Different Outcomes Require Different Choices

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start budgeting for free today. [MUSIC] >> Normal is broken common sense as we're so we're here to help you transform your life. From the Ramsey Network and the Fair Wins Credit in your studio, this is the Ramsey Show.

I'm Dave Ramsey, Jade Washall, number one bestselling author. Ramsey Personality is my co-host today.

“Carlos is in New York City, High Carlos, how are you?”

>> Hey, hi, thank you for taking my call and God bless you all. >> You too, sir, how can we help? >> Yes, I'm 64 years old. I work as a security guard. And I don't have any savings.

And I've got about $1,000 medical bills.

I own like 20,000 in credit card. And I own about 12,000 in IRS. >> Ooh. >> Yeah. >> Okay, and you're working 40 hours as a security guard?

>> Yeah. >> What do you earn? >> About 55. >> And here. >> Is it just, do you, or do you have a family Carlos?

Anybody else in the house or wife? >> No, I'm recently divorced six years. >> Okay.

“>> So, did you, did much of this happen because of the divorce?”

Or help us understand how you got here at a 64 with really nothing to show financially? >> Well, it's where I'm very embarrassed with much.

So, because I went through a lot of my life and I will never teach about saving and it was

I was just, I didn't have the right, the right advice is, you know. >> Well, I appreciate that. >> I'm very, I'm very embarrassed to open myself. >> Well, we're not here to shame you, we want to help you go forward. And they only benefit a looking back as figuring out what not to do because it brought us here.

And because you know, they all saying, if you keep doing the same thing over and over again, you're going to keep getting what you've been getting, right? You don't want to expect a different result. So, we got to have some pretty dramatic changes to get out of a pretty dramatically scary situation because this is a little scary for you.

You're looking down the, you know, a tunnel and the only light coming at you is a train, right? >> Yeah, and I forgot to tell you, I just, I just had my physical and I was, oh, my God. I was diagnosed with prostate cancer too. >> Oh, no. >> Yeah.

>> What are the doctors saying is, what's your prognosis is all getting good with treatment? >> Well, everything is normal now, but I have to go on September 9th to see if surgery is the best or what they call like laser or something like that. >> Yeah. >> Okay.

So, you're going to be down from work for a little while and you've got health insurance and you've probably got some sick time at work, you can use. >> Yeah. >> Yeah. >> They're going to do at least an outpatient surgery here and maybe a major surgery

to remove that. I'm sorry. Okay. So, yeah, yeah, I kind of stocking up on you. >> Oh, and I forgot to tell you, I forgot to tell you.

I forgot to tell you. >> Give me some good news, Carlos, for God's sake. >> Yeah. I forgot to tell you that I have, like, a PIA, a craft, or they call it. >> Yeah.

What's in there? >> I have about 40,000 in there. >> Oh, that's good news. Okay, God. >> It's good news.

>> All right. Well, here's the overall thing. The overall thing is in order for you to have a quality life at 76 years from now, you've got to clear up the debt and pile some money into that craft and into some other savings vehicles, right?

And so, if you really lean into it for six whole years and you're going to have to, you know,

“when you hit 70, you should be debt free and have piled another 100,000 or 200,000 dollars”

into that account and you'd be sitting there with a couple of 100,000, 250, 150, whatever it is somewhere in there and no payments, and you've got so security coming in at that point and you can make it then, but you can't make it keep doing what you've been doing. >> How do you live Carlos, are you renting or are you in a place of your own? >> No, I mean, what they call like a furnish room, it's an apartment that I rent a small

small room.

We're going to put you on an every dollar budget and your first goal is put $1,000 away.

“Your next goal is to list these credit cards and these are the debts smallest to largest.”

I want you to clear the IRS and get them out of your life. You do not want that hanging over your head, get these credit cards cleaned out and then when that's all gone and you've got no debt and you've got that little $1,000 debt, we've got to get red off and when those are all clear and you don't have any payments and you take that budget and you squeeze it like your life depends on it because it does

and you start throwing and chunking as much as you can set aside and that's $78,000 a year that you could do for say five years, so that's another $40 or $50,000 you would have set aside plus growth so you'll probably be with that other $40 in there. It'll be between $150 and $200 when you get to $70 but that's saving only 15% of your income. You probably could say more than that if you can once you've gotten the debt cleared because

the more you save, the bigger your nest eggs are going to be and the more comfortable you're sustainable your situation is going to be when you get there. This is going to require a major shift and how you approach each day major shift.

“I think you can get there to you. I think you can get to $152,000.”

Yeah, 100% I mean, making $55,000, he's got $800 in rent, his rent being low, even though it's just a room that he's renting, his rent being low is really going to help him out and it's just him, there's nobody else to speak of so. Yeah, that's just lean in and just, you know, but it's going to be as, and I'm going to

use the embarrassment you called it as a motivation like I'll never be here again.

So, like Carlos, when I went bankrupt and lost everything, I was embarrassed, I was ashamed, and I was really pissed off at myself and at everyone who was near the thing. So, I'm still 40 years later mad at bankers and I don't feel much better towards lawyers. And so, I just generally, you know, just generally stay pissed off all the time. And that is driven me to get away from all this.

You know, and to say, I'm not going to be there. You know, if American Express calls my house, it's a wrong number. Because I don't want anything to do with that company. They're absolute hogwash. I don't want anything to do with that company.

I don't want anything to do with some trust financial. I don't want anything to do with fifth, third, ever, period under no circumstances. And so, in other words, as dramatically as I was heading the wrong direction, I dramatically headed the other direction. And that's kind of what I'm calling out here.

And so, sometimes the answer is some drama.

Yes. Created drama, and it's to avoid the embarrassment, the shame, the anger, the source of the anger, whatever it is. And I'm just going to stay away from anyone that looks like they can do that to me again. And yeah. Well, the good news is if he does that, he's got the 40,000, and I've just plugged in our calculator here.

He's got the 40,000 already sending in TIA CREF. If he continues to put 15% of his income in for the next eight years, I mean, that's going to be $200,000 for Carlos. So I was pretty close. Yeah.

One fit they did 200 was my gas. Good. And it shows up in the calculator. Hey, guys. It's Rachel Cruz.

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(Music) Susanna is in Chicago, high Susanna, how are you? Let me try one more time. Hey, Susanna, how are you? Better than I deserve or what's up.

Thank you so much for taking the time to speak with me. I'm just calling, I've been doing a day-framsey budget for the last probably 9 or 10 years since I got married. And every month we are short and every month we're pretty much paycheck to paycheck. And we're big grown-ups, I'm 52, my house is 48, we have careers, and we make decent money, but it's seemingly every month while going through the budget.

We do seem to have it difficult time, and there's never any extra money.

My husband did have a career change recently, and so we took out a giant loan for him to have a career change. And we have a vehicle, and we just bought our first house, and we just had an adoption for our son, so there have been some really big expenses. But it all looks great on paper when I write it all down and all the ticks and balances. But then when we try to see where to be going, it's just very hard to sort of get it right, even after all these times. And we've had some financial advisors help us, some look through things, I'm kind of doing it on my own, the budgeting.

So I guess I'm just looking for a way that you could advise, I'm sure the steps are perfect, and if I follow the steps, then I would be within where I need to be, but I'm just looking for a way to be more successful. I know that we do make decent money, and when I go through my budget, I'm just surprised that it's always so tight, while we do have some large expenses.

“Well, that's what you're facing is what a lot of folks face.”

If when you have debt, it turns a good, a quote, "good income" into paycheck to paycheck-living, that's what it does. Because you've said, "Okay, there's these things I want to car a house, I want to do the adoption, I want to do the business, but you've done it all on payments." And that's what's dwindling away, you're really, really good income, so that's why it feels like I'm working and working and have nothing to show for it. Because you keep buying stuff on dad. Uh-huh.

So you have to stop that? Yeah. So what is your income?

No, I mean, you got to stop that.

I mean, how do you want to hear any excuses? No. You got to stop it. But how do you buy a home? Well, you don't win your freaking broke.

You don't buy a car and you don't go in debt for an adoption and you don't go in debt to change your careers. Period. You save up the money to do those things or you don't do them.

“How could you ever send out, save up $90,000?”

You love on less than you may? Yeah. $90,000 for what? He's a pilot. Okay.

Well, maybe he didn't get to be a pilot. Uh-huh. There's an option. And now that we're here. You can't say, James, exactly right.

You guys got to stop borrowing money and then wondering why you don't have any. There reason for this Suzanne is because if we just jump straight into, here's how you get out of it.

And you never figured out what the problem was.

You'll go back and you'll repeat it again and the solution will stick. Yeah. So the way you become a pilot is very, very slowly. And you work there giving lessons on the weekend and you get your hours in for free. As an instructor.

“And that's how most people go through flight school or they go 90 grand in debt.”

And then they get a job making not a lot. Not a lot of money. Uh-huh. Beginner pilots don't make a lot. So what we can do, what we got to do to get this kind of under control.

This out of control situation under control is to Dave's point. First things first. You've got to decide. I'm not borrowing money. Yeah.

How much is your house payment? It's for months, it's $2,500. Yeah. And what's your take home pay a month? My personally or the household income.

The household income. The household income is about $122. We rent out part of our home as an Airbnb. So your take home is about eight grand. Is that sound right?

No. It's more than I'm saying it. What our take home is $122. Oh, you're $122. So $10,000 is your year to fourth of your take home.

Give her take is your house payment. So that's not the problem. What do you owe in the car? We owe. It was a $45,000 car now.

We owe $12. So we thrown a lot of money at that. And for the loan. Somebody helped us out so that we had a lower percentage.

So we owe about 38,000. I would say. That's on the adoption. No. That's on the loan.

We paid the adoption. Okay. On the adoption.

And you're talking about the $90,000 on the pilot.

Correct. You got that down to 38. 36. 36. That's good.

That's good. You've been working on this. It's been beating it down. You're heading the right direction. Yeah.

But of course you've got no money. Because you've got these big stinking expenditures that turned into the home. And that's where your money is all going. So I mean, it's not like doing a budget. Doesn't work.

Yeah.

It's doing a budget while you're reducing debt.

And debt this dramatically is not going to leave you any margin. So yes, you do need to sit down every month. You and your husband look at the every dollar budget and plug that in and spend every dollar on paper. And that includes huge amounts of debt reduction, what you've been doing.

And no eating out. And no impulsing in me thing. Nothing. You don't get to buy anything. You're broke people.

And you just attack these debts, smallest to largest with every piece of margin. We can squeeze out of this budget.

“But the two of you need to be doing that together.”

So the thing that I want you to remove from your discussion in your head. If I were you, this is what I would do. When you called in, you said, "We've been doing the Day Ramsey thing for like six years."

And the answer is, "No, you haven't."

Because you wouldn't have done any of the crap you told me you did if you're doing Day Ramsey stuff. Because we don't tell you to do anything you were doing. And so you said, "I'm sitting down to do a budget by myself. That's not what we teach." And then I get to the end of the month that I can't figure out what happened.

That's not what we teach. So you're a tempted a budget has been okay. And thank you for doing that. And I'm glad you're reducing your debt. But so far, the reason you're not getting anything out of this is you're doing it halfway.

So the full way is you sit down with your husband before the month begins and say, "This is where we're going to spend money." And we're not going to spend money anywhere else. And we're certainly going to lay out a budget that every dollar has an assignment. So everything's gone. Everything comes in, everything goes out.

But it's going to be chunking on this debt and we're going to get our satisfaction from that. And we're not going to have anything left over and we're not going to have any luxuries. We did an adoption, a pilot, slice-ins and bus and bought a house and and and and and and we can pay in for that now. And so we're going to and then we're going to stick to the budget. We're going to spanky swear and spit shake.

This is the plan. And pretend like it was your job to stick to the budget and then we're going to fire you if you didn't stick to your budget.

“Because that's what would happen if you worked somewhere.”

I've got 14 profit centers inside Ramsey, the vice president that runs an area has a budget. He misses budget three months in a row. He's probably working somewhere else unless there's real reasons that were beyond his control or she. So I mean, you need to lay out and plan where you're freaking money is going and then make that happen. And that's if you work here, right?

And that's if you work somewhere in this was your job. So treat it like it really, it's not a passing thing. It's not like, well, we're going to write it down, hope it happens. No, we're going to write it down and that becomes the boss of you. It tells you what you must do. No, they must do it.

There's a couple of legal years old. Do what? When you're 48 and 52 years old, you must do it. Yes, you were going to end up like Carlos who called in earlier at 64 with nothing saved for retirement. And you have to stop buying anything for the rest of your life.

Unless you pay cash for it. That's, yes. No rationalizations, no justification.

“No, it's the only way you can do it that it means you can't do it.”

If the only way I can do that is go into it, I can't do it because I don't borrow money. And that's me. If the only way I can do X or Y or Z is if I have to borrow money, I can't do it. I don't have enough money. And I'll guarantee you there's every one in the world has to eventually go, I can't afford that.

No matter who you are, I mean, even Bill Gates, there's some things he can't afford. Not much, but there's a few things he can't afford. Jeff Bezos, there's a couple of things he can't afford. Not many, not a couple. I can't, it's something he's paying cash.

I can't afford that. [Music]

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[Music] Well tonight, for those of you listening live, September the 1st and 2nd. The 1st is today for those live.

“We'll be doing our investing essentials event.”

That's George Camel and I doing a virtual event for thousands of you. A record number of you have signed up for this. Thank you so much for the response. We're going to go into the nerd stuff on investing down in the details. Not only cover the basics to make sure everyone has a seat at the table,

but then from there, investing 201 to go with 101. Going to go open the real estate playbook and go, "Here's some properties I actually purchased.

Here's why I bought them, here's what the returns are, here's how you do it."

And then we're going to go into wealth planning. How to not destroy your family tree with your wealth. People always ask, "How do I not mess up my kids?" Well I'll go ahead and spoil our alert. You don't mess up your kids with wealth, your wealth reveals the fact that you already messed up your kids.

And so that, you know, we'll go ahead and tell you what the answer to that one. But anyway, we'll get there and we're going to cover stuff like doing your will and basic estate planning stuff, wealth planning, which includes estate planning. And that's tonight and tomorrow night, it's a two-night event. It's so it's hours and hours and hours of this stuff for 199 bucks.

A virtual event, you can watch it from your couch. And RamseySolutions.com/events and click the link in the show notes. If you're listening to her on the podcast, Dave Ramsey and George Campbell, we'll be doing it. D is in St. Louis. How are you? I'm within the dream, and by the way, so happy to be able to talk to you and Jade.

Thank you. I love you both for your ministry and the rest of the team. Thank you. I have a question that I'm dealing with. It's a struggle.

My husband and I have gone through all of the baby steps. And so at this point, we are debt free other than our mortgage for our house, which we have significantly paid off. Good for you. Well done.

But I would also say that I have a relationship in the family, and that would be my brother. And his wife, they have two kids, my nephews. And we haven't spoken in a couple years.

“And I think mom and dad helped them out here and there, just to keep access to the kids.”

And so I'm really struggling with whether I decide with my husband to come up with some sort of fun for the boy. For college or whatever. But also, I'm struggling because I don't want my brother and sister-in-law to have access to that money. Because I'm not sure that they'll be wise about how they use it or spend it. And I know--

So what's your household then? Me and my husband. Should we talk about salary and then-- I don't know. What do you make any year that you pay taxes on that your household income?

Yeah. Well, I make free 50 a year. But with bonus, my target is for 58 this year.

And my husband brings home W2 about 68 to 70.

Awesome. So you're going to have me and dollar a year income. That's wonderful. And you've done very well for congratulations. And yet these are not your children.

So you don't have any legal access to them. They're minors. I take it. Yes, they are. Okay.

All right.

“The only thing I would do is finish paying off your house”

and pile up cash and become very wealthy. And then if at some point that they reach college age, and you want to write a check and pay for their tuition, you just take it out of your account and write a check and pay for their tuition.

Okay. But you wouldn't do that. Absolutely.

Nothing with anybody's name on it, but yours.

Your brother is not trustworthy. Yes. Well, that's true. Yeah. For sure.

I'm not putting any money in his name. He doesn't talk to me. No way. But if those boys go off to college and as an act of love, you want to reach out to them,

maybe through your parents and say, you know, hold anti that you heard all the bad things about. It's going to pay for your tuition. This, this border, that'd be kind of fun. Well, it would be great.

I just like, I struggle from a, like, a moral perspective because it's not the boys in jail. Yeah. But you don't need to put any money in the boys name. You can just take care of them.

There's nothing more all about you giving the boys, is paying their tuition for them. How old are the boys? You said their minors, but how old are they? So the boys are in seventh and ninth grade now.

Yeah.

“Are you concerned for them that you feel like you need to do something prior to college age?”

No. I'm not concerned about that. Record. I'm more focused on the fact that they don't have any background. Right.

Wait. To, like, my parents when they raise us, they put us on the credit cards early in the age. And I would have to ask permission to spend 25 bucks. But that was to build, like, you know, credit history kind of.

Yeah. You know, this is, this is not your circus and not your monkey. They're not your kids. They know. If the kids are not in a physical harm, then you got no say.

They're not. You got no say in it. None. It's just part of the heartbreak of the arrangement. Yeah.

But you see, there's nothing that you have the right to do. Or the ability to do. To fix those kids' life. There's nothing unless you call child services because they're being abused. And they're not.

So they're not.

“So you need to quit worrying about whether these kids are raised with work ethic, whether they're”

raised with integrity, whether not your monkey, not your circus. You can pray for them. But that's all you can do. And, you know, I feel like you can do things now. That will allow you to cultivate a relationship with them when they're older.

Like now, you can make sure that you send them a birthday card every year. Or holiday card, like, right, there's ways that you can be part of their life. So that when they are 18, you can kind of show up. And if you suddenly want to bring them to dinner or find a way to create a relationship with them,

it's not we've never heard of D before.

I'd like to buy your breakfast and hand them a chair and hand them the receipt where you've already paid for. Yeah. Don't give them a check. No, don't give them a check. Just give them a receipt where you've already paid for it.

And that kind of stuff. I mean, that's the kind of stuff. They're going to have to reach adulthood before you're going to be allowed access, because of this arrangement. And so Jay's right, I mean, you can send them a note.

Send them a letter. Send them things through your parents or whatever. But there's letting them know that you're there and that you care about them. But you don't get to control how they turn out. Not your monkey.

Not your circus. And you don't get to. And so even the influence that an ant would have in a normal setting is limited. Yeah. Yeah.

Our kids live on top of each other. They live three doors down and a quarter of a mile away from each other. So their kids are all growing up more like siblings than cousins. But that's the most. And but even then, it's not Rachel's kid.

It's the nicest kid. Yeah. I mean, they don't they don't treat over and tell them. You know, we make them all make them all behave. But that's, but that's, but that and that and we're freaking on top of each other.

Yeah, but you have more. You definitely have more of those liberties when there's a healthy relationship. Exactly. The siblings and she's just, I mean, But even then, it's not, it's not, you don't get it.

You don't get to parent them. No. I mean, I mean, I, we were at the soccer game last night, but I don't get to parent them. I can just, you know, kick the ball.

You know, I mean, it's like, that's it. And so that's normal boundaries. Yeah. Yeah. And you've got even worse boundaries here because of this arrangement.

Late date. I think you might be trying to fix your broken heart through the kids. Yeah. And it's not going to work. The broken heart's just broken because of the arrangement.

And that's just sad. And someday, hopefully that'll be minted. And maybe you can do some nice things for the kids. Financially, as you get there from your checking account. Running a business is hard enough.

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Rod is in Oklahoma City. Hey, Rod, how are you? I'm well. How are you guys today? Better than we deserve.

What's up? Well, so to give you a little bit of background, my wife and I moved about a year ago back to the hometown Wornfront for a job. And we have had our house on the market since January. And we don't really know if we should continue to try to leave it on the market.

Or maybe try to have a bigger, and better smile like her in its own right house or an Airbnb kind of thing.

And it takes up about a third of my salary.

And so that could be a lot of money that could go close to that that we have. What's on the market for? 215,000. What's your own weather? Nothing.

It's four bedroom, two bathroom. It's a six year old house. We built it in 2020 from the, you know, interest rates were about 3.1. And so we paid 159 for 140 on it. And excuse me.

I'm at 225, not 215. Okay. Is it too expensive? Or is it, is it a neighborhood? There's something going on.

It's something going on. I mean, is it on a piece of ground? They're kind of, that's the kind of conundrum that's entwined by university. And it's my boss, middle. And so I thought, you know, it's selling no time.

A real third can't seem to get any feedback.

There was only been. We've had, we get about three showings a week. And I don't know. I really just don't know what the, what the issue is.

“I mean, are you objective enough to say if you stand in the street?”

Is this house ugly? No, sir. No. It's a very beautiful house. I mean, it's kind of cookie cutter.

It's like a lot of houses in the neighborhood. But have other things in the neighborhood? It's a construction. Uh, no, sir. It's kind of, that's kind of the thing.

There's a lot of other houses up for sale. And so I don't know. It's what cities do they get? No, to be honest. So it's on, it's on the house groups of Oklahoma City.

It's close enough. It's technically called Shawnee. Yeah, I don't know Shawnee. Is it freestanding or is it attached? No, it's freestanding.

Huh. Is it a Ramsey trusted real estate agent? Uh, another. Okay. Or not that I'm aware of.

Have you seen a competitive market analysis?

“When they listed it, did they show you the comparative sales in the area to give you a value?”

Yes. Um, I can't. I know they showed me the report back when we passed it.

Okay. And your monthly payment is how much? 1200. Okay. So every year that it sits there, cost you 15 grand in payments.

Yeah. Okay. So if you lower it 30, that's not smart because I'd rather sit there and wait. Okay. So assuming we've addressed anything that's wrong with it.

Okay.

Because the first thing I think about from a real estate perspective is when I walk up to the front door,

what am I seeing and what am I smelling and when I walk in the front door, what's the feel? Um, and, um, is this bad floor plan? Is the colors awful? Um, you know, what's the, uh, and a real estate agent with a little bit of experience should have the ability to kindly tell you, uh, by the way, your carpets ugly. You know, I mean, they need to be able to become, they need to say that to you.

“And, uh, honey, you need to change this living room carpets this thing and go sell because people walk in and see this, they start itching.”

You know, I mean, whatever it is, I don't know. But it's by a university in hospital. Are they getting the ambulances, screaming through there every, you know, ten minutes is it? Is it the university traffic? Yeah, it's both.

I mean, the university is not. It's not a huge university. So I, I really wouldn't think. It's connected to two major highways. So I mean, not directly, but the neighborhood sits between, like, what do they kind of intersect?

So I don't know. But when you were talking about the flooring and stuff, I mean, it's all new flooring, like we, we paid about. Yeah, you just finished the house and that old. Yeah. But I mean, again, you said, is the highway in your background?

Are you on a, you know, up against the freeway? Those are the sorts of things that I'm thinking of based on what you're saying. Yeah.

Number one, the first thing I'm going to do is call a rampsy trusted real estate agent or two and have them come out and interview them and look at the house and tell you why this thing isn't selling.

Get somebody out with feet on the ground that knows Shawnee, that knows what the market's doing.

“I think I look here six other ones, just like it that if sold, there's no reason this hasn't sold.”

We need to put this on the market at two, nineteen, nine with a selling bonus to an agent. And let's get this thing moved something like that. I would take it off the market, put it back on the market with someone else that starts a new listing number and put a slightly different price on it. Twenty nine nine or nineteen nine from your twenty five number. And, and I'm also going to go through.

Do I need to put a coat of paint in this? Do we need to go in there and break bread every morning? So this smells like mama's kitchen when they walk in. What is it we got to do to market this property? And, and then I'm going to wait and wait on my buyer.

Because you, you know, fifteen hundred bucks a month, you can wait a long long time before you give up thirty or forty or fifty thousand dollars in price cut. And so, you know, you can decide stuff like that. And I did do one one time that I don't know if I would recommend this to anybody, but it was kind of fun. I just dropped the price two thousand dollars a month until it sold. This put a new price in MLS every time.

And just kept and I don't know if I recommend that and I don't know. And it was kind of weird but it's like a reverse auction. You know, and it was kind of fun just to mess with it just if it could wake somebody up. Yeah. Somebody sitting around and we're going, I don't know if I'm waiting.

I'm going to wait, get away, get away, get away, you know. And we finally got off. I just got off.

Well, finally just got to get off her on it and sold it.

Yeah. But, yeah. But I don't think that's the case here. I can't tell. You don't know why I didn't selling and so we don't know why I don't sell.

It feels like for them the neighborhood was fine but for other people. It's not a desirable neighborhood. There's something on what he's saying. Something going on there. I don't know.

And, you know, I need a real estate agent to tell me what to get feedback from showing.

“If you're getting three showings a week, you should got an offer.”

Yeah. For sure. That's, that's a lot. Media and days on Mark is 57 days. In the nation, right?

Yeah. And he's been also in January. Yeah. Exactly. All right.

Aaron is in Houston. Hi, Aaron. How are you? Good. How are you?

Better than I deserve. What's up? So, I'm going to call the student and I'm expecting to directly hear this year. Congratulations. What's your degree then?

Let's go engineering. Cool. Future millionaire. But after graduation, I'm looking at about $40,000. I'm going to be in debt from student loans.

But I'm talking to that. I'm looking at a dollar for that. I'm expecting to get a return offer with about $100,000. Annual salary plus $10,000. God.

And that makes you smile. Wow. I mean, it does.

So, if you live like a college student, you'll be debt free in like six months.

Yeah, because that 10K signing bonus is about to knock out a quarter of that student alone. And Aaron, you don't get to buy a car. I know. I know. I know.

My parents have made that, but I'm not an exception. No car. Do you get the student loan paid off? Even though you got the big fancy job. I'm proud of you, man.

That's a great job. Congratulations. Yeah.

“Can you not just go live on nothing and keep living like a college student and pay off 40 grand in less than a year?”

I mean, yes, you can. I'm going to answer that for you. Yeah. That's my next question.

Do I put all this $10,000?

Yes. Well, you got you got to cover your move. You're going to need some for deposit on utilities and deposit with the apartment. And, you know, you got to have some gas to put in the car to load your 14 things you own in the car. Do you have any other money or this is it?

I have the baby set number one. I have $1,000 in savings that I get. I get emergency wife and school. Good. I would get moved.

I would get moved and with without spending any money, the minimum money. And then I'm going to throw what's left down $2,000 at the student loans. And then I'm going to start. I'm just going to live like I'm not making anything. I'm just going to live on nothing.

You're used to living on nothing. Yeah. You're college student. Do I move back to my parent? No.

No. This version of nothing is still going to feel like an upgrade. Like you living on this version of nothing. Just because you're earning a paycheck is still going to feel like an upgrade from being in college and being in a dorm and being on campus.

No eating out. No free-ups. No buying a car. No buying a bunch of furniture. By garage sale furniture.

They're rich in the town and buy some ladies' couchs. They're just going out. But there's nothing wrong with it. And buy it for $18 dollars and haul it away for.

“You know, and that's how you furnish the first apartment.”

And then you go pay cash for this. Yeah. So proud of you, man. It's awesome. If you want a free-up margin in your budget.

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Go to BoostMobile.com/Ramsy and make the switch today. That's BoostMobile.com/Ramsy. $25 forever requires customers to remain active on boost mobile and limited plan. Welcome back to the Ramsey Show in the Fair Wins Credit Union studio. Jodie is in Toronto, Canada.

Hi, Jodie. How are you? Hi, Dave. How are you? Better than I deserve. What's up? Hi, Dave.

I listen to you guys like every day while I'm working. And it's the elbow on the farm. But I work. I'm so excited to speak to you, too. What's up?

Oh, so. So I'm trying really hard. I've been listening to you guys like avidly since like the end of February. Like daily. And I'm so encouraged by like the whole team's wisdom and like you got this.

You can do this. So I'm like, I've got motivation. But between my income and like what I like have available after expenses. I'm having difficulty getting my 81 or maybe set one emergency fund. And setting aside like sinking fund, sinking fund.

Like item lines like kids Christmas gifts. I have two boys. They're birthday gifts. Both birthday Christmas gifts. Like all those little things, dental visits, like car repairs.

Having those set aside and working on my emergency fund. And I feel like it's a weird time of year to start this. Because like Christmas isn't like three months time. So how do I get enough at this point for Christmas?

And I have started my emergency fund. How much do you have? How much do you have before? At the minute. I don't have anything as far as emergency fund.

And so here's what I would do.

Here's what I would do. I would prioritize the emergency fund before getting into a bunch of sinking funds. The number one thing you need is a thousand dollars. Because if you don't have it, something pops up. Jody and you're going to be looking at credit cards.

You're going to be looking at debt. You need a thousand dollars. Most people get it done in 30 days. This is scorched earth. So scorched earth means I'm not thinking about sinking funds.

I'm not thinking about Christmas presents. I'm not thinking about anything extra except getting this thousand dollars. Matter of fact, I'm selling old Christmas presents to get it. Right? I'm selling off things.

So that's, I mean, your hair is on fire on this. To get this thousand dollars. What's your income? I'm about 35,000 Canadian. What do you do?

I'm a farmhand at a local agriculture as I'm farm.

And your single mom? Oh, no. I am married. Oh. What's your household income?

I'm sorry. Oh, sorry. My husband is roughly about the same. He has his own family farm with his dad. So he's income's roughly about the same.

She has 70,000 dollars a year coming in. So $6,000 a month. Technically, but our expenses are separate from one another. And he's still paying child support for his children that he has with his wife. Why are your expenses?

“That doesn't mean you have to have separated accounts.”

No, no, no. Like we don't even have a mortgage because it's included as far as like part of his salary with being a farmer here. And all that fine on a hydro expense. So that doesn't matter. The two of you still have $7,000 a month coming in, don't you?

I mean, you make 36 and he makes 36, right? Before expenses, you should have $6,000. Yeah. Before taxes. We keep our, like we keep our expenses separate.

I know, okay, that's problem number one. You're trying to run us like a single mark. I knew you were going to run us like a single mom with a boyfriend. And it's not. Do you all live together?

Yeah. Yeah. So the property that he is being furnished as a part of being a farm and on his family farm is free. To you all. So you don't have housing cost?

Exactly. Because even more. Okay.

“So why have you why are you not combining your incomes?”

Um, just more and more comfortable this way. Yeah. Well, it's not working. And it's what you call this because you're not comfortable. It sounds like you're trying to do this on 35,000.

And I don't know what happened to his 35. It was sounds to me like. Well, majority of it goes to his child support. How much? No, he doesn't have a $3,000 child support payment.

Uh, no, $1,000. No, okay. That's, that's our thing. $1,000 of three. So he still got $2,000.

Where's his other $2,000 going? Oh, there's the problem. Okay. Just found it. He's doing, he's doing, he's going to their plan farmer with his daddy.

And he's not bringing money home to his own family. No, no, he is. He lives like that free. He's, he's good with his money. Here's the problem, Jody.

He's not good with his money. His kids are not knowing how they're going to get Christmas presents. He's not good with his money. He sucks with his money. And you guys need to put your money together and develop a game plan to develop.

That's where your struggles coming from, honey. It really is. You're, you're saying that you're married, but you're doing this totally separate. And you're calling here because you're experiencing the symptoms of that. You sound like a $35,000 or your single mom to me.

Yeah. Everything you described early in the call had that symptom. I thought you were making no money. That's where I, the very first question I asked you was you had, what's your income? And you stayed at it as if you weren't married.

And then I had a dig to figure out you were married. So I can, we can tell from the way this is going down. You're, you're kind of trying to pull this whole wagon by yourself, kiddo. And that's not fair.

“So the two of you need to sit down and say we're going to put our money together.”

We have the responsibility, our first responsibility on this planet. Both of us as grown-ups, so these two kids we made. And we have housing furnished. So we should have some money in this house. Even with a $1,000 child support, there should be some money to be able to get a $1,000 saved

and then begin to work your way out of debt. You can do this.

But the problem is, is you're trying to, I don't know.

Yeah. And by the way, because you said it, you said, oh, when we asked you, why are you keeping your money separate?

So we've always done that.

“Just because you've always done something doesn't mean you have to continue to do it.”

And just because you've always done something doesn't mean it worked. Yeah, this is an opportunity for you guys to sit down and truly ask yourself the question, why are we doing it this way? And challenge yourselves to answer the question with real answers. And I guarantee you it's going to be a lack of trust in someone's area.

Yep. And I think you can fix this in about-- Not convenient. 60 days. By the time Christmas gets here, you're going to have your $1,000.

You're going to be reducing debt. Your budget's going to be working.

His child support will be paid and we're going to be able to back Christmas for our kids.

And pay for their dental appointment. All of that can be done. The numbers are there with what you gave me. There's nothing here. This is prohibitive.

But you're trying to do it by yourself. That's the problem. You're doing it on half your household income. That's what's going on. So you can't go there.

All right, guys. So here's the thing. Let's just cycle back on this again. The largest study of millionaires ever done in North America. We talked to 10,167 of them.

89% of them said one of the top reasons they became wealthy was that they combined everything and worked together towards one goal. When you ask the public how many of you combine your finances, it's only about 40%. And work towards one goal.

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at Fairwins.org/Ramsey. That's FairWins.org/Ramsey. Ensured by the NCUA. [Music] Today's question of the day is brought to you by Wi-Refi.

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All right. Today's question comes from Owen in Alaska.

“He says, "What's the difference between an index fund, a brokerage fund, and a mutual fund?”

Is there a particular type that you recommend or can they all be used for different purposes?" Wow. I think that's a really good question. It's a teaching question. It is.

Um, do you want a teach day if I can teach, but I feel like this is your bag. [Laughs] I'll jump in and then you can help me. All right. All right.

We'll start with the mutual fund. A mutual fund, if you're visualized, is that, Jade puts in some money, I put in some money, and Owen, you put in some money. We have now mutually funded it. That's all it is.

What the mutual fund buys with a mutual fund manager buys with the money that we give him or

If they buy bonds, it's a bond fund.

“If they buy with the money that we mutually fund, stocks and companies that are growing,”

it's a growth, stock, mutual fund. If they buy companies like Gerber and Nestle and Unilever, which owns stuff, soap, and Ben and Jerry's ice cream, those are all foreign companies. They were started in the US in every case, but they are now owned by people that do not live in America. And so those are international or foreign stocks.

And so you call it an international stock mutual fund. It buying stock and companies internationally. And that tells you the type of mutual fund. The typical growth stock mutual fund for instance, why I need a 200 different stocks in it. And as that group of companies goes up in value, that's where your return comes.

One type of mutual fund is an index fund, the first one you asked about Owen.

An index fund is a mutual fund that buys stocks that follows and index. An index is a representation of a market. The most famous index is the Dow Jones industrial average. The most accurate index is the S&P 500 standard and poor. Rates the top 500 companies on the New York Stock Exchange.

The big board we call it, and those 500 companies are represented in an index fund. And so that's the baseline of what the stock market's doing. So what the S&P 500 is the actually the best measure of what the stock market's doing. So is it up is it down that tells you what stock market's doing good or not?

“And if you buy an index fund, you should do exactly what the market's doing.”

No better, no worse. You should exactly follow the market. I have some money in an index fund, and I just looked at the ticker a minute ago. And we're right at 12% increase in value since the beginning of the year.

And this is the first of September.

So we're eight months in, still got four months to go. September, October, November, December. And we'll see what the total return is on the stock market. And the S&P 500 index fund will be what the market does. And so if the market's down for the year up for the year, then it follows that.

A brokerage fund is opening an account with a broker, a financial advisor. And you can put mutual funds in it. You can put stock in it. You can put index funds in it. You can put anything in it. And run it. When you buy a 401k or an IRA, typically, and especially if you follow what we teach,

“you will be buying a mutual fund or funds inside your 401k.”

Your 401k is not an investment. It's how your mutual fund is taxed. So if it's in a Roth IRA, it grows tax-free. If it's not, you get taxed on it as it grows. Or when you sell it, one of the two. Okay, so that's the basics there. And the good news is the market has done very, very well.

It's setting records this year and last year. The last five years, it's just been phenomenal. Unusually good. It's not been down and permanently down for the year for a long, long time. And so it's a great time to get in touch with a Ramsey Smart Vester Pro. Some at RamseySolutions.com and find someone that can teach you the stuff.

I just taught you and show you some actual funds. And then you look at the fund. You understand it and only then do you buy it. Do not buy it because Jade said to Dave said to or because a Smart Vester Pro said to. So what did I miss Jade? Nothing other than the fact that you're going to be teaching all this at the investing essentials event.

That's why I tossed it to you. Oh wow. Okay, that's true. Yeah, I guess I am. I'm teaching that tonight. Yeah.

In more details. It's not too late to get tickets. In more details. It's only $199. And we're going to do two and a half hours of what I just did in two minutes. So that was the start.

That was a primer though. We just went to kindergarten. And tonight we're going to go into graduate school. So I go a lot deeper into this. But that gives you the basics and gets you going.

And Owen, you're brilliant to ask this question because you never invest in something you don't understand.

So you never do it just blindly because you heard about it somewhere else and you don't know what it is. That's how people lose all their money.

To go slow and always have someone with a heart of a teacher, not the heart of a salesman that's helping guide you.

And that'll be a big help. And right along the same track is Davis and Montgomery all about my high days. How are you? Hey, I'm doing pretty well. Nice to go to you all today. You too. What's up? So I have some investments and I'll met with my guide the other day and we were talking about the percentage. So I am earning probably. He said it's about 6% trying to get it to 7%.

And I hear you talk all the time about should be earning at least 10%. And you're retirement fund. What do you invest it on? That sucks.

“Yeah. Well, that's what when I thought about that when he showed me that percentage and I said,”

Well, should it be 10% and he said, well, the market is going to get 10%. But you would never get 10% and I said, why? I kind of, I don't know if you're not invested in the market. What are you buying? Do you know?

I don't know. I know it was like 60, 40. 60, 40. 60, 40. I couldn't tell you. I think you're in bonds. Yeah. It's probably going to bond.

Yeah. I think he's got you two heavily in bonds and you're getting milked. You're getting destroyed. This guy doesn't know what he's doing. Get away from him for two reasons. One is his job. He failed.

His job is for you to know what's going on. Right. Yeah. Yeah.

“So you need to get it. You need to get a smart investor pro or somebody with a heart of a teacher.”

You need to know what's going on. You can't even tell me what you're putting money in. No. No. That's an epic fail on his part. He's a teacher.

Not a salesman. Yeah. And then he goes, well, yeah, you could make that much if you were in the market. How old are you, Davis? I'm 53.

And why has he got you in bonds? That's dumb or than crud. Well, I have reached out to one of the investor pros and they were, they were telling me pretty much the same thing. They were saying you might be too heavily invested into something different. But I wanted to get your opinion on that because I--

Well, I don't know because you don't know. But that's what it sounds like. So here's the deal.

Again, I just mentioned that I just looked it up a second ago.

Year to date were up 12. Just January. If you were just in an S&P. Yeah.

“If you're beating the S&P, you'd be above that.”

And a lot of my funds beat the S&P. Now, I've got some money in the S&P. Last year, it was up 18 for the year. The year before it was up 25 for the year and the year before it was up 26 for the year. Meanwhile, this bozos got you in bonds.

Yeah. It's six percent. I know. You're getting slaughtered. Yeah.

That's what I figured. Yeah, you need it. But here's the thing. The thing you violated, you can't do anymore after today. Never again.

Put a dime in anything unless you tell me how it works. And what it is and why you put it there. Not like my guy's not doing it. No, you're the guy. You got to take care of you.

We'll take care of you. We'll give you tickets to the investing essentials event tonight. You need it. Probably. And then get to it.

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[Music] If you're working, the baby steps the best and fastest way to get out of debt and into wealth is using the Ramsy plan, and it is built into every dollar. Every dollar is our budgeting app that has the plan built into it to track your progress, give you personalized recommendations and coaching for your particular situation.

It's kind of like us having us in your back pocket on your phone and saying, "Don't do that, do that, do that, do that, don't do that." Start with every dollar for free by downloading it in the App Store or Google Play. Mike's in Chicago. Hey Mike, welcome to the Ramsy show. Hey Dave, thanks for taking my call.

Sure, what's up? Yeah, my life and I are kind of in a disagreement in my 17-year-old car just kind of broke down for the timing chain. And he's in the shop. She wants to buy a new car.

Well, not a new car, but basically a car payment.

And in the disagreeing, it's a train of brainstorming with the best path forward is.

“I think the problem happened about five years ago when you guys were not on the same page about borrowing money.”

Yes, we're still not on the same page. Yeah. So, yeah. So, you guys are still-- So, if you haven't been able to solve that in the last five years, aren't we going to solve that in five minutes?

Yeah, what's our argument for wanting to continue on with debt and what the conversations looked like? Well, that would be handy. Say it again, you cut out. Yeah. Yeah, he's 17-years-old, so the debt would be on hand.

She'd just-- Not really. A minor fence on a contract. You're going beyond the debt. Oh, it's my-- I didn't know that.

So, minor cannot get a car payment?

No, 17-years-old? Nope. No. You go to the 18.

“Yeah, you can't-- you're not on a door. You can't contact business.”

But the bigger problem here is even if you were 18, it's problematic that she's teaching him to go into debt and that you have a completely opposite philosophy. It sounds like-- Yes.

Yes. So, what happens next time the two of you want to buy a car? All right. We'll probably end up giving in and getting a car to be honest. Well, there's a part of the problem, I think.

Okay. So, I can't help you a little bit to give in. Okay.

Do you just want to battle that horse?

Yeah. I mean, the deal is you know not to borrow money on a car. You know it's not smart. You know it's not going to lead this young man where he wants to be. It's a burden on him. It fixes a temporary problem of a broken-down car

and gives him a permanent problem called car payments. And it's really, really dumb.

“And you should not be abusing your own child with a car payment.”

Don't do this, parents, to your kid. Now, if your wife is dependent-- if your wife is-- or your husband is out there, it is bound in the term and to do something, it's going to bring harm to your child. I don't give in.

Yeah, Mike, why are you afraid of pushing the issue? Why are you-- Like null and not doing this? Yeah, it's sometimes just maybe not worth the fight. Yeah. Okay.

Well, then you're going to have a car payment. Because you're going to be a worse. So, you can't be a worse man. You're going to stand up. And, you know, it is worth the fight.

But you're 17-year-old son. You take any amount in the middle of the traffic and go in dodge. Don't get hit by the 18-wheeler. You know, I'm going to walk him through the gauntlet and get the hell beat out of him.

Because you can't tell your wife no. So, no, this is worth the fight. Of course, it's worth the fight. So, it because it matters because it's your child. It's your bringing harm to your child by not standing up.

So, yeah. I got to tell you, me and the Hillbilly wife, we would be having a knock-down freaking drag out. It wouldn't go good. It wouldn't go good.

We're not going to do things that bring harm to the children and my view. And not because I'm a bully and not because I'm overbearing. But also, if I try to do something that's going to bring harm to the children, she'd be all at me.

She'd be all on my face like a raccoon. I mean, she'd be tearing up, tearing up my hair. What little of it was left. I mean, come on. I'm right there with you.

I would be fighting this battle all day long. Over and over and over again. I'd be fighting it. So, run down to Wal-Mart and pick you up a backbone. They're all now four.

You're going to have to stand up and go, no.

We're not doing this. We're not going live like this. And the worm has turned. I've put up with this crap for 10 years and I'm not putting up with it anymore. No.

We're not going to go in debt for a 17-year-old to get a freaking car because it's time and belt went out. He goes and works six jobs and puts a time and belt on the piece of crap car. Or he goes and gets him another piece of crap car for a thousand bucks and drives it.

“That's what 17-year-olds have done since time began.”

And in none of us died from it. I put two engines, three transmissions and changed the brakes on my car. By the time I was 18. Because I kept blowing them up because I was such a hot rod idiot. And guess what?

Every time I did that, my dad looked at me and goes, "You're an idiot. Go fix it. Deal with it, boy." And taught me to turn a wrench and taught me to quit driving a car like that. I'm blowing up everything.

So, I mean, you know, there's stuff, there's consequences to this stuff. So, yeah, no. I don't work, man. Sorry. Sorry, not sorry.

Anthony's in New York City. Anthony, what's up? Hey, what's going on, David? Jay, thanks for taking my call. Sure.

How can we help? So, one of the calls today. I'm 29 years old by the way. I live in New York City. Not even had proper, thank God.

But I discovered you guys a couple months ago.

And my whole life basically, my parents raised me to never have a single dime of debt

of debt to my name, right? They'll not. Of course. Can they call my name? Opposite in it.

Can I get my number? Yeah. Way to go, man. Did you say? 21.

29. 29. Okay, cool. Good. All right.

So, you were raised well. Good. Read well. But to that point, I also stayed home a little longer than I should have under the circumstances.

The assumption that I was saving every dollar I made, which, as the young kid in New York City with a lot of friends, I did not.

“And honestly, it didn't start saving until I really got my first decent job at the 25.”

I started putting a little bit away, but still was kind of spending my income not stocking all the way and being smart. When you say stocking it all the way, how much were you supposed to be stocking away that you didn't? Like, what was the standard?

Realistically, I mean, I probably could have been. At the time, I was probably making, you know, from 25 to 28 years old, I was making it maybe 80,000. 85, 90,000 a year. And how much did you have been saving?

Realistically, probably could have saved 75 of it. And I did probably half of that. Listen. So, how much money do you have now? So, right now, my money spread all over the place.

And I was getting there. So, I have about 120,000 in a brokerage account that's tied between, you know, mutual funds and general investing. But also, a Roth that I was doing just because that company had the time to not have a 401k. What other money do you have? So, I've got, at my current job, which I started last year, which has more than doubled my income from when I was at.

I've got about 30,000 in that 401k, about 16,000 in stock. And then just a thousand dollars starter emergency funds. So, what does it that you're trying to do?

“Are you trying to get a place of your own and move out?”

What's your goal? Yeah. Yeah. So, the last bit of context is a year and a half ago, I was getting engaged. I was engaged with a ring shopping.

Getting all excited. And then I got broken up with, because wasn't making enough. I was at a bed in job. And what are you trying to do? How can we help you to?

Hold on. Hold on. Hold on. So, where am I now? Move down to my parents house.

I'm renting paying 2,300 bucks a month. And it's a great apartment. It's a great little one bedroom. But at the same time, now I'm shopping around for either an apartment or a small entry level house, right?

Okay. And I've been following the baby steps. I've paid off all of my debt in the last three, four months here. But any entry level, two bedroom condo in a decent area around here is between

450 and half a million bucks.

Then you can't live in that area. With the income that you have, you just have to decide. You're trying, you know, you can't live in Tokyo and Toronto and Los Angeles and San Jose either by the way. [Music]

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“Summer is in Canada, which sounds like an oxymoron to me, but what's up?”

How are you? Hi, I'm good. How are you, Dave? Better than I deserve. How can I help?

Sorry, I've been nervous, I'm talking to me here today. So I got laid off last year for my full-time job. And then I started my small business. And then I also started a new part-time job last year. And I also got made last year.

And I'm kind of stuck knowing what to do next. My business grew from $6,000 last year to $20,000 this year. And I make about $22,000 from a pot-time job. My husband and I have been talking about buying a house because he's getting $100,000 inheritance

soon, but I don't feel like I'm going to get a close line for a good mortgage when

I'm only making about $30,000 by myself. So I'm stuck that should I be closing everything down and moving into a full-time job. Or should I just continue going? Because I have confidence that I can grow my business next year. Why wouldn't you and your husband, your newly married husband, why wouldn't you all combine finances together

and buy the home together? Yes, yes, that is a thing that I've been listening to guys.

“And I have been thinking, it's I think it's a neat issue that I, the building the trust”

and also I'm nervous about how you don't trust the guy you just married? No, no, no, it's me. I mean, it's a neat thing. It's a neat thing. I've had trust in the trust.

Trust with who? My father. No, I mean, why do you have a trust issue?

Who's your trust issue with now on this subject?

It's me. Maybe you're a trustee of trouble trusting yourself? Yes. I'm, I'm, I'm, I'm decent with money. Okay.

Well, listen to the facts are that you're bringing in 20 at one thing in 22 at the other. That's 42. And your husband makes how much? He makes about 80 to 90 thousand. So the facts are that you have $120,000 household income with a $100,000 inheritance to put down.

Those are facts. Yes. Okay. There's nothing, there's no distrust in any of that. That's just a fact.

There's nothing to trust in. Yes. It's not an emotional thing at all. Right. Okay.

Now, do you have the ability to shut both of those things down and go and make a 80,000 dollars at a job? That is another thing. That's, I'm sorry, ma'am business because it was hard to get a new job. No, I'm asking.

Can you go get a job? Making 80,000 dollars a year. Yes or no? Probably not. Okay.

And I don't have money. What did you make? What did you make at the job you lost? Fifty five thousand. Fifty five.

Okay. Now you're making 42. I'm, I'm after paying all this. Yeah. The bills are for my, for my work.

I mean, for my business. Well, that's not, yeah.

“Business has to, you have to operate on net profit on business.”

Not gross. But, yeah. I mean, that's, is the 20 of the gross revenue or the net profit? Not. I'm sorry.

So gross and gross income and then net profit would be 11,000 dollars. Oh, you're not making anything. Oh. Yes. You need to go get a job.

Yeah.

Yeah, because you can bring 55 or 60,000 dollars into the household.

And you're bringing 11 and then 22 at your part time. So you're bringing in 33. And you have the ability to bring in 55. And you've been working this. And you've been working this business two years.

Yeah. Yeah. Yeah. It's not, it's not growing fast. Okay.

Okay. It needs to, it didn't grow fast enough to survive.

“If you want to keep it as a side hustle, you can.”

It's a fine side hustle. But it's not even a great side hustle. If you're only making $1,000. $1,000 a month. I mean, it's okay.

It depends on how much time it takes you to make that $1,000. What are you doing? What's the side? What's the business? Um, I'm not writing planner.

Oh, okay. So you just not get many gigs. Yeah. You're not getting many gigs. You're not getting many gigs.

It sounds like it's too much time for the amount of money that you earn on it. That's why I said it might not even be a great side hustle. Because a side hustle, you just want to get in and get out and get your money. You know what I'm saying? So yeah.

I think the key issue here if you're really talking about trying to buy a house. If you're looking at employment, I agree with Dave. You need to go somewhere and get a job. Probably doing whatever skill you were doing when you were making $55,000. And when it comes to the house, you guys, you need to combine your money.

If you're standing here and looking at me saying, "Jade, I know I have trust issues." That means you've admitted it's an issue. Which means you know you need to do the opposite of what the issue is. If you know you have a trust issue, that means at this point I need to do the opposite, which means I need to trust my husband.

And I need to try something different. Let me try combining my finances. It's the opposite of what I want to do. But I know what I want to do is an issue. You just said it.

So let's do the opposite. Yeah. Yeah. We'll go find our finances. Here's the thing.

I think I hear when you got fired at shook some of your confidence. Oh, yes. Oh, I was going back. And I was telling you to go back in. You're kind of like getting creeped out right now.

Let's tell you to go right back into the fire again. You're like, oh, God, don't do it. Oh, let me keep the 11,000. Where I'm safe. And I want you to go be risky.

Don't be safe. It's not that risky, by the way. You didn't die from it. They just fired you. And so that feels terrible for a lot of people.

It's hard. It's hard. I've been fired. It's not, I'm not making fun. But I mean, you kind of got to keep it in perspective though.

It's like, you know, so what? Yeah. What's next? I mean, I've been fired. Can you imagine the guy that fired me?

What do you think I'm doing now? I mean, that's pretty interesting. You know what? So it's, you, you just move on. You go the next thing and go, okay.

“But what's good for our life and our life is for me to get back out there in the game again.”

And that's great for our life. And then if you want to keep the wedding planner thing going as a side gig and try to grow it. And someday maybe it gets so big. It surpasses your full time gig and you quit. That's fine.

But not for $11,000 after two years. No. Definitely not. Good question. I appreciate you call.

Thank you for joining us. Robertson Toledo. Hey, Robert. Welcome to the Ramsey Show. Hello.

Thanks for taking my call. Sure. What's up? So I'm wondering. I'm 21 and I'm wondering about employment retirement account.

I've been told that whether or not I choose like a loss, like a, which I think it's like a post tax contribution or a pretext contribution. It's all about personal preference. No, it's not. It's about math and you should only do a Roth.

Okay. Because the Roth gross tax free.

And when you got a million dollars in that account someday because you called the show today,

you're going to have a million dollars without taxes. If you do it pre tax and you got a million dollars in there, you're going to have to pay taxes on the million dollars. Which would be like $300,000. So this is not a matter of personal preference. Once dumb and once smart.

Okay. Do, do Roth. It's a $300,000 phone call. You just may.

“Because as long as you are, you should have at least a million dollars in your retirement when you get there.”

You might have three million. In which case, this is a million dollar phone call. If you have three million dollars in your traditional versus three million dollars in your Roth, you should call this show today, I saved you a million dollars. And your ears will thank you.

Yeah. America will thank you. Because you're a productive citizen. You're not on the door looking for universal income. You're not trying to be a socialist.

Because you are a capitalist and you went out there and produced something. You left the cave, killed something, and drug it home. Good for you. Why do you go, Robert? Why do you go?

Yes. Do Roth. So the rule of thumb folks on your personal retirement accounts is take the match,

even if it's traditional first up to the match.

Then do, because 100% rate returns better than it's tax-free. Okay. If you can do Roth and take a match, do Roth and take a match. But if you can't, then do traditional up to the match, and then go do your Roth,

So it's match, beats Roth, beats traditional.

That's the math, and it's not a matter of personal preference. Isn't that interesting? He talked to somebody in HR. He's such a matter of personal preference. That's too bad.

“You have to be careful who you're taking your advice from.”

Who's giving you the math coaching here? Someone who doesn't know. The broke lady with $80,000 in debt and student loan debt in HR. It's a matter of personal preference. I can't tell you anything, because I'm an HR, and we're not allowed to have opinions here.

[laughter] Corporate HR. You gotta help you people. [laughter]

No, Robert, we just saved you a million dollars.

And you know what? We didn't charge you a dime. It's pretty cool. This is the Ramsey Show. [music]

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That's NetSuite.ai/Ramsey. Welcome back to the Ramsey show. When the Fair Wins credit union studio, Jade Walshaw Ramsey personality is my co-host today.

“Cameron is in Athens, Georgia, High Cameron, how are you?”

I'm doing well. Thanks for having me on. Sure, what's up? Well, me and my girlfriend are looking to get married. In the near future. No, congratulations.

Thank you. We're looking for, excuse me. We are completely on board with combining finances like you recommend. But I was wondering, is it okay for each of us to also have our own small savings account? Not that either of us couldn't have access to the other.

But in order to, let's say if I want to buy her a nice piece of jewelry. And I want to save up for that, rather than it coming out of our joint savings account, would that be okay if I want to save up for an expensive truck part? And don't want to take that out of our joint savings account. Now we get to it.

You led with a jewelry, but you're going with a cry. This is a fun money. It's really a fun money conversation.

“I think because what you essentially be doing is saying, okay, like whatever my line item is for fun,”

I'm taking that. And I'm kind of putting it aside and stacking it up until I get the thing that I really want to buy, right? How expensive is a truck part? I don't have it. I don't know.

Give me an example. You got something in your head that calls that to come up. Put it, give me an example. Is that a $2,000 item, but $20,000 item? $700,000.

How expensive is this? This jewelry we're going to surprise you with in our hypothetical discussion here. $1,000. Good. Okay.

So at our house, what we would do is Dave has an account called Jim, gas entertainment and miscellaneous. Okay. And I'm generally walking around with more than that in my wallet. Okay. And so if I want to buy her $1,000 item as a surprise out of my miscellaneous money.

And it builds up sometimes because I don't use it. It gets a little bigger and I just take a little of it in the gun safe. You know, and sometimes it gets a little smaller, but it's just Dave's bun money. And it's just, but it's laying around and cash, honestly. That's what's in my case.

In my case. And so, but it's not, it's not a $20,000 item. It's a number of that in my pocket. But, but I mean, at any given moment, I've usually got a thousand bucks in there. And, and I have for years, it's kind of redneck emergency fund.

And so, once we got up out of being, you know, once we've been working the system for several years, Cameron,

“that's kind of where we got to is we have one little line item called,”

I paid my gas out of that, my entertainment, my miscellaneous. And I don't have much of any of that truthfully that we aren't doing together that's on some other line item. So, um, you know, the Dave's personal entertainment is fairly low. I'm fairly boring. So, um, okay.

Well, you know, you just build that. It'll build, it's like you're a little personal, you're a low personal miscellaneous account, and let that build up and cover those things in cash. And again, if it gets to be $3,000 bucks and you don't want that, your pocket stick a little in an envelope and set it in the gun safe.

Okay. That makes perfect. Yeah. Good question. I appreciate, sometimes if you look at the amount, folks on something like this,

it frees you up from putting together some big system for something, because it's like, you know, I need $23. Okay. Well, that's not an opening account. You know, just keep it just keep it where you can get your hands on it and that kind of stuff.

So, yeah. That's a good question. And here's the thing. Listen to what he's doing. We're going to get married soon.

And then you set a date. They're getting ready to. He's getting ready to set the date. He's going to repop the question. He's trying to figure out how to be a good husband.

Yeah. What a good guy. What a good guy. Yeah. I want to be able to pay cash for my truck parts and that caused problems of the family.

Oh, and get her some jewelry too. Yeah. Do kiss in Knoxville. What's up, dude? What's up?

There you go. Better than we deserve. How can we help? Um, I just had, I had a quick question. Um, I have money sitting in my 401(k) that's more than baby step one.

But I got a lot of that from school. Um, what, what, what? You see where I'm, where I'm going? How much is in the 401(k)? It's not much.

I've only had this job for six months. How much is in the 401(k)? 2,800, maybe? 2,800. Yeah.

It's not a lot. Okay. I got you. Okay. And how much is your debt?

64(k) roughly. And that's student loans. Yeah. And, and what's your income, sir? It's, uh, there's a bonus.

It's not always the same.

Okay. Roughly, what do you make? I mean, give me an idea. You make a 10 or 20, 80, 100? Uh, 60 a year.

Okay. All right. Good for you. What are you doing? Medical device sales.

Good for you. Oh, that's a good job. You're going to be doing great. Okay. Yeah.

I would just leave that whatever's in the 401(k) alone. That $200 is not going to change your world today. It's invested. But I would just work the baby steps from baby step one on up with your income. Is it just you or is there anybody else?

Why for anything like that? I don't have a wife. I have a girlfriend. Um, I believe it's getting pretty serious though here in the next couple months. We teach us to stop your investing.

So no more 401(k) for right now. And then still, let's start.

The first thing you do squeeze out of your 60 grand.

You don't go out to eat and you don't go to happy hour. And you put a thousand dollars in a little.

“You can just put it in cash if you want to.”

And you're under word or I don't care. This month, you should be able to do that here. Do that in a month. Yeah. And just set that aside.

And that's your baby step one. And then baby step two is we're going to start attacking these student loans. And that's going to take a hot minute. Yeah. Yeah.

And so if you go sell a bunch of devices and get above your 60, you may double your income. If you have a great year in sales. That's the good thing. The 60's your base, but you won't budge the prize money. You make 120 in that world, right?

Yeah. I'm going to associate. And so I don't the commission is just if I do my job and to set rate. That next step of getting paid off of doing good work doesn't really come until I have my own territory. What is that?

It is. They said 12 to 18 months. Perfect. Good. We'll put your nose down and get to work, man.

And earn that other territory. Because this is a good field you're in.

We work with a lot of medical device people making quarter million.

So that's where you could be headed. Okay.

“That's why I was saying it's a good field.”

But what the mouth is you're in the apprenticeship stage. And you're in there to support the other sales person. He or she. And you get in there and you learn the business. You learn how to interact with the docs and the surgeons.

You interact with the hospitals. And learn how to do the skill that takes you to serious business. That that be field. I mean, I don't know which device you're selling. But medical device field is an excellent sales field. But it's all people skills and it's working with the docs and sometimes they're tough to work with.

And so, you know, in the nurses and whoever else is involved in deciding which company we're going to do the device with. But he has a major upside if he can keep working. But in the meantime, you could still pick up a side hustle.

I have kids. You don't have a wife. I'd be working day and night.

Yep. I would. I agree. And double your income that way. And while you're waiting on this, while you're waiting on your ship to come in. But yeah, stop your stop investing in retirement temporarily.

“That's what we teach while we get you out of debt.”

And here's the thing. If two years from now, you're dead free. And you're making sure and you're making a hundred fifty two hundred. You're on your way to be in a multi-millionaire, then Duke. So that's where you're headed. You can't think short-term about this stuff.

You have to think long-term.

Is the price I'm paying now going to be worth it five years from now on the answer is yes.

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Well, we wish we could get to every call on this show, but we can't. And so we took a bunch of years of answers on this show. All the stuff we've written in articles and books and dumped it into a data set called AI. And we have a thing called AskRamsey that answers questions only from that data set. So you get no filth from TikTok. You only get Ramsey answers.

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It's trained on proven Ramsey principles. And you have to train AI because it is artificial after all. I ask your question today at RamseySolutions.com. It's free or click the link in the description if you're listening on podcast. A hundred and fifty thousand people a month are asking Ramsey for free.

That's kind of wild, y'all. And it's going up every month. It used to be like 10,000 a month. And it's blowing up. You guys are using it. So we're glad it's there to help you. Let people know that they can ask Ramsey. Sarah is in Philadelphia. Hi, Sarah. What's up? Yes, hi, Dad. Thank you so much for taking my call. Huge fan.

Sure. How can we help?

Yeah, so I have two questions. So I'll be brief. My first one is, um, we must first start to close.

We decided to buy a house together by a year ago. We both had, I've been cutting it. You know, good saving. The house is holding money, um, because we didn't have credit. We were going to buy a little hospital with her credit. But at the moment, um, we're having issues, um, she has the boyfriend. They're engaged after a couple of months.

“I don't agree that there is a lot of that sister. And it's just like, um, where do we go from here?”

Do you, you don't agree with the boyfriend? What? Um, we are engaged at the moment. Um, you don't like it? You don't like it? Not the three months they got engaged. I have other relationships on him. Just like, you know, like, your phone is awful.

Can you speak more directly into your phone? It's all muffled. Yeah, can you hear me now? Yes, that's a little better. Okay. I'm sorry. Yes, um, she asked for my opinion on it. And I gave my own opinion. She knew, like, it's an afternoon.

They're awkward at home. Okay. But, um, no, that's messing with the people at home. And I'm just considering it the time. You know, um, she doesn't want to be talking about anything. Should we, should I would it out?

Should, uh, you know, consider putting the house up. Right. I thought the house was in your room. It's in your name. She's the roommate, right? She's just renting a room in your house.

Yes, but we both went half on the deposit for buying the house in the room. How much? How much? How much each? Um, I would say each, maybe, like, 30 K. 30 K. Each and what was you guys's agreement when she moves out? Does she just get the 30 or does she think that she is entitled to any other bit of equity?

I'm not sure. I didn't write anything down, did you? No, it was horrible. So, the agreement was we would still, you know, pay half of the other portion of money. The other portion of one move down until we either serve the property or until one got her roommate.

You can't afford the mortgage if she moves out.

I can. I just wouldn't want you because it would take up a chunk of money. That means you can't afford it. That would mean you can't afford it. Okay, shall it?

Okay. You lose a bad plan. There's a bad plan. There's a bad plan. Okay.

Now, let me say this. I think the way you do this does matter. If you, she says, "Hey, what do you think about Ken?" And you say, "I don't like your boyfriend Ken." And then you say, "Well, that's it."

You're kicked out of the house, right? That doesn't go well.

“So, I think that there's a way that you can not do this throwing a hissy fit, right?”

She's, I mean, she can marry whoever she wants to marry. She's a grown woman. Yeah, I mean, that's not the point. The point is, okay, look, we're not getting along. And so it's not good for us to own this house together anymore.

So, let's get it sold. That's all you have to say. You don't want to talk about Ken. Okay. You don't go putting it up for rent.

We'll be a better option. Why? It's not a better option. You still own it with somebody that you don't like, and it doesn't matter to you.

Well, I don't know about my thoughts. You've got to do that. Right, but you can't. I know, but you own it because you did a deal. I hand-shake deal to said you own it together

and she gets her money back out. So, you can't just put it up for rent. And cut her out. Yeah, you got to get, you got to undo this deal because you guys aren't getting along.

Because you shouldn't have been in this deal in the first place.

Because you guys might not have been getting along. Did Ken move into your house? Oh, no, I hope not. No, he does. He has a lot of things.

But he's always there. He's always there. Okay, I see what's going on here. Yeah. And that's what I was afraid of.

Yeah, it's time to get the house. It's time to get the house sold. Yeah, let's just talk about, okay, guys. You guys, it looks like you guys are moving on with your life. I'm going to move on my life.

And so, real good time. Realtors coming over. We're going to put the house on the market. A sister, you're going to get half of whatever we get out of this. Yeah.

Uh, at closing because you put in half of it. And I'll be signing all the papers. And you guys have a good life. Mm-hmm. And love you.

We put so much into my mind.

Listen, what I would do is it doesn't matter. You call this and said, "This situation sucks." So don't stay in it. Regardless of how you got here. And if you sell it and you make a profit split the profit too.

Whatever, you guys split it down the middle. You split the rent. You split the down payment. If there's profits, split the profit. Yeah.

That was your deal, wasn't it? Yeah. Yeah. Well, you did a dumb deal. And now you've got to undo the dumb deal.

Buying a house with your sister when you are not aligned on how life works is a dumb idea. And so you got yourself into a barrel of fish hooks here.

“And the best thing to do is dump the barrel out and get out of it.”

Yeah. It's fast as you can. That's going to be the best thing for your money. It's going to be the best thing for your piece of mind. And it's actually going to be the best thing for your relationship with your sister.

I agree. Yeah. Because now she feels like she's like the house is in your name. And her boyfriend's over there all the time. And there's all this tension in the air.

But when the house is sold and you know, they got to go do their own apartment. You do your own situation. And everybody will be okay. And all of a sudden 10 years later, you might like can. Who knows?

That's why I said don't do it with drama because if you just look at it and say to her, it looks like you guys are getting ready to go into a new phase of life. No, let your perfect time. Let you go do that. Yeah.

That way it doesn't mess with your relationship further. Yeah. Instead of like, I got to sell the house because I hate your boyfriend. Mm-hmm. That's not the reason.

Yeah. That's fair. This is a bad idea when we did it. And it looks like you guys need to do your thing. And we're going to let you.

And I'm going to go do mine and everybody's cool. It's all good. It's all good. It's all good. No problems.

And you don't have to get into trying to fix her life, which is where you got into trouble. Yeah. As soon as you start telling her who she could date, that's a problem for her. Oh, no way. Strange.

Okay. Yeah. I mean, that's. She doesn't like it. That's fun.

Matthews and Charlotte North Carolina. Matthew, what's up? Hey, Dave, how's it going? Better than I deserve. How can I help?

Good deal. So, um, well, my, my question mostly is what to do with all this extra money that I've kind of came across. Long story short. My wife and I are in baby step four now recently. And, uh, that happened by pan off.

Students. Uh, finished off pan of car. And another good news. Uh, my wife actually just landed a great new job where she's getting like a 32% increase on her thing.

Wow. And, uh, also within the next couple of weeks, I'm getting a promotion to director.

“So, that life is good on Matthew's planet.”

It is. Well, what's some bad news. Um, I feel like I'm a little bit behind in the retirement. So, um, 35 years old.

I think you're okay. You're okay.

So, what will you be making in your new position?

Um, about 110. And what will she be making in with her 32% raise? She is going to be up to about 85. Okay. So, we have a 200 and we have a 200 and some $1,000 household income.

Give her take. Okay.

“I think we can prosper at 35 and and and retire a multi-millionaire.”

Okay. I hope so. If you were to invest, um, 15% of that because you're debt free except the house right now. Is that what you told me?

Um, yeah, correct. Okay. So, that puts you a baby step four if you're to invest 15% of that. That'd be $30,000. About $2,500 a month going in from age 35 to age 65.

It's going to be a bunch of money. Jade's going to put it in the calculator for us. So, you're you're just fine. Uh, so you want to do Roth for a 1K at your place and at her place first. Get the match if you can.

Uh, and so Roth match beats Roth beats traditional. And if you need some help, go on to a smart investor pro at Ramsey. Uh, Jade put that in the calculator that'll be $5.2 million.

If you never get a raise and you only invest 15% from age 35 to age 65,

think you're going to be okay. [Music] Dave Ramsey here for more than 30 years. I've been talking to folks on the air and I can tell you that most people are broke. Not because they don't make enough money, but because they don't have a plan.

“You need to give every dollar you earn a job.”

Because when you do that, something changes. You stop guessing. You stop worrying. You stop stressing. Our every dollar budgeting app will show you how to find extra cash, pay off debt,

and finally start winning with money. But most people won't do it. They'll keep living paycheck to paycheck. Keep hoping things will change without making a change. It's time to say enough is enough.

It's time to take control of your money. It's time to start your every dollar budget for free today. Go download it in the App Store or Google Play. [Music] Seth is in Portland, Oregon.

Hey Seth, how are you? What's bad are you doing? Better than I deserve. What's up? Oh, see now I can get out of this guy.

I got on a one-incon with a married up. Well, wife can't work.

She's pretty much basically disabled.

Just trying to get some ideas on how to attack this and then also get to a good return. Got you. So how much debt do you have, Seth? I get this about 74,000. On what?

Two car loans. What are you on the car and break them down? You can go through my truck and take them in life's car and then 13,000 credit card. Gotcha. So you're kind of normal.

Only normal socks, right? Yeah, this. Gotcha. And what's your income? How's what do you make?

Um, about 65,000. 65, what are you doing there? I'd make bill be helicopters. Cool. Good for you.

Okay. Civilian side are you in the military? We do both, actually. But you're a civilian. Yeah.

Okay.

“And what's the nature of your wife's disability, sir?”

Um, well, the past eight years, um, her, been trying to figure out exactly what it is. But it's really hard for her to walk and standing for balance is really off. So, you've got a, other plan is also to move, uh, how'd be in Arizona? Because they have better, um, care over there for neurologists and.

The better opportunity for her to actually get help. Well, what would your career be in Arizona?

So you think you can land a job there before you'll go?

Oh, yeah. I've been a little dry run and this couple of people that wanted to hire me, but I'm just not down there. So, they want to get down here. Good to go.

No, no, no, no, no, no, no. You, you, you need a job offer before you walk away from the current job that you have,

“because you're the only thing eating feeding your family.”

Yeah, it's, that is the plan that's going to happen. Yeah, I'm gonna come on down and then we'll hire you. You come on down, then they don't hire you. You're screwed. Aside from landing the job, what other things are you waiting on to make that move?

Um, well, I need, uh, you see some money to get down there? This is, you know, moving cost money. Yeah. She applied for and received permanent disability, she getting SSI. I see, applied for this waiting on the eight years.

I was going to call back. No, well, we started it about a year ago because it started getting worse and worse. The last, like, year and a half, it just got it, you know, to where she can, that's trips over anything. And when it's cold, especially that's the other reason.

But you've got a doctor. You've got an doctor's right up to be able to send to the Social Security Department to be able to get her on SSI. And you've done that, right? Yes, and no, because I've been neurologist here. Um, they, you know, leave all the time.

And we get one. And she gets an appointment and all of a sudden they're done. They leave because I don't know what's up with the Oregon, but they just have issues keeping her all of just. So. Okay, because that income, that social, that SSI income,

probably be three or $4,000 a month, it might be very helpful. Right. And so it's very important that they do follow through and get that income coming in. Um, if she's not able to work, that's a legitimate thing to get and get going.

“Regardless of your location, you need to push that on through.”

Um, and so if you have to chase an neurologist around the state and tackle them, then let's do that and get these letters and get these forms filled out and get this done. It's very important. Is she able to drive? Guess he's able to drive.

You can't, like, you know, lifting you thing just all, you know, her balance is goes right to. No, sure. She's safe driving. Yeah. I mean, I'm just looking at these or does, does, maybe she can, but maybe she doesn't drive much.

Because I'm just looking at these cars, thinking gosh, I wanted to think of the hard direction in the driveway with this disability. Yeah. She can drive, you know, not problems. Like, um, you've got an X-ray honor.

And they said that she has, like, right where this attic is and, uh, the L5.

Um, this is basically like a little.

There's a muscle and nerve tear and also, like, this little. This, uh, D generation. Yeah. I'm sorry. So you guys have been through a lot, man.

Yeah, yeah. So yes. What I would do though is I think you've kind of been, um, sitting in the middle and limbo. And so if I'm going to do anything, if I'm in your shoes,

it's start being, it's, I'm to start taking some action. So I think it's time to move Arizona. Matter of fact, you're a year late.

“It's so you need to call up, go down there, interview, get a job,”

and load it. Get your friends to load you up and help you dry up down there. So it didn't cost you much out of pocket. And just get your stuff down there and get your new job started. And let's get her landed down there and get a neurologist there.

And get, you know, get her disability signed up. Decide whether or not she really needs to keep a 15,000-dollar card debt in the driveway or not. Uh, in this situation. I doubt she's driving around much.

Um, it didn't sound like. And then you begin to work as, like, like, like Jade said, every extra job, every piece of overtime you can. And you work like a maniac. You get her income coming in from disability.

And between those two things added to your new job of 65,000 or more, maybe it's more. It's tougher. In Arizona, then we start working these deaths off.

But the problem is you've been kind of hovering around the edges of everything

because of the pain she's been in. And because that medical problem has just got you all per, you know, got you on hold. You know, and so we have to get turned loose here. And, uh, and you're just going to bust loose.

So it sounds like you said the cold is a problem. The care is a problem in that area. And you've got a good lead there in Arizona. If I'm you, I'm going to wrap that up next couple of weeks and be in Arizona and about, like, by the end of the month.

And having a apartment there, get this one sold, get to get out, call the landlord, get out this lease, and whatever it is. Let's get moving and get this done. If I'm you, that's what I'm doing.

I'm good. How are you? Better than I deserve. What's up? Good. Give you a little story here. I'm married. I'm 50.

“I've been 54 years old. We have four kids.”

Two were in college and set to live good financial lives. Good. A question comes into play that we have a fourth child who is nine years old that we adopted with special needs. Who will not be able to provide for himself in the future.

He will live on SSI and Medicaid.

We did set up a third party trust and special needs trust for him,

just within the last month. That lawyer advised us to look into whole life insurance because her thought process is that when we leave, our son will need a large lump sum of money to live off of home. On older son will most likely take care of him.

The lawyer should stick to practicing law. That's horrible advice. Horrible. Do you want to know what the real answer is? That's where I'm calling you real answer.

Because this is horrible advice. And don't take any more financial advice from this lawyer. They're more on a confidential things. Or they're brother and all cells whole life, one or the two. Now, by term life and name the trust as a secondary beneficiary.

You're the beneficiary if he dies, he's the beneficiary if you die. And the secondary beneficiary, if both of you die, which is all we're concerned about, is the trust and it goes in the trust. And then you name that the trust goes in to good mutual funds.

“What's the child need to survive a month in come-wise?”

Wait, now he's nine. No, I mean, I mean, into his adulthood when you're not here anymore. I mean, to adulthood, well, he'll need a care giver. He'll need five thousand eight thousand a month. Sure.

Okay, eight thousand a month is $73,000 a year.

That means there'd need to be a million dollars in there.

$700 a million dollars in there. So go buy a million dollar term life policy until you can put a million dollars worth of mutual funds in there at your death. But don't buy whole life for anything ever. It's a horrible product.

Way too expensive. It does not accomplish your goals. You shouldn't feel uncertain about investing, and you don't have to.

“At investing essentials, our two-night virtual event,”

George Campbell and I will walk you through my playbook for investing in wealth planning. We'll simplify everything from 401k's and mutual funds to passing on wealth. It's happening now, September 1st and 2nd. Take it start at 199. Grab ears today and lock in full replay access at RamseySolutions.com/events

or by clicking the link in the show notes. [Music] Our scripture today, Psalm 7714, "You are the God who performs miracles. You display your power among the people." Peter Marshall said, "When we long for life without difficulties,

we remind us that Oaks grow strong in contrary wins. And diamonds are made under pressure." Lynn is in Dallas, High Lynn. Welcome to the Ramsey show. Hi, Dave. Thank you so much. Sure. What's up?

Well, I had a question about a consolidation loan for debt. I'm really kind of embarrassed to even talk about this because I know that I was stupid in doing it. I get it out of here and I've been here before and I know the Lord takes care of things, but it overcame me because of a lot of trauma in the last four years. Anyway, I retired medical in October of last year.

I was working out of pathology and I retired because the job had gotten so much that I couldn't handle it.

I'm 77 and I just had never believed in retiring.

I've always done something inside of this little going. But I got frauded for years ago and it took me a while to recover from that. It was about $25,000. Cups me representing themselves is Amazon and over $5 million worth of the insurance they ruled it as fraud and not a defect.

And when I muddled through all of that and got over it,

I had no credit card debt, everything was cool. And I ended up this year not having a lot. And I was living off of the income from the medical, which was last year, on my taxes, I made $25,000. When I retired in October, I was dealing with some medical things

that they couldn't put a finger on, but I was healthy on my blood panel circuit. In February, I was taken to the hospital by ambulance and they thought that I was having a stroke. And I was gone on the end of my mind. I couldn't think, I didn't know where it was.

And they found out it was a UTI. It took me, it has taken me quite a while to get over this. And it was brain fog.

And they said, "This was normal."

And I've been doing everything. All of my numbers came back and everything's good. But that's been a little fuzzy. And I have shown professionally for years on the side. I do high-end wedding dresses and min suits and all kinds of things like that.

Stuffed at most alteration specialists don't even touch. And so my business here has been growing. Your alteration business has been growing? Yes.

“Okay. So how much are you making at the alteration business?”

Right now, because of the business I lost. Last year with the alterations and another side hustle I had, that alone was 12,000. And of course, I've had such security for a long time. And I have another little thing coming in.

So what's the debt consolidation loan for? Okay. The just recently I put 5,000 on a credit card to finish a website that I am doing. To for holistic products, organic holistic supplemental type things. And it just went live the last couple of days.

But it's taken much longer to get through the setup of that business. But I've voted another business. Yeah, but all the reasons for now you have an alternative medicine business. Yes. How much did you submit to do that?

5,000 she said. Okay. 5,000. Any more? No more than that.

“And you want to get a debt consolidation loan for $5,000?”

No. I have the other. I have a total of just under 20,000 in debt. That's all that they have I have. And you have no money?

Yes. That's true. I bring in about 2,500 a month. That's over the last three months. Because I had after the hospital trip in February, it slowed me down.

I didn't lose the business that I could not do it. I didn't lose clients over it. Yeah. And the all of that has come back up. I want you to work on one business.

Not four. Your 77, you've had all kinds of medical issues. The last thing you need is trying to run four directions at one time.

And the second thing is never again for the rest of your life.

Be so urgent to do something in business that you force yourself to borrow money. Slow down. And got let God provide you the money to build the website for a business that you might not have even should have been in. You might have should have been just working on the operations side. But I don't want you to open anything else.

You've got too much going on now to do it all well. And no debt consolidation is not your issue income is your issue. And so anything we can do with either one of these businesses to get them moving without borrowing money. Like working like as much as you possibly have the energy to do on one or the other or both to create income and then just really dialing down your budget and just begin to pay these cards off.

And land please don't ever pick up one of them again. Just see my face in your mind saying I don't want my friend to lend in debt any more. It's not good for you. It's making these medical problems worse. The stress it goes whether you don't need with everything else it's going on.

“You need to clear this and a debt consolidation loan doesn't get you out of it.”

It just moves it around. And the P is still under one of the shelves.

List them smallest to largest. Call each of the card companies and ask for reduction in interest rates. And then begin to work them off smallest to largest. Living on nothing and doing anything you can with either one of these businesses to get your income up to attack this with. And that becomes your new focus and leaning into that.

And it sounds like you've been thrown off a lot. So I sure hope that you can turn that around but borrowing your way out of debt does not work. So now that consolidation it's a it's mythology it makes you feel like you did something and you didn't. Yeah. I also find that when you have individual debt psychologically I mean it's like we teach it's nice to have them.

List them smallest to largest.

“You can see them go away. You check off the boxes when at a time versus one giant debt that you have to kind of.”

Yeah. Terran too. And you know if you have if anytime you do something regardless of if you're 17 or 77. And it causes you to feel shame.

That's an indicator to never do that again.

That's good. And so I've done stuff that I look back and I go. Cali how dumb is Dave you know and I feel shame. I feel convicted. I feel condemned by the action. Well, why would I then I'm never going to repeat that action. And in this case it's credit card debt and and so you know if you're going to grow your business.

Grow it more slowly and with cash. You have enough to eat.

“And then you have enough to pay your lights and this is what matters.”

Pass that we're just trying to build an estate and trying to get things going. And so keep things in order here. Good question. I'm sorry you're going through that. It sounds like it's a lot. Sounds like it's a lot.

So I couldn't tell in her situation without and I don't know if we didn't have time to get into it.

I think she lost five million dollars.

Twenty five thousand. I thought it's what she said to a company pretending to be Amazon. Yeah or something. Maybe that's all it was. Okay. Thank God. Twenty five thousand. I had identity theft and fraud and everything else involved. Some kind of a con. And so you've got to be very, very careful there.

But the thing is just move slowly with these kinds of things and double and triple check them. And it folks and it keeps you from getting bit by one of these fraudsters that are out there. There's a lot out there now. Good time to check out Sanders. I de-theft insurance too.

Make sure you have that in place in case there's some kind of an identity issue going on. Didn't sound like that was hers though. 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.