took us maybe a little bit longer than it would have to save for them as well for college and things like that but we bought a minivan during that time so Meredith now is a minivan and just yeah lived a little bit a lot of trips a lot of things with the kids, so I've been very fortunate to do a lot of that.

[1393] We live in a culture that wants everything right now.

[1394] You have this big motivational speech night where you turn all the lights off and you light the candles and light the essential oil diffuser going and you show her these spreadsheets and you'll have this big kumbaya moment.

[1395] And then our culture tells us that everything needs to be fixed for the next day.

[1396] what would you tell somebody we'll get to the keys to getting out of debt here in a minute but I'm more fascinated by y 'all hammered away to sing for seven years and we have a culture just doesn't do that anymore when it comes to weight loss when it comes to nutrition when it comes to any sort of any goals we have people coming out of school with their first year or their bachelor's degree wondering why they're not making six figures and they just like what would you tell somebody is the key to just simply sticking with something over time that long I definitely had to learn that lesson And right when I came out of college, I bought a truck.

[1397] So with a loan, and then eventually paid that off years before we started this.

[1398] But delayed gratification is something that I've definitely learned over time to, and in the back of my mind, the main thing is how can we help our kids down the road?

[1399] So you have this, you have this Y down the street that just keeps pulling you along.

[1400] Right.

[1401] What about you?

[1402] I'd say I still struggle with delayed gratification a little bit.

[1403] bit.

[1404] But yeah, I agree just knowing like the reasoning behind it and looking forward to what's to come is the motivation.

[1405] So how'd you celebrate?

[1406] I don't know that we really have yet.

[1407] What?

[1408] I need a cruise.

[1409] I need a I need you.

[1410] Listen, to live like no one else cruise is still available.

[1411] But anyway, I need you guys to have a milestone.

[1412] So if you could do anything, what would like a big trip or a big celebratory moment look like?

[1413] So we're going to San Diego in October to kind of get for a little getaway.

[1414] So that's somewhat of a celebration.

[1415] Well, y 'all make it a big getaway.

[1416] You make a quarter million dollars.

[1417] You don't know anybody anything.

[1418] You need to go to Europe.

[1419] You need to go to Tahiti.

[1420] You need to go somewhere.

[1421] We want a lake house eventually.

[1422] So that's what we're same time.

[1423] All right.

[1424] Okay.

[1425] So there's a guy who just got married or a young bride who still fit.

[1426] She's got two years left in school.

[1427] She just got married.

[1428] and they're both realizing how much they're going to owe and they all get out.

[1429] What do you tell them is the key to getting out of debt?

[1430] I'd say being on the same page, communication, working through the budget, looking at that constantly, and having a good discussion on where we're going to spend our money and both being in agreement there.

[1431] Yeah, I think knowing it's going to be hard during the process, but that you'll be able to breathe on the other side.

[1432] of it is motivational too.

[1433] So I want to hear that story.

[1434] Paint it's a picture of y 'all hit send on that last payment.

[1435] And there's like the, ah, it's kind of cool.

[1436] But then there's been days and weeks since then.

[1437] Paint me a picture of what your life has been now that you don't owe anybody, anything.

[1438] No one could take your house.

[1439] It's yours.

[1440] No one could take your truck or your van.

[1441] Paint the listener a picture of what that feels like.

[1442] It's definitely freeing.

[1443] you feel more lightweight like nothing's weighing you down yeah and i'm in the world of um contracts and things like that so those come and go and it's it's good to know that if something was to happen to my work that um i i don't have to go find something right away oh gotcha you've you've bought yourself the luxury of time right and peace and ah it's amazing good for you guys all right so So we ready to rip this thing off?

[1444] You're going to bring the girls up?

[1445] We have Abigail and Emma.

[1446] How old are they?

[1447] Abigail is four today.

[1448] And Emma is...

[1449] She'll be two in September.

[1450] Happy birthday, Abigail.

[1451] All right.

[1452] So we have Taylor and Meredith and Abigail and Emma from Huntsville, Alabama.

[1453] Paid off $220 ,000, including your house because your weirdos in seven years.

[1454] count it down.

[1455] Let's let your debt -free scream rip.

[1456] Ready?

[1457] Three, two, one.

[1458] We're debt -free!

[1459] All right!

[1460] So we're going to hook you guys up with two every dollar gift cards that you can give away.

[1461] It's a year of every dollar subscription.

[1462] You can give it away to somebody a need, or you can use it for yourself.

[1463] And, Jay, this is how it's done.

[1464] This is how it's done.

[1465] Picture perfect.

[1466] I love it.

[1467] Seven years slowly chipping away.

[1468] Now, forever, no house payment.

[1469] And those little girls are never going to know money stress in that house.

[1470] Changing the family tree.

[1471] That's what it's all about.

[1472] Amazing.

[1473] If you're listening, yes, you can too.

[1474] We'll be right back.

[1475] Welcome back to the Ramsey show.

[1476] Today's scripture of the day is 2 Corinthians 8 .11.

[1477] Now, finish the work so that your eager willingness to do it may be matched by your completion of it according to your means.

[1478] Justin Timberlake says, if you put out 150%, then you can always expect 100 % back.

[1479] That's what I was always told as a kid, and it worked for me so far.

[1480] That's some different math, JT.

[1481] Yeah.

[1482] He definitely brought sexy back, but he did not bring math back.

[1483] He did not bring math back.

[1484] I brought mathematics back.

[1485] Yeah.

[1486] That's like that's a court that Michael Scott would have on his office wall.

[1487] I mean, I think I'm going to get this thing printed up and put in our suite back there.

[1488] Oh, boy.

[1489] I can just see Dave walking down the hall and pausing to read it and compute it, and his inner calculator just starts smoking.

[1490] Let's go out to New York City and talk to Daniel.

[1491] Hey, brother.

[1492] What's up, Daniel?

[1493] How you doing, guys?

[1494] Nice to talk to you guys.

[1495] We're doing great, man. How can we help, man?

[1496] So, no, I sent in the email.

[1497] So, basically, I'm 25.

[1498] I have my own house, my second house.

[1499] I'm financially successful.

[1500] I got everything going on.

[1501] And within my financial success, I would say about 95 % of all my friends, like, dropped me, left me. And I feel, I just have a girlfriend now.

[1502] And I just, you know, just very alone, like, depressed, like, don't know what to do.

[1503] So what happened?

[1504] Where's your friends go?

[1505] I don't know.

[1506] I don't know.

[1507] They just, I was just focusing on my business and doing my thing.

[1508] and then after a while they I guess maybe they just felt envious or whatnot but Were they jealous or did you Or maybe you stopped calling them back?

[1509] Yeah like you didn't pour into the relationship No not even I mean no one of my friends I donated a car to And then a year later stopped hearing from him Like so You know So if you What's one of the businesses you run?

[1510] You say you're a 25 year old entrepreneur You're very successful What kind of business do you work in?

[1511] Well, I own power washing And a shrink wrapping business Okay So let's say you were working on a Power washing job And one of your One of your nozzles broke What would you do Right in the middle of a job?

[1512] Fix it How Replace it How Well, if I had in the truck In the back of the truck Had some extras You don't have any in the truck What are you going to go do?

[1513] Go to the store and have to buy some Okay the store down the street's out what are you going to do you got to finish this job you can have to replace it or reschedule the job excuse me so the here's what I'm saying you're a very smart young man and you're very driven and you're successful and when it comes to your business when it comes to honoring and your word and you're a commitment to a customer you will keep finding solutions and finding solutions and so my question for you is why don't you why don't you love Daniel as much at least as much as your customer maybe I'm just so focused on everybody else helping everybody else around me that I'm not you know I think it's deeper than that man I talk to a lot of entrepreneurs across the country and a lot of entrepreneurs become successful because they charge so hard and they can charge so hard because they've been running from something their whole life either I'll prove it to you I'll show you or this illusion this false illusion that when I get this much money or I get the next car, the next house, when I donate this thing, even giving can become that sometimes, then finally I'm going to have peace.

[1514] And every time they get there, Jade said it earlier, the goalpost just moves.

[1515] I'm going to buy another house.

[1516] I'm going to get another car.

[1517] I'm going to give this car to my bro.

[1518] I'll hook him up.

[1519] He don't even talk to me anymore.

[1520] Exactly.

[1521] So I'm telling you right now, in a weird way, you're lucky you're finding this out at 25.

[1522] Most people find it out after chasing this stuff for 25 or 30 years.

[1523] and they wake up at 50 and their kids don't like them and they're surrounded by nobody.

[1524] And you're right.

[1525] And so my question for you is, how are you going to solve a friendship crisis?

[1526] You're going to go find some friends.

[1527] You're going to put yourself in a position.

[1528] You might take one less job or two less jobs or hire somebody to get some of the work done now that you've got some financial margin, but you're going to make a commitment to having people in your life.

[1529] And unfortunately for you, it's going to be different people than you ran with when, when you were younger, right?

[1530] 100%.

[1531] There's also part of this that I think is kind of normal.

[1532] You know, you're 25 years old.

[1533] The people that you're friends with at 25 won't necessarily be there at 30 and won't necessarily be there at 40.

[1534] And so I wouldn't necessarily look at this as, oh, my gosh, I can't believe this is happening to me. It's also part of life.

[1535] Like, there's people that I invited to my wedding that I have never seen since.

[1536] you know what I mean?

[1537] There's people that I thought that we're going to be my rider dies for life and we don't talk.

[1538] We don't talk anymore.

[1539] We never talk.

[1540] Like, it's over.

[1541] And I don't necessarily know what happened.

[1542] It just, you drift apart.

[1543] And so there's people who are in your life.

[1544] Some of them are there for a reason.

[1545] Some of there are there for a season.

[1546] Some of them are there long term.

[1547] Some of them are, some of them are there to get you to the next spot.

[1548] Some of them, you help them get to the next spot and you never see them again.

[1549] But in many ways, there is a revolving door to this.

[1550] and I don't want you to think that it must be because of you or it's because they were jacked up or it's because I think there is part of this that you're 25 and life is changing very rapidly probably for everybody in your friend group.

[1551] I agree.

[1552] That makes sense.

[1553] And no men don't tell this to other men, so here you go.

[1554] You have permission to be sad.

[1555] You have permission to miss your old buddies, dude.

[1556] That's right.

[1557] It's good.

[1558] because those have been your friend since you were 12 since you were 16 since you were 17 y 'all did some stupid stuff together y 'all got each other out of trouble you'll hide each other's back you're a kind of guy that will give you a car so it's all right to take a walk and to exhale and say man I miss those guys and like jade said I gotta go be about making new friends and new community I'm gonna ride with people who are entrepreneurs who are interested in doing the next right thing who are good people who have good character who will hold me accountable to the man I want to become will you do me a favor yeah actually it's not me a favor dude I'm just going to go about my day it's doing you a favor you get off this call sometime tonight maybe this weekend I want you to get out a piece of paper and I don't want you to type but I want you to use a hand like a pen and if you're younger than 25 yeah you're 25 so a pen is an ancient technological device that you can write with I use I use attending school.

[1559] No, I'm playing.

[1560] So I want you to write a letter to 35 -year -old Daniel.

[1561] And I want you to write him about the time you had X number of dollars in the bank and you felt lonely and the things you started doing when you were 25 so that in 10 years he could have the life that he's going to be having.

[1562] And that's the way I'm living.

[1563] There you go.

[1564] But hey, so you could live like no one tomorrow, right?

[1565] That's right.

[1566] But that 35 -year -old life is not going to be about square footage.

[1567] It's going to be about friends who love you.

[1568] Exactly.

[1569] Is that fair that's fair all right i'm proud of you good man thank you for being uh for having the courage to say man i'm lonely i'm 25 and i've got it all and i don't got anything jay we see this all the time right absolutely i mean i think there's honor especially you know we talk all the time about changing your family tree and so there's this piece of honor in putting your head down and doing what you have to do to make things right financially for yourself and for your family and for your kids but at the same time the piece that you're looking for is not found in the money and the things and the stuff.

[1570] Like Dave says all the time, there's only one way to true financial peace and it's to walk daily with the Prince of Peace, Christ Jesus.

[1571] So there's, and that's talking about relationship is what that's talking about.

[1572] And so even at on this level, you know, talking about person to person relationship, you need that.

[1573] You can have all the stuff.

[1574] You can have the best paycheck.

[1575] You can have, you know, your business is on point.

[1576] But if you don't have relationships that matter, you can feel very empty very quickly.

[1577] Yeah.

[1578] But it's an old trope by this point.

[1579] But I think it was Jim Carrey that said, I wish everyone could just get a million dollars just so you could know.

[1580] have all the money in the world, but you've got to have that gang.

[1581] You've got to have a group of people that you can call in the middle of night and say, hey, I need some help.

[1582] Come see me. So that's awesome.

[1583] Thank you so much for your calls.

[1584] Hey, America, thank you so much for joining us right here on the Ramsey Show.

[1585] We're here all the time.

[1586] Always putting shows in your feed to help you live a better, more peaceful life.

[1587] We'll see you soon.

[1588] This is The Ramsey Show.

[1589] If you're a leader, your personal growth matters for your organization.

[1590] because whatever you lead can only grow as much as you do.

[1591] I know from experience.

[1592] I've been CEO of Ramsey Solutions for over 30 years, and now I'm sharing that leadership and business coaching experience with you on the Entree Leadership podcast.

[1593] I'm taking your calls and helping you figure out how to overcome challenges within your organization.

[1594] One episode could change your business.

[1595] Check it out on Apple, Spotify, YouTube, or on the Ramsey Network app.