Winning With Money Is 80% Behavior 02:05:14

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George Campbell, Ramsey personality, soon to be a number one best-selling author of the book Breaking Free from Broke, is my co-host today. Open phones at 888-825-5225. Dave starts this hour in Madison, Wisconsin. Hi, Dave. Welcome to The Ramsey Show. Good afternoon.

Hey, what's up? My question is, my wife and I are on Baby Step 7, and we want to be able to help out our kids. We have grown adult kids. One of them just got married, and the other one is a grad student in college. And

We want to be able to help them in such a way that, you know, whether it's paying, you know, helping pay for a down payment on a house or something like that, we want to help them and have it be a blessing but not make them feel entitled or not, you know, kind of make them feel like they're just waiting on us to provide. Mm-hmm. Are they waiting on you now? Oh, no, no. So there's not already a sense of entitlement. You're just worried that handing them $30,000 might create more entitlement?

I mean, you know, we like throughout the course of them growing up, you know, we, we paid for their, their state college. Uh, you know, they, we basically provided them, you know, when they graduated from undergrad, you know, we got them a nice, reliable used car and kind of set them on the path and said, all right, you're, you're, you know, you're never going to borrow money to buy stuff like that. You know, you're the next car you buy, you're going to save up and pay cash for it. Uh,

You know, you're not going to have any student loans. And are they doing all of those things? Yeah. Okay. All right. Good. Well, here's the thing. I don't think the gift causes the entitlement. I mean, you could give one person a dollar and they would be entitled, and you could give another person $100 million and they wouldn't feel entitled. So entitlement is an arrogance thing.

Entitled is I am due the, I'm on third base, I was born on third base, walking around acting like I hit a triple, you know, and you didn't do squat. So entitlement is I am due something from someone. It's an arrogance. And it's my right to get this. I'm entitled to this.

I'm entitled to something. And it's basically saying you're willing to, you improperly believe that you have rights over someone else's stuff. Right? That make sense? So entitlement is an attitude. It's not caused by an amount. And so it sounds like you've got really good kids that you're describing. Yeah.

Yeah, I mean, they've worked really hard for everything they have. I mean, I'm a teacher, so, you know, I feel like they... You know, we live in a pretty nice suburb, and, you know, the reason that they had their schooling paid for is because we didn't go out and buy all the things that maybe their friends had. You know, we... But they didn't walk around acting like that you had to do that or you were a bad human. It was just what you did. And so, you know...

Like, you know, I have a friend that bought his kids when they got married. He bought them a paid for house and said, you know, the only thing I ask from you is that you promise to never borrow money the rest of your life. And those kids have gone on to become millionaires fairly quickly, obviously.

got a head start with a nice house, you know what I mean? And they got no payments, so they're piling it up. But those kids were not entitled at all. They were just grateful. And I know the kids well. And they were, you know, they've gone on to become normal grown adults. And they just got a real nice head start because their dad and mom had done well, like you guys. So I think it's about the attitude. The thing you don't want to do, I guess one thing you could say is just, you know, don't

develop an expectation with this gift of this down payment for this house that I'm always going to be here handing out money. This is a one-time thing. And you could just say that one thing to make sure there's clarity about it, right? But the entitlement has to do with their lack of character, not about you giving them an education or giving them a car or giving them money for a down payment. Does that make sense?

Yeah. Yeah. I mean, and I guess the other thing I question I have with that is, you know, I, I want to, I, you know, this is a gift. I mean, I'm not, I know I hear you constantly talk about how, you know, when your kids are grown, you can't use your dad voice anymore. You know, you,

They're basically we're walking together as friends. And maybe, you know, I can be a mentor, but, you know, I can suggest some things. But ultimately, it's their choice. And so, you know, that's the thing. My gift would be contingent upon them, you know, doing these things. I mean, I don't have a promise that they continue to go that direction.

And I do have the right to attach that with a gift. I'll give you an example. The Ramsey Family Foundation, we give to a lot of ministries. We do not give to ministries that borrow money. And so the gift is contingent upon, you know, the fact that that ministry is not going to go into debt and use some of the money I gave them to pay stinking bank interest. That'd be stupid. Dave Ramsey be giving people money for that, right?

So, I mean, but that's a gift that has control on it. And, you know, if there's going to be a gift in another year, the follow-up gift will not happen if they have borrowed money during that year. We stop them. You know, so it's the same thing. So it's okay to attach a...

contingency to a gift. Yeah, and I think the worry for our friend Dave here is that he's worried his generosity of trying to offer them this blessing will turn into laziness, but he hasn't raised lazy kids, so this will not cause that to happen. The gift in and of itself doesn't cause that to happen.

I mean, it can be part of the equation that caused it. I mean, if you've got a trust fund baby that's waiting on, okay, I'm going to, you know, at age 30, you're going to get $2 million. And so they decide, well, I'm not going to work much. I'm just going to sit around and wait until I hit 30. Well, but the problem was it was not just the $2 million at age 30. The problem was the person you raised to be that person.

freaking lazy, you know, that mediocre mindset. And so the fact that you plugged that into them before you made this announcement about this trust gift. And so that's the problem with a trust fund baby, you know, right there, the classic stereotype.

Because that's a sense of entitlement. Well, you've said that an eagle that doesn't leave the nest is called a turkey. Right. I love that. And that's, I think, the worry for every parent out there. But he's saying, hey, my kids are getting an education. They have jobs. They're getting married. They're not stuck in mom's basement. And he's going, here's $30,000. That's a very different situation. You should be in order for...

a parent and Dave situation to come alongside and start dumping money on the situation. You should be that they should already be on fire and you're just adding some fluid. You're adding a little gas to the fire, not like wet wood is sitting there. We're going to throw some gas on it and hope it lights up. That's a little different. That's the difference, right? I mean, so you're, all you're doing is trying to accentuate the good things that are already happening further. Those things, good things that are already happening, not, but,

But you're not going to with a gift like wet wood. So the kid needs to already be on fire. That's the deal. This is the Ramsey Show.

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because you shared it thank you george is a big deal isn't it huge and i mean we hit number one on all podcasts recently which was just mind-blowing number one on apple big time we were doing the same show and which tells me it's largely due to all of the folks out there who are helping us share the spread the word yeah we didn't suddenly get smarter it didn't i wish i could say that i'd like to have one amazing show did it days so we had a breakthrough no we didn't just still here doing what we do linda's in phoenix hey linda how are you

Hi, good. Good. How can we help? So my husband and I, we currently own a home. We've been here for 12 years. We have a really awesome interest rate on it, low mortgage. And we are thinking about buying another house and we want to keep our current home as an investment property. But I'm just a little bit worried that it's going to strap us financially too much.

and just kind of wanted to get your thoughts. I wouldn't. You wouldn't buy it, no? No, I mean, I'd sell the house and buy another house, but I wouldn't keep your other house. I know that because you have a mortgage on it. Okay, well, our mortgage is really, really low. And your first goal to becoming wealthy, one of the top two things you need to do, there's two big things to get to the first million to five million in net worth, is get your residence paid for, be 100% debt-free,

and build up your retirement in mutual funds. Those are the two primary things that cause people to get their first $1 to $5 million. It is not leveraged, borrowed rental property. That is not what causes the typical first $1 to $5 million. All the research we've done studying 10,000 millionaires,

So everybody talks about how good rental property is. Rental property is wonderful if it's paid for and your home is paid for, but that's not the situation you're in. Okay, so you say this house needs to be paid off before if we wanted to have two. Well, and you would need to pay cash for the next house. Okay, yeah, we couldn't do that. I know, I can tell. Let's pretend you were sitting in a paid-for home and you wanted to buy a rental property. I would tell you to do that with cash.

It's what I, by the way, have done. Buy the rental property with cash. Everything with cash. Never buy real estate with that. Because here's what happens. You don't make as much on them because you're eating up your cash flow with payments. And all of a sudden, the way you're dealing with the tenant changes because you need the rent money to pay the payment.

You know how much I need rent? I've got a bunch of real estate. You know how much I have to collect the rent on any of it? None of it because I don't have any debt. And so I don't have to put a bad tenant in there hoping they'll pay because I've got to make the banknote.

Okay. That makes sense. Yeah. There's no desperation when you do it that way. And your worry that you mentioned, that's wisdom. That's your body telling you this is not a good idea. And so doing it this way, it's going to take longer, but you're going to do a lot of peace and a lot of patience. Yeah. So if I were going to move in your situation, I would just sell that house, move the equity to the next property, get that personal residence paid off, and then start saving and pay cash for your first rental. Yeah.

That, by the way, is exactly what I did the second time I built wealth. The first time I was a millionaire, I did it with borrowed money on real estate, and I went bankrupt and lost everything because I was leveraged up to my eyeballs and I was stupid. So I wasn't stupid. What I was doing was stupid. And if you're out there doing it, you're not stupid, but what you're doing is really stupid.

So there we go. Well, Dave, this is another part I love. She said, we've been here 12 years. I love the interest rate. I don't love the house. I just love the interest rate. People are hanging on to this. George, do you love the interest rate that you have? No, because I don't got one. The interest rate you have is zero. It's a wonderful interest rate. I love your interest rate. Thank you, Dave. I love my interest rate. It's zero. I don't have an interest rate. But that's the toxic money culture, Dave. They're saying you should get obsessed with a low interest rate, a low payment. That's the key. No, the key is be...

If you're going to borrow to buy your home, date the rate, marry the house. The interest rate should be looked at as a temporary thing, not something we're going to keep around like a family heirloom.

So you're passing it on to my grandkids. We're going to make sure everybody gets a little. No, that's not. That's right, though. That's how people talk about it. And that's not making fun of her. That's just what. But that's how people think in America today. So, Linda, what we're always big on around here is getting you out of debt, keeping you out of debt, because it is the shortest, most sustainable way to build wealth. The shortest path.

to proven wealth building because you don't have any payments. You have money, and then you get to buy more stuff and help more people and be more generous. Chris is in New York City. Hey, Chris, welcome to the Ramsey Show. Hi, Dave. Hi, George. Thanks for taking my call. Sure. What's up?

Well, I am hoping to get some advice from you in terms of streamlining and simplifying our investments. We rent right now. We also, our business...

uh, is mortgaging a property. And that's, uh, we have about three 50 left in the mortgage, but we also own outright a rental property. That's probably worth about 200. And I have, we have, my wife and I have, um, about 55,000 in a whole life policy and 65 in stocks. And I was thinking maybe we should sell the rental and then cash out, uh,

the life insurance policy and the stocks to pay off either pay off the mortgage on the business building or to buy a place to live outright so i was hoping to you could help me shed some light

Oh, either one of those would be a wonderful idea. Neither need. I mean, either one's fine with me. If you buy a home, then what we're going to do is lean over next and start using cash flow to start paying off the business mortgage. If you pay off the mortgage, we're going to use the cash flow to start saving up to buy a house either way. So, um, I mean, at the end of the story, both properties are debt free.

And that end is not that far down the road. I mean, at the end of three to five years from today, that's where you ought to be. What's your household income?

We make about $120 a year. Okay. All right. Right. And what has made it so difficult is our rent. It's just really, our landlord has been wonderful, and the rent has been so cheap. Yeah, that's nice. I started listening to you about a month ago, and I feel like it's time to make things simpler. Yeah, and I like your idea of simplicity, but also you may have cheap rent, but that property is going up in value in his name.

You're right. You're right about that. Yeah. You want to be an owner, not a loner, man. So you'll get there. I would do this move anyways. I would cash out this whole life policy. I'm selling the stocks. And I think simplifying your life without the volatility of the stocks, without the crappiness of that whole life policy, your life's going to be better.

Yeah, and get rid of the rental and buy you a home. I like this. I like this. You can get you another rental later on down the road. Yeah, I mean, you make good money, and you get the business paid off, and you're sitting there really making some serious money. No house payment, no business payment, boom, boom. We've got what we call margin at that point. Increased cash flow. Cash flow. Yeah, money's flying everywhere. You start stacking cash at that point, and you can get your...

I mean, you get yourself in a really, really pretty position. The thing snowballs in the right direction, you know, because the more of this stuff you own that you don't have payments and you've got a good income, you know, it starts feeding on itself. And all of a sudden you look over there and it's, where's all this money come from? Oh, I'm not giving it all to the bank. I'm not supporting those towers in the skyline that has furniture nicer than I have. It is amazing when you look at the rental property numbers people share and they go, I'm going to go, how much are you making a year off of this?

$1,200. $100 a month. I'm like, you're doing all of this for $1,200? Which also means, by the way, they're probably losing money. Oh, yeah. At the end of the day. I mean, that's... That's not our friend on the call here, but that's many people out there. They're doing too much at once, fiddling around, trying to skip ahead. You have $100 a month cash flow. You're not making money. Because, I mean, one heating and air filter...

And you're done. You know, oh my gosh. You're in the red. Just one little thing. One little sink issue. You're done. Yeah. There's no room in that. That's no fun. This is The Ramsey Show.

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George Campbell, Ramsey Personality, co-host of Smart Money Happy Hour with Rachel Cruz. He's my co-host today. Open phones at 888-825-5225. Michael is with us. Michael's in Louisville, Kentucky. Hey, Michael, how are you? Great, how are you? Better than I deserve. What's up? My girlfriend and I are getting married this year, and...

We are combining households. She has a grown child. I have two kids that are getting ready to go into college. And just trying to see what's the best way to kind of combine, you know, with a blended family and assets, you know, previous assets and things like that, what's the best way of going about combining that fairly where, you know, my kids are taking care of the way I've been planning for years and obviously her thoughts as well with her own. Hmm.

Well, it's an emotional series of decisions, and I'm not sure there's a wrong way or a right way to do it. It's whatever you guys sit down and come up with is the right way. I don't think there's an immoral or a moral issue or an ethics issue. I'm old school on kids, and so our kids understood when they were growing up

that the number one thing in my life was not them. It was their mother. I understand. It was their mother. And they get their second right behind their mother. But don't get between me and your mother. That won't work well for you. And so were I to remarry, if Sharon were to pass away, I would have the same concerns that you've got. But I would want to, my first goal would be to take care of my wife.

Sure. And so my second goal would be if there's anything left, we can help the kids. But they're, like, supposed to be grown-ups and on their own. Correct. And I agree. I guess more of a technical question, too, was, you know,

Maybe not. I have a home that's paid for, and she has a home that's still got a mortgage on it. Other than that, we don't have any debt. I have 401K in my retirement and all that. Basically, her home is her asset that she's been thinking of leaving to her kids or her child someday, or it'd be really her only asset. But I'm going to combine my home, sell mine entirely, and put all of that into hers to help

start to pay off a big chunk of the mortgage and do some improvements. Which will change her plan. That would change her plan. If you're going to be living there and she dies and the house is going to her kids, she's going to make her new husband homeless. Correct. After you put money in it. Is there a way to, yes, I guess that's a way. How do you lay things out where, I don't know, I guess to put her mind at ease. I'm not really sure how to word that where things will be.

There's not a – there's – I mean, you could start using a bunch of trusts and putting things into a trust, and the trust has certain terms to it, and you're going to spend a ton of money on that. But I think what you're feeling is a natural tension, and I would feel the same tension if I were in your shoes, and I'm validating that. But I think the two of you have got to decide, okay –

What is more important to the two of you? If you're going to take several hundred thousand dollars, dump it into her house, right? And now it becomes our house. Oh, but wait, it's going to her kids. Well, that's screwed up. That's going to create a problem. And so maybe her plan is going to change now. Maybe her new husband is going to get the house if she does. And really, my thoughts were,

Whoever goes first, obviously the other person, everything is theirs. And then when they're gone, it can go three ways to everybody and divide it up however, you know. Or you can leave the portion that was going to be her house to her kid and the portion that was going to be your stuff to your kids. I mean, there's no right or wrong thing. And it's not wrong to leave the house to her kid.

If she wanted to, it just leaves you homeless, and it's really weird. It feels awkward, you know? But I have seen that. I've seen where the step-parent gets kicked out upon death. Yeah. And it can be really emotionally strenuous. That's a nice way of saying it.

Yeah. So I think that what I want to encourage you is really push through and don't the problem with the other plan is, okay, you leave it all to her. She leaves it all to you. If you don't do that in a trust that states how things are going to be distributed, then their surviving spouse could change their will after the death of the, like say she passed away first. She left everything to you. Four years later, you're getting married again.

You could change the whole will again, and her kid ends up getting nothing. Legally, legally, it'd be immoral. It'd be unethical for you to do that. But legally, there's no way to keep that from happening except to dump it all into a trust upon death, and the trust has certain terms, and the terms are the distribution...

you know, maybe based on the past evaluation to the kiddos upon your death or something like that, because you're not going to be able to undo those trust terms. So you'd have to see an estate planner to do that. That would be a mechanical way, a tactical way to pull it off. Now, Dave, would it be simpler to turn this into cash? Let's say they sell the property and she would get that amount, let's say, of the equity as it stands today in an investment account. Would that simplify things?

Well, she's, I mean, then he's buying the only house. Because they have two houses right now. The paid for one and the mortgage one. Yeah, but I'm saying either way, she's either got her cash sitting over here to the side, but if she passes away, she's just going to leave that cash, nothing to her husband, you know, everything to her kid. You know.

So the key is there's a lot of ways to skin this cat, but we have to be in agreement with both spouses, which is the hardest part. Yeah, and just promising that you'll do it in your will is not,

binding legally. I'm not an attorney, but you'll find that out when you go sit with your estate planning attorney. That's what they're going to tell you. So, but leaving it into a trust, you could do that. You could set terms of the trust and it's locked in. There's nothing you can do about it. If I was in their shoes, I'd sit with the estate planning attorney, have them lay out all of the options, and then we agree which is the best route. Yeah. And then, but here's the thing. Part of what you're struggling with is before they met,

Her children were her everything, even though they're grown. His children, since he's divorced or his first wife passed away, whatever, his children are his only concern, priority-wise. And this new relationship changes the priority. The spouse now takes that seat. It challenges the priority position.

in your emotions and so that that's the hard thing to walk through and it's very real i mean i i haven't had to do it thank god but um but you know it is a very very real thing it's it's um you know but you i'd like to think that i would want to make sure my new wife was taken care of

before i worried about my grown kid you'd hope the kid would understand but i'm sure it causes relational turmoil i don't care i don't care i mean it's it's you know what is what's the primary relationship who's your first team then who's your second team and that's what we're talking about here and so the kiddos growing up understood their second team you know we love you they're the beat and we'll take a bullet for you um but but you know

You know, your mom's coming first. Your mom's in front of you in priority. That's how this works. I love the idea of the kids being so self-sustaining. They're not needing whatever's on the other side. Yeah, and that changes the whole equation when somebody doesn't feel entitled to it or need it. The kid says, well, that was my one shot at home ownership was getting mom's house, and now you ruined it. Well, they feel like that dad's assets are somehow they're entitled to them. They're not entitled to them.

You have absolutely no moral or ethical obligation to leave your children money. So your kids doing heroin, don't leave them money. You'll kill them because you will leave them enough to buy enough heroin to kill themselves.

So you, you, you know, if you're, you know, think whatever other fill in the blank of any misbehavior said misbehavior, you will magnify the misbehavior. So you, I am under no obligation to leave my children money. And by the way, that's very clear around our place. They're grown. And we're like, you know, you're, I manage these assets for God. If you're not walking with God, then you don't have the opportunity to manage his assets. Boom. You're out.

Sorry. Sorry, Charlie. Just like that. Charlie. Yeah. King Charles. Rachel's smallest. And he is a king. He sleeps on a queen bed already. So that's the most impressive part. I'm just saying. That's a neat question, Michael. And I struggle with you on it, but I encourage you to get closure on it. Don't just assume because you know what that does. Yeah. This is the Ramsey show.

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. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly and they don't have life insurance.

When you have to think through how am I going to pay my bills in the middle of next week, in the middle of all that grief, like it's just it is it's terrible. 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. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here.

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George Campbell Ramsey personality is my co-host today. Thank you for joining us. Open phones at 888-825-5225. All right, America, ready for a pop quiz? What percentage of Americans say they live paycheck to paycheck?

Oh, pick me. Pick me. Oh, oh, the big guy in the front row. That's me. George. I'm going to go seven out of 10. Yeah, this survey says 65% say they do. Six and a half people out of 10. There we go. Half a person. Yeah, and I've heard as high as 78% actually do. So somewhere around seven houses out of 10 on your street have too much month left at the end of the money.

Looking good and broke, B-R-O-K-E, broke. Sitting at a stoplight burning gas they bought on a credit card. Or worse, electricity that they financed on a credit card. Oh, yikes. Pick it on George here. That's even worse. Yeah. So you can stay stuck in the cycle, paycheck to paycheck, rat in a wheel, or you can change something. Stupid has a gravitational pull.

Once you get stuck in the orbit around stupid, it's hard to break the orbit and you just keep going and going and going and going. And you're the wrong kind of ever ready bunny, right? Just a rat in a wheel, just going and going and go no traction, living a life of mediocrity, no hope, not fired up. That's most people. You don't want to be like that. Let me tell you how you get out of an orbit.

Even if it's orbiting stupid, you have to expend energy to break the orbit. You have to break the cycle, break the family curse, break the way you grew up in the way you look at things, the way they talked in your neighborhood, the way they, the kids I hung out with at work. Well, little man can't get ahead. Thank God it's Friday. Oh God, it's Monday. We're all just stuck.

Sure hope we can elect a president who'll fix my life because I'm not going to do anything about it. You grow up around that, man. I'm telling you. That's the worst country. Eeyore is your spirit animal. I mean, come on. Seriously. Yeah. So to kick off the year, we're going to help you. We're going to host a free live stream this Thursday, January the 11th at 7 p.m. Central. Three hundred and fifty two thousand people have already registered.

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practical money tips that actually work. We're going to help you break the cycle, and we're going to give away $10,000. Ten people are going to get $1,000 each during the viewing. You have to be watching or you're not going to get it because that's going to be part of the deal, okay? So if you want to sign up, you want to watch, we would love to have you. It's this Thursday night at 7 o'clock, Breaking the Cycle. You go to ramsaysolutions.com slash break the cycle. It's completely free, by the way.

completely free. Hello, did I mention it's free? It's amazing. And it's going to be about an hour long. So I'm just picturing if you just spend one hour with us hanging out on a free live stream, it could change how this whole year goes for you financially. And if we can change how you think and how you look at this, then it'll change what you do. And if we can help you change what you do, then you're going to change your results and your results will change your life.

Now, we're not going to change your life. You're going to go do it. You're the hero in the story. We're just going to show you how. We really know how to do this. We're going to break you free from the orbit and get you on a different path. Yeah, and just say, you know, you've been believing some stuff you didn't need to believe. You're better than your belief. Well, especially going into an election year, I feel like everyone just gets angry. Everybody's worried about inflation. The anxiety is so high out there. They're worried about interest rates. Man, I'm worried about, is the market going to crash? I'm worried about this, worried about that. And let me tell you what.

We can show you what to do. We can show you the process. It's not magical. It's not get rich quick. It's not easy. I mean, we're going to teach you important things like live on less than you make. You ready to do that? There's a whole new idea. Concept Congress can't grasp. Nicola is with us in Jacksonville, Florida. Hi, Nicola. Welcome to the Ramsey Show.

Oh, Mr. Ransdy, thank you so much for taking my call. Hope all is well with you. So in my 20s, I listened to your, read your books and such, purchased a home at 27. However, I lost my job after 10 years and I sold my condo in 2016. I live at home. I'm now 42 and I created a lot of debt for myself, but I want to purchase a condo.

So I just wanted your advice and a strategy on how, what debt to pay down first. I have $10,000 in total debt, three personal loans, three credit cards, and I have $45,000 here

student loan debt. I'm still in school seeking my master's and I'll be done at the end of the year. So I'm not currently paying that. Right now I have $36,420 in my 401k. I know I borrowed from my 401k $20,000 to pay off my debt, which I accrued again. So right now, biweekly, I'm paying $171.94 at 4.5% interest on my 401k.

All right. So what is your total debt outside of, you don't have a mortgage now, so what's your total consumer debt? 10 plus 45 plus 20 on the 401, right?

Yes. $75,000? $65,000? No, the 401 is $36,420. No, the loan balance. The loan on the 401 is $20,000. Oh, I'm sorry. $14,000 left to pay. Oh, $14,000 on that. Okay. Yeah, and it's $171,000 biweekly on my paycheck and a $4,500. So you've got about $70,000 in debt, and you make what?

Right now, it just got raised. So $60,400, I wasn't making much, but now I am making more, and I recently paid off my car in 2021. Unless your income changes, you're not going to buy a house in 25.

Right. What's your master's in? A condo. I wanted a condo. I work in education. I work in education, so obviously you don't get that much in education. Will this master's increase your income? Not much. Then why are you doing it? Well, it's required. Right now I'm not paying for it. The school pays for it. Because I work in education, it's required to have a higher degree. But the school pays 90% of that.

Nicola, you need to pay off $70,000, save up an emergency fund, and then save up a down payment. Well, right now I have $3,500. I just don't know if I should, but I have three personal loans, $35,000, $35,000, $25,000. Yeah, and you have $45,000 in student loan debt, and you have $20,000 on a 401K. You have $70,000 in debt.

Okay, I didn't look at it like that, but yes. So here's the hard truth. You're not going to be ready to buy a house a year from now. It may be two or three years from now. Wow. We have to get rid of the debt completely. You don't have $70,000 coming in in the next 12 months. You have $60,000 coming in, and you have $70,000 in debt.

Right. Um, what I was thinking, maybe I should pay off my save up this year, pay off, you know, my, uh, 401k, the $14,000 just flat out paid off. Or if I should pay the high interest rate that I have on the personal loan.

I think we're beyond the math of interest rates. I would just list all of your debts out from smallest to largest, make minimum payments on all of the debts except for the smallest one, and we're going to attack that one with a vengeance, as much extra on the principal as you can throw at it, and that might mean you're doing side jobs after your master's program, after your full-time job. And you complete your master's when? At the end of this year. So 12 more months? Uh-huh. Okay. Do you have any time to do tutoring while you're working on your master's?

Not really. I mean, the job is pretty demanding. You know, sometimes I do have to work weekends. Now, you said you're living at home with your parents? Yes. Okay, so you have almost no expenses. What are you having to pay for right now?

Okay, honey, you're going to have to draw a line in the sand and quit borrowing money. I don't want to hear any more about your situations. You've situationed yourself into your parents' basement, and you've got to quit situationing.

So cut up the credit cards, get yourself on a beans and rice, rice and beans budget, anything you can do to increase your income, like tutoring, let's go do it. And let's start attacking these debts just exactly like George said, smallest to largest. And it's going to take you a little while to clear $70,000 in debt. When you get that clear, you can start talking about buying a house. You may go rent something in the meantime, but I wouldn't buy until you get this mess cleaned up.

from the headquarters of Ramsey Solutions. It's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey Personality, is my co-host today. Thank you for joining us. Open phones at 888-825-5225.

Starting this hour off is going to be Jenny in Columbus, Ohio. Hi, Jenny. Welcome to The Ramsey Show. Hi. Thanks for having me. Sure. How can we help?

Um, my husband and I are on baby step two and we are all in, I've got a second job. He's working overtime. We're selling everything but our kid. Um, we're all in. However, um, we are looking at anywhere depending on what option we pick at the dentist. We're looking at anywhere from 10 to $50,000 worth of work needed on my husband's teeth. Um,

I don't know how to do that without taking on more debt. What's your household income? $170,000. Well, I do. You save up $10,000. Well, okay. So the $10,000 gets us 10 years, they said, and then he'd probably have to have the work done again. Do you still think that's the best option, or should we try to do the $50,000 option, which is a fix for the rest of his life? Um...

B or C, none of the above. I want you to go talk to two other dentists. Okay. I'm calling BS. Okay. Unless your husband has some kind of disease, $50,000 is out of control. I'm not a medical professional. It's for dental implants. I know, but it's not, okay, then it's not $50,000. Let's go shopping. Okay. Let's go shopping. Okay. Okay. Okay. I can do that. Because the thing, I don't know.

beans about being a dentist. Okay. Uh, but what I do know from having sat in this chair for 30 years is that I've had a lot of people bring me dramatic numbers like you just did. And I send them back to the marketplace and they, there's a lot of other ways to do this and turns out and a lot of, uh, different pricing structures and so forth. For some reason, when it comes to medical or dental or things like this, we, we don't shop like we, if you were buying a car, uh,

And someone said, you could buy a $50,000 car or a $10,000 car. You would say, okay, tell me about it. And then I'm going to keep looking at cars. I'm going to keep shopping. And then I'm going to have a lot of things to compare with, not just two of these options. But for some reason, all of us, you included, just accept, well, it's $50,000. It didn't say so. Doc said it's this. No, there's no reason.

vast array of pricing structures in that world. So I want to go shopping and then yes, I'll put, let's pretend you can fix this for 10 or 15,000 bucks or 20,000 bucks even. Okay. For implants. Okay. Something more permanent and then you don't have to cheap out, but you also don't have to go bananas. Okay. So, um, then, then the answer to your question is how do you pull that off? You make 170, you just slow your debt snowball and pile up 20 grand depending on the urgency of

The amount of pain he's in or whatever it is you're facing is how fast you do it. If it's me and I'm hurting, we're going to do it fast because I'm a complete wuss. You want it over with quickly. I don't do pain. I'm a wuss. Sharon has the pain tolerance of a Navy SEAL. I get a hangnail and I'm in the floor crying like a four-year-old.

So, no, I mean, so I'm going to go, I'm going to write some checks and get out of pain is what I'm going to do. But anyway, so just depending on the urgency of the situation. And if what she's saying is true, let's say 10,000 buys are 10 years. Well, 10 years from now, you're going to be in a very different place financially.

In two years, it might be debt-free, and you could do whatever you want. I don't know if I want to rip my teeth for 10 years. But anyway. I'm confused. I didn't know it was like an HVAC. Like, well, this thing will keep it running for the next 10 years. I don't know what they're doing to his mouth there. It's a very strange diagnosis. Well, I can tell you this. There's the cost. It's $400,000 to become a dentist now. And then buying into a practice would be another half a million or so. And so there's a whole business side of dentistry.

that allows them to sell a vast array of products. I've fallen for it. Every time I go in there, they have a new technology they've purchased that can now do this new thing. And it's for $50 a tooth, we can do this for you. Otherwise, it'll be $300 later on if you get the cavity. And I'm like, I don't, it's so stressful. That's called practice management. They're in sales. Which is medical talk for sales, okay? Okay.

So I'm not accusing this dentist of malpractice. I'm just saying he's willing to sell. Implants are the most expensive piece. Willing to sell old Jenny a Bentley. That's all I'm saying. I'm seeing on Google, Dave, $1,000 to $5,000 per implanted tooth is what the going rate is. So if he's talking many, many teeth. Could be 50 grand. It could be. Okay. Depending. We know Google's right. Always right. I go to WebMD for all of my health needs. Yeah. Yeah.

Yeah, if you go to WebMD, you're dying. You have three days to live. That's it. You got three days to live. Everything is three days to live. Or it's a minor head cold. Three days to live.

And $1,000 a tooth. Yeah, three days to live. Seriously, shop it, Jenny. That's what I would do. And then if you need $20,000, slow down your... You got $170,000 coming in. Slow down your debt snowball enough at the speed of the urgency to come up with the $20,000. If you're going to wait 10 months, it'll be $2,000 a month. We're going to do it over 10 months. If we need to do it right now, we're going to have to stop everything and do it over two or three months, right? And so however quick you can build up the $20,000. But it is going to impact and slow down your...

debt snowball speed because this is something you have to deal with your your husband's uh dental health does matter and we're not we're not blowing that off hey thanks for the call open phones at 888-825-5225 thank you for joining us america we appreciate you being here and uh i mean this is how it's done boys and girls we you know it's um

Man, George, your brand new book coming out next week, Tuesday, January 16th, called Breaking Free from Broke, The Ultimate Guide to More Money and Less Stress. You can see right there on the cover, there's a millennial holding up the wall. That's all you need to know. So if millennials can hold up walls, then they can do anything, right? I had to flex my muscles. That's it. I've got an interesting question about this, Dave. People keep asking, well, how is this different from the total money makeover?

And it's been an interesting question because I believe it's very different. The first two thirds of this book are really unpacking probably the most in-depth we've ever done on the toxic money culture, all of the different types of debt with research from these last few years. I mean, if you want some in-depth stuff on any of the financial things moving around out there, this book's got it in there. And Total Money Makeover has none of that.

Total Main Makeover is the baby steps. It's how to do it. How to do the baby steps. Yeah, this book has a little... I cover the baby steps and I go, cat's out of the bag, but we're going to have to unpack why to do the baby steps. What's underneath this all? The research in this and the snark in this is incredible. But let me tell you, living on a lesson you make, living on a budget, being generous, getting out of debt, saving money is going to be in every Ramsey book.

In one form or another. Nothing new under the sun, says Ecclesiastes. We didn't change that for Jade or George or Rachel. It's going to be there. So every Ramsey money book, anyway, it's not going to be in John Deloney's book, but even part of it's in John Deloney's book over there.

So be sure to pre-order. January 15th is your last day to get $100 in bonus items at ramseysolutions.com. Thank you to so many of you who have already done that. I hope this book helps you take the right next step with your finances this year.

George Campbell Ramsey Personality is my co-host. Thank you for joining us, America. We're glad you're here. Open phones at 888-825-5225. Our question of the day is brought to you by Neighborly, your hub for home services. No more scrolling through pages of Internet results. Neighborly is the one place.

You'll find a variety of home service professionals that you can rely on to do the job right, or Neighborly will make it right. That's the Neighborly Done Right promise. Learn more at Neighborly.com slash Ramsey. Today's question comes from Sherry in Vermont.

Hello, Mr. Ramsey. Can you please explain why the most common form of income mentioned is gross income, not net income, when discussing budgets and personal finances? I find it confusing because in my mind, the deducted taxes don't count. You can't spend what you owe the government. So if you include that, it makes it seem like you have more discretionary income than you actually do. Thank you for the clarification. Well, it depends on what we're talking about. The problem is, honestly, Sherry, the

Too many people don't know. I'm going to say this delicately. They don't know what the flip their own money is. I mean, so here's the thing. If you make $60,000 a year, that's $5,000 a month gross before taxes. But if I ask you what your net is and you say $2,500, which is $30,000 a year, then I've got to go try to figure out because you apparently don't know what

Whether you have taken out 401k out of that, health insurance out of that, whether you have your car payment deducted out of that and it's going to your credit union, that's not real net, but it is what you're coming home with because you had all this other crap taken out of your check. And so a lot of people don't really understand that net, what you get your take-home pay because people have various things taken out is not germane. I can tell what's going on with your gross.

And I know about what your taxes are based on your gross. And then I can do the calculations while we're sitting here to help you move towards getting out of debt. But I'm well aware if you make $60,000 a year, $5,000 a month, that you're not getting home with after federal income tax withholding $5,000. I know that. But I also know that you should be getting home with a lot more than some of you are. Some of you have too much taken out of your check. Your deductions are wrong.

Some of you have other things that aren't taxes coming out of your check, like I just mentioned. And so when I say take, when someone gives me take home pay, I really don't know what they're talking about because it could mean so many different things, but I can back into it from gross and know where you stand. So that's why I use that figure, but it's not because I don't realize there's taxes taken out. It's because I do realize there's a bunch of other crap taken out of other people's checks and

And sometimes they're so confused by that because you really can talk to somebody that has a $5,000 gross and they're getting home with half of that. Or if they have a regular income, they can be very confused based on what's going to come in that month. What's your take-home pay? So the, hey, what did you make last year? If you're self-employed, you know, you don't have a take-home pay. You know, unless you set yourself up on a salary and you've done withholding, then did you do your withholding correctly? Because way too many people get a tax refund.

which means you have too much coming out of your check for taxes. It doesn't mean Santa Claus lives in Washington, D.C. And so if you have too much coming out of your check and then I use your take-home pay number to try to help you with your finances, then I've participated in your stupid mistake, you know? And so that's why we do that, because the only reliable number to back into things is your gross. And yes, obviously, Sherry, we do realize it comes out

And we use some round numbers too when we're just on a five minute phone call. We're not digging in to the exact mathematics, but your brain is pretty good. I mean, the lady a few minutes ago, $170,000 is her gross. And I know she's not getting home with $170,000, but I also know that with $170,000 gross, she could come up with $15,000 or $20,000 for her husband's tea. I mean, I can. They're taking home $8,000 or $9,000. They could.

probably live off half. Not rocket surgery to do that basic math right there. And so, but I don't have to actually go, well, let's see her tax withholding. You don't have to do all that. She's out of 170 minus income taxes, minus food, she can still find 20 to fix her husband's teeth. I mean, that's just, it doesn't take them, you know, a sixth grader to do that. So, hypothetically, but that's why, that's why. I know you can't spend what you owe the government. I'm well aware of that. They take so much from me that it,

I can't breathe. Aiden is with us in Tampa, Florida. Hi, Aiden. Welcome to the Ramsey Show. Hi. How you doing? Better than I deserve. What's up?

Great. I'm 22. I just got married in October. Congratulations. Thank you. Thank you. Yeah, we make around $115,000 right now. We both contribute 10% to our IRA for work. We're debt-free. And our question is around housing. We have enough for about a 10% down payment on the house we want to buy. And our question is, should we go ahead and do that and pay the PMI, or should we wait a couple of years and just save up 20%?

Well, I doubt it'd take you a couple of years. You'd probably do it by a year from now, couldn't you? Yeah, I think so. I think the math I was looking at, it'd be about a year and a half. Okay. All right. So you'll be a whole 24 years old when you buy your first house. That's the goal. Yeah, that wouldn't be bad. I like that. No. I just, I mean, it's okay to do it the other way, but the PMI is so stinking expensive, man. I mean, it's 75 bucks a month per 100,000. So it's $225 if you do a $300,000 house. What does this house cost? A month.

Aiden, what's this house going to cost? Yeah, about $300,000 is what we're thinking. My wife works for a home builder, so we get a good deal. So you got $30,000 and you want $60,000. So the question is, how quickly can we save up another $30,000, make it $150,000? You really ought to be able to do that in a year, dude. You have other debt. Yeah, that's what we're thinking. You said you had no other debt, right? No debt at all. Oh, good. Yeah, I think I'm going to sit down, do the budget, and tighten up and say, hey, we're not going to buy that thing, and we're not going to buy that thing, and we're going to save for a house.

And that's what I would do if I were you guys. And you're investing 10%. You're in baby step 3B. And so if you so choose and you wanted to do this in six months, you could pause investing or bring it down to a match or something like that in order to speed this up. Yeah. I think you'll be. And if you're building a house, the two, you're not going to be closing on it when you break ground.

Mm-hmm. That's exactly what you could break ground, you know, next spring, one year, and still have time to get the money together to have the 20% down. So I just don't want to give them PMI. Private mortgage insurance, folks, if you don't know, is foreclosure insurance.

It pays the mortgage company in the event they have to foreclose on you and they lose money. That's what PMI is. It's private mortgage insurance. It protects the lenders, not you. It protects the lenders. It's not life insurance. You are buying someone else insurance.

an insurance policy. It's a risky borrower fee. That's $75 a month per 100,000. If you're buying a $300,000 house, it's $225 a month. On top of your interest that you're throwing away. So it definitely hurts. But I was in the same spot as Aiden, Dave. Our first townhome was $300,000. It was a new construction build. And every delay, I was happy because it was more time we could save up. And so we were able to put down well over 20% because of that. And it allowed us to pay it off even sooner.

You didn't purposefully cause any delays, did you? No. That's just the construction business, Dave. I learned I had to manage the project myself. I had to show up there and be like, that towel bar is not even centered on the wall. I'm not a construction expert, but I feel like it should be centered. Wow. And so a lot of things need to be fixed. That really happened, didn't it? Yeah, it's real life. You really did do a towel bar thing, didn't you?

Because you had too much passion about that. So much passion about the towel bar. But you know, you've been in Nashville a long time. The amount of construction that's gone up in the last five years even is wild. And these builders, you know, they're moving as fast as they can, but they run into delays and subcontractors are moving around and going to the next guy who will pay them a dollar more. And so it can be tough. Now things have slowed down, which is great. You get a little more attention on these builds. Yeah, probably keep the towel bar centered.

Keep the towel bar centered. That's all I ask. I'm OCD. It's got to stay symmetrical. It's a big deal. But new builds, as you know, Dave, they can be a blessing and they can be a curse.

And so we were happy to have it, but getting there was a journey. The amount of blue tape on the walls, Dave, every little nook and cranny. George, you blue taped them too? I blue taped the heck out of those walls. Oh man, you're that guy. Yeah. Okay. They didn't like me. They were ready for me to be done. Yeah. Got to get rid of OCD George. It's the biggest purchase of my life, Dave. I wanted it done right. OCD George, he's the towel rack guy, the blue tape guy. I've complained more at Chick-fil-A to get the order right, let alone my house. Oh, you've complained at Chick-fil-A?

It's happened. Are you going to heaven? They're not always perfect. They're not always angels, Dave. This is The Ramsey Show. George Campbell Ramsey Personality is my co-host today. Sarah is with us in Seattle. Hi, Sarah. Welcome to The Ramsey Show. Hey, Dave and George. Thanks for taking my call. How are you? Better than we deserve. What's up?

Well, my husband and I are pretty young. We're 24. Over the last three years, we've paid off all of our debt. You know, college and a car, we've paid for our wedding in cash. But since we started working, we've actually tripled our income. So now it's about $400,000 a year. Good Lord. What do you guys do? We work in tech. In what? In tech. Okay.

Okay, they work in tech in Seattle, so I could guess where that might be. Okay, well, good for you. Way to go. Congratulations. You know, thank you so much. And that kind of leads to my question. You know, as the baby steps lay out, we're moving on to the next phase of wealth building. We've maxed out our 401ks, our HSA, contributing to an IRA, some mutual funds. We don't have a desire to buy a house soon, but, you know, maybe we'll just...

save up for a down payment to be able to do that down the line if we choose. But since neither of us grew up with this kind of wealth or anywhere close to it, all of it kind of feels excessive almost. So how do you guys think about what a reasonable amount is to be saving versus spending? You know, we don't want to be excessive savers and missing out on generosity and enjoying the now, but also we don't want to be excessive spenders. So since it's new territory, I was curious if you could share your insight on that.

There's a lot of wisdom there. Well done. Very well done. Thank you. Well, the experience that most people have, and I've had it as well, is that as your income increases and it goes places you've never been before, it takes your emotions a while to catch up, which kind of causes you to ask this question.

Yeah. Okay. It's like, you know, give an extreme example. I mean, I own Ramsey Solutions. Our gross revenues here are about $300 million a year, and I've got 1,000 team members. We spend more on coffee.

Than I used to make, you know, it's kind of, it's kind of emotionally mind blowing. You know what I'm talking about? And so, um, it's, uh, it's hard to get your head around. So how do you go? It almost feels immoral or unethical unless you really start to put some, uh, you know, put, put some help to it to help with the emotions. So one of the things I've discovered and I, I, you know, when I'm working for instance with a pro athlete, I'll use this.

is we just always say, Sharon and I work off of percentages. We say this percent of our income, if I get a check in from a publisher, total money makeover check comes in, which is usually a pretty nice check each year, and that check comes in, a percentage goes to investing certain percentages, that preset. A preset goes to additional purchases and enjoyment.

A preset amount goes to additional generosity, additional investing. Now, 50% of it's gone before we start because 40% goes to taxes and 10% to tithe because we're evangelical Christians. Okay. So that leaves me the other 50% to split up among fun, investing, and additional generosity. And so...

We just put a percentage on that. And so that's what you can do. You can just say, so for instance, here, you're in baby step four and you're saving towards a house. So I would put 15% of my income towards retirement, right? And you ought to be doing that anyway. That's a standard baby step move. And then I'm going to put X percent for enjoyment. And then you kind of like have to spend that on enjoyment, even if it feels weird. Yeah. Because when you were thinking about it,

not in terms of a purchase you wanted to make, but you were just thinking about it in general terms, and you said, okay, we're going to spend 10% of this money on us as an example. I just pulled that number out, okay? So that's $40,000 of just increased lifestyle, and that would be leaving 90% for everything else, taxes and generosity and investing and everything else. So that would be

You know, we can't really say that would be crazy. But yet then when you get ready to spend $40,000 on something, oh, my gosh, what in the world? That feels so weird. But it helps you to do that because, oh, I've done my generosity. I've done my investing. And these are amounts I came up or percentages I came up with. So because your income could go to $600,000, then what are you going to do? I wouldn't use an amount. I would use a percentage.

That's really helpful. I think that's exactly my word, not worry. I mean, what a blessed problem to have. But, you know, we're 24, so presumably this isn't going to be the peak of our income. And so thinking about it as percentages is so helpful. I hadn't thought about that before. Yeah, it'll keep you from underdoing an area or overdoing an area.

Yeah. Because you thought about it and you thought about it in ratios when your head was calm, not when you were, because if you wait until you're looking at an opportunity to support a thing with generosity, a ministry or something, you're emotionally involved then. And so I, you know, I want to help that thing. I want to, I want to cause the, I want to help those people with that situation.

uh these hungry kids or whatever it is right by then by then you're already you're already deep into it and then you start going well you know i don't know if this is right or not and i may be going too much and you could do too much you could get all caught up in the you know the the

beautiful little children that need some food and you could just give away, you know, you go crazy. And so that's, that really helps to lay out ratios. Yeah. Well, I think of it as that kind of tire and you don't want a flat tire. If you're only saving, you're not enjoying it. You call into the show and you're just clenched fists and,

And, you know, some people can be very, very generous, but I have a hard time finding people who went broke being generous. So that's a great one to flex. And the spending side, people call in and say, Dave, I've been following you for 30 years. I can't stomach spending money. And Dave's like, go force yourself to do something fun. And so if you look at it through those three buckets, it becomes easier.

I mean, the first time you spend X, Y, Z that you've never spent makes you want to throw up on something. You go, what in the world am I? Have I lost my mind? Even if you're a spender, you stop in question. You know, am I out of control here? I bought a car that cost that. Oh, my gosh. I used to buy houses for that. You know, I mean, it's like, golly. And so, yeah, it is emotional. And but, you know,

The good news is once, and the first time I gave away $10,000, I thought, man, I'm rich. I mean, only rich people give away $10,000. I thought this is a big deal. And now $10,000, I mean. And then you kept upping it every year. Yeah. The other year you gave away a million dollars in a day and that was a big goal for you. Yeah. To get there. And so, but it wasn't, I mean, I couldn't even, I thought I was so cool in one sense. I gave away $10,000, you know, and then, and then I was like, wow, you know.

But then you get satiated to it, and what will keep you from going out of control is to have some boundaries, and those ratios are good boundaries. It's kind of the opposite of lifestyle creep when you're not living on the lesson you make. This is someone following the plan going, how do I increase the right way? Mike's in Washington, D.C. Hey, Mike, welcome to The Ramsey Show. Hey, Dave, how are you? Better than I deserve. What's up, man?

Uh, not, not too much. I have a question. So I, my employer offers a 401k and, uh, I just finished up my first year of work, maxed out my contributions to it. Uh,

found out we have the ability to make Roth contributions. Great. So I switched from 12% pre-tax to 12% Roth. Awesome. And so now that I'm contributing, making Roth contributions, I lose that deduction that I was getting for making pre-tax contributions. Correct. And other

Other than an IRA, a traditional IRA, I'm curious what other avenues there are to kind of make up for losing that deduction. Okay, let's reframe that because you traded a pre-tax tax deduction

making the entire account taxable when you get ready to take it out. So if you have a million dollars in your 401k at retirement, 100% of it's taxed. If it's a pre-tax 401k, you traded that for tax-free. You didn't lose the tax deduction. You traded a small tax deduction for a huge tax-free gain. So that's a good trade. I'll make that trade every day. I hate taxes, but not bad enough to

to just you know do something stupid like avoid a Roth no you did the right thing with the Roth there are no big deductions out there this idea that the rich people have all the deductions is a bunch of crap unless you run a business or you've got something you can depreciate you don't have big deductions out there and don't go do a traditional just to get a tax deduction George Campbell Ramsey personality is my co-host Heidi is in Bowling Green Ohio hi Heidi how are you

Hi, Dave. I'm doing well. How are you? Better than I deserve. Bowling Green, Ohio, hometown of Scott Hamilton. It is. It is. Yeah. And the National Tractor Poles, and yeah. And I believe Dave, there was an old runner back in the day, Dave Waddell. You probably don't know that name, but yeah, that was a long time ago. Anyway, how can I help? Okay.

Okay. So my question is, first I want to say thank you so much for taking my call and you are an answer to a bold prayer that I just said yesterday and I'm so grateful to get through. Um, but my question is we, my husband and I, um, we've been blessed with four kids that we've raised. We have our, our baby is a senior in high school and now, um,

My husband and I are trying to buckle down and figure out how to ride this next season and to the best we can financially to hit retirement in a good note. We have our home that we live in, and we also have a five-acre piece of property that has four rentals on it.

on it for rental homes. It also has a large barn, but we've had a hard time renting the barn out for anything. But we have, um, through this process of, um, raising the kids and, um,

selling a business that we had for years. My husband went back to school, and they called him Grandpa Daddy, but he graduated first in his class, so he was a good Grandpa Daddy student. But we took out two HELOCs. We have a HELOC on our home and a HELOC on the rental. For what? For what? What did you buy with that money?

We just covered expenses while he was in school because my income. Oh, so he wasn't working? No. Oh, crap. He worked a little bit. And you weren't working. Y'all didn't have any money to eat, and so you borrowed money to eat. Well, I was working, but my income was not going to fill the gap of his not working. So how long did he not work, and how much money did you guys rack up?

Well, he did not work for about a year. And in that time, we went from, I guess over the course of a few years, we went from a really large income. How much do you owe on these two HELOCs? That's what I'm asking. On the HELOC. On the first one, we owe $29,500. What about on the other one? $2,000.

The other one is $39,500. Okay. So you borrowed $70,000 on the year that he didn't work. And what is his degree in? He is now a substation electrician. Okay. And what is his income now? Well, he's still climbing each year because he's been at his job for three years now. But currently, he is working a lot of overtime, but he makes about...

$110,000. Okay, what do you make? And I'm currently home. Okay, so you have $110,000 income. You have $70,000 in HELOCs from this mess. Any other debt? Well, we have $140,000 income because we get rental income from the five acres. So another $30,000 in rental income? Do you have any other debt other than the HELOCs? We have... No, we drive...

crappy cars and you're how old we 52 okay so how quick are you going to clean up 70 000 making 140 i i hope i would love to do it in two years i think you should but but i don't i would also my other proposal thought is do we sell the five acres with the rentals because over the next

10 years from what I'm calculating, if it makes a profit of $216,000, I don't know if it's worth hanging on to or just trying to sell it. What would it bring? Everything.

I think it would bring at least, my husband thinks $450. Okay, so you've got a half a million dollars sitting in the middle of your coffee table, and you don't own this farm. Would you go buy it? No. Then sell it. Okay. If you wouldn't buy it again, you shouldn't keep it.

But do you think it's possible to get out from under the HELOCs? Because then that would be paid for total. It's possible. If you make $140,000, surely to God you can pay off $70,000 in two years. It's only $35,000 a year out of $140,000. You've got to struggle through on $105,000 minus taxes. Right. I think you can do that for sure.

And or you can sell the other property. I don't think you're required to sell the other property, but it doesn't sound to me like you guys are... You're not enjoying it. It's a headache. Yeah. It's like, you know, if you didn't own it, would you go buy it? No. It was an instant answer. You didn't even think about it. So, obviously, it's not... I mean, if you wouldn't buy it again, folks, that means you need to sell it, whatever it is, other than your spouse. I mean...

And you said you only got one more kid in the house. The baby is a senior in high school. So it might be time you go back to work and help speed this process up so you can retire with dignity. Because you said that was your goal. Yeah. But if you sold that and you cleared the HELOCs and then you just start stacking cash towards retirement, you're going to be just fine. You're going to be okay. It's just a matter of which way is the rest, the way you want to go at it. 20 years from today, do you want to own that farm?

And if you ask me that about several of the properties that we own, the answer is yes. I very seldom sell a piece of real estate. But occasionally I look at it and I go, God, if I didn't, I wouldn't buy that. I didn't own it. That means you got to get rid of it. That means it's time to move to something else. And I've got a couple of those. I have moved a couple of pieces of real estate over the years. But 90% of the stuff we buy, we keep forever. That's our goal. So, but, you know, it's okay to move it. There's nothing wrong with it.

Good question. Thank you for joining us. Canada's on the line. Dale is calling. Hi, Dale. Welcome to the Ramsey Show. How can we help? Hey, guys. I'm just wondering, I hear you guys talk all the time about if you own vehicles with large payments on them to sell them and downgrade to smaller vehicles. But I guess my question is, if I've got vehicles with negative equity, how do I do that? You have to cover the negative equity with a new loan program.

or savings. Okay. How much negative equity do you have, Dale? We have two vehicles and a travel trailer that we don't use anymore. So we're deciding that because we're not using it, we might as well get rid of it. Yeah, so let's just take the trailer. What is it worth? It's worth about $30. And what do you owe on it? $47. Okay. So would you rather have $47 in debt or $17 in debt?

I'd rather have 17, but I just wasn't sure if that's the best way to do it or if there's some other options. There's not another option. You've got to cover the negative in order to give a clear title to the buyer. And so that's the problem with being stuck upside down in these things. So you could go to your local credit union and see if they'll give you where the place that holds the loan and say, listen, I'm underwater on this thing. You've got bad collateral here because this thing's only worth 30. I owe 47.

I'm looking for a $17,000 loan to cover the difference and get rid of this thing. Yeah, let me sign a note for the difference. And if it's a local credit union, they might do that for you. Yeah. You know, if it's Trevor Trailer Finance Incorporated, they're not going to.

You know, because you're not running in trouble. You're going to have to go to the local credit union and borrow the $17,000 to get out. But I'd rather you be $17,000 in debt than $47,000. That'll speed this up. Especially on a trailer that's sitting in the yard that you don't use and wish you hadn't bought. So there you go. Or you come up with a difference. If you've got it in savings or you can come up with it quickly. By the way, travel trailers are not evil, but if you're out there sitting there thinking today that you're going to go buy a $50,000 one, you need to know that it's going to be worth $30,000 in about 45 minutes.

And so don't finance it, for sure. You know, be ready to take the hit. That's how this world works. This is The Ramsey Show. From the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. The phone number here is 888-825-5225. George Campbell, Ramsey Personality.com.

Host of the George Camel with a K YouTube channel that has absolutely exploded in listenership and subscribers. Thank you. Viewership, I guess you say on YouTube, but thanks for doing that. The team just let me know, Dave. We just hit, I think, a record over a million unique viewers in the last 28 days on the YouTube channel. So thank you to everyone who's been tuning in. That's the fastest we've ever gotten to a million on anything on the Ramsey Networks. Wow.

Fastest. So thank you. We've had some get bigger, obviously, this show and so forth. Sure. But the fastest to a million is you. Way to go. Wow. I'll take it. Nice sprint. I'll take the win. Nice sprint. Well, the team does an amazing job, and we make those videos entertaining while informing the people about personal finance. So I appreciate it. If you like this show, you'll like that one. Jessica's in New York City. Jessica, how are you? Hi, I'm good. How are you? Better than we deserve. What's up?

So my question is, so in late 2022, my boyfriend and I invested $100,000 in my family's fast food franchise business. And then so in 2023, we've since made $11,000 back, and that's currently in a high-yield savings account. My question is, should we keep it in that savings account until we've accrued the initial investment back, or should we reinvest the $11,000 that we've made? Okay. How much did you put in?

I put in 30. My boyfriend put in 70. Okay. And you made an 11% rate of return. Mm-hmm. Wow. So the franchise is not doing that well, huh? Well, yeah. I don't know. You ought to be making a lot more than that. You ought to be making more than 11% on a small business operation. Okay. Okay. So the $11,000 is really not a joint amount. A portion of that is yours and a portion of that's his, correct? Correct.

Yeah, but for the purpose of this question, we can view it as a joint amount. I just want to know if it was fully the $11,000, what should we do? It has nothing to do with recouping your investment. I just wouldn't put any more in this. So I would take that money and just do something else with it, and I would not view it as a joint account. I would view it as separate because you're not married.

And so it's not legally a joint account. You do not have an LLC managing this. You don't have any kind of joint venture agreement. This is two individuals that dump money into an account. So it is separate legally.

You don't have a choice in that matter. And so you ought to separate it, and his portion should be the return on his money, and your portion should be the return on your money. And then you guys go and do with that in your personal finances, each of you, not joint, what you should be doing. But no, I wouldn't put it back in there. You've already put enough in there. Put a lot in there. Now, if she's talking about...

the money instead of having it sit in a savings account, if we're talking five plus years, you know, she wanted to take that money and put it into mutual funds or an index fund. Is that something that

Yeah, but I'm guessing they probably have some other financial goals like getting out of debt or saving money for the house, that kind of thing, that that money should be moving in those directions even rather than as an investment. But would I roll it back into the franchise? No, I sure would not. A small business ought to be returning double that.

So, no, I would not. Thanks for the call. Open phones at 888-825-5225. Jasmine's in Cleveland, Ohio. Hi, Jasmine. How are you? Good. How about you guys? Better than I deserve. What's up? So, my father passed away unexpectedly in December. I'm sorry. How old was he? Thank you. 56. Oh, wow. Yeah. Okay.

So we are feeling debt loss right now. He had one life insurance policy. I was awarded 25% of it and also my five-year-old daughter was awarded 25%. Both of our portions value at just a little bit over $18,000 each.

My portion, we plan to, me and my fiance, we plan to pay off debt. With her portion, though, obviously it's with her. I want it to stay with her. But she's five years old, and I wanted to know, get some advice on what are the best options to possibly invest it. Yeah, I would put it in some mutual funds and a college fund and a 529 fund.

Go to RamseySolutions.com and click on SmartVestor and find some of the SmartVestor pros in your area that we endorse. We tell folks to go see because they have the heart of a teacher. And I would get her $18,000 sitting in a 529. And then I'll step over into the other part of your statement. Much like the last caller, you and your fiancé aren't doing anything until you're married.

You are doing things with your money on your bills. Don't you dare pay his bills with this. Well, we do have plans to be married. When? We planned it in the next month, actually. Okay. After you're married, you have shared accounts and shared assets. But until that ring is on your finger, and this is official, do not use any of your money to pay his bills. Please. Please.

Please, for your sake. Okay? Now, once you're married, then it's all in. All the money's in the middle. His, yours. You know, my debt, your debt. My money, your money. All that. But until you're married, because if something happened until you're married, you know, you have zero protection on this. So it's just dangerous as crud to start handling your financial issues.

transactions as if you're married when you're not in both of these cases. And we take those calls when it was supposed to go perfectly according to on paper and then life happened and it didn't work out and then someone's going, wait, I paid off your debt and now we're not getting married. What do we do now? Well, I mean...

All kinds of things happen that we don't know are going to happen. And, you know, sometimes it's ugly things and sometimes it's sad things and other things. So please, please, please, folks, do not have joint accounts for your $11,000 when you're not married. Do not take your dad's $18,000 from your dad's passing away from his life insurance that he left his daughter and pay bills for a guy you're not married to yet.

after you're married, it's not a guy you're married to. And he now called your husband. Now we are one. And now, yes, we can pay any bills with it, whatever, whatever we decide we're going to do. But guys, you cannot treat these things the same because you're, you're going to get yourself in a pinch. And I just, we love you too much to see that happen to you. And, um,

We run into ugly situations where people misbehave. We run into sad situations where people die. We run into all kinds of things. And we've seen it all. And, you know, as long as you, you know, things don't always turn out exactly like your little plan. So until you're married, don't be combining assets. Do not buy a house with someone you're not married to. Dumber than crud. Don't do that. I was just talking to you right then.

You out there, you know who I'm talking to. This is The Ramsey Show. George Campbell, Ramsey personality, is my co-host today. Open phones at 888-825-5225. We're glad you're here. Ruth is with us. Ruthie is with us, rather, in Orange County. Hi, Ruthie. How are you? I'm doing great. Thank you for taking my call. Sure. What's up? So, you know, I currently live in California, which is, I grew up here, but it's high cost of living and

Aside from the house, consumer debt is about $150K that we have. And I was thinking about relocating to Tennessee, as a lot of Californians have, and maybe just either use the profit from our home here. It did increase in value in a short amount of time. And maybe just get a house cash and then help speed up the process of getting us out of debt.

I don't know. That's a good idea. What's your home in Orange County worth? It's about $1,135,000. Okay. And what do you owe on it? About a little over $700,000, I think. Okay. So you've got $500,000 in equity and you have $140,000 in debt. So that leaves you $350,000 to buy a house with when you make your move, right? Yes. Okay. All right.

Well, a million two in Orange County is probably 350 in some other areas. Not New York City, but it could be in Tennessee for sure. It could be a similar property, actually, depending on where in Tennessee you landed or Texas or Florida or whatever, but wherever you decide to go. So financially, obviously, that changes things. What does your husband do for a living? What do you do for a living?

I am a registered nurse. I work from home. I bring in about $139 a year. He used to be in sales, but he's in his early 50s and

kind of aged out of it, really. He's working with special needs kids, really, at one of the local high schools now. He just got the job. He's bringing about $40,000, really, a year. Well, that's not that hard to replace, then. And you can do your job from anywhere, right? Yes, from anywhere as long as they do us. Okay. So I keep my same salary, really. Okay. So you can handle the career change. You can handle the real estate change. You'd be debt-free to make the move. Okay.

Um, then the only, uh, the bigger question than all of that is, um, you know, just because it makes financial sense doesn't mean that your family is going to want to do this and that you're going to be happy and that you need to do this.

Right. That's part of the history. I was with a friend of mine last night that just moved to Nashville from California, and his wife grew up in Orange County, and they're settling into Nashville. It's a different culture.

Sure. Yeah, you know, that's part of the hesitancy. The other plan was thinking about maybe just chugging it through, and I'm on baby step two, really, just trying to get out of debt. I mean, so the answer to your question is financially, mathematically, everything you're saying makes sense, but that doesn't mean you should do it. The reason you should do it is it makes you happy, it causes you to be excited, and...

you get out of debt and pay cash for a house. Not I get out of debt, pay cash for a house, and I'm miserable. True. So you guys got to see. Would you still want to move if you didn't have any debt? Would you still want to move to Tennessee? Yeah. If the answer is yes, this could be a great move. Yeah. Or if you wanted to move to a different state of income, start a new adventure. But it sounds like my friend's wife, who grew up there, the axis of the world for her runs through Orange County. I mean, the axis for me runs through the middle of,

Nashville. That's where I grew up. And so, uh, you know, we're out of moved orange County. It'd be different. It'd be like being on a different planet, you know? And so, um, to see that Dave, yeah, it'd be different. Be weird. But yeah, but I'm saying, you know, you can, you could pay off 150, making 180. That's not impossible. You can do that in two years. So three years, you know, it's definitely doable. Uh, if you're willing to make the sacrifices, the question is, where do you want to be 10 years from today? Living physically, geographically, where do you want to be living? And, um,

then that needs to make your overall decision. In my friend's case, they left California because of the political situation, the ridiculous actions around the Fauci pandemic, and the crazy butt taxes.

They paid cash for their house here in one year of income tax savings, not living in California. Wow. Well, we got no state income tax here in Tennessee, which is another blessing. And so that, you know, for them, it was like, you know, the state of California ran us off is the way they feel about it. Well, we saw the migration numbers too. It's the second largest state for losing people. New York lost the most. California lost the next most.

And most of them went to Tennessee, Texas, and Florida is where there's the three most, I don't know, incoming with the shift in migration. We've had a huge migration. But the migration is completely, in all of these cases, caused by the politics and the taxes associated with the politics. And so, you know, you cannot tax rich people when they can move away. They will leave. Right.

They don't have to stay. And so this idea, we're going to tax all these rich people. And then they all just load up the truck and head away from Beverly Hills. That is swimming pools and movie stars. So there you go. I mean, they, they leave buddy. I mean, that's what happens. And so you see these migrations. And, uh, so what you've got is a perfect storm between, uh, several of the political issues along with the, uh,

pandemic issues, which are really political issues of what they came down to. And then you mix in the tax issues, which really is a political issue when it gets right down to it. But these four, you know, one or two of them people can stomach. But when you start putting three, four, five of these things on there, then people move out of Michigan. They move out of, uh, which is the third one. Uh, they move out of California and they move out of New York. It's, I mean, this is not an opinion. It's a statistical fact.

U-Haul is making a killing. I mean, it's like they think Governor Newsom is just incredible marketing. Thanks for the business. Yeah. Oh, man. So that's what's going on. So, Ruthie, but I'm not saying you're dumb if you stay because, honestly, I hear sadness in your voice when you're talking about it. It sounds like you're sad. And you don't want to move somewhere and just be sad. Right.

Even though the math works, I wouldn't do that. If you can look at it as an adventure and a new chapter in our life and we're excited about this and it'll be fun and be different and whatever, then yeah, that's fine. But only the math works on what you're talking about. But just because the math works, that's not the only reason to do it.

It's one solution. It doesn't mean it's the solution. Exactly. Exactly. Samuel's with us in Columbus, Georgia. Hi, Samuel. Welcome to The Ramsey Show. Hi, Dave. Good afternoon. Thank you for taking my call. I'm a long-time listener. Thank you. I'm calling to get some help and advice on how to best assist my mother and her husband who are both struggling financially and medically. How old are they?

Both about in their early 60s. Okay. What's the medical situations? So her husband has had two strokes. He had his second stroke at the beginning of last year around this time. So he's very, very incapacitated. He has some other residual medical problems. My mom, she has high blood pressure, and she's also, unfortunately, obese, morbidly obese, and...

They both are, but they're both partially disabled. So, I mean, if you sit down and coach them on their money, will they take your advice? Well, I'm not sure, sir. Okay. Then you might be wasting your time. I mean, you can't make grown-up people do stuff. There's not a law that allows that. You can cover a medical bill, but we need to find a sustainable solution. Yeah, I would sit down with them and...

Figure out where we're going and what are we going to do to get there, and then you can realize what participation you need to do. But if you start throwing money at this and they're digging a hole faster than you're filling it in, that's not going to work for anybody. So you've got to get a holistic approach to this, and that'll help you get there. George Campbell Ramsey personality is my co-host today. Open phones at 888-825-5225.

All right, let's catch up a little bit. There is a company called Standard & Poor. They are one of the companies that rates things on the stock market. The most famous thing that they rate is

There's a company called Dow Jones that has an average of the industrial companies, which creates the Dow Jones Industrial Average, which is a little strange because a lot of the companies are not industrial anymore that are part of that average. It's an old-timey term. But it comes from when America was more manufacturing-driven than it is today.

The S&P, Standard & Poor, rates the top, the largest, 500 companies that are publicly traded, meaning their stock is sold on what we call the big board, the New York Stock Exchange. So these are the largest 500 companies that sell stock in America. And that means that as this group of companies grows,

is a good indication of what the economy is doing. It's a good indication, certainly, of what the stock market is doing because basically they make up the stock, the vast majority of the stock market. So the top 500 companies on the New York Stock Exchange is called the S&P, Standard & Poor's S&P 500. Now, that's important because that's actually a better way of measuring stocks

What the stock market is doing than the Dow is, okay, or the Dow Jones Industrial Average or any other measure for that matter. This is a very generic measure and people in the financial world use the S&P 500 as a plumb line to tell what the market is doing. So if a mutual fund, for instance, outperforms the S&P 500, that means the mutual fund is making better returns than the market as a whole. If it underperforms the S&P 500, it makes less returns. So all that's important.

Nice article, James, our producer, pulled up for us. If the S&P 500 hits a new all-time high in 24, you can expect a strong year of gains to follow, according to Ned Davis Research. The investment firm crunched the numbers and found that when the S&P 500 hits at least one record high in a given year, that year's median return is about 15%.

So what they're saying is that when the stock market tops out and has a new record, that is almost always a year that you get great returns. Well, duh. Obviously, if the stock market's hitting a new record, you ought to be getting great returns. It kind of makes sense, right? Good foreshadowing, guys. Yeah. But, I mean, it makes sense. That's encouraging. It's an interesting... It is...

It is a valid statistical correlation, so I like the study. The S&P 500 has tended to post double-digit gains in years with record highs, Ned Davis Research said. The data point highlights two typical characteristics of the stock market, that strength begets more strength, and that stocks don't typically crash from all-time highs.

So just because it goes way up generally means it's going to go up. It doesn't mean it's going to go right back down. And that makes sense, of course, too. Of course, this STAS is not a slam dunk. The S&P is less than 2% away from hitting a new all-time high.

If it were to do that in the next day or two or the next month or two, then the historical data indicates that you're going to have a great year, which also makes sense because it wouldn't have hit a high if it hadn't moved towards a great year. But it doesn't just jump up there and then jump down. So all this to say we're close to hitting a new record.

ever in the history of the stock market up. And if it hits that, that is a great indicator that 24 is going to be a great year to have invested, which means that if you're waiting until after the presidential election in November to do your investing, that's probably a dumb idea. If you got some money you're sitting on right now, I would buy your mutual fund like tomorrow.

Right now. And if you're thinking about pulling all your money out because you saw some headlines, don't do that either. Yeah. We found that if you just ride this roller coaster over time, you're going to hit a new record high and a new record high. And then it's going to go down and then it's going to come up and then it's going to go down and then it's going to come up. This is how life works. I mean, it's how the real estate, it's how the real estate market works is how mutual funds work. It's how the whole stock market works. The S&P 500, all this does that. So here's the deal. You got a hundred thousand bucks and you wait till November, November,

And this market hits and does what this study indicates. And it makes, let's say it makes 15%, which was the average, the median. Okay. So a hundred thousand dollars and you don't invest it. You wait till November and, uh, the market goes up 15%. What'd you lose? $15,000. Cause you didn't do what I just said to do invest. So you start, and let me just tell you, real estate's exactly the same place right now. Is real estate going to go down? No.

It's not. We have a tremendous shortage of housing. There's more buyers even in a sluggish, slow market where people are sitting on the sidelines because interest rates spiked up. Now they're coming back down. They're coming off the sidelines in the last two weeks like never before. But if you wait a year to buy a house because you're somehow waiting to time the market, you've got this mysterious insight that you think things are going to go down, you're wrong.

And if you wait a year to invest in the market because you're waiting on the market to come down, you're going to miss it. And if I'm wrong, give it another 12 months and I won't be wrong because it'll come up. I mean, really. So I got to tell you, what is Dave Ramsey doing right now? Buying, period. Investing, period. I'm not waiting on the clash of the old men.

Trump and Biden. I'm not waiting on two 80-year-olds to have an MMA to decide what I'm going to do.

Because who the crap knows, one of them may break a hip. Well, it's more like bumper cars that are running out of battery, bumping into each other more than a clash. It's like two Muppets. The old men Muppets, right? Statler and Waldorf, is that them? That's him. Oh, my gosh. So don't wait on this. Don't watch Fox News and CNN and let your butt sit on the bench. Get in the game. Shoot the ball. Fire.

Pull the trigger. Whatever metaphor we need to use to cause you to actually do the investing. Sports, weaponry, whatever it takes. Whatever it takes to get you moving here. We'll go whichever direction you need to go. And this validates a lot of what you've been saying for 30 years, Dave. We looked at historical data, and the S&P 500 average annual return is 10% to 12%. And they're saying right here, this could be a year about 15% median return. And people always go, well, Dave, I'm not getting that in my account.

Well, yeah, dummy, not in a given one-month period will you see that, but over time, the average is 12%. It's the average. That's how averages work. Averages. I think we all need to go back to basic math. Statistical. These sixth-grade math classes that people flunked. But, yeah, that's the thing. So all of this to say, boys and girls, please be steadily investing. Please. The people that invest are the ones that have money.

There's a high correlation between people who save money, invest money, that have money. Hello. Why was that deep? You know, if you don't put any money in the account, please don't expect any money to be in the account.

Why is that hard? Well, but just keep doing it. Just keep doing it. Just keep doing a lot of fear. And that's why I love, you know, working with a financial pro, a smart investor pro, great, great person to work with, to reach out to a financial advisor and investment pro and go, help me understand this.

And you make the decisions. And they're not going to pull the money out for you. You are calling the shots here. And they're going to help you understand the perspective that we're showing you on the show today. Yeah, you can pull up the historical data and look at the track records, look at the trend lines. It's really not hard to understand. I mean, it's really not. I mean, if you pull up in a neighborhood and there's cars up on blocks and the gutters are falling off the houses and the place, everything you see needs weed eaters.

And then you pull up the MLS data on that neighborhood and you see the values have been going down. It doesn't require rocket surgery to figure out that this thing's going down in value. I mean, you know, it's just not hard. And if you pull up in the neighborhood and everything's manicured and it looks like freaking leave it to beaver lives there, you know, and you go pull up MLS data on that, you're going to see a line up and to the right. Hello. Hello.

Well, it doesn't take a rocket surgeon to figure that out either. Go buy a house in that neighborhood. These are trend lines. It's historical data. You can watch this stuff. This is The Ramsey Show. Our scripture of the day, Proverbs 13, 3. Those who guard their lips preserve their lives, but those who speak rashly will come to ruin.

Robert Frost said, half the world is composed of people who have something to say and can't, and the other half who have nothing to say and keep saying it. Well, since we're on the air with a live mic, we pretty much have to fill up the time. So guilty as charged. Dave's going to keep saying it. Guilty as charged all the time. Robert is in California. Hey, Robert, welcome to the Ramsey Show.

Hey, Mr. Ramsey. I just wanted to say I'm a huge fan. My economics teacher from my senior year in high school introduced me to you through the Ramsey Solutions Investment Calculator. Wow. Just to let you know, the main problem at hand is my father is pretty much not allowing me to get a part-time job while I'm a full-time college student.

That's like the main issue at hand. The background on it, though, is my father came to this country as a refugee during a civil war in his home country.

And he has a bunch of brothers and sisters, and they ran into a cycle because they never really had any guidance through financial, where the second that they would get a job, which was minimum wage or, you know, close to minimum wage, they would spend all of their money. They wouldn't save. They wouldn't try to invest. They wouldn't do anything with their money. They would just spend it all.

And, you know, even now we're still seeing, I have a bunch of uncles and aunts. I don't have a single uncle or aunt that is financially well off. The only person in my family that is financially well off is my father, and that is because of my mother. Because of your mother's discipline or she brought money to the table? My mother's discipline. My mother showed up. It was to the point where there's a story my mom told me. What country did he come from? El Salvador. Say again? El Salvador. Oh, El Salvador. Okay, gotcha. Yeah.

All right. And I had to put the Tennessee accent on there to understand. Okay. And El Salvador. No, I'm kidding. But anyway, the – all right. So what's your dad do for a living? He is a CHP officer. Okay. And you are – and he is paying for your college? My mother is paying for my college. Well, your parents are paying for your college, and you live at home. Yeah.

Yes, I live at home. Okay. All right. Well, you come, like I do, from a culture of honor. So honoring your father is very important. Would you agree with that? Absolutely. Okay. That's a good thing. And so, number one, you're not going to work unless he's going along with it.

And that's honoring him and that's honoring your mom, writing the checks for you to go to school. You're going to go along with their plan. Okay. Now, then the next, then the next thing is, is there any way you get a hearing with him? And, um, you know, what I might do is say, uh, dad, uh,

I have admired your work ethic and mom's work ethic and discipline, and I think I can do some work and not be irresponsible with it. And would you coach me, mentor me, and let me try it for one semester with you watching my behaviors and see if I get out of line? And let's run an experiment, Dad. And the only way I would do that, though, is if I can do it and honor you, Dad. Yeah.

Okay. And so I want to honor your request, but I'm asking for you to help me try this as an experiment. If the experiment goes the way you think it's going to, I won't ask again and I'll go through school without working. If the experiment goes well and I'm able to do this without any kind of debt and I'm able to do it without becoming irresponsible due to working, which is his fear, if I understood you right.

Then maybe the experiment turned out positive and maybe we can extend that. Why don't we try this? But I need your help to make sure this is being done the way you want it done, dad. That's different than you rebelling and saying, you know, in a sense, using the attitude, the old man has no clue. So you're going to do whatever you want to do. I would never endorse you doing that.

No, absolutely. And it wouldn't work. Yeah. And it wouldn't work. Robert, what was your goal in working part-time? What would you do with that money? Well, to give you some background, I followed up with Mr. Ramsey since I was 17. I remember coming home to my mom because my mom has a better credit score than my dad does and begging her to let me piggyback off her credit card as a 17-year-old. And because of that, now I have a 750 credit score with my own credit card.

Well, you didn't get that from us. Oh, no. We didn't tell you to do that. Because of you, I decided to take a bunch of financial classes in my high school. Oh, okay.

Okay. Yeah. And so what are you going to do with this money? Invest it. I just want to, I, you know, it's, it's to the point where in order to get any type of income, I've been having to do side hustles behind my dad's back. I do computer repairs for my friends. Uh, I do digital repairs as in, you know, I do it work, uh, across the internet on Twitter. Um, uh,

Even one of my friends has contacted me to open up an e-commerce business with him. I have been trying to get any sort of income under the table. I already have my emergency fund set up, $2,000. And then in flat cash, I have around $300, and I've been investing like a dollar a day just for the past year into the Vanguard S&P 500, just a dollar a day. So, Dad, you risked your life for our family to have an opportunity to start in the land of the free.

And part of the free is free enterprise, and part of the free is the ability to go into the marketplace and earn. And I want you to walk beside me and show me how you think I ought to do that in a way that's responsible. That's a lot better than under the table hiding and deceiving your father. You don't want to do that. That's not going to turn out well for you. Yeah.

Good question, sir. Good question. Honored to have you in our listening audience. We appreciate you being there. Jana is with us in Athens, Georgia. Jana, right quick for a run out of time. What's up?

Hey, real quick. I'm curious on how you started on with my budget. When I have so much looming debt over us, I'm really been laser focused on trying to get our financial situation fixed since before the holidays. And when I try to look at the budget and I'm thinking about the four walls, it's hard for me to navigate where to even begin. So can you cover the four walls right now? Food, utility, shelter, transportation? How much money do you have left after covering those?

Barely anything. What's your income? So my income between my husband and I is $82,000 a year. And how much debt? So we're actually not counting our house for like $115,000 in debt, and that's all been accrued since we bought the house. It's all house debt. Yeah. You're not spending $82,000 on food, shelter, clothing, transportation. You're saying after your debt payments. No, okay, well, I'm paying personal loans. Yeah, that's not. Your personal loans are not four walls.

Your four walls are your basic necessities. There's only one way out of this. You've got to make more money, sell all the crap you bought, and decrease your expenses. And use all the extra margin at the debt. Smalls to largest balance. How much do you owe on your cars?

Between both of them, $14,900. They're not the problem. Okay. I don't know what else you bought. Let's get you into the EveryDollar budgeting app. We'll pay for it and the premium version and get you started here. There's a great paycheck planning tool in there that will help. And we'll go ahead and put you in Financial Peace University so you guys can do this. But the two of you are going to sit down together and figure out what of our lifestyle we're going to cut, what we're going to do to get our income up and our outgo down.

And that's what George is saying, and he's exactly right. So hold on. Austin will pick up. We'll get you signed up for every bit of that. So the four walls are basic food, and that includes no eating out, electricity and water, utilities. It does not include cable. Okay, that's not a necessity. It includes clothing, although you probably don't need any. You've probably got enough to wear if you're up against the wall.

Shelter, so you've got to pay the house payment of rent. And transportation, you've got to keep the cars running. Gas in the tank. So you can get to work. And that's it. That's your four walls. Everything else is not a necessity. Everything else is a bad Monopoly game. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

If you're a leader, your personal growth matters for your organization because whatever you lead can only grow as much as you do. I know from experience. 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. I'm taking your calls and helping you figure out how to overcome challenges within your organization. One episode could change your business. Check it out on Apple, Spotify, YouTube, or

on the Ramsey Network app.