Discipline Is the Difference Between Broke and Wealthy

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start budgeting for free today. [MUSIC] Normal is broken, common sense is weird, so we're here to help you transform your life. From the Ramsey Network and the FairWins Credit Union Studio,

this is the Ramsey Show. On day Ramsey, Rachel Critton's Ramsey personality, number one that's selling offered co-hosts just smart money at the hour. And my daughter is my co-host today. The phone number here is AAA, 825, 525.

The call is free, and some say the advice is worth exactly what you pay for it.

“Stasis in Portland, Oregon. Hey, Stasis, what's up?”

Hi, you too. Thank you for your time today. You too, how can we help? So I have an issue with my spouse. We've created a habit in our marriage where we go, I go to my parents and ask for money.

And this basically comes from him,

telling me to do so. And I just really need help with the situation because I don't want to ask my parents from money anymore. I feel like we need to handle our own financial problems or so. How long have you guys been married?

Almost 20 years. Okay. And what's the main reason for going to them for money? Is this for big purchases, emergencies, monthly bills?

What's the reason for it? I would say it's a combination of all three. It's different every time. Just this last time. He decided to spend a lot of money doing a project

for himself and then that kind of left us behind. What kind of project? Building a shop at our home. Okay. And how much money do you guys usually?

Are you looking for when you ask them? It's probably around 40 to $50,000. Each time? Yeah. Okay.

All right.

“Well, to start with, I think I can see behind the curtain”

that you are not involved in handling the money at all. He is. And so he brings you a want or a crisis that he hasn't figured out a way to handle

and you're kind of on the outside looking in. And he says, oh, you've got to help with this because your mom and dad are like the infinite bank for there. Would you say that's true, Stacey? So almost.

He actually has nothing to do with the finances. I say, he sounds like the one that's checked out and he's like, oh, well, we need some money because I'm doing this thing over here. Yeah, he kind of just bends and, you know,

waits for me to say, okay, you know. Well, here's the thing. The going to your parents is the symptom. It's not the problem. Correct.

And so you've got to fix the problem

“and then you won't need to go to your parents anymore.”

And so how do we do that? Well, this is called a marriage makeover. We're going to sit down and we're going to both be grown-ups. I refuse to continue to operate the way we've been operating. It's not healthy.

It's not good. And I'm getting progressively pissed off at you. I mean, frustrated with you. I mean, bitter towards you. I mean, resentful.

Whatever, right? I mean, you fill in the word, right? But, and this is getting worse rather than better. And so we're going to try a new thing. You and I are going to sit down together like two adults,

not like one of us at a kid with a candy store with his hand out. And we're going to decide each month what we are going to do with our money. I'm happy to write the checks and pay the bills. Once we have agreed on where the money that we make is going to go.

And I'm never going to my parents again.

For any reason ever. So we've got to fix this money. We've got to get on the same page. It's messing up our relationship and it's messing up our money. And it's going to mess up our relationship with Mom and Dad eventually,

because eventually they're going to get tired of it. They're probably past tired of it already, really. But so, I mean, so if that conversation, sitting down with him, this says, okay, we're going to get on the same team. We're going to be in agreement each month before the month begins.

Where are the money's going? And we're going to be in agreement on the principles that we are going to save. We're going to be generous. We're going to invest. And if we can't agree on those principles, then we have a different problem.

It's a marriage problem.

And we're going to sit down the marriage counselor.

“Yeah, and I think going back Stacey and looking at the pattern at which”

what reasons you did borrow the money, right? So it may be him and a lot of his projects. And it's like, so that means going forward. We can't do these unless we have the money. I don't know if you ask for big money for big vacations.

And it's like we don't have the money for the vacations. We're not doing it. It's almost like putting out the reality of what has been the state of the union. This is what we've been doing. And now we are not going to keep living like this.

We can't. I'm going forward. I need your help to carry the weight of this because the weight of this is too heavy for me to carry by myself.

And by the way, husband is going to say that to wives.

Well, I was going to say that to husband. It's right. And because it's properly done to grown-ups are making the decisions. But what happens with the spender. And I'm a spender and Rachel's a spender by nature is we don't think about the consequences.

We just want the thing. Yeah. And nobody, there's no grown-up in our head when we start the process. And only with intentionality do spenders inject a grown-up into their brain. And I got the opportunity to go broke in my 20.

So I had to learn the hard way. Rachel had to grow up in my house. So she had to learn the hard way. It's exactly what I was supposed to say. And so everybody's got their heart.

But somehow adult has to be injected into that spender's brain to where you can't spend Like you're in Congress. Yeah. I've tried to get him because I have that every dollar budget after I've tried to get him. So be a part of that and to have monthly meetings.

But I don't want to ask him to do a budget. I want to ask him to help me carry the weight of the households. I'm tired of being your mommy. You feel like you're a little boy that comes wanting his allowance. Baby, I want a new wood shop.

Would you call your mother? Yeah. Oh, my God. You know? Yeah.

“That sounds in your head because that's why you've described it to us.”

And he needs to hear that that's how he sounds. And so instead of honey, I grew like a grown man and I think a wood shop will be really cool. And here's all I think we can save to get that money. It may take us three years. And I may have to actually use some woodworking tools to build the stupid thing.

But I figure out a way to get it, right? But that's what grown up state. Right. And you can't just, but this is a relational marriage issue. And ask him to help you not do a budget, but to carry the weight of the decision making

and the household and being agreement. And the best way to do that is a budget. Yeah. And I think that's one of the weird dysfunctions in money when it comes to relationships as when one person's in control.

And we hear this a lot. From, again, it can be husband's or wives. You know, we hear both sides of it. Of one person has all the, you know, the all the control, all the decision making, whether because they want it or they're defaulted into it.

And the other one is just sits on the sideline and gets hands it out. What feels like in a lot, or yeah, or an allowance, or when it, and it, and it's this weird. It becomes a weird house. Yeah. Weird power dynamic.

And if you are married, you're both too grown-ups that you both get a say. And you're both in the decision making process. It's not one taking care of the other. It starts to get this into this weird nuance.

“But that's the important part of, of having equal say in your marriage when it comes to your money.”

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So adding to that last discussion a little bit in most marriages opposites attract.

“Larry Berkett used to say if two people just to like get married one of you's unnecessary.”

It's a good thing that opposites attract typically the Spender Mary's a saver. And you savers need a Spender in your life so you have a life because you would live in a cave, collect lent and only come out on triple coupon Thursday. You spenders need a saver in your life so you don't have to eat out på at retirement. And so you need each other to balance this thing out. But that requires that you're working together not that one of you assumes the role of parent.

Which is what Rachel was talking about as we went into that break. So, you know, mom handles the money and she just lets me do it now. No, no, no, no, she's not your mother. She's your wife. And I call my wife mom or Mimi her grandmother name, but she doesn't function in my life as my grandmother or my mother. Okay, she's my wife.

When you say it when the guests on the grandkids. Yeah, so I call her that on the golf course. People don't give me like she's not enough to be your mother. You'll have to do that. Hey mom, mom, where are you? Yeah, but that's in our Mimi.

So either, but I mean that, but you're not functioning in that role. Okay, that's the difference. And if you're the one that has been, and usually the nerd that likes the details, I also marries a free spirit that hates details.

And the nerd's usually the one listening to the show, by the way, at least at first.

The free spirit when they do start listening to the show, finally are glad that it's occasionally funny. Because otherwise, they think it's a 401(k) meeting for their mother's company and that's a root canal. No, we don't do that on this show. This is like real life. It's fun, funny, sad, happy, all those things.

“So that's why it's compelling and entertaining.”

And why people tens of millions of you tune in and thank you for that. But the last thing you nerds need to do, or you savers, or whoever it is, it's got control of the money, is look at the other one and say, "I'm going to put you on a budget." That sounds like you're going to time out.

Okay. Instead, I'm tired of carrying the weight of all of this by myself.

And then finding out later, you might have had a good idea that you never voiced.

And so emotionally, we're going to carry the weight of running our household together. And financially, the nerd is probably going to be the one that does the execution, that it's submit on the payment to the light bill, or whatever it is, right? But the free spirit's probably not going to do that. But we're going to develop where the money is going before it leaves together.

And that's called a budget. I'm going to put you on, I'm tired of you dot dot dot dot dot. So I'm going to put you on a budget. That will not work. Suddenly, this person who's been acting like a child will suddenly start acting like a grown-up. And go, "No, you're not telling me squat. You're not going to tell me what I'm going to do.

You're going to have that fight, right? You're not like a four-year-old. You're not the boss of me." You know, that kind of thing.

Yeah, and I would say to the spouse, if you are the one doing everything, and it's not always out of malice.

I was talking to some friends the other day, and he even mentioned he was just kind of by default. He just kind of takes care of everything, and he was like, in the other day, he mentioned to his wife. He was like, "I'm so nervous about X, Y, and Z thing coming up." And he was like, "Even just saying it out loud." That's what he said. He said, "Even just saying it out loud."

He felt good, and he was like, "And then I realized, "Oh my gosh, we really don't talk about this very much." I just ended up doing it. And so again, it may not be out of this malice weird control of his wife. It's just how it's been done, but then you don't realize even a small glimpse of even speaking something about money to the spouse that never talks about it or is not involved. You suddenly feel what that weight lifting off feels like to have another adult in the formula with you.

“And I think that's what's important. So start practicing that, and start that being the pattern with your marriage because you are to adults.”

And one of you does not even be carrying the whole thing. Yeah. Multitud of Council, there is safety. When two people can be in agreement, there's safety. And also, by the way, those of you that are doing the budget right now and they're the one that's no idea what's going on.

Another thing that you alleviate this I discovered didn't happen very often with Sharon, but it did happen a time or two. It's when something would go sideways, my best plan that I did by myself because she wasn't involved. It would go sideways. I got to experience I told you so.

Oh, in my head, I knew it was wrong. I knew that wasn't going to work. I had a bad feeling about that. All these things come out. All that goes away because you cannot say I told you so because you were in on it from then on.

So from then on, you never get another I told you so. It's like, we decided to do this thing and this thing didn't work.

We decided and wished we hadn't. But we can't look at the other one and go, you're an idiot, you know, that kind of thing. And so, but don't use the phrase, I'm going to put you on a budget. That's lashing out anger, you're frustrated, you're tired. Instead, I need help. I don't want to carry this by myself anymore. Would you please join me in managing our lives?

“And that's what, and the best way to do that is write it all down and have a budget.”

Yeah, instead of I'm going to put you on a budget, that's like, you know, like you're getting ready to get fired from your job or something. Suzy is in Stanford, Connecticut. High Suzy, how are you? Hey, David, it is such an honor. I've been listening to you. So 12 years now Rachel, such an honor to be with you as well. I can give you a little bit of my stories. Okay. Well, what's your question first? What are you calling about?

I am calling because I'm trying to see if my plan follows Ramsay principles. I'm married 36 to the home way for about $900,000 at worst. I've followed you guys again for years. And just wanted to opinion about some loading retirement and 529 accounts for my kids. And then by the age of 40 setting up a budget count. And I doly pulling from that, maybe sort of 6% to cover expenses once the house is paid for.

So that you could stop working. Is that the goal? No, I'm not only working, but doing the duty that we like more. I guess, and maybe more time spent volunteering as well. Well, let's be clear. You did not ask if you'll be okay if you do this. You just ask if it aligns with what we teach.

Because you're obviously doing great. You're millionaires and you're 36 years old. Congratulations. Very well done. And I'm guessing you did that starting from nothing. Well, it's a little help from parents paying for college,

than other than that. They pay for college, but they didn't give you a half million dollars.

“Okay. All right. That's what I'm saying.”

So you guys have built a million dollar networks by the time you're 36 way to go. Congratulations. That's excellent. Now, I would buy, if you want a front load 529 is a quick funding them after that. That's fine. I did that. I would not front load retirement above 15% until the house is paid off. Because that's baby steps 4, 5 and 6 working together.

Baby steps 4, 15% of your household income going into retirement. If you want a front load college and finish it, that's fine. You can check up box and then six is pay off the house early. But no, I would not load up and start doing bridge while the house is paid off. That's the idea. The house should be paid off. I deal with the next six years.

Well, when the house is paid off, you're at Baby Step 7. You can do whatever you want to do then. You can load up retirement.

“If you want to dump a bunch in 401k at that point, max out everything and not do any bridge.”

And then stop for a while and do bridge. That's okay. Baby Step 7, but not today. Your house it and paid off today. Okay. That makes sense. Okay. Yeah, that I want the house clear before.

Here's the weird thing. It's actually going to work for you mathematically because without the house anymore. Well, we did it. Sharon, I did. I took our house payment was like, I don't know. I was 1,500 bucks or something. It wasn't a lot compared to today.

But I rounded it up to 2,500 bucks and just 2,500 automatically coming out of my checking account. I kept paying a house payment, but to myself in one mutual fund. That became effectively a bridge because I looked up.

It felt like 20 minutes later and that account was a million dollars.

Just paying yourself a stink of house payment. You know, just pay yourself a stink of house payment. Get out of the debt. You know, it's so powerful. Your most powerful wealth building tool folks is your income when you quit giving it to the stupid butt banks that have been screwing you for years.

When you stop giving them money, you're going to have some. It's magical. Hey, I want to talk to you for a second about love and not love like in Titanic or something.

The kind of love that moves you to take care of the people closest to you.

“And one of the most important ways to show that kind of love is by having term life insurance.”

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Angel is in Canada. Hi Angel, how are you? I'm good, how are you today? Better than I deserve, what's up?

Okay, so I'm basically on nervous.

Well, I've been looking into you guys for like two weeks now. And then I asma has done here, check that out, check the book, and then, okay, we've run two things. We're in baby step number two. Mm-hmm. And my question right now is, is it worth it?

Or is it feasible in our income to pay a 2000 monthly day care for my 14 month old child? So I can give you the numbers. Basically, we're earning 8200 in a month. And we're currently renting 2600 all in parking and doing these everything. Now, I just have one that next which is a car loan.

That is at 22k. And the rest is just consumer bad. Out of the 8200 Angel, how much is your income versus his in that number? So I'm earning 4200 in his if 3000 and the extra 1000 is, okay, now I'm hearing there. It's not a fixed amount.

Okay.

“Well, that's why I sometimes budget to some side hustle stuff.”

The way you said that, it sounded like you could buy or you could get a day care that's less expensive. But you want to do this more expensive one. Is that right, did I understand that right? Yes, yes, yes. Okay, what's the cost on the other day care?

Okay, so the other day care is 840. Okay, so what do you get for 1200 dollars a month for a baby? 1200 dollars? 2000. No, 800 to 2000.

Oh, the difference. You're going to pay 1200 dollars more to move to Lux day care.

“So what does Lux day care do for the baby that for that's 1200 dollars a month?”

Extra. That's 12 dollars extra.

First, he gets full hours like that's Monday to Friday.

Now the other one is just three days in a week. Now, aside from the full hours Monday to Friday, he also is getting full meal for the morning. So that's six snacks and lunch. And the other people don't see them. No, you bring the food with the bottles or whatever, yeah.

Yeah. Angel, what's your comfort level with the other one?

The 800, I'd say maybe about 7 over 10.

Uncomfortable. They're private actually. They feel one more that's cheaper than that, which is half like 400 in a month. It's a subsidy. However, when we visit them, it's not comfortable at all.

I love first time. Yeah. Don't do that. Let me ask you why. If you did the 800 and it's only three days, what do you do with the other two days?

I'll be taking care of him. I'll take off from work. My work denies me to be working weekends. So that means I get weekdays off. Oh, okay, so would, would you be, do you have days off now or you would just switch your schedule to weekends?

Oh, I have days off now on weekdays. Okay, but he still just goes to daycare while you're home. Just to give you. Yeah, right now. Okay.

He doesn't go to daycare yet because my mom is here with us right now.

Okay. He's leaving soon.

“So that's why we're like taking a fire and be like, what do we do?”

Gotcha. Okay. Now, I get it. So to answer your question, if I understand what you told us right, the comfort of the child, the safety of the child, the love and care of the child is equivalent. The difference is the number of days and food.

Mm-hmm. Yes. And my husband, I mean, we both went to both daycare. We're both comfortable. Yeah, I would do that.

I would do the last expense of one and by my own food. That's what he said. That's what he said. Yeah. The other part sounds luxurious to me.

And you're not in luxury mode and maybe step two. Or you have a 22,000 dollar card debt. Mm-hmm. Yeah. Well.

So what I would say-- That's like a cold. Yeah. And I would say after baby step three, that's when you get to be a little bit more like, hey, I do.

I like having this because I like to have my day.

“You know, if you want to finagle some things then, then you totally could.”

You guys just put it in the budget and pay for it. But until maybe step three, I would see where I feel caught again. I said it so cautiously as well. Like where I would feel comfortable. Yeah.

And it sounds comfortable. That we're not asking to something where the child is not cared for. That's right. Yeah. But if you feel okay about it, then for sure.

I mean, that saves you a lot. Angel, how much-- if you sold your car, how much would you, could you sell it for? So I'm actually looking into that. So the car is worth 17 right now. Okay.

Okay. Okay. And we actually put dumping in like 5,000. It was a very, very bad decision to get that car. Okay.

Do you have any money left? Yes. How much? So I have a liquid that I have a cash of about 7,000. Okay.

So you could ride to check and sell the car. You could ride to check and sell the car. And then finish up baby step three is all you would have like. And then if you wanted to do the luxurious daycare, you could. But we would tell you to do that at baby steps 4, 5 and 6.

And that's when you move from intensity to intentionality.

“And it, you know, because it's not the only way the child is cared for adequately.”

And so, and that's what your, you know, that first thing is safety and comfort, you know, for the baby.

And make sure because first time mom, second time mom, third time mom, all that and all that. You know, we'd none of us want our child in a situation that's not good. Yeah. Yeah. Well, and I would say two angel be thinking about, um, I hate say priorities because that means it's not bad.

You're, it's not a bad thing if you keep the car and just pay it off. That's fine. But also you're trading what you kind of want as a mom for that car. For a car. You know what I mean?

So if you really want that better daycare, sell your car. You don't have to worry about it. You don't have to worry about it. Try to check out the 7,000 cover the difference. Yeah.

Get you a beater. And then you can do whatever you want whatever you want to do. Whatever you want to do. You got to get the emergency fund bill. But I think you could do that anyway with the two.

Oh, yeah, come on. Yeah. So I don't think that's going to kill you. But, you know, but you're right, Rachel. There's, uh, we've even seen situations where we've got an

SUV payment that's massive, uh, to talk kids around and the mom's like, I want to, I want to quit and go home and be a full-time mom. And you go, okay, well, how much are you off on? And you do all the math and it comes out about the SUV payment. Yeah.

So like you're working to buy an SUV to talk kids around and you're not home. And so yeah, sell the SUV. That's, you know, we get that, we've done that math. And well, it starts to get a good picture of what your stuff actually means to you because you think even even people in baby step, you know, too and they're working hard.

They're working extra hours. They're working weekends. They're not having a life to get out of debt where some people, you know, you have an asset sitting there. And that could save you a four months of over time.

You have no option.

You've got to pay it off.

You're student loans. You've got to pay it off.

“But when it comes to the car specifically, it is the, it is the one thing.”

And we're not mad if you keep it and pay and, you know, work hard and pay it off, you can do it with it. But she said it's a big, it's a big thing to make. So do it. She doesn't like it.

It's a big, it's a big, it's a mistake to make. Yeah, our car. Yeah, we don't like it. An asset sitting there and it's taking time away from my family. The ability to have margin in my budget.

You know, like, you just kind of start to realize this stuff is costing us. And man, selling it. That's a lot of freedom.

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That's fairwins.org/Ramsy. Ensured by the NCAA. Well, you know, is whether it's in Charlotte, North Carolina. Hi, William, how are you? Hello, Dave. It's so wonderful to finally get the opportunity to talk to you.

I will get ready to my question, but you've really changed my life. Will you change it? I'm proud of you. How can we help? Well, thank you so much. My question is for people who are established financially and looking to invest. They're money in state but morally appropriate way.

This is the good my question is, can the average investor work towards putting our earnings into individual companies that we like and understand? I ask this because when we give all of our money to large investment groups,

we lose control of the equity and give massive amounts of loading rights to groups that don't always have concrete or even good moral values.

An example being Wall Street Magnets in corruption is this possible and house so. It's an excellent question. Thank you. There's a lot that goes into this. If you were to invest in any company as a single stock, publicly traded company, you have absolutely no control what they do.

“The only thing you could do is you could invest.”

You could look up and go, okay, that company is doing X or Y that I don't agree with morally. And so I'm going to sell the stock off. The problem is that a portfolio of single stocks underperforms a good portfolio of mutual funds dramatically. A mutual funds in general can fall into the category that you're talking about, where the voting rights are gone. And someone else like a black rock or whatever is their holding sway over some of these companies or some of these mutual funds.

And even some of the boards of those companies get infected with that stuff. Your observation is correct. My friend Vivek Remsworthy wrote a book before he got into politics called "Woke Capitalism." Where he got into how the boards were infected even with some of these things. So it's a very cool philosophical discussion and really a good ethical question in general to that you're asking. So if you are, there are some mutual funds out there that pledge to only invest in stocks that align with X or Y value.

And so they refuse to do that. That's actually one that I had brought up one time and actually happened. And so that you can say I'm an animal rights advocate and I don't.

Dave explaining dolphins.

“I didn't think that was happening today. But they do. They get caught in there and they die. And so that's what happened.”

And so the other side of that, of course, is from a moral or ethical, from a person of faith, if you are a Christian, like Rachel and I and Sharon and I are. So you know, I don't want someone invest in something that's investing in something that's complete or running their company in a way that's completely contrary to what I believe biblical values are. And I don't want to put money into that. We're hiring and investing that. Yeah. So then there's there's one company down in Atlanta that actually has a pretty good track record. It's called the Timothy Fund.

If you're worried about on the Christian ethics side and the Timothy Fund does their best to comb through these companies before they put them in the portfolio that they line up ethically with that. And it has not performed poorly. It's performed about like other mutual funds, roughly. It's not substantially better, not substantially worse. So that's there. And we've actually told people about the Timothy Fund for 20 years or 25 years. I've met those guys a long time ago when they were putting that thing together and it has worked out.

That's one part of the equation. Oh, sorry. My thought. No, that's fine. Go ahead. What's your question?

“Do you think that the Timothy Fund would also on average outperform individual stock investment?”

Yes. Okay. Because all the research says that when you go by five stocks, you suck at part of it. You're just not good at it. And these guys do the analysis on this come to work in a car longer than your house. I mean, it's ridiculous.

And they're very, very specialized and nuanced. Though I have one guy who's done nothing but study. Yeah, got one guy that studies the automotive industry 24/7 and you and I can't keep up with that. I can't do that level of detailed research. I would spend all my time with my nose and my computers. Heck with it. No, thank you. Now, all of that being said, here's the other thing.

When you buy a stock from a company or you buy a stock in a company like you buy a share of home depot, you realize the money does not go to home depot. It goes to the guy on the other side of the equation that's a seller of the stock. Yeah. Okay. So when you buy a used Chevrolet from me, Chevrolet doesn't get any of the money.

And so if you're pissed at Chevrolet about something, they're not even affected by the transaction. Now, if you buy a Nike shirt and you don't like what Nike stands for, then you gave Nike the money. That's different.

But when you're buying a share of stock, almost always you're buying it from another entity that has nothing to do with the company unless it's treasury stock issue.

So it's really not there. And it's a slippery slope to get into studying and trying to figure out who's doing things that are wrong. I mean, then you can't go to the bank with that bank because they support plant parenthood. And you can't go to that grocery store because right down the aisle, there's some pornography. And you can't, and there's, you know, everywhere you go, you're in an apple. Right. Everywhere you go, you're interacting with a world somewhere.

And they're always doing something that's mischievous at a minimum. And so, you know, you've got to decide where I'm going to draw the line on this and go, okay, if somebody stands for something, for something that I oppose, and it's their whole thing, I want to stay away from them. But if there's a corner of the market where I buy gas, it sells penthouse. I probably don't know it unless I'm in there looking for a penthouse, right?

What's that? A playboy magazine. Okay. And so. It's like an 80's reference.

It's 90's reference. Okay. They're probably out of business.

“Okay, so I don't even know, but anyway, I got no idea, but that's how.”

Anyway, if there's something you've permanently disagree with, and it's in the corner of the market. Right. Okay. I hear I hear you. You don't believe it's spoken weed, but they show rap.

I'm with you. Right. Well, it's just like you're going to boycott, you know, every time. You're going to grab a Starbucks coffee.

You're never going to have an apple phone.

I mean, like, yes. There's always something to be pissed about.

That's right. It's a very, very slippery thing, so I have made the decision. If something's in my face, I'm not going to do it. But I don't think I can do enough investigation or spend enough of my time to control

to have 1,000 percent of all my dollars pure.

Right. Right.

“And I think I really don't think God's mad at me about that.”

And he's asking me to manage his money by the way. I'm sure. Right. And so now, if you're Muslim, you're not allowed to do any of it anyway by the Quran. You can't put a dime in those kinds of things, period.

You don't have it's not an option. And so ethical question over. You cannot do, you cannot engage in things like that, period. And you can't invite, you can't put money in a bank because you can't get it's usually to receive interest. And the Quran, if you're strictly following the Quran, you're not allowed to draw interest.

And so obviously there are some Muslims that don't strictly follow the Quran. Like there are some Christians that don't, as strictly follow the biblical interpretation of something. And so, but you know, so you've just got to look at things. But it is, I love your question because you're thinking and saying, "My faith matters to me. My values matter to me."

And I don't want to support things that are bad from a world of use. That are against, yeah? I think that's, I think that's wise.

“Yes, but I think to your points, when it's all being exchanged, again,”

it's not going to that company. Yeah. You aren't really on the money itself. It's not that company. When that company prospers. Sure. But that's part of it.

Oh, it's a hard thing to figure out. Nice question. Thank you, sir. I've met plenty of people over the years who had a product that they wanted to sell. A side hustle that they wanted to start or a business idea they couldn't stop thinking about.

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Start your free trial at Shopify.com/Ramsy. Shopify.com/Ramsy. That's Shopify.com/Ramsy. Welcome back to the Ramsy Show in the Fairwins Credit Union Studios. Kevin is in Lincoln, Nebraska.

Hi Kevin, how are you? I'm doing well, how are you? Better than I deserve. What's up? Well, I'm kind of wondering.

My wife and I, we came debt free last year paid off the house. Got her emergency fund. Wow. Good for you. Yeah, thank you.

Thank you. I'm a wish I could say I did it strictly Ramsy, but it was more day-ish along the way. We probably could have got it done a lot faster. We've been more strict. But then, in about the last year of working on debt, I kind of started doing some sole search.

And it was wanting to do something a little more personal rewarding as far as a career than what I was doing. And a few months after we became debt free, I became a personal trainer.

And reduced my income by, probably, only where from 66 to 75 percent.

And now, I mean, we're getting by, but that's about it. We don't have a whole lot of extra at the end of the month. And now we've got things like house up, keep. And wanting to travel and, you know, other financial goals that we'd like to achieve.

“And what were you doing before and what were you making?”

Um, I was a cell phone tower construction project manager, making about 105 a year. So you're only making like 25 or 30 grand as a trainer? Yeah, I'm going to take home about a thousand dollars over two weeks. And I know I'm fairly new in the industry.

And if I work hard, I could, you know, make more. But I just, I'm 50 years old, and I've got the time to really put in the work.

I'm not the greatest. I almost, you know. So well, I'm curious, Kevin, what the conversations were. So you guys paid off the house, everything. You're like, wow, we don't really need a lot of money because we don't have a ton of bills.

And so I'm just curious about how you got from where you were to this. So just love training. And you're like, let me just do this and see what happens. And for the, yeah, for the last, I don't know, maybe five years of working in the cell phone tower industry. I really started feeling like I was doing the devil's work.

You know, with where cell phones and social media has gotten the world today. I don't feel like it's in that positive. And I just was really feeling like I wanted to do something that was more rewarding. Something that helps people.

I've always been a little bit of a gym rat.

And I've heard other people say that I should be a trainer. And so I decided to give it a shot. And my wife was supportive. I mean, she saw how stressed out I was with the telephone tower. Let's establish this, okay.

You gave it a shot. What you're, the way you're doing it today is not working. That's why you called. Yeah. So something has to change.

Either the way you're running your personal trainer business has to change. And you're going to have to make it profitable and triple your income,

“which you should be able to do, by the way.”

And you're going to have to get, you know, pretty aggressive about it.

And not, not in a mean or a pushy way or anything like that. But you're going to have to get excited about making a stinking profit. And, or you need to do something else. And I don't think you have to go back cell phone business, by the way. A project manager that can manage the building of a cell phone cell phone tower can manage

a lot of different kinds of projects. Yeah. You could easily get in the home building business as a general contractor. You could easily get in project manager. Other things, just the project management, science of the science of project management.

It's a lot of open. We've got, you know, people in our all through our organization that manage projects here. It's their title, it's their function. And so, and they're not doing the devil's work. So, you know, there's a lot of different ways to apply your experience.

If you don't want to be in business for yourself.

“But if you want to be in business for yourself, you're at the treadmill stage,”

the beginning stage of this, and you're going to have to grow this business. And you're going to have to commit to doing the parts of the business. You don't enjoy as much as the other parts in order to be able to stay in the business. Right. Yeah.

So, if I enjoy writing books and speaking on the radio. But I'm not making a, you know, and the only way I can do that is I have to do the accounting. And I have to do the marketing, which I don't enjoy as much. And I don't enjoy accounting, I don't mind marketing. But I'm saying, if there's parts of running Ramsey in the old days that I don't like,

I've got to do them to be able to do the parts that I do like. And that's what you're not doing. Yep. You kind of took your foot off the gas, and you're just coasting along, helping people. You're like a gym rat that gets paid sometimes.

Yeah. Yeah. I kind of figured I'm spending about 48 hours a week at the gym and getting paid for about 30 of it. About a third of that is minimum wage. Yeah.

You're not making a dollar an hour. Yeah. Yeah. So you got to change your business model and embrace the discomfort portions of the business. And if you want to, if you want to, if you want to, if you want to, if you want, if you want to, if you want to, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if

And if you want to, I mean, if you want to, if you want to, if you want to, if you want to, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you want, if you

You know, and I'm not even making $1 an hour over here at the gym so I get it. I get why you did it

I'm not shaming you for that, but you need to establish, okay, here's what has to be true

in order for me to stay in this business. I don't want to do that. Okay, then you're not staying in the business.

“And I think it takes a lot to keep a small business running. You have to love it and believe in it.”

And if you don't, you sound a little bit on the fence Kevin just from your tongue. I mean, and you may just, I don't know. What I'm picking up is you might be better off. I mean, honestly, go work for someone for 10 years. So you're 60, make a good living, and you know, it's a lot of the day. I think you could do working in your own own as a project manager. If you looked at this as a project, you know, that's fine. So I'm going to send you a

What my desired future is, and then immediately he says to ask yourself, what must be true this not true today. So my desired future is if I'm going to stay in this, I need to make 78,000 hours a year. And what's the path there and the things I have to do that are uncomfortable to get me there. That are ethical, but they're uncomfortable. It's not stuff I enjoy as much as I do the actual teaching of a personal trainer or I'm going to hire some people or I'm going to open a gym or I'm going to,

I don't care, but decide what it is, and then decide if that price is when you want to pay to get there, because right now you're the CEO, the chief, everything officer. And that's what you got to decide. And then I'm also going to send you my higher lightest business

book, my lightest best seller actually, build a business you love, because you're at the first stage

of the five stages of business called the treadmill stage. And you just run, run, run, run, run, run, run, feel like you're getting nowhere. And sometimes it's because you're getting nowhere.

“And I remember that stage in this business, and it wasn't a fun stage. It was exciting because”

it was all on me, but you're exhausted at the end of the day, and you don't know what you did. It's just chaotic. And so I'll talk you through both of those. So I think you're going to make a good decision either way, because I think you've already decided what we're doing is not working. [Music]

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Go to CHMministries.org/budget and use promo code Ramsey. That's CHMministries.org/budget and promo code Ramsey. Well, we wish we could get to every call on the show. Sorry, we can't. There's only so many hours in a day and so many phone lines that you can get through on. But if you've got a question about money and you want to answer for your situation, head over to our website at RamseySolutions.com and click on and use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained

only on proven Ramsey content, proven Ramsey principles. So it's going to give you the exact same answer with like 3 or 4 years of this show all downloaded into the tool. All of the books we've written downloaded in the tool. All the thousands of articles on our website about money from what we think about this or that downloaded into the tool. So it's going to give you an answer. Might not be quite as snarky or sarcastic as I am, but it might be. You're very careful. We've been

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“or YouTube. All right, Anne is with us in Akron, Ohio, high-end, how are you?”

I'm doing well, Dave, how about you? Better than I deserve, how can we help? It's great to have you in Rachel on the line because I have a debate with my husband and I really need both of your input. Yes, we love a debate. Can not wait to know if you're the winner, but we'll tell you. I mean, I feel like I'm the winner, but of course I would say probably. You probably are, and you probably are. We can already tell. Yeah. That's just what's going on.

You are much, oh, so we do a monthly budget together and we have a flush fund for stuff like

going toward the down payment and that sort of thing. My husband says that our flush fund should

be considered spent money. So we put it on the budget as spent money. But I say we should count each individual charge like we're hotel rooms for food and everything. So what do you guys think? So you're talking about your setting money aside for Christmas and when you take it out of the budget,

“how do you take it out of the budget if you don't show it as spent money? That's what I was”

going to say. I was telling him that. So we're going on our honeymoon, which is a year delayed to Italy and we are buying like hotel rooms and stuff monthly like weeks and then like for excursions. You would reduce the savings that you have for the honeymoon. You've already set the money

aside and took it out of the budget for it to put it in the honeymoon account, correct?

I mean, it comes out of a flush fund monthly like whenever we do have the money for and I don't know, I mean, so you're running all of your savings for different things out of one account? No for everything. You didn't have a separate honeymoon account that you're saving money into. We don't have a separate honeymoon account now. Okay, so what is this flush fund event? So the flush funds pretty much are like that appointments can typically come out of there. It's

pretty much money set aside for things we know we need to spend our money on and we just take it out of our checking account into a separate account on the side and then that way it doesn't get spent by accident. Not that we would actually. Okay, so yeah, so the question is when you're booking the hotel this month, is that considered money that should be coming out of this month's income? Is that what

“you're saying versus the slush fund and so it looks like it has been spent?”

Yeah, I know it's kind of confusing. Okay. No, it's not. The way you're doing it is confusing, but it's pretty simple. If you're setting money aside out of your budget, you see, you have your budget and my budget says I'm setting us out of $100 to go into an account that's going to pay for my honeymoon. Okay, that money's already come out of your budget once. Yeah, it doesn't need to come out. And then when you spend it, it doesn't need to come out again. Your books aren't going to balance.

Yeah, I guess that's true. It can only come out once. And it already came out because it's sitting in the slush fund. Yeah, when you moved it out of your monthly budget into this side, we call them sinking funds in every dollar. And so if you have a sinking fund for Christmas, in every month, you set us out of $100 for Christmas out of your budget, your budget is already set that money aside. And there's $1,200 in there for Christmas then. And you get ready to go buy

Christmas. You don't take it out of your budget again. You've already been taking it out all year. Well, does that make sense? Is that answer your question?

Yeah, it does, actually, because I was always considering it like a monthly expense because sometimes

we pull the money out, but then we have to add it back in. It's kind of something. I think your slush fund is probably in generals to confusing. So what I would say is you don't need sinking funds except for specific things. Okay, a slush fund that picks up five different items is going to be really confusing. It's going to be hard to track it. Okay, so if you do car repairs and vet bills and doctor visits, all out of the slush fund, instead of having set money aside

“for each of those things separately, then you're going to stay confused. So that's why we have”

sinking funds. You know, you don't have one fund that covers eight different things. I know, but the fund in every dollar is not going to a separate account. No, I know that. So that's what, but so it could all be in that one quote unquote, which he's calling a slush fund and all her sinks. The money can be in that fund, but there needs to be sinking funds established in every dollar for each one. So that when you could look at every dollar and go, okay, for four months, we've been putting

a hundred dollars aside for car repairs. We have a five hundred dollar car repair. We only have four hundred dollars in the car repair envelope. Then that's a problem. We got to move some money around. But if you have a three hundred dollar car repair and you've got four hundred dollars in your car repair slush, your car repair sinking fund. Yeah, but yeah, but it's all coming out of one large account that she sees. And so it may be that the vet bill is more. It already mean like it.

Yeah, well, I wouldn't, I wouldn't have a vet bill such as Lush fund. I'd just cover that out of my monthly expenses, but I wouldn't, I wouldn't be setting that aside. But I mean, for Christmas, Christmas should be separate than car repairs. They should have different accounting for them. And so

needs to be rolled back into your monthly budget and just be a monthly thing. But the answer to your

“question is if you've already taken it out of your budget once, you can't take it out again when you”

spend it. That's it. Because it's you're going to tell who won that. Your books aren't going to balance. And I don't know who was voting for which side. So we still don't know who won it. You know who won. You'll have to go back and figure that part out later. But yeah, out. Brock is in, Cincinnati. Hey, Brock, what's up? Hey, I don't do better than I deserve. What's up? I don't know. My friends can tell me that I'm not doing this correctly. So if I could pay my house

off within five years, but it means I'm not investing quite 15 percent. Should I stay on this

trajectory or should I fall on my chart? How much what percentage would you be investing? Roughly nine to ten percent. Okay. So five percent off and you're income is what? 90. Okay. Okay. So it doesn't extend the time you pay off your house, but about six months. Okay. You're not making as much headway by doing this as you think you are. Okay. So no, I would put 15 to my income in. Okay. So you're saying bump it up and just follow

“it because quite literally that right. Yeah. Absolutely. Quite literally. Yeah. That's what”

day is. It's a great phrase. It's a great phrase. Yeah. We did not give you a range in baby step four. And the reason Brock is this, I've run the math scenarios. I've been doing this 35 years. And I've run the math scenarios out at all income levels. You know, unless you're making a

million dollars a year or $10,000 a year, I didn't run those out. Okay. But I ran them out of 100,000,

200,000, 50,000, 90,000, whatever, back and forth. And it doesn't, the big thing is is that I want a substantial growth in your nest egg in retirement while you're getting the house paid off. And the average person is paying off their home doing this in seven years. While putting 15 percent away and baby steps four, five and six. And he said five years. That's the average. Yeah. So he's already better than that. Well, he's better than average

because he's not putting in. So he's probably going to be more like six years after I change this. But that's all. He's really not going to change it that much. And the compound interest of the growth

you're missing out on in the market. Yep. I worth it.

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That's the letter YREFY.com/Ramsi might not be in all states. Today's question comes from Erin and Indiana. My wife and I are buying a house and have a couple of questions. Should I ensure my house for the sale price of the home and upgrade that, if the house goes up in value? Also, should I reduce the amount of home insurance

Okay, no, you don't you don't ensure the entire house because it includes the lot and the insurance

company won't let you if they're smart because they're going to look at the house and look at the appraisal value of the house in the area and at least come close on, I guess on it.

“And so what does it take to build your home today on a vacant lot that looks like your lot?”

That is what would be left if the house burned and you'd have to build it with a builder. And so that is the amount you would ensure. What it takes to replace the house on that lot? Yeah, and no, I would not reduce the amount of home insurance. Now, I wouldn't. Now, we haven't. None of that. We fully ensure our homes. Now, I've raised the deductibles considerably on my car and home owners and and life insurance is one that you could become self-insured

eventually. Like that would be one insurance that you've got enough money that your spouse and kids are okay. If there's kids at home without life insurance, then you're you're you're self-insured by becoming debt free and having a polymoney. So that's a baby step seven thing. You get rid of life insurance. I kept my life insurance for quite a few years after that, but not for any financial planning reason. It was just Sharon once at SWI and some things are just SWI, Sharon once it,

and it wasn't that expensive. And so I kept it for a few years and then a few years ago, she said,

“"I don't want anymore." So I think I'm going to be okay and I think you were okay a long time ago,”

but anyway, because all of our estate plan is predicated on me dying first. That's the assumption. No, but the home insurance even if you could pay for the home that like you, it would, yeah, would not reduce it. I've got expensive cars and I don't fully ensure self-insured the cars. Now again, I carry a massive deductible which brings the premium way down, yeah, and the same thing on my home. I've got a massive deductible because let's say pretend that you're

living in a $2 million house. Okay, I'll just make up a number. If you've got a $50,000 deductible,

that's not going to kill you. But the two million might, if the thing burns, so that, I mean, that'll take a chunk out, right? So if you want super low premiums, you can run your deductibles up, but I don't just cancel the insurance. No, I haven't. I carry it on my cars, I carry not only liability, but I carry replacement value, and I will also tell you to say, when it comes to home insurance, it's to go with stated value, where you state the amount, and then as the cost of building

that house goes up over the years on that lot, building that same house back, raise your stated value.

“You need to review your home owners and your car insurance once a year. I've got stated values on”

my cars. And so if the car is totaled, this is how much I get. I don't have to negotiate. This is the amount. It's a set amount. Not going to get more, not going to get less. It's preset. No, no, no, go, well, the car is depreciated. The radio didn't work. I'm bulk, I'm not getting it all that. The car is either totaled or it's not. Write me a check or dump, or fix the car one or the two. And so stated value, and that has helped a lot, again, with expensive automobiles. And so you

want to look at that, and I run a very, very high deductible. And with stated value, it changed it and updated. I just finished my review, it was under on all my home package last week, it's a matter of fact. And so I'm just looking at the car values, how we change them, the home values, where we reset them, and everything, because it does not automatically adjust. Replacement of value is no longer a thing with most insurance. Most insurance, it's the amount you state.

And you want to make sure you keep that adjusted. Josh is in Tampa. Hey, Josh, what's up? Hey, Dave, there's a slide we're talking to you. You too, how can we help? Hey, so I just really want to ask, uh, I'm trying to understand maybe it's me or not. I'm trying to understand if I'm too fugal in my marriage. Or what should I ask my wife to get a higher paying job? Uh, I'm trying to translate it here. What about Josh? Does he need a higher paying job?

Yeah, no, absolutely, you're absolutely correct. So I think, you know, for me, I was trying to find the cheapest possible things that we can afford. So I think, because I feel like that's the only thing that we could afford. And every time I, you know, I say book a trap or shop for things,

I always look at that cheapest, cheapest possible things. And I could almost feel the tension with

deferred, and that's really after paying 10 years of credit card money. What is your household income, Josh? So together, we make around 100 and $5,000 a year. Okay. And so you, uh, on 15,000,

“you have to cheap out on everything to exist. No, you don't. Right, so I'm talking to every single”

dollar that I could get. And that's, I feel like at the end of the week, I have about $300

to spend. See, there's a lot of feeling going on and math doesn't have feelings. As a third time

you said, I feel like, which tells me you're not doing a detailed written budget that you and your wife are agreeing on on every dollar. No, no, we, we did it together. And she sees it. However, I don't think it sort of clicks in her head. Like, no, we can make it work. No, every dollar, when you, the two of you finished every dollar with 105,000 and no debt, 105,000 dollar income, you have $300 left. Every week. Yeah. Every week. And that's money that's also

being contributed to our form. Okay. Rock IRA. Uh, it's also obviously paying the growth

“to use the house and, yeah, at the end of the week. Do you guys bring home what? 7,500, 8,000 a month?”

Yeah, so I, uh, together, we probably bring it around. Yeah, you're like 7,000 a month.

After taxes and, yeah, and all that. How much is your mortgage payment? $2,000 a month. Okay. And then our growth series is a big expense. $800. Okay. Well, there's a couple of things going on. Okay. You have a tendency to be cheap. That's nothing wrong with it. My wife has that same tendency. Okay. That's not a bad thing. All right. But, but what you're saying is your wife has not joined you emotionally in the every

dollar budget committee meeting once a month. And the two of us as adults, look at this and say,

we have X to spend on groceries. We have Y to spend on travel. We have Z to spend. You don't make

500,000 a year. You make 100,000 a year. So it is going to run out. But you also don't make 40, either. So, you know, you're, you're above an average household income in America. Yeah. So if you have $800 for groceries a month, no, no, no, who does the grocery shopping Josh? But yeah, if you're going in your Nickel and Diamond, every single little thing and you're getting the cheapest of the cheap and all of this and then you guys still have money left over in that category, then that means

you can up some of the quality of the stuff you're buying. So you just have to have $800 to spend. Yes. That's 500, 800. Yep. Exactly. You spend the 800 and then when you guys are planning a trip, you guys need to decide together what hotel you're staying at. That is within the budget that you sent for the trip. That's right. Yes. Yes. So yeah, it's probably at both the end, Josh. You probably do need to chill out a little bit. But also, you know, you guys have $5,000 after

your mortgage is paid to say, how are we going to live our lives with this? And so it is important

“to know where it's going. But yeah, you should have more, I would think more than 300 after all the”

debt's going. You're not your job to cheap everything out. It's the two of you's job to decide how much we're going to spend on a category and then live within that category. If it means keeping some of it fine. As a dad of young kids, I'm starting to think a lot more about the world of growing up in and how I'll help them make sense of it as they get older. And that's why I like World

Watch, a video news service for preteens and teens. Because one thing I know for sure, if you don't teach your kids how to understand the world, somebody else will. And these days, that could be TikTok, YouTube, Instagram influencers, or whoever happens to show up in their social media feed. World watches, 10 minute videos help young people understand what's happening in the world through a Christian worldview without all the outrage, negativity, and noise that is everywhere

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Just go to worldwatch.News/Ramsy or use promo code ramsy to get started. That's worldwatch.News/Ramsy.

[Music]

“Adam is an Albuquerque New Mexico. Hi, Adam. How are you?”

Pretty good. How are you doing? Better than I deserve. What's up? Well, I kind of have a crazy one for you. I'm thinking about selling my house and buying a van and doing the van life thing. The van life thing. What does that mean? You're going to live in a van? Don't bother ever. Adam, where are you going? Yeah, it sounds crazy. It's everybody understand.

I'm 33 single, no debt besides my mortgage, and I work fully remote. And my previously working

construction and lived in RVs and traveled, and that's where I saved the most amount of money in my life. When I did that, and now I have a house and I feel like all I do is spend my money.

“It's about a little over 40% of my take home pay. How much do you make a year did you say?”

135. Okay. 40% of your take-home pay. We're not going to recommend, but I don't know if that just allows a van. I mean, that's a pretty pretty extreme swing from that. So you're just travel around living in the van, working remote. Yes, there you go. Okay, campground to campground. I take it, right? BLM land. There's some things you can do for free. There's some things you can do. Yeah, where it's paid.

Okay. Do you know how long are you thinking? Do you have a time frame? Or are you just,

you're not tethered down to anything specific? So you just, like, I just want to see what happens. You know, I'm not, I'm not tethered down. I originally bought this house to be close to family, but I ended up just sitting here working my remote job and, you know, I'm not really wanting to be in the area. I kind of want to get back out on the road and travel and see things. I feel like I've followed the Ransy plan fairly well. Well, except for that 40% of your take on pay house payment. Yes,

yes, yes, here. I hear that one in my brain every day. And then I also hear, you know, if I sell my house and buy a depreciating asset, I also hear that in my brain every day. So if you do the van thing, the answer to your question is, regardless of, it's cool. It sounds fun. It sounds like an adventure. It's not a good 10-year plan. No, it's not a bad two or three-year plan. And if you save that much money and put it aside by the time you're done with everything to be able to put roots down.

Put roots down somewhere. There's 33 in single and we're pretty much ensuring you're going to stay single if you're going to live on a van. You could say that. Yeah, it's more of like a five-year less plan and it's good. Well, there might be, but I'm just saying your chances just went way down on that. So I would, that's debatable, but no, it's not. You just, you cut out 75% of the female population that want to live in a van. There's just a lot of pressure down. Are the good ones

“left out there? There you go. You need a good van, girl. That's what you need. That's fun. I like you.”

You're a lot of fun. All right. Yes. I would sell it. And yes, I would do it. What I would do is put a time limit on it. So it doesn't become some kind of weird way of life. You don't want to be 63 and still doing this. Right. Right. That's not good for you. Career-wise, it's not good for you. Socially, it's not good for you financially because of what you said. You're in a depreciating versus an appreciating asset. All those kinds of things. But if you did this for a period of time

while you're untethered and don't have responsibilities and it's fun for you. I did here. You just, you're a rambling man. I mean, you like the road. And I think that's cool. That's fun. Go do it. Go do it. Yes. Yes. I would go do it. But put a time limit on it. And be, make sure you are saving. It's the same kind of mindset people go and move back home to save money. And then they really don't even end up saving money because they just end up

spending it in, you know, so really nature. I saved up to this point. Right. I've got over 300,000 in retirement and I also have about 90 cash in there. Okay. Well, you may just plug it back in. 25% of the fee. Yeah. Your bachelor eligibility just went off again. Okay. That's good. That's good. Oh, man. I was going to ask them how much a van costs. I think he's going to be okay.

Hey, how are you doing? Better than I deserve. How can I help? Well, I have a considerable amount of money that I'm investing. And I have a friend that's a financial advisor. He's, he's give me some mutual funds to invest in to purchase. And he's not charging me. And my question is, is it okay to go with him and just thank the one percent that typically they charge like a fidelity or each trade or would I get a better return if I went with each trade.

And somebody was actually watching over it. Well, I would not go with each trade because I would want you to develop a personal relationship with a financial advisor that is watching over everything and meeting with you like our smart investor pros that we recommend. But we don't recommend each trade. And we don't recommend fidelity. Fidelity is not a bad company. They've got some good mutual funds. But I, I, I want you to sit with a financial advisor. And I don't mind them charging you a

“percentage. You will recoup on that. So what's the total amount you're investing?”

Um, I have, I have like in my individual account. I have about 619. Um, I have some RSU's that are going to mature. I'm going to sell them in about two weeks. It's

276. Then I have a 401(k) that's 47. So you're bumping up your million dollars? Yeah, yeah over million.

But 1.2. Yeah. Okay. And I think when you sit with some of the financial advisors, there's break points on that as well. When you start getting up to that million dollar mark. So meaning that the commissions won't stay exactly the same. So yeah, I would sit down with smart investor pro and have somebody talk you through that. You can find them at Ramsey Solutions.com. But the data is this DIY do it yourself investing does not yield the same rates of return.

And the main reason is that you get enamored with the romance of some company or some particular stock or thing. Instead of just looking at cold hard numbers, the second reason is fear. And when you read the wrong headline on the Fox News or CNN website and it triggers your fear button and you start talking about pulling all your money out at usually the exact wrong time to do it, you need someone to talk you off the ledge. And so all the research that we have on investing says

that a person who has a calm conservative trusted voice in their ear to stay in the market and to carefully analyze these investments rather than getting caught up in the the internet romance bull crap of something. Then they're going to keep you on track and you're going to build more wealth over the scope of your life than when you DIY it. And so I know a lot about this stuff and I don't DIY my mutual funds. I have a smart investor pro Rachel and Winston have a smart

“friend that was doing it out of just. I think he's just saying pick this phone and this phone. I don't think”

he's actually man. Okay, okay. He said he's showing me which mutual fund. Oh, I got you. Yeah, and not charging him for that. But there's more in this than just simply which mutual fund to pick. But there's staying in it. There's understanding new things to come on board.

Different things you can get into as you get above that million dollar mark. There's going to be some

things that you can do that are very nuanced, very small things are not going to make you rich, but they're also going to stabilize your life and stabilize your future with that. So no, junior, I would not go with each trade. I would not go with fidelity and I would not go with my free friend who told me which mutual fund about over lunch. Instead, I would do what I do is when my advice is consistent. I'm not telling you to do something. I don't personally do. My personal accounts

“are with a more of our smart investor pros. And have been since I started that program all these years”

ago. Yeah, and these guys and women who are in this position, if you find a good one in our smart investor pros, for sure that is they live and breathe the stuff. And again, there are new launches in

that world that you can take advantage of that you will never get by just doing it yourself. And when

you have that much money, junior, that I would. I mean, no, we joke about like tax loss harvesting, you know, at one time on this show, you know, but it's these little things that you, you know, mean that add up over time and they know about that stuff and they can educate you and show you and it's good for you. Take advantage of those things, but you're not going to get that with just someone randomly telling you to pick two or three different types of mutual funds and that's it. So

there's some new launch to it and detail that I think could be to your advantage for sure.

As your business grows, everything becomes more complex. There was a time when Ramsey Solutions had

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like when you're talking to a member of your team. And right now, you can try NetSuite next for free. If you're revenue is at least seven figures, go to netSuite.ai/Ramsey. That's netSuite.ai/Ramsey. Welcome back to the Ramsey Show in the Fairwins Credit Union Studio. Rachel Creaves, Ramsey Personality. And my daughter is my co-host today. So a few months ago, we had another caller named Rachel that reached out asking if she could do a once-in-a-lifetime opportunity

“to see her childhood friends. There's a lot of drama in the question. Can you tell?”

She wanted to go see the backstory boys at the, at the, at the, at the, what do you call the stupid thing? Ms. Fierre. Ms. Fierre. Couldn't let you come out of my brain. I couldn't drop it out of my brain. Okay. At the sphere. She wanted to go back to drama. She was real. No, it was all true and real. It was her personal friend. To the heart of all millennial women in the world. So for instance, the backstory boys. Well, she obviously knew our answer. We're not going to tell you.

We told her, you know, we understand Rachel particularly understood. And empathized. I had no sympathy whatsoever. And just know. And then Rachel's like, "Well, but I understood." Well, it turns out Kevin with the backstory boys. What a good man. Was listening.

“And he was-- A friend, a friend sent him the clip. Yeah. Oh, that's what was. Yeah.”

And he got in touch with us through DMs. I guess it was. And minor years or somebody's. And means that somebody was watching my DMs because I don't. I don't even know what that means other than the way they're missing. Anyways. Okay. Tell the story. So he offered to send Rachel to the backstory boys. So we got him on the air with Rachel. Not this Rachel. Call her Rachel. Call her Rachel. And then we were going to pay for the hotel. So she had no net cost. And she got to go do the

dream because Kevin was so generous. And it was great. We had him on the air her on the air. So fun. Yeah. And so she just got in touch with us. Apparently she went the other night. Yes. And then sent us all the pictures and the VIP backstage experience and Kevin gave her a gift. Give her a shout out from the stage. She said, "My childhood friend." I go on her turn or a shirt. Back, she was very much childhood friends. So good. Very cool. And she had a great time. And she wanted to send a huge

thank you to out to Kevin, the back street boys for hosting Rachel. And we're giving her this once in a lifetime opportunity. That's pretty cool. So fun. There's a fun thing to get to hook up somebody with a super famous and super generous people like those guys. Very neat. Amber is in Atlanta. Hi, Amber. How are you? Hey, Dave. Hey, Rachel. I'm good. How are you? Better than we deserve. What's up? Perfect. So my husband and I have been on our free journey for about 18 months. Good. We've

paid all $45,000. Wow. Where do you go? We weren't really hard. And we're both really proud of the

progress that we've made because we've always been just paycheck to paycheck notes to the ground,

work in trying to make ends meet. And we have been married for 21 years. And so for that time, that's kind of how we've always lived. So we decided last year after they get our church, we're going to get our locks together or become debris. And I know that you always talk about the Bible verse of not being a slave to the winter is kind of what I'm keeping the forefront of my mind. So my question is, I have been that over the last year and a half who's income has double.

Wow. And yeah, he changed jobs about six months before we decided to work on our get-free

Hey, man. So we have our house left, which is about 190,000 and I have 28,000 left and stood at one get. The journey is getting weary. So my question is, how do we keep a lot of

“salaries from getting out of control while staying focused on our debt for a journey?”

You tap back into the exact same spiritual nobility that calls you to do this in the first place.

Something happened to church and God spoke to your minds and said, "You guys need to straighten up because you're not doing this right." And you said, "You're right, Lord." And we're going to not be slave to the lender anymore. And you went after 21 years of doing it wrong, a new dog learn new tricks, an old dog learn new tricks. That's for sure. Yeah, right. And so you're a completely different couple and completely different people than you were 36 months ago. That's worth it.

And so, you know, yes, you're weary, but yes, the 28,000 is going to go as fast or faster than super fast because the 45,000 was in the early days of the thing. And now you see it working.

But you just got one left and you're looking up that hill and you're going to steep hill and I'm tired.

But you just reach down inside and you say, "All right, this is what the Lord gave us to do." And this is what it's changed our lives because it's changed our whole mindset. How do you feel different, Amber, with the 45 paid off versus the 28? I can't believe it. Yeah. I can't believe we actually did that because I didn't even realize it was that much to offset down another day and we kind of hit mid-year and I'll say, "Okay, I need to do a check-up and see where we are.

And how everything's looking, you know, what is the rest of our year? We'll click, kind of thing. And what are we aiming for for the next six nights? Yeah, it must fall in love. As I added it all up, I would like, oh my gosh. It was gone by further. Okay, so, and I would want you to know that. Like, as it's going, do you know what I mean? Like, if you have a great month and you guys put an extra $800,000 more to the debt than what

you had planned out, that should be the energy boost to keep you going. You know what I mean? And I'm thankful that you guys are further than you thought, but I don't want that to be a surprise. I would be in your numbers probably a little bit more so that you know the end to Amber.

“You feel the progress. And you need to know, like, hey, we're going to put an extra three”

grand towards the debt. You know what I mean? And we're going to be done in 10 months. We've got to say on the wall back here, this says, "What got us here won't take us there?" Oh, that's good. I like that. And in my 40s and 50s, I ran 15 half marathons, which are 13.8 miles. Okay? And oddly enough, there's this thing in a half marathon world that happens at nine and a half miles.

And at that point, you've been running well over an hour. And at the nine and a half mile mark, your nutrition starts to run thin, your hydration starts to run thin, and you're certainly not running on any sugar higher excitement. I, you're just trying to finish now. And so you're looking, you're going, it feels like that the next three miles of that three and a half

miles is going to be longer than the first nine. Is there something that happens? And it's a mental thing.

And like I said, I've done 15 of them back in the day. And I remember every time I hit that nine and a half, I was like, oh crap. Why do I do this? You know? This is killing me. And but you're already 75% done, you know? And you, but you're still your mind starts playing tricks with you. And that's

“all it is. So here's the thing. I think you guys are way better and way stronger than you think you are.”

Well, thank you for that. Because one day we're going to make it to where we get to come to our debt free free. You are. And you're going to stand on the debt free stage right outside this window. And you're going to remind me of this conversation because we got your back, kiddo. Yeah. And Amber, you guys are doing exactly right. I mean, on average it takes people 18 to 24 months. So you're about to, you're, you are doing it. You're doing it. If God told you to do this, it's okay to ask him for the strength.

It's okay to pray and say Lord, I need some extra boost right now. And matter if I keep kind of enjoys that. [Music]

and road trips and camp fees and events. And all the extra gas and grocery runs money can get

tight before you know it to really get your money under control and keep it that way. You're going

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spending free up cash to put toward debt and savings. And it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go. Download every dollar in the app store or Google Play and start for free today. [Music] Are you sick and tired of being sick and tired with your money you're ready to get under control?

Work so hard. Don't seem to get any progress. Feel like a rat in the wheel. Get hanging over you. You sick a master card. Yeah, I bet.

“Hey, you don't have to live that way. Our every dollar budget app will help you find extra money”

every month and build you a personalized Ramsey plan to get out of that. So that you can build well.

In just 15, the first 15 minutes you're going to find thousands of dollars in hidden margin. It always

happens. You're going to feel like you've got a raise. Don't be normal. Normal sucks. You want to be a new whole new plan. Every detail under control. Check out every dollar. It's free in the app store or Google Play. Renee is in Boston. Hi, Renee. What's up? Hi, thank you so much for taking my call. I'm a simple parent. We're taking the best way to pay for college. I have two sons. My older son went into the trades. A.K. A no college debt. My youngest son is starting his freshman

year at a private college in New York in a couple of weeks. The good news is where to get the money

for a private college. We have $72,000 in need-based scholarship. Is it $72,000 or is it more?

No, it's $72,000, which leaves me to pay $14,000 per year. Of what? tuition. Oh, I thought it was $72,000. So tuition is so the tuition at the private school is $86,000 a year.

“They get more than that. Okay. I think it's 93,000. Okay, and what pretell is this young man studying?”

That's worth $100,000 a year. Yeah, but they give us $72,000. I know. And need-based scholarships, which means I only have to pay back. What do you mean? $1,000. I gross $1,13. Okay. Can you just pay $14 out of pocket then? I, that's what I'm thinking about doing. Yeah. Paying $14 out of pocket. Okay. That's going to- that- then you really don't have a question if you just do that. That's okay. What I, you know, and it sounds like it's what you're

going to do. What I will tell you from my research is, and we had a award-winning documentary called borrowed future on student loan debt, which you're not talking about student loans. But what we found is is the biggest mistake people make in college is the school they choose. Okay. Now, I don't know if you can find a school that's only $14,000 out of your pockets somewhere else, or if this guy does he have great grades or is it 100% based on needs with you making 115,000 a year? I can't

imagine the need of that. He has great grades, and he was recruited by the football coach. Yeah, so we'll be playing. Yes. Okay. So it's- so there's an athletic component to it. Well, sort of. You said it's need-based. Yes, it has to be need- because it's a division three school. Okay. Gotcha. And again, he's studying what you told me, but I already forgot. Economic. Okay. Okay. Cool. All right. So if you can do this and he can play football for four years,

and you can come out a pocket for $10,000 a year, and you can cover that in cash flow it for four years, and he gets a degree for the equivalent of $60,000 a pocket, then that's not going to be a bad deal. Right? Yeah. That's what I think. Yeah. But if he could have gotten a 100% free ride somewhere else,

Yeah. Well, I didn't know what I was saying. He got recruited from one place

and you went where they called you, but- and because they gave you a big old number, but it wasn't a big enough number. So yeah, the to the philosophical, if I were you, I would do the deal. Okay. But the philosophical thing I want to lay out there for you and more importantly for all of our tens of millions of listeners is that where you go to school does not matter. Okay. No one has, you know, you go in to see your doctor. He don't ask him where he went to school.

You go into spiral law here. You don't ask him where they went to school. You go in and sit down with an economist. You don't say where do you go to school. Unless they got a PhD from Freak and Harvard and then somebody will bring it up.

It's like their vegetarian. They feel like they have to tell you. You know, so, but other than that,

it's not a thing, right? So other than that, it's not a thing. So you just don't go somewhere just because and don't go somewhere by default. But it sounds like this deal. It's not super bad. But if you told me you were coming out of pocket 40 grand, yeah, you wouldn't be able to afford it. I'd be reset in his whole expectation about where he goes to school. I'd say go to school. I don't know if you can afford a pay cash for.

Or it's beginning of a pocket. Or if you came out of pocket, or if you tell me you're going to student loan debt to do this. I would just say no. There's another way to do it. And you can go to a different school and you can afford it. By the way, folks, the average in-state

“tuition in America today is $14,000. That's what she's paying out of her pocket.”

So all the free money that they gave her just brought the cost down to what the average state tuition is. Now, maybe not in New York. She's in New York. I'm not sure that state tuition will be true in New York. But I don't know who all offers in-state tuition in New York. It's a state college. But I'm going to cast and say that one's higher than the average. But still, you cannot justify coming out of pocket 100 grand a year for a school that you could get virtually the same

curriculum and the same textbooks in a lot of cases by going to a state school. 78% of the CEOs of publicly traded Fortune 500 companies went to a state school. Where you go to school does not matter whether you go to class or play beer pong matters. Whether you learn something while you're there matters. Whether you're studying something like economics that's usable in the marketplace, that matters. And so this is a sharp young guy,

obviously. And so the good news is she's got the money to cover the 14, the 14's not unreasonable. And as long as they don't rescind the scholarship. But if they rescind these scholarships or these things, you know, and he gets hurt. Then he's going to a different school if he's mine. Yeah. Because we're not coming out of pocket 50 grand so you can finish up where they started me with that. And it's a pretty debatable topic, but even college sports at a three, you know what I mean

at school. It's not like it's SEC and football. You're right. You're like that. You give a full time. The only reason he's it's just a job. You have a full job. You have a full job. You have a full job.

“You have a full job. That's a totally. That's how I was going to say. Is at that point you are”

going because they're paying for for your well. And then they take that team and they go play a big school and that school pays them a million dollars for beating the crap out. Yeah, that's that's what happens. So that's where it comes from. But that's true. Oh, man. Oh, hey. Well, what's crazy

too. It's not his deal is not a bad deal. Sure. Totally. Always look. Always look at lots of options

and don't just set the thing up on based on where you're going to school. It's the number one mathematical mistake in the whole college equipment, whole college decision making paradigm. Yeah. Well, average tuition. I just liked those $12,000 room and board is 13 to 15,000. Yeah. You're starting to pay more for room and board than the actual tuition. tuition. They're going to, they're going to price themselves out of the market if they keep it up.

Some people go, she's like she said she got one went in the trade. She's going to end up making more than the economist. Right. Yeah. The diesel mechanic will make more than the

“economist or done here. That's what's going to happen. 120 a year. Do some mechanic right now.”

So yeah. Sounds like Renee's a good mom. She got two boys. She's raised both. I didn't know what productive well done Renee. Very cool. Well done Renee. And I hope it goes well. I hope it doesn't get injured. I hope it and he loves it. Yeah. Oh no, it works out. Perfect. If it doesn't pull him though, put him in a school you can afford.

through real money problems and figure out what to do next. Now you can get that same kind of help

“anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles.”

We use on the show whether you're making a decision or just want something explained. Ask Ramsey is here to help. It's fast, simple and free to use. Go to RamseySolutions.com and try AskGramsey today. That's RamseySolutions.com. Dennis is in Denver. Hi, Dennis. How are you? Hey, Dave and Rachel. Thank you for taking my call. Doing a lot of other yourself better than I deserve. What's up? Awesome. Um, so I'm 24 years old.

I have about $100 in 70,000 in a regular savings account. Um, embarrassed to say that, but that's

what it is for now. My question is, my mother is currently renting a home. She has been renting that house for quite some time about five years now. She doesn't own a home herself. And the home has worked about $180,000. I could cash flow it and have her pay rent. She would want encouraging me to do this to build some equity over time and also, um, so I'm have some income from the rent that she'll be paying me. I'm wondering if that's the wife's decision to make.

Where'd you get $100 to $70,000 at $24? I've been working since I was 16 and to be honest

with you, I just have accumulated that much. Over the years, I have to, um, I take home about $3900

a month and I happen to know that no payments at all and no apartment. And I also don't people are housing as, um, it's a benefit through my employer. What do you do? I'm a property manager for, um, a ski resort. Okay. Wow. Well, you've done really well, sir. Congratulations. Very well done. How old is your mom? She's 60 and she's looking to live in that grandhouse, uh, for five to seven more years before she would tires and goes back to her home country, at least that's

“where she says, but it's, it's unknown. Okay. Is it a house nearby? Is it in Denver?”

No, actually it's in the aspects of Houston, Texas. Yeah. Okay. Okay. What's her home country? Just curious. Cunderous. Okay. Cool. Doesn't affect the answer. I was just curious, but, um, um, so I, I think your mom wanting to own a piece of real estate at 24 that's going up in value is a good idea. I think renting to relatives is a really, really, really bad idea. And I think owning rental real estate in a town you don't live in is a bad idea. Okay. So this is going to go sideways.

Something's going to happen. Somebody's going to get sick. Something's going to shift. You're going to get married. Your new wife's not going to like the arrangement. Something's going to happen somewhere. Um, I would rather if your mom needs some help through those years, which it doesn't sound like she does. She's paying her rent now and she's working. And when she, when she retired, she's going to leave and go to Honduras. So she's probably in pretty good shape. After all, she

raised you and you're pretty frugal. So I'm guessing she's probably doing a pretty decent job. But anyway, I would just live your life with your 170. And if you need for some reason to,

“you know, if you want to help your mom at some point with some cash, that's fine. But I don't”

think this is the best way to help your mom and it's not the best way to help you. Mark. And she doesn't need to help at all. She just is encouraging me to just let it be a good idea. She just wants you to own real estate. And it's something going up in value. She wants to pay her son. She'd rather be paying you than to land more. Like, I understand how she got here. It's just when you look at all the facts. It's probably not the best route.

He didn't ever go out and it's $8,000 next year. Right. You got a problem. You know, and when this or that happens, you got a problem. And by the way, you're supposed to go up on the rent every year when you're a landlord. That's how it works. Well, he went through mom. Well, he didn't do that for five minutes. I know. I know. And so you're not getting the right reader return on your seven hundreds of anything. So you're not going to

Sweet mom is going to be your type of mom. That's right. She needs to just rent. And then

execute her planning needs to execute. That's right. I agree. Keep it separate, Dennis. But I understand how she and you thought maybe this could be a good idea. But at the end of the day, after going up the best. Sitting in this seat for 35 years, I can tell you that very few people have called up and go, oh, that really changed everything except in bad ways. And so if anything Dennis, I would recommend you put your 170 or part of it, half of it into the market. You could be

making more return on that. That is one thing I would say is do something with that money you have

“saved. All sitting and checking is not good. That's right. That's right. Yeah. So you need to move”

some of it somewhere and start thinking about what, you know, where you want to live. You don't you've got free housing right now. So that's okay. Yeah. But I would park the vast majority of that and at least in this in P500 or sit down with the smart investor pro and let them help you to develop a game plan for investing that. Because the crazy thing y'all, not just him, but everybody also think about this. Okay. In 2023, the market went up to this in P standard and poor 500, which is

500 larger stocks and you can buy that in a mutual fund, went up 26% in 2024, went up 25% in 2025, went up 18%. Year to date in 26 is up over 10%. And we're not even at the end of the year yet. Okay. Or you can get three and a half percent on a high yield savings count. So basically, had you been invested if you're out there and you've been invested for those four years, you would have doubled your money. And by the way, I have some money sitting in an S&P,

he always, that's where I park money, what I'm waiting to buy, he's a real estate. And so during that

five-year period of time, the money that I've got sitting in there doubled. That's crazy, y'all. So like if it was a million dollars, you got two million dollars. That kind of thing. If it's 170, you got three, 40. Not the market does not always do that. That's a unusually good four-year period of time. But that's a lot, y'all. That's crazy. And so you know, just leaving money in a fruit jar in the backyard, buried because it's

“quote, "safe," no, it's not. Because you're getting beat up out here by inflation. So you need to be”

investing at a rate that's higher than taxes and inflation, which is higher than 6% on your long-term investing. Because you got to cover taxes and inflation, inflation runs about 4.2. And then you're going to have income taxes, some kind on that money, somewhere. So when you got money like he's got sitting there, beat Rachel's point, get it towards working for you. Andrew is in Tampa, high, Andrew, what's up? Well, I've got an interesting problem. I am truly blessed. I'm at a very

strong financial position, but you've got me getting, I guess, anxiety because I burnt through my baby step three. I had a couple of very large ticket recent expenses that fortunately, you know, I had that fund who was able to pay it. So, you know, just not having I'm super cash poor right now, but was wanting to know your opinion on borrowing against a 401(k) since I can pay it back to myself with interest at roughly the rate that the market's moving. No, it's not the rate the market's moving.

It is more like five or six percent. You don't pay yourself back on 401(k) loans at market rate. You mean, you mean the market on a high yield savings account, maybe, but not the market on the,

not about the S&P 500s doing. No. That's not available. But anyway, the answer is no.

I would never borrow on a 401(k) under any circumstances. The only time I would take our used 401(k) money is to avoid a foreclosure bankruptcy. You don't know where near that. How much money did you have in your emergency fund? Well, going back to COVID, I had quite a bit, but I use that to buy a business, and I now own forelocations, and that's doing real well, and I'm keeping all of that money separate,

“to continue to grow that business. How much money is in that business? How much money are you saying?”

You said I'm keeping all of that money. How much is in there? It makes about 300,000 years. Good. And all that money is just sitting there and retained earnings? Well, no, I've used it to buy properties and open additional shops. How much cash is sitting in there right now? In the business account, about 180, right now? Okay, and how much was your emergency fund recently until you had these unexpected big purchases? It was about 100,000.

emergency fund. You don't have three to six months of $100,000. Okay, so I'd take some of your

“880, maybe 30 or 40 or whatever. The three to six months of expenses and move it over there,”

set it in your emergency fund and call it a day. [Music] You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros,

whether you're looking for car home or any other type of insurance, Ramsey Trusted Providers, have been coached and vetted to serve you like we would. Find what you need at RamseySolutions.com/insurance. Our scripture that a Psalm 37 23 and 24, the Lord makes firm the steps of the one who delights in him. Though he may stumble, he will not fall for the Lord upholds him with his hand.

John Maxwell says a man must be big enough to admit his mistake, smart enough to profit from them,

“and strong enough to correct them. Woo, that's good. Makala is in Philadelphia. Hi, Makala. How are you?”

I'm good. How are you guys doing? Better than we deserve. What's up? I'm calling because I'm wondering what it means to be a beneficiary on a will, and if that person who is the holder of the will, if it passed away, does the beneficiary

inherit any debt? Okay, the second answer is no. The first answer is there's not really anything

called a beneficiary. There's an heir. You can name an heir. You can name who you're going to leave money to. You can name, you can take a certain kinds of things like your 401k. You can put a beneficiary on that. Life insurance has a beneficiary on it. An annuity can have a beneficiary on it, but a will technically doesn't use that term. It would be more that you're just the heir or the person that is willed the money. A will also has, and this may be what you're talking about. I'm not sure,

they will assign someone to manage the affairs of the estate and follow the directions of the

“will, and that's called the executor of the will. Is that what you're thinking of? I think. Who's”

will are we talking about? This is my grandmother's will. Okay. If she's simply leaving you money, it's that simple. Okay. Okay. The executor, as the word implies, executes. Executors execute. The terms of the will. So if the will says, you get $5,000 of grandmother's money. Your cousin gets $3,000 of grandmother's money. Your mother gets that piece of land, your brother-in-law gets that piece of jewelry, your Bible or whatever. Then the executor's job is to do what the will says,

and execute that, and give you that money. Your sister, that money, your brother-in-law, the Bible, whatever, all that stuff. Right? It's their job to do that. But in no case does the, does the debt get assumed by the person. Now, okay. If there's something like a house that has a mortgage on it. Okay. The executor would sell the house, and whatever the net is, would be distributed to the people in the will. Okay. But if they die and they don't have enough money to cover

all of their debts, the person in the will will get nothing because the debts have to be paid before money is distributed. Gotcha. Okay. But in no case, are you suddenly going to have debt on you because your grandmother had a mortgage? Okay. But now, let's, let me make it, you know, that's the law. Now, if, let me go step further, make this even more complicated. But let's say your granny had a house,

the she out $100,000 on, and the house is worth a half million dollars. Okay.

She dies and she leaves you the house. Now, you have inherited a house that has a mortgage, but you're not on the mortgage. If you want to keep the house, you're going to pay the mortgage,

report it on your credit report. They're not going to sue you if they foreclose. There's no change in

the documentation. How about the deed? The deed can go into your name, but you don't owe the mortgage.

“Okay. But if you want to keep the thing, if she leaves you a card, and it's got a car loan on it,”

if you want to keep the car, you're going to pay the debt. Okay. But you're not technically on the debt. Like if she left $50,000 in credit card debt, you don't just get the $50,000 in debt. That does not inherit it. Okay. Is that logical? Yes. Very. Thank you. Okay. I'll put it and give you too much. Well, you're good. Right. Just throwing everything at you. One thing. So folks, when someone dies to make it simple, what you own when you die stands good for what you owe.

So only your net worth after all debts are paid can be distributed to your airs.

And so it's like, you know, sometimes I run into people who are kind of, they don't have the stuff works. It's like my grandmother left me a car, but the bank took it. Well, no, you're a grandmother if you're a card with a debt on it. And you didn't pay the debt.

“That's why the bank took it. The bank didn't do anything wrong. That's why they have a lean”

on the car title. So they get their dead gun money. But so, but if someone is penniless, they're they're a palper. They live in an apartment. They don't own a piece of real estate. They're and they got $60,000 in debt and $40,000 or $60,000 in credit card debt and $40,000 in student loan debt. And they don't own anything of value. And they die. That debt is not inherited by their airs. That debt is just simply lost. The company that loaned them that money loses the money.

Student loan doesn't get paid. The credit cards don't get paid. And so if that's your father that passes away as a palper or what we would call it, poor, you would just get copies of the death certificate and send it to city bank and say, you get nut and honey. Because he died with no money and nobody paying this. But you don't get to keep his car and not pay the credit card debt. Either. Because what you own stands good for what you owe when you die. Jacobson Salt Lake

City. Hi, Jacob, how are you? Well, I'm great. How are you guys doing? Better than we deserve. What's up? Yeah, the question about coal fight HSA funding distributions. Are they a good idea in terms of

“working your money with a traditional IRA in a smart way? The only thing I've used HSAs for in that”

way is I fully fund mine every year and I've never used it and I've got it invested in mutual funds.

And so it's become a third type of retirement savings. But I don't move it around. I haven't done qualified distributions. I haven't done anything. If I had a big medical event and didn't have the money, I could pull that money out of there. But I got several hundred thousand dollars in an HSA, because I started at the first year at George W Bush started it and I fully funded every single year. And when he got above a hundred grand, I dropped, I put it in the mutual funds. I'm actually, I think

it's more like a half million in there now. But anyway, doesn't matter, a lot of money in there. And so it becomes, but only after you're at baby steps seven to you do that kind of stuff. If you don't be pulling money, loading up that thing and not paying off your house. That makes sense? Yeah, it doesn't make sense. I just have a traditional IRA that it's not really doing anything. It's from a previous employer. I haven't rolled it over anything

like that. I wanted to see if like transferring to that money into my HSAs. No, no, no, no, no, no. Good idea. No, you don't need that money in your HSA. No, you want to keep that as an IRA. Roll it from there from a traditional into a traditional IRA into a good mutual fund that's doing something. Get a good smart investor pro to help you with that. We don't use the HSA instead of IRAs. No, no, IRAs are much more flexible. A lot more things you can do with them than you

can with the HSA. But, by the way, sidebar. If you can-- From a tax perspective, the HSA-- Do what? From a tax perspective, the HSAs. It grows just like the figure out. No, it isn't-- And it's pre-tax that goes into. Yeah. You don't-- Yeah, you-- It's like a traditional. You void double taxes. It's like-- No, you get double taxed. If you don't-- If you don't use it for medical, you get-- You get taxed.

Not at the end. Retirement? Yeah. Yeah, when you pull the HSA out at 65 and you start using it for retirement money, you pay income tax on it. Yeah. Just like a traditional 401-- Why did I feel like the growth was tax-free in HSA? No. It's tax-free if you use it for medical. Yeah.

A lot of tie-in-all. My HSAs. Yeah. But you're HSA-- I mean, but it's-- You got a big old traditional

“lump sums in there. And there's nothing you can do with it except that. So, but no, I wouldn't put”

more money in there than that. And I wouldn't do any of that until that's a baby step seven and

beyond type strategy. Where you've maxed out 401k's, megroroths, mega-backdoor-- Well, everything.

You know, mega 401k's, everything's got all going in the Roth. You can't do anything else

and out there. Okay, here's a little bit more money. I can keep the government channel. Yeah, and again, you can't get to it. Well, I'd less for medical, until retirement. 65. Yeah. So it's stuck in there again. So I mean, I can get mine, but I don't need it. So I'm not going to-- I mean, I'm just going to let's

“return grow. Just let's return grow. That's what's for. Never was intended to be used by me.”

That was just keeping the governments thinking hands off mass-thinking money. I put this out of the Ramsey Show in the book, so we'll be back with you before you know it.

“And 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. (upbeat music)