Building Wealth Requires a Long-Term Investing Mindset

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From the Ramsy Network and the Fair Wins Credit Union studio, this is The Ramsy Chef. I'm Dave Ramsy, your host, J. Washall, number one best selling author, Ramsy personality is my co-host today. Open phones here at Triple 8-825-5225, that's a free call and some say the advice is worth exactly what you pay for it.

Internet is in Sacramento, hey, Leonard, how are you?

Good. How are you going to today? Better than we deserve. What's up? So, long story short, me and my wife have together $86,000 in debt.

We make about 200,000 a year and our current house in situation where we're living has rendered us paycheck every single month. We have no money in savings, we have no disposable money whatsoever. Okay, and what is the, what's your house payment? So we pay rent, our house is 3300 a month, and all of our other, go ahead.

All of our other utility bills accumulate up to about an additional between 4 to 600, so we're

paying about $4,000 in just rent utilities. What's the $86,000 in debt? So we got a little marriage happy and got into a truck payment on a high interest rate and high monthly payment. That's just one truck for $86?

No, the truck is, we bought it for $62,000, and we currently of $55,000. And that's, if $5,000 has not moved at all in the past 12 months due to interest. Got it.

“I think we've identified the more about that, isn't it?”

It's one of the problems, what's the payment on the truck every month? $142.70, that's one of the problems, but there's something else going on here because you're taking home over $12,000 a month, right? Yes, and I also, I pay 1,500 a month in child support. Okay.

So that's another 1,500 per month, and then we have credit cards, like credit card bills that take up, you know, 100, a couple hundred bucks a month as well. Right, but it's still got a lot going on here. How much is coming out for your 401k? How much is coming, how much of a tax refund are you getting?

No, I am the past three years, I have owed like $6,000 every year. Then this has got to be a budgeting issue. I think that you guys make a good income, and as a result of that, you can get a little bit reckless.

“I think that's what happened with the truck, and I think that if I were to plug your”

numbers into every dollar, I'd see a lot of areas that would surprise you that you could cut back in, and probably a lot of them are food in lifestyle. Is that fair enough? Are you there? Well, honored.

I think honored. Yeah. I think honored. Here's where I get that from Dave. If he's brain home of her 12,000, he gave me 4,000 of rent, he gave me 3,000 of child support

and truck payments. He still got a lot left to go this only $7,000. So unexplained.

“So that's why I say that, and I think that that is a key problem when people have an”

higher income, it gives you more, more margin to actually, and more margin to get sloppy. And I think that's probably what's going on here. Yeah, we're training the next Olympian and dance class. The next MLB player in travel ball, we're eating out, fine dining frequently. We have a wonderful vacation every year, but we can't make ends meet.

And so yeah, so you're going to have to go to score Earth on the lifestyle, get a detailed budget, find the margin and the detailed budget by using every dollar. It'll point the margin out to you.

It's one of the things that it's built to do.

It'll show you immediately and you'll be going, "Oh my God, every time somebody doesn't me included. We first do a budget. You look at it and go, I'm so bad. Where's all this money going?"

Yes. Just do you have this moment, you're like, "I'm stupid." And so you're not stupid, but you end up doing stupid stuff, and so all of us, and so when you find that margin in there and you get that stuff going, and you sell the truck. You got to sell the truck.

Sell the truck, cut up the credit cards, go to score Earth, and you'll be out of debt and in control and have margin year, a year. Oh, yeah.

“And part of that, when we talk about the budget, probably the key behavior that a lot”

of people don't do is you've got to track your transactions just about every day.

And that's the way that you stay on top of the numbers, a key thing that I find that people

do that's actually wrong is they make the budget for the month, green check, that's great. But then they don't check in with their budget until the end of the month. Which means you're not living on it. You're not living on it.

Yeah, and then you-- It wasn't a guard rail. It was a theory. And then you track everything and you realize, "Oh, I was over a budget here and I was over a budget there. And by that time it spilled milk, there's nothing you can do about

it." Yeah, it's like you put the address in your GPS and then you never look at the eye. Right, you just-- I think it's this way. Yeah, that idea. Pretty over there.

Let's go over there and let's go over there and score. Let's go over there. But when you track the transactions and real-- in real terms, you say, OK, here we go. I've already spent half of my grocery budget and it's only a week into the month. I need to pull back, right?

You start to make changes. You understand that a lot of work on cruise ships and you know this, that a cruise ship is never on course.

A hundred percent of the time they are adjusting 1 percent, 2 percent, 1 percent, 2 percent,

based on the currents, based on the winds, based on the weather, based on speed, whatever. But they're all-- you're a hundred percent and if you actually-- you can't see it because it's imperceptible because it's one and 2 percent. But they're constant feedback and constant adjusting to the plumb line, to the actual target. Yes.

“That's what the daily check-ins do and it forces you to do this stuff.”

And it forces you to look at stuff like that car is brain damage. Yeah. We can talk about it a lot of different ways, but the largest thing that Americans buy in the typical American budget that is stupid is cars. Yes.

And it's like stupid on steroids, the level of money we spend and going get a car that's completely out of control and will just sign me up for 21 percent because while I'm out of control, I'm just going to be all the way out of control. But we do it.

And guys are worse than gals.

You think men will impulse a freaking pick up for 80,000 bucks. He said a marriage thing and he's driving the pick up. Yeah. And he blamed it on the marriage. That come on, Leonard.

You know, car payment. You know, he claimed it on Leonard, okay, so that when Dave Bazaar pick up, it's Dave's fault. Hello. Because guys, we get into cars.

“Now, some guys are more into cars than others, but I'm redneck.”

I like the loud mufflers and all that stuff. I love a good muscle car, a good sports car. I love all that. Now, my wife thinks the car is just a really large purse, but she's not as into the car other than she wants it to start when she sits down in it.

But other than that, you know, she's like, oh, this seems to be a nice car. Yeah. That's how nice this car is. You know, he should really enjoy it. No, it's just, it's a place to put the things I just bought at Target.

Wow. You know. Car payments have caught up to student loans, Dave, 1.66 trillion. Oh. That's painful.

I didn't think much could get a, get a stupidest student loans, but I just, I, I, I just had a whole no the ramps. It took a breath away. And I'm not gonna have time. We got another segment.

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That's JoinDeleteMe.com/Ramsy. Timmy is in Salt Lake. Hi, Timmy. How are you? Well, try again, you're absolutely broke up, your phone's not working.

I'm sorry. Can you hear me better now? Yes, sir. Try again. How is it saying?

It's a pleasure to speak to you. I'm doing great. How are you guys doing today? Better than way to serve. What's up in your world?

Thank you, sir.

So first, I just want to say I'm really grateful for what you guys do, and I'm calling for

your advice. There's been father and I just need some guidance in my situation here. So I've been laid off for two months. I just accepted a job offer, but it is a major pay cut. And we still have $24,000 less than babies that too.

My question today is should I sell our vehicles and just get a second job to attack the state or focus on replacing my old income first? Both.

“Yeah, you need to take any job until you get a job.”

Hey, you did. So what were you making? So I was making $1,000, $1,000. Doing what? I was a manager at an insurance company.

Okay. And the insurance company wasn't doing well and laid people off in your run. I've done a lot of them. Yes, sir. Yeah.

And I got some severance pay. We had a little bit of savings. We were just tackling that like not to now credit cards. We were on this final one here and then boom, I got laid off.

I finally received a job offer.

I've been applying like crazy interviewing a ton and I got enough or for about $27 an hour, which is basically like half of what I was making. Yeah. What? Doing what?

It's still an insurance. It's a different type of insurance, kind of starting out from my level one. Basically, but it'll be under the small business side of things. Okay. I would take that for the time being, because you need some money.

Yeah. But I'm not settling for that. That's for today to get you off the street. Okay.

“But what kind of debt are you carrying in, baby, step two?”

It's just a personal loan, our payments about $600 a month.

Now, I have three vehicle that I'm considering selling and just like getting a second job

is to knock it off. Let's tell us about the cars. The three of them. What are they? Each worth.

So, to do our dad's fund car, I've got a Corvette. In 1986, Corvette for speed and condition, and then a contact zero. I could probably get like 12 grand for both, and then we have a second family car that's probably worth $6,000,000. So, you own a total of three cars, including the vet and the fero?

Yeah. We have three cars, and then we have like a family car that we would just use for car. Four cars. Four cars. Yes, sir.

Oh, yes. Okay.

“So, if you sold the vet in the fero, that would pay off the family loan, or the personal loan?”

Pay off half of it. Yeah, pay off about half of it. I think I could probably get down the personal loan from 24 to about 10. Oh, are there not worth 12 each? 12 together?

No, no. Yeah. I've been like going to dealers, car max, Kelly Boob would kind of like sell it online. Yeah. That's usually wholesale.

And those are cheap enough cars. You've probably got to track somebody and private sale and get a little bit more. They're only selling for $6 or a grand a piece, so in the core of that, you're going to track somebody that's just interested in that cool, cool, low car. You know, same thing with the fero, I guess, so we're to pick, but you know, are you the only

working? Yes, man. I am the private bedliner, my wife, she takes care of our kids, she does have a small side hustle, she does like flower arrangements and how many children do you have

Sure?

I have two, sir.

I got five year old and one year old.

Okay. What else? All right. Well, yeah, she's probably going to have to do more than arrange flowers and she can do that from home while they're in day care, taking a nap or whatever it is that she works

for schedule around to where she can make a lot more than a few hundred dollars a month doing flower, she's not making anything doing that, that's a hobby and then you're going to pick up an extra job and you're going to sell at least those two cars for sure. But this is not a debt problem, this is an income problem, this is a correct career crisis, where you go from 112 to 50 grand, that's your problem.

Yep. The other things are little things we can do to kind of shore up while the waves are crashing in, but the big deal here is for you to get back to a hundred K and where are you going to do that and how are you going to do that and it's not just applying for jobs, it's getting your foot in the door on a job and using the skills that you used to run the insurance

company before, you know, you could be a project manager with those kinds of skills because you have administrative skills and people skills, you know, you're a lot of different things you're doing when you're general manager in an agency like that.

“So you need to start looking at that that way and reset this in your mind so that you”

don't look up four years from now, still be making 50 or 55. Absolutely. Yeah, you can't, you can't consider the 112 of flu, you have to consider that your new standard. Now, once you have driven at 112 miles an hour, it feels weird to drive a 50.

Your body is now real, is as now reset at 112. Your mind is reset, your spirit is reset at 112. And so you're going to, you should, if you keep a positive attitude and keep looking for opportunity and how can I do this? Who do I know that works over at that place where I wanted to be doing that thing?

What is it I always wanted to be and accidentally gotten the insurance business?

What was it I wanted to be before that that pays 200? And you're just reset your whole way of looking at things and continue this career to where this is just a temporary setback, not a permanent path. Yeah, and we can give you find the work you're wired to do that will help you convert those skills into into other career paths along the way.

Stephanie is in Canada. Hi, Stephanie. How are you? How are you? How are you guys?

Better than we deserve. What's up? So, my husband and I are having a little bit of a disagreement on when to write time to upgrade my car. Cool.

And over 13 years. How old are you? And I've been driving. I am 40. What are you driving?

About 15 years. A 15-year-old Honda Civic. Okay. It's a piece of crap. All right.

Are y'all broke? Not at all. We make about 250 combined. You have money. I can pay it, how should we do that?

We can pay cash. We make decisions on our cars.

“How much are you thinking of spending on the new car?”

This is a disagreement. The car, and this is Canadian dollar, so the numbers are a bit bigger.

The second hand SUV, it's not a Honda basic, but it's slightly above and it with taxes

later than about 15. 15. Okay. And what is the driver? Like five-year-old.

What is he driving? He drives a Hyundai, another piece of... Oh, his is his old car. Okay. He's got a spending money on it.

He's got it. No. He got it last year. It's not old. It's not new.

It's worth not. What do you pay for it? We pay about 47 for it. Okay. Do you have debt?

Zero debt. Except for it. Okay. So we can buy his car for 47, but we can't buy yours for 50. I'm confused.

Well, it's not that we can. It's more... No. I mean, I'm talking for looking at him. He says no, you can't buy a 50,000-dollar car.

I just did, but we won't want buying one for you. That wouldn't go in my house. 50, but he wants me to wait another two, three years. And it's already no AC in my car. No backup car.

We'll just tell him to take your car and you drive his. Yeah. There you go. My car is manual, he doesn't know how. Well, then he's going to have to learn.

Because he thinks it's an awesome car. I guess that's what... Besides that, we have a lot. It's federal law in America, wife gets the good car. You don't need to pick that up in Canada.

“I'm just saying I think that's a good rule.”

So, no, this is weird, honestly. The fact that if you have the cash and you're just wanting to spend what he just spent on a car, but you're not, yeah.

You lose the argument, my man.

My man's Stephanie, she's right, you don't lost, we're throwing a penalty flag on this one.

Statistics show that half of Americans don't have enough life insurance. So they don't have any at all.

“I don't understand this, John, why don't people want to take care of their family?”

They think they're going to die or something? Well, I used to be one of those guys. I didn't even think about it, and one of my buddies said, "Hey, the only reason to not have life insurance is if you hate your wife and kids, and I immediately went and got term life insurance."

That's a good punch. Oh, you're telling me, and for decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them. Me too. They don't know what to do next.

Me too. I have a crisis here, and you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not miss this up, or she's concerned how she's going to eat tomorrow.

That's exactly the two options. And turn your dad gum family to her, and life insurance can replace income theft, dad's cover funeral expenses, so your family can actually have the opportunity to just be sad. Yeah. To just miss you.

That's exactly what it's supposed to be.

It's saying I love you to your family, term life insurance. For Zander and the team of Zander Insurance makes it easy and affordable. I've used them personally for 25 years that the only people I'd trust go to zander.com or call 800-356-42-82. What's up?

Are you? Good. How can we help? Okay. Yes.

“I'm in a situation where my sister is running without any financial conscience at all.”

She's running up her credit cards, and my mom is willing to bail her out, and at least to the hundreds of thousands of dollars over the last 15 years. And so that's really eating your way yet. What should be coming to my inheritance, my kids and her. I can do what I'd like to know.

Okay. So, your mom is wealthy? Yeah. Yeah. There's money coming in.

Yeah. There's a real, real significant, you know, that I'm not a wealth in the family. Yeah. So, what is your mom? How much does she have?

A million? A million? Yes. It's probably could be, I don't know, exactly, though. No, I mean, I have an idea.

Give me a guess. Oh, it's, um, probably, um, could be to my, I don't know. Okay.

But it's not 100 million.

Okay. But it's not 100 million. Okay. That's your sisters.

“No, it's just you and your sister are the only two siblings?”

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