Finance Hacks Won’t Save You, Habits Will

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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 in the Fairwins credit union studios, this is the Ramsey Show. George Campbell Ramsey personality co-host of smart money, Happy hour and the more and best knowing author is my co-host today. I'm Dave Ramsey.

Open phones, a triple eight, eight, two, five, two, two, five. Sarah is in Green Bay, Wisconsin. Hi, Sarah, how are you? >> Hi, thanks, Jessica Michael.

>> Sure, what's up? >> So I'm considered even my husband, but I feel like I'm financially trapped with the amount of debt that we have. I just feel like I'm not able to leave

with my daughter. >> Okay, what happened to your marriage, huh? >> We've been married for about 13 years, and it's just been a lot of full abuse over the last five years since we've had our daughter,

“just kind of started realizing that it's not something I want”

for to be in and grow seeing that type of treatment. So I just, at this point, we're trying to look at my options right now. And we've done couple therapy, and it just doesn't seem like it's kind of clicky with him. It's kind of like I'm at my wedding with that, so.

>> I'm sorry. And how many kids you got? >> Two or one. >> What age? >> She is four.

>> Well, obviously, we're going to be a purple group. You know, obviously, we're going to be a proponent for anybody to do anything they can to try to stay together, but not in an abusive situation without some traction on that. So I certainly understand where you are.

A friend of mine that does divorce recovery counseling

has always told me for the last 30 years that divorce

turns a marriage into a business transaction. So this is now about incomes and assets and liabilities. So what is your income? >> So my income is approximately 56,000 a year. >> Okay.

Can you live on that as a single person? >> Yes. >> I'm in our area. >> Yes, you can. Okay.

And you said there's a death that makes you feel like you're trapped. How much debt do you guys have? >> Um, the supervisor house. My husband has a camp alone. His truck loan and a four-wheeler loan.

And then we have about 12,000 in credit card debt. And I have 27,000 in student loan debt. >> Okay. And what's the home worth? >> In our area, homes that are equivalent to ours,

are equivalent to 35,000. >> 35,000 dollars. >> I'm sorry, 235,000 dollars. >> Okay, I feel better now. Okay.

>> I thought you were in the camper for a minute. >> Okay. >> Okay. And okay. 235,000.

What do you owe on it? >> We owe about 179,000. >> Okay. So there's a little bit of equity there. Okay.

I don't know how divorce works in Wisconsin necessarily. But obviously your next step is just gather information,

information always relieves anxiety.

The unknown creates more anxiety than a known bad thing. If we got bad news and it's clear, that's less anxiety than unknown. Then there's just a boogey man in the closet thing.

“So you need to sit down with an attorney and find out exactly how this is probably going to go down.”

I mean, a good divorce attorney can tell you in 30 minutes. This is probably how this is going to go down. And he could sound like he gets all of the debt with his camper truck in four-wheeler. And they sell the house and the house equity cleaners up the debt. That is on the credit cards and maybe on the student loan.

And maybe some of his debt as well. And because you're probably getting half the equity each in most cases. So either one of you have a big retirement plan. >> I have one through my employer, Mr. Pete pension fund. >> But nobody has a 401k.

>> I believe my husband has a 401k, but he doesn't have much in there right now. >> Okay. What does he make? >> He makes, about the same as I do. Both of you.

>> Okay. And then there's child support and then there's alimony. And those are the things. Those are the variables that if I were you I would want to learn about those things. So that you know you know what you're facing.

And you're probably not as trapped as you think you are. I mean, you go get a one-bedroom apartment or a two-bedroom apartment sell the house.

>> Yeah.

>> That's not really trapped.

>> Yeah. >> I felt like I was trapped though just because I mean I still care about them and I don't want to be stuck, but at the same time I'm looking at it as like financially we got into the situation. And I feel like I'm responsible to pay off the debts and I don't know why all of those are his toys. >> Like I said a divorce turns a marriage into a business transaction.

“If you want to get all romantic and start paying stuff you don't know that's a different discussion.”

If you're going to do all that you probably need to go back to marriage. Councilor and try to save the marriage. But once the decision is made and the switch is flipped it's every man for himself. >> Yeah, it's not mean I don't I'm trying to destroy him in this situation. But he could sell the four wheeler the camper and the truck and be out of debt too hello.

>> Yep. >> Okay, so.

>> You both are going to be okay on the other side.

>> Nobody's trapped here except by decision to hold on to a bunch of crap you can't afford. That's the only trapping there is. >> And staying in an abusive relationship. >> Yeah. >> That's a worse trap to me.

And so I think those next steps will help you get some clarity on this.

“>> Yeah, and I also might change the tone of the therapy sessions.”

Like if you go sit down with an attorney and you know exactly how good a position you're actually in. Then you're coming at this from a little bit more strength and you're going look. I really want this to work but all of a sudden your body language changes your voice tone changes because of confidence. And because you know you're going to be okay instead of trapped.

Because Sarah what you've told me you're not trapped unless you choose to be trapped.

But you can choose that if you want. But you're not. And but you know, the much better outcome is for him to grow up and stop the negative behavior. And you guys to sell off all the garbage and get you that life back with no debt. And just quit buying everything in sight.

But campers and four wheelers and toys and trucks. And this just sounds like boy out of control a little boy out of control buying crap. And so I mean I don't run into a lot of ladies that have bought a camper and a four wheeler. >> That's usually I do, but generally that will be the guy. They went along with it.

>> Yeah, and the pickup to pull the truck to pull the camper with that's the other thing. So yeah, and occasionally I run into some light in it. The whole thing was her idea. But usually she's going to make her mistakes in other places. So you know, but you know, she said she was participating in the decisions.

So she's willing to take responsibility for her part. >> She owned up for that. She was in a compless to some of these bad decisions. >> Yeah.

“>> But I like what you said there that you need to know the facts because those unknowns can be scarier.”

And just you're overwhelmed by everything around you. >> Then you get the facts, you go, okay, yeah, we could sell that. >> Yeah, you know what, that will be split or that won't be in my name. And then you know how to move forward. >> Yeah, it's interesting.

Like cortisol release, stress drug release is way lower on bad news that's clear than on ambivalent, ambivalent, not knowing the unknown. It creates a whole lot more stress. [ Music ] >> You've worked too hard to get control of your money just to let strangers control your data.

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[ Music ]

If you have a money question and you want to answer for your situation, head over to our website and use our AskRamsy feature.

AskRamsy is our free AI tool that's built and trained on proven brandy, Ramsy principles. So if you don't know how AI works, AI is only as good as the data that is entered into it to cause it to think. And so what we did is we took thousands and thousands and thousands of hours of this show. All of my books, all of our books, the personality books, all of the financial peace and diversity lessons. And impede them into a database in every article that we've written.

And it's all in there. And so AI forms an answer based on all of that. Which means that the answer that this Ramsy AskRamsy will give you is better than you will get here on the show. [ Laughter ] We'll have a brainfighter too. But that thing can't. It can't. It doesn't know how. It's really, really popular.

It doesn't have a brain.

“It's working. It's the only thing I want them to add a little bit more sass in there.”

Yeah, the snorke of sass should be increasing. The snorke of sass should be increasing. Maybe we can add that as a dial. You can dial up how much snark you want it. Oh yeah, more or less snark.

How direct? How Dave do you want this to be versus Rachel?

You know? Oh, now that's a snorke. That's a snorke. Sorry. That just got personal fast. She's more friendly. I think America can agree on that.

Hey. Hey. See what I'm doing? We're going to improve it right now. All right. Check it out for Ramsy [email protected].

Go to the website RamsySolutions.com. AskRamsy is completely free. You'll get your question answered in some version of Georgia, Rachel or Dave or whatever. It's way nicer than me.

I will say that. That's true. For now, till I get through with it. I'm not done with it. Mike's in Baltimore, Maryland.

Hey, Mike. What's up? Hi. I'm calling. I'm wondering if you have... I would recommend... Would recommend...

“Caching out principle in a Roth IRA to pay off debt.”

Not unless you're bankrupt. Not unless bankrupt. Okay. Because it's going to cost you millions and millions of millions of dollars in tax-free growth later. Because you didn't address the real issue.

So how much debt have you got? What's the problem? We have about... Well, we bought a new house last summer and we used... We have a few locked from that at about 50k. And we have a retirement loan at about 28k to the 401k.

I'm trying to take out the 401k retirement loan first.

So we've been paying that down probably like 4k a month. I'd say... We've got a 50,000. A 24,000. What other debt have you got? We've got a car loan of about...

About 13k. We've got a credit card debt of maybe... I don't know, a 15k. And then... We've got savings.

How much savings do you have? We have... Well, we don't have a full amount of savings. But we have about 11k and 11k savings currently. Good. And then...

Our Roth principle, though, is... The question is really about the Roth principle. I understand the question. I'm still telling you... I completely understand the question. It's a stupid but idea. Don't do it.

What's your household income? We make about 83... Sorry, 83 hundred about every two weeks. Okay. Y'all 27? No, now we're both about 40.

40. Okay. Hmm. Miss that one. All right.

So... In doing what we do here, helping people walk out of debt and become wealthy. What is the shortest distance between where you are now and wealth? It is to become debt free, not by destroying your nest egg that's going to make you wealthy later.

“And so that's why I keep coming back to know.”

I'm not doing that. So in listening to you, you're fairly new to our information. And I'll show you what we teach as a process. It's very detailed and very intense. And dialed in. Like eyes wide open.

So you start with a thousand dollars in savings. Only not counting your retirement. You temporarily stop all retirement. And then you go to what we call maybe step two. And you list your debts smallest to largest. And you pay off everything.

But the house in that order with great focus intensity. Anything you can do to increase income and reduce debt is fast as possible. Because the sooner you've gotten rid of this 110,000, the sooner you now have flecks called, you're now have your income to create the,

which is your largest wealth building tool. And right now you've given it all the way to all these stupid things you bought that you couldn't afford.

we have, you know, pretext retirement. That's I would say close to 900,000 at this point.

“But that's why I'm feeling like the Roth.”

I mean, I appreciate the tax free growth for sure. How do you mic? I'm attempting to just mic that with it. The guy in your mirror is freaking lazy and disorganized with his money. That's you.

That's not going to be fixed when you take that money on that Roth. And all of this freaking debt's going to grow back in five years.

Because you've never addressed the fact that you all have overspent.

You're looking for a quick fix or quicking for a shortcut. And that is not a good plan. I would stop adding to your retirement. And you've got to address the misbehavior. You don't even know your numbers.

Oh, sort of kind of maybe I think is all the language around your numbers. You don't even know where you are. You're just wandering along buying crap. And you guys are going to have to stop that. Whether you crash out your 401k or not.

If you can't afford to live off of what you told us $200,000 in take-home pay, I don't think we can help. I thought it was Haiti. He said 83 hundred every two weeks. Oh, that's what I heard.

So I'm going dude.

You guys make too much to be fooling around with all this debt.

Okay. That's even worse. And so if those numbers are true, you're right. The behavior is not going to change.

You're going to keep robbing that 401k every chance you can get. Because you guys are living the lifestyle you can't afford. So my hope is to offend you enough to make you look at this. I love you enough. I want you to get mad at me.

That's fine. I'm good with that. I want to piss you off just a little bit and make you grow up and sit down and go. I'm running this thing.

This company called me incorporated very poorly.

If one of my VPs sat down and use the language about their budget in one of our profits centers, the way you've discussed your home, I would fire his butt for being incompetent. Okay. You don't know.

“I think I got sort of kind of bull crap.”

You need to know exactly. And you guys need to get focused. You make too much money to be this broke. But you all have been intellectually lazy in how you've addressed your personal finances. And if you're, if you're roll up your sleeves and attack this and get.

Get some muscle tone to what you're doing. Get some intensity to what you're doing. You can clean up this mess in about a year and a half and not have to mess up everything. But if you don't, you're going to make a bigger mess later. Because there's no in between in this discussion.

There's not a mediocre landscape. Because you guys have consistently added to the problem. And until you stop adding to the problem and being people that do that, you're going to create more messes. That's what it comes down to.

Folks out there listening land, this is why debt consolidation doesn't work too. And this is why when you get an inheritance from your grandmother. And you clean up everything and four years later, you're up back in the same mess. Because your habits haven't changed. Your household processes haven't changed.

You've got to address what is wrong with our systems and our hearts. And our relationship that's caused us to get to that we can run up these debts with this kind of money. But we feel better because the junk drawer we cleaned it up by putting it on one bucket. And so hey, look at that. It looks better and feels better except now you still got the same mountain to face.

And you can't debt snowball it. So debt consolidation is scary because it makes you think you solve the problem. Yeah, and you didn't change the habits. And so 88% of the time someone takes out a debt consolidation line. They're back in debt within five years.

Nine out of ten times. Because that is not the problem. It's the symptom of intellectual laziness, immaturity, no good systems. Bad discussions with our no discussions with my spouse that were around the same page. It's that that is the symptom.

It's not the problem. And so when you just address the symptom, expect the problem to stay there. And the symptom will grow back. It's that simple. If you're going to get dandy lines out of your yard,

you can't just cut them with a lawnmower.

“You have to dig them out by the freaking root.”

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Get started at CHMministries.org/budgets and use promo code RAMC. That CHMministries.org/budget and promo code RAMC. Oscar is in Ottawa. I Oscar, how are you? Hi, how are you? Thank you very much.

Sure. What's up? Well, long story short. I've been dating a Polish girl for the past five months. And everything has been going well, except for a few small details that are mostly related to finance.

Like since they won, I've been thanks for restaurants, like going out, like activities, snacks and everything. And she's directly mentioned doing our conversations that this is a part of her culture, even though she was born in Canada. And me and Iranian, I was born in Iran, raised there, and I've been here for a couple years. And I know how it's been called to her culture.

And I would like to kind of make sense of it. I want to do some sort of, but at the same time, I don't feel a point of man getting for everything, especially in this economy. And my question is, what is your suggestion? What should I do? Is it like a big red flag or is it just something that we can kind of figure it out together? Hmm. It's an interesting question.

So the marriages that unaware of that are high quality, and when we're dating, we're, you know, courting to use an old term, an old word, and we're thinking about that leading toward marriage.

“Okay, so that's why you would ask if this is a red flag or not.”

Do I want to get involved with this person, right? And so the marriages that I know that are super, that I consider some of the best marriages on the planet that I've been personal witness to, are where each of the people involved make the relationship about how much they can serve the other person. Okay, how much, how good can I be to you? So you, how good can I be to her? How good can she be to you? And instead of what am I getting out of this?

In other words, I'm adding value to the relationship instead of taking value. If you're a taker rather than a giver, kind of a thing. And so I might look at this through that lens and say, yes, the cultural implication is very real.

The economic in this economy, you're always going to be able to say in this economy through the rest of your entire life.

You're going to be able to say that from now on. There's always this economy. There's never going to be one that there's just raining money on you and makes stupidity okay. There's no economy that does that. And so there's no this economy, but you know, so how much do I love this person to the point that I want to serve them and give my life away for them would lead you to not ask this question even. Okay, does that make sense?

You're kind of worried about, you're kind of worried about if there's, you know, if this is all, you feel like you're being taken advantage. If I'm getting, if I'm getting my part of this, yeah.

“Are you sensing that from her that there's a lot of entitlement and expectation?”

It's not, I don't, I wouldn't say it's about expectations like she wouldn't like necessarily let's force me okay, let's go outside or let's do it. Okay, she a money hungry gold digger.

I would, I would say the first one.

Is money hungry? Yep. Okay, let me put it in a cultural setting that I can understand and explain and see if it extrapolates to your situation. I grew up in the old south. I'm an old southern redneck.

Okay, that is a cultural thing. I'll admit that. Okay, that's not necessarily true in every, in every part around the world from Iran to Polish to to Poland to Canada, okay, and some mix of them between. But that's the world I grew up in. Now in my world, what I would be looked, what I looked for is, I don't want to, because I'm willing to pay for everything and that's an active shivalry. The last thing I want is a high maintenance princess that's entitled. I'm, that's great. And I'm going to avoid that woman like a, like the plague. Okay, so one guy said, one guy said, you know, if you, if you marry a woman that like spending money, you better enjoy working a lot.

You know, and so I, no, I'm not, I'm not getting, I'm not doing that. Just because my, I'm going to, an action out of my cultural upbringing, I'm going to pay for everything doesn't mean I'm going to be taken advantage of.

Did you ordering the fanciest wine on the menu on the first date? Flame and y'all?

“Like, I've, no, that's not, that's not like, that's what's happening, but let's say in a couple of months, I was planning to go on a trip with her to Europe.”

And I was just like, we're talking about everything with such a destination, like with cities and blah, blah, blah. At the end, in the end, I was like, okay, so let's like, pop, find out that the group pays what? And she was like, my daughter usually man pays the ticket at the hotel, and me, I can be taking care of, like, food, which, what I looked at it. Like, ticket on the hotel, it's going to be, like, 90, 85 to 90% of the whole expense and the food. You know, I might, I might go ahead and take this step further than and say, okay, what if we were married, how does this work?

Uh, this and I would love to pay for everything. No, I'm saying, I would ask her that. And if she still expects to be coddled, then you've got a princess on your hand, regardless of the cultural issue, a high maintenance princess. But that's not what it sounds like, it sounds like that, you know, you just got it aside, how much of this you're going to pay for. And I don't know whether that's an old guy thing, a southern thing.

I don't know, Georgia, you're a Boston guy.

Yeah, it was paying for it. Did you pay for all your dates?

“I think it was a little different in the north.”

You split dates, you went Dutch. You know, I didn't get a lot of dates back in my day day, but when I did, when I did, I happily paid. I will say that. But I'm just so happy to be here exactly. It's so exciting.

I don't want to mess this up. But at days point, he's going, well, I'm planning a trip to Europe. Well, maybe let's not plan a trip to Europe if you're worried about the finances and then bring it up like your idea.

And then she's like, wow, he's taking me to Europe.

And now you're going, well, it's going to cost you two grand. I think let's sap the boundaries earlier on and go on less fancy dates. And say, hey, you want to take a walk in the park? And she goes, no, I'd rather go out.

“Well, that's a sign today's point that there is some entitlement there.”

And that she is just wanting to just spend spend spend spend. And I don't know if she's taking advantage of you or not. But I do think it's a red flag to bring up in the relationship of how you work. The red flag is not as much about her character or your character. I'm suddenly, it's certainly occurring to me as it is that you guys might not be a match.

The values are different. Yeah, if you can't get a line on the handling of money and the value of money in this relationship, that is a red flag for any relationship. If you can't be in agreement on how we're going to handle money in the future together. We can't be in agreement about how we're going to handle crazy and loss. We can't be in agreement about religion.

And we can't be in agreement about kids. How many to have and whether they're going to run the house or whether we're going to run the house. Then these are the things that terror marriage apart. And the high quality marriages get aligned on those four things. And so you're not aligned on that.

And the fact that you're not aligned is the red flag. That's a big red flag. It just took me a minute to get there. I'm trying to wander around in the cultural bullcrap and figure out what's going on here. It's beyond culture or whether or not we got a princess on the line.

But I don't know that. I don't hear that in his description of her. I don't hear that about her but could be. He might need to find a penny-pinching gal who loves going to the thrift store. That might be your type.

How many hours a day they spend on Instagram? That would be an interesting study. Spending habits versus. We do know that. The number of hours on Instagram is directly attributed to amount of spending.

I'm 100%. The Rachel Cruz tell you there's a personal experience. There's no there's data on that. That's actually real. But I'm just talking about if you're trying to find happiness and image and happiness and where we go.

What we do, what we eat, then you're going to be hungry or whole life.

It always has to include spending money.

Exactly. But if you guys cannot work through this and you get comfortable and she gets comfortable, the fact that you're not aligned to Oscar is the red flag. (Music) Dave, we got a lot of calls on this show where life happens.

One day someone's healthy, they're working, providing for their family, and then a curveball hits. You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

“Yeah, and that's why you've always said that having term life insurance from Zander is essential.”

Because it protects your family if the worst happens. Yeah, that's right.

You need 10 to 12 times your income.

In coverage, no gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook and that's long term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work.

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Go to zander.com or call 800-356-4282. Protect yourself, protect your income, protect your family. [Music] Paul is in the San Francisco. Hey Paul, how are you?

Hey, thank you for taking my call. Sure. What's up? So my question is about retirement planning and specifically retirement accounts on 401k. I have a bit of a unique situation and I get a different opinion from regular and I ask about this.

So I thought I might call the Ramsey Trail. Well you'll definitely get an opinion. [Laughter] Yeah, I thought so. It's an interesting one.

So I've done it recently well for myself so far but this is my first time having a 401k.

And I'm wondering if it makes sense for me to really use the 401k because I found out recently. You know, someone in my family had been very, very successful and I knew that eventually I was expecting to probably inherit some of that. But I was able to see actually read through the trust recently. And it's a lot more than I expected. And I'm sort of wondering if I can find security and retirement from that potentially.

“Does it make sense for me to not use that 401k and maybe have that money being more valuable to me now or use a Roth IRA instead?”

Roth IRA instead of 401k? Not necessarily instead. I have a Roth right now that's it's pretty small but I'm just saying instead of. Okay, how old are you? I'm 21.

About 330,000. What are you doing? Old tack. Good for you. Well done.

Okay. And how much is in this trust is supposed to come to you? So there are a lot of different people. A lot of a lot of a handful. I think it's six different beneficiaries in the trust but it's low to mid.

Eight figures.

Especially if that's going to grow over time. I'm sorry.

So you're going to receive a hundred million dollars.

You're part. I mean if you're accounting for how it's going to grow. That might be what it's worth toll. I mean divide that by five maybe. Oh divided by five.

Well that's a lot different. You're going to get somewhere between 10 and 20 million dollars. I would think so. Okay. And about one.

How many years out did we think this might be? Well I mean like we said I'm pretty young.

“How many years before this person dies and you get your 20 million dollars, do?”

Roughly. Maybe 20. Okay. She'd be like 40 years old. Okay.

All right. So no I would not put my life on hold and quit investing and quit building wealth on my own because I might get an inheritance 20 years from now. Absolutely not. I would pretend like that's not coming and live my life properly.

And with discipline and with dignity. When you save money it says something about your character and your maturity. It's not a math thing. And so it's good for you to develop a life that's good for Paul.

And if in addition to that you get an extra 20 million dollars.

Well that puts you in a position to be outrageously generous someday. And change your whole family tree. In addition to the money that you make because you could easily making 330,000,

“starting at 21 you should be a multi-millionaire by the time this money comes.”

And if you don't then you just pissed it away and you're an immature child. Yeah. No. I'm quite frugally actually I know that. Well I mean there's a lot of options in your career.

There's three things we can do with money. We can spend it and enjoy it and you should. You can give it and be generous with it and you should. And you can save and invest it and you should. All three are good for your character.

They're good for your psyche. They're good for your spiritual work. All three are good for the math. All three cause you to have a high quality person and be a person. Someone listening would want their daughter to date.

A trust fund baby who put life on hold waiting on an inheritance 20 years from now is not someone I want my daughter to date. This is not a man with big broad shoulders. Yeah that you gotta not let that muscle atrophy. And if you start flexing this now and you have that delayed gratification muscle

done and the wealth building muscle then you're going to treat the money differently. If I was handed 20 million dollars that I didn't actually put away and earn. I'm going to treat it differently than money that I socked away for 20 years. And I think that delayed gratification lesson is worth learning. One definition of maturity is learning is the emotional ability to delay pleasure.

That's one of the definitions. And so yeah I want that for you not because of the money or the math are not because you're going to need money. You may or may not need money. If this comes through you're not going to need money. But I want it for who you become as a person as a man as a woman if you're out there listening.

Who you become while you get out of debt. Who you become while you sacrifice and work extra to clean up a mess. Who you become in your marriage and in your relationship. It looks like because we struggled together and we both put our shoulder to the wheel and push together. Who we become is more important than what we but what we end up with mathematically.

And so I don't want you to be atrophied. And you know from lack of use of your lack of maturity that you grow into. So now I would pretend like that money is not coming. Instead of using it as a D motivator. And if you're so frugal you're going to have plenty of money left over.

To max out all retirement accounts and still have an incredible life. Yeah. You're a sharp guy still enjoy. I mean I'm not saying don't spend an enjoy money. We always say do that.

And in your case God you're 21 you make 300 grand. She even crick it. I mean that's amazing. Enjoy some of it.

“So yeah you need to but you need to be giving some of it and saving some of it and enjoying some of it.”

Always be doing all three. Melissa is in Greenville, South Carolina. Hi Melissa. How are you?

Hi I'm good. Thanks. Thank you guys so much for what you do. I listen every day and just feel like I learn so so much. Thanks. How can we help? So I has been his in regional sales and he drives about 350 to 400 miles per work on his personal vehicle every week. Unfortunately a company car. Yeah. Unfortunately a company car isn't available to him. And up to this point we've just chosen to manage that by budgeting for a part payment on a new car in order to keep in

But I'm curious how I know that that's not what you would suggest but I'm curious just with our situation. How you might suggest we avoid that without draining our savings every few years. To buy our in-tash that isn't really going to last the mileage that he puts on it.

“Okay. Can we agree that the amount of miles he's putting on the car is absolutely destroying the car's value?”

Yeah. I mean it's worth nothing when he's through with it. Okay. So we're taking something and making it worth nothing as a function of his job. And so if you're running a business what you would do is you buy the least expensive car that would end quotes get a job done. Now what gets the job done? What does that mean? Well it means two things for me if I'm in his shoes. Number one it means reliability. I have to be able to get to the job and get the get the sale made, right?

Number two it has to be reasonably comfortable because I live in the stupid thing. Okay. So we're not going to put him in a smart car or a Dodge knee on. Okay. He's also six foot three so that might not be a great idea. I rest my cash. You know. So yeah, it needs to be reasonably comfortable. But what people do when you're all situation is instead of buying a $20,000 car that would do all of that in destroying 20,000.

They buy a $60,000 car in destroy 60,000. And that's that's not necessary to get the job done. So I would buy a $20,000 car with that every two year replacement plan. And I would pay cash for it. Period.

“You're breaking up on you know to walk back to wherever you are.”

Just know that every average the average new car loses 60% of its value in the first five years.

So you're better off buying a six year old car for 20 grand. And driving that into the ground because someone else already pre-paid the depreciation. That's the lesson here. Yeah. Just whatever it is, you're destroying that amount of money. So destroy the least amount of money possible to get the job done.

For me, that's a $20,000 car in the situation. And every two years, I need $20,000. So I need to be setting aside that much every month to replace the stupid car all the time. But no, I would not be driving something fancy. You don't need eye candy when you're road for warrior. I love entrepreneurs. Don't forget guys.

I started my company on a card table myself. So I know what it's like to have people counting on you.

“Your team, your family, not to mention your customers.”

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Take a free product tour today at net sweet.com/ramsy. That's net sweet.com/ramsy. Welcome back to the Ramsy show. In the Fair Wins Credit Union Studio, George Campbell Ramsy personality,

number one bestselling author, is my co-host. Jacob is in Dallas. Hey, Jacob, how are you? Hey, brother. Thank you for taking the call. Sure, man. What's up? Oh, yeah. So I've been in a bit of a unique situation.

Um, I had a network with north of the same figure mark around, I want to say probably a month ago. Or, yeah, a month and a half ago, made some portitations. Well, it's a significant downside in my net worth.

Uh, downside in everything, trying to reframe my mind to, and like, decide the next steps to go from here. That was pretty vague.

So you had, like, a million dollars?

Yeah, that's probably around $1.9 million. Okay. And what you do that screwed it up? Um, gambling, lifestyle and inflation. Um, lifestyle and inflation. Yeah, I mean, partying doing the whole nine yards.

Um, I mean, it was more so just going out,

traveling, clubbing, bottles, cars, airbings. It was, um, portitations. And then a lot of gambling.

“I think, uh, what kind of kind of thing is for sure?”

So what, what drugs were you doing? Um, I mean, it was more so just like cocaine. Yeah. The whole nine yards already. Just like it is.

Okay. Yeah. So have you been to rehab yet, huh? Um, I have, I've got no, um, I think. I don't have an absolutely drunk problem.

It was more so just. Oh, no, you have a drug. There's no question.

It was all in your story.

I heard it. You definitely have a drug problem. And you definitely have a gambling problem. And you definitely have a lot of problems. So what are we doing to fix the problems?

Um, well, I did start going to gambling or going to therapy for gambling. Specifically, um, that was like the main step. And then the downsides along the life cut back on majority of my expenses. Don't be framing everything. Go from there.

Okay. So what did you or do you do for a living? Um, I did a lot of marketing and crypto. Okay. Are you still doing that?

Um, yeah. I just recently stopped after this last hit, uh, lost kind of all motivation. So do you have a full-time job or are you just playing with crypto as kind of another form of gambling? And you've made some money. Well, I mean, uh, I said I was making around five to six figures every month.

They're a lot consistently for the last X, Y, X, X, X. But I'm also in college. So this is all just a side time thing that was working out really well. How old are you? I'm 20.

20. Yeah. Okay. All right. So you, um, you changed the rainbow and it didn't bring you happiness.

Is that the moral of the story? Um, yeah. I would say that. I mean, the money was, it was nice. But it wasn't, um, just fairly muscle format.

Well, it led you to a life that was just out of control and not fun. It was, it's supposed to be fun. But at the end of the day, it just looked like a stupid kid losing all his money and snorting cocaine. When you look back on this, got to be what you see. Yeah.

100 percent, um, my doubt can tell any of the actions nor do I think that it's part of the decision.

Yeah. So I'm, well, where I'm going is is that I don't know what drove you to get to that point. Um, but, um, yeah. Okay. So what would I tell my son if he was 20 years old and called me and was in the exact situation?

“It sounds like you need a complete reset of what you think life is about.”

And someone told you that it was about getting a lot of money quickly and easily and that you're smart and that you could do that and then you could go do anything you wanted to do. And so you, the good news is you got hedonism out of your system really early in your life. The bad news is it cost you a couple million dollars to do it. And so, um, you know, I would take you from Wolf of Wall Street to a monk.

I'd go the other end of the spectrum and just go, I'm just going to be a boring, calm, steady guy, which is the opposite of everything you have been. In order to reset your brain and reset your spirit, I'd plug into a good local church and, um, one of the things I had to assess and I kind of smell it here. I'm not sure if I do and you can you can correct me if you want to.

I don't care. Um, when I went broke in my 20s, one of the things I figured out was I wasn't as hot as I thought I was. It pretty much took my little ego and grounded under a boot. And, uh, because I was pretty smart and I was doing some pretty smart, have leverage fun things, nothing like you've done.

But, um, but I mean, I had to go in and then when I hit the wall and the car just disintegrated and the, you know, NASCAR wreck the engines up and the stands, right? I mean, this thing's just degone, uh, one of the things I had to come to grips with is I wasn't as hot as I thought I was. And that helped me reset and I settled way down into a more psychological and

spiritually healthy rhythm to reset my life.

“And I think that's what I want for you because I like you.”

Yeah, no, um, I think I wholeheartedly agree.

a rough, that was definitely going through an episode.

Like it was there while I was flying. I spent 100 get the club, I fly back. Then I'd go gamble like 500,000 out of points like multiple six of your hands. Um, like what I see is 1.9 and that was slow. Obviously, I mean, I have words that have losses.

And that this will include my cash flow, but I was very cash-loving.

“Why do you even need money right now as a college kid?”

Um, I mean, I think. Are you in college? Yeah, I mean, I'm in college. I mean, I don't think it was that silly about you. What are you studying?

Um, marketing. Well, I was, yes, marketing. Okay.

You've been going to classes and completing all the assignments?

Oh, I did until this last year. I think I went off the rails this last year. Yeah, okay. Well, I, um, yeah, the behaviors got you into the mess. And to get the, I would go to the opposite of the behaviors to create healing.

And so look at every one of the behaviors and what are the roots of each of the behaviors. And how can I avoid those? So one of the things I fell for that you did as well is get rich quick. And I thought, I'm smart enough. I can do this.

I can build wealth quickly and easily. Other people don't know how to do it. I'm quick enough with numbers. I can do this.

“And that's what I did, not at the scale.”

Well, actually as a scale, you did. I had better night worth than you had. But, um, at 23. But, um, but I lost it all because I built a house of cards. And, um, you know, I wasn't playing long ball.

Everything was short ball. Everything was just get on base, just get on base. And there was no infinite game. There was no eternity thought. There was no thought of a heaven.

There was no thought of other people matter. It was simply get the thing done. Get the thing done. Turn the deal. Turn the deal.

And so I had to go to the other end of the spectrum when I went broke. And I had the benefit of losing everything and going bankrupt. And I got the opportunity to start over. I met God on the way up.

“Jacob, I got to know him on the way down.”

And you desperately need to get to know him. Right now, it's your only shot out of this. So, I check into a great church in the area. Start talking to some of the businessmen and that church that loved Jesus. And let them talk to you about how to reform what a man really is inside of you.

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See stores for details. [Music] Meredith is in Greenville, South Carolina. Hi Meredith, how are you? How are you?

How are you? How do I deserve? Yeah, so my husband and I have two young kids under the age of four. We currently run a small due play for about seventy-five a month. And we have about seventy thousand dollars in savings.

And only that we have is a credit card. But we pay that off every month. Like completely off.

We're about to receive a 2.6 million dollar lawsuit for medical malpractice.

And we didn't go up with money. So, honestly, we were kind of scared. And I was just want to make sure we're doing the right thing for our family. So, my question to be what would be the widest thing for us to do. And how should we handle this?

It's a fabulous question. I really, really like your spirit and your attitude. Thank you so much. You are very wise to be scared. Okay?

And because you don't, you know, you're smart enough to know that you don't know how to handle 2.6 million. Now, so a couple of principles are this.

The Bible says in the multitude of counsel, they're safety. And so you start bringing people into your life to advise you not to do it for you. But to teach you, to teach you. Okay? And there's a couple of three people.

“If you want to write this down, you can.”

Or you can go back and watch it or listen to it later. When it comes out and hits the podcast.

But the first person you guys need is a financial advisor.

Someone to help you with your investing. And you can go to RamseySolutions.com. Click on Smart Vester Pro and sit down with a couple of those and interview them. Now, what you're doing is you're interviewing someone that you are comfortable with. You feel good about.

They're not intimidating. Instead, they have the heart of a teacher. Anyone in the financial world that does not have the heart of a teacher. And instead starts dropping their glasses on the end of their nose and wagging their finger. And saying, "You need to do this because I said do it.

You should run from them." Yes, sir. So your job is to manage this money, not that person.

That person's job is to teach you to be a little bit better at managing money.

So principle number one is we're going to put a group of those people in our lives. We're going to have a financial advisor and like a mutual phone broker. Okay, we're going to get an insurance person that knows insurance. We're going to get a real estate person because I got a feeling you're going to buy a house. You're going to get that at Ramsey trusted at that website if you want people.

Because we do not put out Ramsey trusted label on these people unless they have the heart of a teacher. Okay, you need a tax advisor. Okay. Okay, so insurance, real estate, investing, and tax. Those four people become your little board of directors.

And again, their job is not tell you what to do. Their job is to teach you some of the things you could choose to do. Okay. Principle number one, heart of a teacher, not babysitter. Okay.

Principle number two, do not put money in something unless you understand it. Okay. If it feels good or they, well, that he seems to know what he's doing honey. We're going to go with him. Those are the words people say right before they get scammed.

Okay. So you say, I don't understand this yet. So we're not doing it yet. Okay. Because it's your job before God to manage this money.

Not theirs. And so we don't, we don't do stuff until we understand it. And if it's brand new and your brand new to it, that's okay. You don't know how to write a bicycle yet. You just got your first bicycle.

So it may take a minute to balance, right? That's okay. That's okay. But you don't go by a $30,000 hardly and you can't write a bicycle. We get our skills up and our competence and confidence up.

And that will give you great peace about this.

“Principle number three, go slower than you think you should.”

For some reason, we feel like we have to become competent and sophisticated overnight. And it takes a little while.

The first time you buy a house, you've never seen that much paperwork.

The first time you open a mutual fund, you've never seen that much paperwork. The first time, you know, when you're eight years old, you open a bank account. It's intimidating. But once you've opened 30 of them, it's not a big deal. So take give yourself the grace to go slow and to learn and not put money in something until you're ready.

So it's okay to park this money in something super boring that is not sophisticated while you spend some time learning. Is that feel right to your spirit? Much better than it. We've got to read it down.

Okay. How old are you guys? I am 29 and my husband is 28. Okay.

“And a good framework if you want to figure out how to apply this money and start working your way”

through as you understand it and as you increase your speed just a little bit on some of these things. And it has some of these people with a heart of a teacher advise you is I would walk right up the baby steps that we walk everybody up. And so that's become debt free pay off all your debts. Get on a written budget. So you're and you live on your income.

You don't touch this money. You don't need this money to live. You just live on the income that's coming out of the house you're living on it now.

And don't increase your lifestyle where you're having to drain this money to support your lifestyle. Keep living on your income.

“And if you do that and you use this money to step through the baby steps.”

The 2.6 million could literally be 20 million in about 20 years.

Yeah. Yeah. We don't have it. We just use our credit cards. Yeah.

You would get rid of the credit card because you don't need it anymore. Use a debit card. Okay. And you get on a budget. And the two of you know where exactly where every dollar's going.

Now the duplex. Do you own it or you're renting it? No. Okay. So you're probably going to go buy your house and pay cash for it.

Yes. We were thinking about somebody that told us about getting a new credit. No. I just go buy a house. Okay.

You don't need to get fancy. Just go buy a house. Go buy a nice house. I don't know. Two or $300,000 in Greenville, South Carolina is a pretty dead-gum good house.

It's nicer. It's nicer than the duplex you're living in. Yeah. Yeah. And top off your emergency fund.

So if you spend 400k out of 2.6 million.

And you pay cash for a house and you don't have any payments anymore on a house. And you have no payments anywhere else. No other debt. And you're living on a budget. Then the rest of that money can go to completely change your old future.

Yeah. If you'll live in the present like grown-ups. And a void. And I know you're going to do this because I could tell by the way you asked the question coming out of the gate.

I avoid the need or avoid the thing of, oh, I hit the lottery and I'm rich. You're really not rich. Just money will be gone about 20 minutes if you start screwing around with it. Exactly. We just took that call.

So you can be very wise with this. I just clung some numbers for you. You said you're 29 years old. If you just pretended that money did not exist in a 62, you looked up and said, hey, we can retire.

It'd be $81 million in there.

If you didn't touch it and forgot it existed and it was invested wisely.

“So that's what we're talking about here.”

You're going to use some of it though. So it's not going to be quite that much. It's probably only going to be 60 million. You'll enjoy some and you'll give some. You'll cover your kids college funds and help them get started in their adult life.

But that's the kind of stuff you can do if you handle this wisely. And I think you will. And but it's it's number one. Do not take advice from someone unless they have the heart of a teacher. Number two.

Don't put money and stuff unless you understand it. Number three. Go slower than you think you should. It's okay. Give yourself time to catch up.

You're not an expert on this. You don't have a you didn't grow up with money. You didn't grow up with people talking about money. This is a new thing. And it's okay to learn something new and take a little time to do that.

And and that's how this stuff. That's how money gets away from people. As I violate those three things. Hang on. We're going to send you a copy of the total money makeover is our gift.

We don't need anything from you. And we're also going to set you up in the every dollar budgeting system. And that'll guide you through the process and then you guys make your decisions and be smart. And Meredith, we're here if you need some more help. You call us anytime.

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Get back into making real progress, get yourself out of debt. Go to yreify.com/Ramsy, that's the letter yref.com/Ramsy might not be in all states. Today's question comes from McKenzie in Washington. My husband and I are in a considerable amount of debt including two car loans, two student loans, credit cards, taxes and our mortgage.

We have $100,000 in a high yield savings account. Do we pull out all of our savings and pay off everything except the house and have no emergency fund? We are in our early fifties and contribute to retirement, but don't have much in there yet. We are scared to deplete our savings account. What should we do?

I mean, you got a life raft sitting there and you're going further into debt on these credit cards. Absolutely. Drain that high yield savings down to just your starter emergency fund right now and knock out the debt if you can. I don't know if it will knock out all of the debt but the mortgage just sounds like it will. Yeah, the way you're describing it will.

So McKenzie, here's the thing.

You got to cut up the credit cards and never use them again. Ever.

“You have to get on a written, detailed budget.”

Get the every dollar app and get yourself going. You and your husband working together. Absolutely the only way you're going to survive this. You probably need to sell one or both cars. Because we don't know the numbers.

They're not here. But I'm going to guess and say, a large portion of this might be card debt. It usually is. That's how we guess that. It's not a hard guess.

And then I would dream about savings and be a hundred percent debt free. You know, let's pretend that of your debt that one of the cars is a fifty thousand dollar card debt and you owe fifty-one of it and it's worth forty. Use some of your hundred to pay the difference and sell the car. Cover the upside down amount and then use another ten thousand by your ten thousand dollar

car for cash. Okay, that uses twenty of your hundred in that example. Instead of simply paying off the fifty thousand dollar car. Especially because you're behind our retirement. Yeah.

And you said you're scared to deplete your savings. I'm scared you're not going to be able to retire. That's a much bigger problem. You can build back up the savings. But you guys get it get on.

Go back up the savings and you can build back up your retirement when you don't even think in payment. That's probably a few thousand dollars in payments.

But here's what's happened.

You guys are normal. And normal in America sucks. You've got two car loans, two student loans, credit cards. And you don't make enough to cover your bills. Because you've put yourself so far in debt buying crap you couldn't afford with money.

You didn't have to impress people. You don't even really like. You're a normal American. I guarantee there are six figure earners. Yeah.

“So what you've got to do now is you have to stop being normal.”

And that means get highly organized, highly intense. And I'm going to make every dollar of our income behave. And we aren't buying anything unless we pay cash for it for the rest of our lives. If you can't pay cash for it, you can't buy it for the rest of your life. And then you'll have your income freed up to put your retirement in place, build some wealth,

and put your emergency fund back in place if you've used it all with this hundred thousand dollars. But you should use the hundred thousand dollars today. And you probably should sell one or two cars. You can get some less expensive cars. You can move back up and car to later after you become wealthy.

But right now you're just broke people. So you need to be acting like broke people instead of rich people. Andru's in Atlanta high end, how are you? I'm well, Mr. Dave, how about yourself? That other than I deserve, how can I help?

Hey, so I'm just giving you a call today because I am in a pickle. I am supposed to be getting married in Italy. And my family or at least my side of the family has basically let me know that they have, you know, they don't really have the savings or the money anymore to go. So I'm going to babysit two.

I only have about two thousand less in my car alone. I have about three thousand saved and I have...

“How the heck do you get married in Italy if you're broke?”

Well, it's her family is doing her side as well often. You know, they ask us what we want. We always dreamed of getting married in Italy. I don't think there's any way I think it's what she wanted. You got hooked into it.

It's something that we always spoke about when we first got together.

Like it was like a joke. Like, yeah, we can get married in Italy one day. And then it actually became a real thing. So, yeah, I mean, they're willing to pay for it. Okay, yeah, let me stop here for a second.

There's a hundred percent chance when you were planning all this, that you knew your family couldn't afford it. Well, I told them a year ahead. No, no, no, no, you know your family. You grew up with them.

You knew they didn't have any money. Yeah, I mean, I mean, I told them to save.

And then now we're here and they're like, hey, you know, we didn't save. So I'm just kind of in the pickle. So you're not a pickle. You're not a pickle. They are.

“They won't be able to attend your wedding.”

That's the thing.

I never thought I'll be getting married without having my family to support me.

And I feel like now I'm just going to get married. And it's just going to be a whole gang of your family. Yeah, and I'm just there. That's a bomb. That's a bomb.

You have a right to be disappointed with your family. Yeah, not really. Not really. No, I mean, I disagree. And for you to think they were going to do this was, you knew your family.

You grew up with them. You knew they didn't have money. You knew they weren't going to be able to save this money. And you wanted to go to Italy anyway. And so this didn't sneak up on you.

I don't agree.

And it's not not do them being irresponsible.

They're just who they is. And you plan to wedding a place. Your people can afford to go to. Man, that's that's all for I'm sorry. So I guess I guess you just have big celebration or some kind of cook.

Get some barbecue when you get back and put it in the backyard and on the picnic table.

“Let's have a little throw down when you get home, right?”

Yeah, yeah, that's I mean, that's the plan. Okay. Maybe maybe I can do that. I mean, if you didn't call us. It was no plan really. I mean, I thought it would be wrong. I thought about maybe doing something like locally, but

Honestly, with me being on baby stuff too, I don't really have, you know, enough funds to do something that will be big, you know, or that will be nice for my family at least. Yeah, so her family's paying your playing ticket. They're paying for everything.

We already got our playing tickets.

Probably about like a year ago. On your own? Yeah, no, I mean, she did that and all their family paying for everything. They bought the plan. Her dad bought the plan.

You're not paying a dime for anything involved. Yeah, he done any money. He's got $2,000. No, yeah. How old are you, too? I were both 20, 25.

Okay, you're both working full-time. I'm not.

“I'm pretty much, you know, pay everything and do everything she's staying home.”

But just our money, you know, I'm real big on the ramp. The ramp is a wee lot of eye. You guys have kids? No, you're not big on the rampsy way because you're not married. Yeah.

The rampsy way doesn't apply to your married. We tell you not to combine money until you're married. Remember, did you know that? Yes, yes, that's me, did. Okay.

All right. So how long have you two been living together? We've been together about living together probably about two or three years now. Okay. When is the Italy wedding?

Um, roughly about 30 days from now. Okay. It's probably not going to go over well. No, your parents don't get to go to Italy. You don't have the money.

And you're not going to go borrow money to send them to Italy, you're broke. Um, there's another alternative. I don't think it's going to work because I don't think the people involved in this story are going to do it. But what you could do is go get married next weekend and have your family and their family there. I have a friend that did that.

Because they, the kids wanted to move in together and their Christians and to more lived together before they were married. And so they went and got married like 60 days before the destination wedding and moved in, married, moved in together. And the family was all present for the little wedding at a little chapel. And then they went to Paris as where they got married. And did a destination in Paris.

You could do that. Hey, if you're working the baby steps, the best and fastest way to get out of debt and into wealth is by using every dollar. Now, this is more than just a budgeting app. It's a plan built right in. It's our plan.

You walk the Ramsey plan. We're going to help you track your progress. You get a personalized recommendation all the time continuously from us. We're going to push you pull you. Wink at you yell at you smile at you to get you to do this stuff.

And it'll help you free up more money and work the plan even faster. It's like having one of us walking with you every day. Start every dollar for free by downloading it in the App Store or Google Play. Why it is in Fargo, North Dakota. Hi. Why it. How are you?

I'm good. How are you today?

I am calling today to ask if I should repair my credit score.

No. Just no. Just no. Yeah. Because let me let me back up then and tell you why.

Yeah. And where that came from. Okay. So there's only one way to repair your credit score. And that is to go to borrowing money.

And the paying on time of the borrowed money begins to flush out and push the old late payments to the back of the file. And the further to the back of the file, they get the better the credit score gets.

In other words, if you have three things on your credit report and they're all negative because you

were laid on them and you put 10 things on your credit report that are all positive

“in your own time on them. It will shift. That's how you repair your credit.”

Yep. But you can't make the actual late payments history go away. You can just push it to the back and overwhelm it with new debt. That's how people repair credit. The other way you can repair credit is if there's something inaccurate on your credit bureau.

You can have that removed. But that's probably not what we're talking about. And then let's go past that and then rise up above the whole thing and say that a credit score is not an indication that you're winning with money. Yeah.

Credit score is 100% derived from an algorithm, fair Isaac wrote the score. That's where it came from. And the algorithm is 100% how you interact with debt. So what kind of debt you have, how you pay the debt, how much debt you have, those are the things that create your credit score.

So your credit score is actually not a credit score or an I'm winning with money score. It's actually an I love debt score. Mathematically. Mathematically. Yeah.

And so, you know, I don't want an I love debt score. I want to high net worth. So think about this way. Why a good score just means you're good at managing debt. A bad score means you were bad at managing debt. None of that has to do with actual wealth building. So let's get you to build some wealth instead.

And that involves paying off your debt. And at that point, you won't have a score.

“So what I would do is, how many bad things have you got on your report?”

Quite a bit, not from me though. Okay, wait a minute. That doesn't make sense. How can you have stuff on your report that's not from you? Because back when I was a child, my mother took out credit card in my name. And that's identity theft, honey. That's fraud. That's fraud.

I'm aware. And she took out money in my name. She's paid it all back at this point. But my credit score has suffered severely because of that. How old are you? I'm 22 now. Okay. All right.

I would submit identity theft on everyone of those accounts and have them removed. Okay. Yeah. Did you use the money? She paid you to pay the debts off. Did she give you didn't get any of this money? She just stole your identity. Your mother's a thief.

Yeah. Sorry. It's heartbreaking to say that out loud. Yeah. We have a complicated relationship.

Oh, bad. Unless you're insane, you would have a complicated relationship. Because you're not being sane to go along with this. Yeah. I mean, I'm doing great now. But it's following me and it's affecting interest rates and stuff.

Well, it affects interest rates only if you're borrowing money. We don't have not too much of anymore. Okay. Then you don't have to worry about it.

“What do you need to do it a debt for right now?”

Okay. There's two answers to the question.

One, the first answer I gave you is the correct answer.

Don't worry about repairing your credit in the sense of don't worship at the altar of the FICO score. And because it doesn't affect interest rates home for me. I don't have a credit score and I have zero credit and I have zero debt. So I don't have a problem with interest rates.

Now, then let's go to the other part of this and there's that you were abused as a child. Your mother's a financial abuser.

And so you should file identity theft and on every one of those accounts that you did not open

and have them removed, they're probably going to require that you do a police report and identify the thief. They will do nothing to her. They should. They should put her in jail, but they won't. But the good news is they actually didn't lose anything because she actually went and paid them, but she just paid them late. Is that what you told us?

Yeah, really late, but they won't. They won't do anything to her because they got their money. But you're going to have to go through some steps and you can have every bit of that completely removed and you should from your credit bureau report. I would if I were you.

“Do you want to work on that if you want to work on that?”

I've got somebody that will help you do it. I know you're not going to do it. That was a long pause. That was a bigum. You're not going to dress your mother ever again.

Okay, so anyway, you're going to live with this then and you're just going to live with it.

And over time after it's been on there after the account has no activity for seven years, it will completely fall off. But if you want to address it, folks, it's under insurance as identity theft. We'll take care of it. And if you have out there identity theft in place before this happens,

which he couldn't have known he was four years old. But I was going to offer him Zander, but I'm not now because I don't think he's going to do it. So I'm going to waste my time. All right, Ben is in Jacksonville, Florida. Hey, Ben, what's up?

Hey, sir. Thanks for taking my call. Sure, how can we help?

“So I think I'm on baby steps six, but there are two astruscs.”

One, I don't know if I've saved enough for my daughter's college, and two, I still have a rental house that's not paid off.

But rental house would be the Green Baby Step Six and four five and six runs simultaneously.

Okay. Not progressively. And so if you're on baby step four, you're on baby step six, four five and six run at the same time. So we're saving 15% for retirement. We're saving towards kids college.

If you think you got that done, you could stop that. And then you continue on and that would put more on baby steps six, which would be to clear off mortgages in baby steps six. Okay. That was that logical?

It does, yes it is. Okay. How much you got saved for the kiddo? About 40,000 in the 529. How old is she?

“She's in the garden, she's about to turn six.”

You got, you got enough. And I also have a gigado. You definitely got enough. You did a great job. Thank you for your service to the country.

And thank you for being a great dad. Way to go, dude. You're crushing the court. Yeah, both of those. You've just got a plus on both categories.

Well done. Also make sure that 529 now is invested in good growth stock mutual funds. If it is, it will double every 7 years, which means it's going to be 80, 160,000, but times she gets there. I think that should be enough.

Yeah, that's what I said. Thank you so much. Thank you're done. Box is checked. You did great, man.

That's 40 grand a year. And that's if they don't get scholarships and you get the GI bill on top of that. So I would, you could stop funding it at this rate. Yeah. And now just start going over that mortgage.

I got that mortgage in the home mortgage before you do that. And by time she's in college, you could cash flow any other expenses that come your way. There we go. Good life, man. Life is great.

Well done, Ben. See what happens when you pay attention boys and girls. [ Music ] Welcome back to the Ramsey Show in the Fair Wins Credit Union studio. I'm Dave Ramsey, your host, George Campbell Ramsey personality is my co-host today.

Jordan is in Minneapolis, Minnesota. Hi, Jordan, how are you? Hi, I'm doing good. Thanks take my call. Sure.

What's up? Well, I am currently 40 years old. Have my house paid off. No debt on all of my cars. I really haven't started to retirement fund other than my pension I have from the government.

But I work at and I have a lot of collectibles. And I'm trying to determine if I should sell them and put that into retirement account or let them continue to increase in value and sell them later.

I would make sure you got a retirement account started.

If it requires selling the collectibles to do that, I would. But if it doesn't, then you might keep them. The rule on collectibles are is this as a category collectibles, which would be like coins, art, antiques, guns, anything that falls in that category. As a category collectibles do not keep up with a good mutual fund investment.

However, people who are into a particular hobby generally will make a good enough purchase on the collectible and know the particular nuances of it. For instance, a car collection of persons really into cars, you can make more on that because you have knowledge in it than you would make on a mutual fund. But as in general, if you just said, I'm going to collect cars that know that wouldn't

you wouldn't keep up with it. But if you just really are into car vets and you've got five different times for car vets or whatever, you probably are going to make some good money on that. So that's probably your case. You're probably kind of into a couple of these things.

Stamps is another one. That kind of thing that a baseball card's even. I know one guy's got $200,000 in baseball cards, but he's way into it. And so he's probably actually making decent money on it.

I would never use that as a substitute for retirement though.

Are you there? Okay. What kind of collectibles do you have? For the most part, a lot of card collectibles, vintage board games, vintage antique books, stuff like that.

Yeah. Well, as you know, I don't know anything about the board game part, but the book side, a wide spectrum of completely useless, all the way to extremely valuable. Yep. And it's like there's a lot of stuff in between.

“And what kind of cards, Pokemon or baseball or what?”

I have a lot of magic together in alpha cards, black lotus and different vintage ones like that. Yeah. Are there ones you could part with and I have no sentimental value to you? There you go. I could sell this and make 20 grand and be fine.

I could probably sell it all, be fine. I just don't want my wife or my kids to buy kick the bucket to send it to goodwill. That's just that's some estate planning and some good instruction. So like my wife actually brought that up to the other day. She said, okay, what am I going to do?

We've got all this detail to stay planned, but she's like, made me write out a thing about about a year and a half ago. Like, okay, I am not going to deal with your guns. You have way too many of them. And I have nothing to do with this. I mean, the boys will want four or five each and after that, what am I going to do with them?

Okay, I need to give you a plan for that. And so write it out and I've got a detail just because I'm into it. You know, it's a copy and so it's all written out.

“And so that's all you need to do there is write it all out so they don't send it to goodwill.”

And then we don't, you know, give away something. This worth $20,000 or use it as a bookmark or something in one of those vintage books. And so yeah, that kind of stuff. I'm sure they'd much rather have an inheritance in the, you know, inherited IRA. That's going to be a lot simpler for them to handle.

So I would sell it if it doesn't mean much to you. And it was a fun hobby. I would sell it and park that in your retirement account or an IRA and start on that. Because you're 42. I mean, you got 20 years at least of a working career to build some wealth.

And it sounds like you can do that with your income and paid for house. You're in a good spot. So yeah, let's build wealth and have a retirement plan. And if we want to have a hobby, also, that's okay. Because I have, I mean, I have these collectible hobbies.

But they have nothing to do with my real network. You're not doing it for an ROI. I am not doing it. You just enjoy doing it because I, yeah, that's it. It's a, it's a, it's a, it's a, it's a hobby.

It's a, the healthiest form of addiction you can have. Not just a hobby. That's it. There's nothing wrong with that. Anna is in New York City.

Hi, Anna, how are you? I am good. How are you? Better than I deserve. What's up?

Yes. Okay. So I have a question. My husband and I are retired. We don't have any debt.

We have a broader and only child. And we'd like to buy her an apartment. We'd like to do that now. Well, well, it's still alive, rather than let her get everything.

“How much, how much, how much, how much net worth do you guys have?”

What's the size of your mistake?

How many, I'd say about two million with our house.

Our house is paid off. But so some of that would be, you know, not cash.

Okay. Good for you.

“Well, then, well, then, and how much will this apartment cost?”

Uh, somewhere between, move around to 50 or 300,000.

Don't wear around there. All right. I would do that. We can do that. You're going to pay cash for the apartment.

There's no debt, right? Nope. We don't want to. Yeah, that's another question though. Would there be any advantage?

No. To get no. No, we don't want that. We don't want that. That's a disadvantage.

Because then you're not giving her a blessing. You're giving her a curse. Right. Yeah. No.

We don't want to do that. Right. Now, what I would do, I had a friend of mine that did something like this.

And he said, he asked her to sign a one page letter promising to never borrow money.

Right. So, she doesn't go, "Reef, get a boyfriend and refinance this to buy him a pizza store." Oh, no. Oh, yeah. That happens every day, right?

I never thought of that, and I did think that maybe, you know, borrow money just because maybe she mismanaged her all the time. Now, that would work too. Yes, so no.

“You have to promise us, it's not a legal contract.”

It's just a moral contract. I have to raise your right hand. Sign a letter stating, "I will never borrow money again, Mom." And I'm going to use the fact that I have a free apartment to create wealth, or since I don't have a house payment.

And how can we help her do that?

Also, because she lives at home right now. She, and she lost her job. She came, and she moved back home. She now has a good job. And what's a good job?

Well, she's been living here several months. There is a decent wage. What's that decent wage? How much does she make? About 73,000 a year.

Can she live in the city making 73? Um, you can. Oh, okay. Okay. How about that?

Yeah, just make sure she can afford the ongoing insurance taxes. All of that plays a part. Yeah. Maintenance. But I mean, help her get on an every dollar budget.

And, you know, we'll send her a copy of the total. I'll send her a copy of George's book on how to avoid all the traps. And get with the every dollar budget. And we'll help you guys get to start it. And then let her get back out there on her own two feet.

But yeah, I wanted to promise that she's not going to make a mess out of this. Blessing. That's all I want. I bet the HOA over there is as much as a mortgage payment in the city. It could be.

Hey, guys, I've got big news. The Ramsey Show is going on tour. And this is your chance to be more than just a listener. You get to be part of the show. So here questions, ask live and experience the kind of momentum that only comes from being in the room.

We'll be in Charlotte, Denver, Phoenix, and Anaheim with a limited number of seats in each city. So last fall, we completely sold out in 72 hours. So do not wait. Get your tickets at RamseySolutions.com/Events or by clicking the link in the show notes. Everyone to see the person who's calling in and watch the mass of the question are being the room when we answer it.

Well, now as your chance, the Ramsey Show is going back on tour live recordings with live studio audiences. And you can be in the audience and watch the Q&A happen, because all the questions will come from the microphone on the floor. Experience live Q&A, raw confessions, crowd debates, local debt free screams. The team will be in Charlotte, Denver, Phoenix, and Anaheim in April. We're limiting this for production reasons to only about 300 seats a night.

Last year, we sold this out and we put out there in 72 hours. It's just been out there a couple of days. It's almost gone.

“If you want to come grab your tickets at RamseySolutions.com/Events or click the link in the show notes.”

If you're listening on the podcast or on YouTube, Ronda is with us in Virginia Beach. Ronda, how are you? Hello, how are you? Better than I deserve. What's up? I recently just found out that my husband is in debt.

Except for the count, my name is not on it. The main thing I want to notice judges are normally stable on the other spouse's side is because that was created secretly.

We just wanted to have you heard some stories of judges making the other spouse help pay the debt that a mother spouse has created secretly. Well, yeah, we've heard all this stories. I mean, for sure, there's a lot of this goes on sadly. Okay, so how long have you been married? A long time. Over 15.

Okay.

We've always had separate accounts.

Why did he deceive you and hide it from you? Because it's online gambling. And it's all in the count and I have to ask about it. Because he has a gambling problem.

“Okay, and so how much has his gambling problem called, how much debt is it caused?”

40,000. What does he make? Of course it's about 90. Yeah, what do you make? Right now, 42.

Okay. Well, I mean, at the core of this is not really the money issue. At the core of this is two things. One is your married to a person who has an addictive problem. He's got a gambling problem.

Okay. By definition, he is following all of the behaviors of an addict. The actual definition. Okay. One of those being that he's deceived two is that he's out of control.

Okay. Okay.

“And so when you have to lie to your spouse and your out of control,”

bottom line, we're going to define you as an addict. Anybody in our world does that, okay? Number one problem is you are a married to a person who has an addiction. Number two problem is that he has as a part of that addiction has lied to you and broken your trust and your heart with it.

Right. Okay. So the only way that this goes forward in a positive way, the only way you have a wonderful marriage at 20 years you're at 15 now is that he addresses the addiction openly with you, gets help, stops gambling, gets a therapist, goes to gamblers anonymous.

You got to sit down with your pastor and he's held accountable to never gamble again

the rest of his life. Right. And then when he does that over time, the first 10 minutes he did that. He's been dry for one day, two days, one week. Well, he's not trustworthy yet.

“But when he's been dry for a year, you can start to trust him and that would be logical.”

And you know, and he can't do anything that looks like violation of trust ever again the rest of his life because he has, you know, he has deceived his wife at a very deep level. And you're pretty pissed and pretty hurt about that unless you're weird. Right? Yeah, I'm not happy about that at all.

And to the point that I'm about to look into more, I was just worried about the judge making the judge will not make you pay this. The judge will not make you pay this if you very unusual. I mean, I'm not a judge. I'm not a lawyer, but very unusual that.

And the deception has nothing to do with it. It's just simply, hey, you're on the reason I'm divorcing him is he's gambling addict. And he rent up a bunch of debt gambling that I don't even know about. And the judge is going to go, oh, he gets to pay that. I mean, that's going to wait.

That 99% of the time, that's the way that's going to go down. So if you divorce him, that's where you end up. But his path, his path to staying married is complete transparency from this point forward. No hiding anything ever again. Getting help, which involves admitting that I have a problem and getting in a 12-step program like

GA, gamblers anonymous, and getting a 101 therapy to never do this again.

And this is gambling addiction and lying to my wife as a part of it. So he has to act like that you discovered cocaine in his bedroom. Oh, trust me, yes. There's exactly where I felt that with other not addiction, I felt that I've moved people with addiction. And that's exactly what I thought is, I'm like, oh, it's just like a drug addict.

Yeah. But one thing playing around with it here and there, but yes, definitely. What caused him to tell you now? He didn't. She found it.

Oh, no, I had to. I asked. Oh, you asked. He told you when you asked. He told you when you asked.

He came out. He came out. He said, how is your credit going because of keeping things separate. I don't get to see that. And you don't get to see mine too much.

The health things going. How are you credit?

“Oh, you know, how are you doing on your savings and come to find out.”

You've depleted the savings and yeah. On top of going to for a pain death. Yeah. So if healing occurs and we stay married. There'll be a period of time which he handles.

Oh, money and you handle all of it, his and yours. And then over time, you'll start to handle it together.

Never again, will you act like room mates.

Right. Because the fact that you're running this separate and added it added to this, it made it worse. The lack of unity caused the lack of transparency. Yeah. And so if you're both looking at all our money is in a pile.

And all our bills are in a pile. And we are both looking at all of them. Then it's much harder for something like this to occur.

“You know, I'm definitely even been separate.”

I still look at it as a major thing. It doesn't don't no excuse, Rhonda. It's not the same. Right.

When it's all in one pile, everybody sees everything.

It's almost impossible for this crap to happen. I'm kind of scared now. I'm done. And that was my whole thing with me having the savings and paid off my car. And now it makes me think that.

Well, the only reason you would allow it to be in one pile is if you're in control. And or over time, he becomes worthy of trust again. Because it last time he gambled with five years ago when he's dry. And we've had these healthy good marital discussions about our budget every month. And we both know where every dime of our money is going.

And if you did that for five years, you could start to not be scared. Wow. And that's a healthy place to aim at if you guys are going to stay together. That's how you should do it. And I hope that's what works out.

I hope it works out that way. But this is how people come back from the deception around people, hiding that and/or come back from being married to an addict. Is you rebuild trust. Dr. Henry Cloud was with us here this morning.

I had lunch with him today. And he has a book I'll call trust. And it's how to lose it and how to rebuild it. And these are the types of things. But lots of transparency, lots of extra layers of communication over communicating.

Never assume the other person knows something.

You should have known. No, that's not that's bull. Everybody knows everything because it was set out loud. And the more of that you have, the more trust is built in any relationship. There employee, husband, wife, parent, child, all of this works.

From the pulpit in your church, transparency, extra levels of communication. Reality is dealt with. [ Music ] Hey guys, Dave Ramsey here. Every day on this show, we help people work 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 Ask Ramsey today. That's RamseySolutions.com. [ Music ] Tim and Shannon are on the debt free stage right here in the lobby of Ramsey Solutions.

Hey guys, how are you? Hey Dave, we're good, great. Welcome, welcome. Where do you guys live? Chicago land suburb of Illinois.

“Love it, very cool, and how much debt have you paid off?”

We've paid off just over $103,000. Very cool, how long did that take? About 57 months. Good for you. And your range of income during that time?

We fluctuated between 175 and about 200 ending. Cool, what do y'all do for a living? I am a police officer. And I work in HR. Oh, very cool. I excellent. Good job for both of you.

What kind of debt was the 103?

That was out there. You paid for house. We do.

“And you're a police officer and HR director.”

And you're not 150 years old. Correct. How old are you two? I'll be celebrating my 40th in May. Love it.

I'm 32. I love and you have a paid force thinking. What's this house worth? Just 300, 300. Why do you go, you two?

Awesomeness. How much in your retirement mistakes? So we were calculating that were 3, 400,000. All right. Cool.

So you're heading towards a by-be-step millionaire. Just a year or two. Yes, sir. Why do you go, y'all? So proud of you.

What caused you to be weird? So it started during COVID when I rolled out with some help, smart dollar to our police department. And we took a village wide. I was the training manager at the time.

And Shannon and I binge that. Baby step two. We were here joined June May of 2021.

“But baby step seven, we've been working on that.”

The last 57 months following the blueprint of smart dollar. For those of you that don't know smart dollar is our financial Piction University. But for companies and for organizations, HR directors, use it, and people, we have several police departments.

The first responders using it around the nation.

To put all their employees there. Yes. So you all put their all their employees through Costco, put all their employees through our, you know, financial Piction University in essence.

It's a class. And so you led the class at your police department. Yes, I've been in charge of that since since COVID. Well, thank you. Wow.

That's cool. We started not only got to see yourself get out of that. You've got a lot of your your guys that are out there and gals that are out there. On the highways and byways putting their life at risk. They're getting their lives cleaned up.

Yeah. We saw we saw a really strong benefit with it where we started with it. Just as the police department and then we got the whole village on board. So now we have our wastewater employees have access to it. Our admin clerks.

Everybody the entire city now has adopted smart dollar. That's a movement over there. Look at trying to hear that you're the guy running the whole thing man. Way to go. Well, that's so stink and cool.

Yeah, and you know, with the police department,

I always love hearing you guys doing it in particular.

Because it's also like we have we've had it with a military for years. And one of the things in a high stress environment like that is is the. In military world, they say combat readiness being ready to go into combat. Well, you're head clear ready to do one thing is is much better when all the. There's no debt stress at home.

I'm not worried about my car being repot. I'm not worried about my life being cut off. And police officers is exactly the same thing. Yeah, the idea behind that is exactly that I want the officers on a daily basis to be able to go out and serve the community. But not have to worry about their finances or at least have a plan that the idea is service first to the community.

And not to be sitting in their squad cars worrying about the debt worrying about how they're going to deal with the next over time. Or whatever the case may be. Yeah, trying to book some. Some side gig. Exactly.

Yeah, the whole thing. Wow. Wow. That's so cool. And so freedom.

I see the blue stripe shirt now. I'm getting the blue flag. Okay. Yep. All right.

What's it saying? That free family baby step seven. Hey. Yeah. Custom made T-shirts just for today.

So deleting smart dollar did that kind of put a notice on you guys to really get the. House paid off faster. Like was that part of the story? We we we hit the deadline ahead of time. But there wasn't without bumps along the way.

Yeah, so we were actually here in May of 2021 and did our baby step two debt free screen. And after that, we tried to start a family and we're really struggling through that. So during that period, we actually saw it in fertility treatment. And because we were able to complete baby step two, we were able to cash flow all of the infertility treatment. And we're able to welcome our baby girl back in March of last year.

Yeah. Yeah. And so I think that really. That's really something else in the whole story. Absolutely.

“So she's our why and I think after having her really kind of put things into perspective for us.”

To really just knock out the rest of the debt that we had and wanted to set her up for. A future that we weren't really familiar with ourselves growing homes. I love it. Yeah. Yeah.

Change your family tree and while you're out of being example to all your compatrails. It was and I saw that there was such a void in the financial wellness aspect along this journey that I went ahead. And to part in your financial coaching and have since started coaching first responders across the country. Wow. In workshops in one on one to where a lot of employers yet have not really adopted a true financial wellness program.

And this is giving them some sort of hope.

Yeah. Well, thank you. Thank you. Thank you. It's incredible.

All right. Now that you've done all of that. I mean, I'm not only got out of debt. You also cash flowed fertility and then on top of that, we paid off the house and now your coach helping other people and you've led the whole village, not just the police department through smart dollar, the whole thing. Now what do you tell people the key to getting out of debt is?

And it's down. Easier said than done, isn't it? Absolutely. It is. And especially in our world of first responders, we crave, we thrive control.

“That's what we have to have. So it amazes me when I hear a first responder that doesn't take control of their money with a budget.”

And a lot of times that's where we start in these trainings. So if you can just start telling your money where to go, you're going to want to put it in a lot of different places once you start seeing where it's going.

So the budget is the most crucial part.

Yeah. You know, it's interesting. I thought about the so much of your training is about controlling all the variables from a safety perspective. So no one gets hurt. And policies and procedures and law, everything guides are doing. You start your squad car, you start the fire chart, everything is a policy procedure and everything. The checklist, yeah.

Just put a policy and procedure in place for your money. Wow, just apply what you're used every day. Yep. Yeah, that's very interesting. Wow, very cool. Have you been seeing stories from the people in your village that are following the plan also becoming debt free?

Because it's weird to talk about money with your coworkers. It is something with you. That is the difficulty of trying to get a chief of police or a fire chief to even. Say, hey, you don't come on in and talk about this piece for so long. It is that taboo topic.

But it's the quiet conversations afterwards. It's after you meet in a workshop then see that person sticks around in the back of the class and then comes up. And it says Tim, can I ask you a couple questions? And we're still working on it, but the fact that we're all trying is what really helps.

“Because these first responders need that.”

Yeah. Well, thank you for being a service to your village. So proud of y'all. Thank you. I mean, you know, I'm thinking 40 years old, you're almost millionaires got babies coming and everything's happening.

This is what, what better life can we have.

This is the life we always dreamed of.

And it wouldn't be possible without following the baby steps. I'm just so proud of you. Thanks for embracing smart dollar and I'm just, I'm thrilled it worked. I know it worked. But I'm always, I'm never surprised that it worked.

But I'm always thrilled that it worked. It's hard, but it works. Yes. And it's worth it. It is hard.

It's just easier than being broke and stressed. And freaking out for 25 years. You know, instead, I got there's 20 months of really having lean in on this. And now you got your thinking house paid off, man. How does that feel?

It's unreal. Yeah. It was December was our last payment, which again was ahead of schedule. So we've had a couple of months here. And even standing here and getting a meat with the smart dollar team and spend some time.

It's just just still taking that deep breath. Because you know, like I said, before four years, not real. No. Still surreal. We have so many options and choices we get to make now.

“Then what's the big thing you're going to do to celebrate?”

This is the year, this is the year of traveling. Oh, yeah. To watch the big trip. This was a big one. This was a big one.

We're spending my 40th in Florida. So we're taking the whole family down there. All right. So we've got a couple of other things. But at the end of the day, that's where we remind ourselves.

Money was never the goal.

Money is the tool to get to the goal. All right. Are we going to put the baby into the dead free screen? We'd like to. All right.

Fine. And name and age. This is Keely. And she will be one next week. I love it.

So proud of y'all. Tim and Shannon and Keely from this cog on Illinois area. Took their whole village through all the first responders, all the police department. And then everybody else paid off their own home. Dead free house and everything.

Count it down. Let's hear a dead free screen. Three, two, one. We're dead free. Yeah.

Yeah. That is one cute baby. Talk about paying it forward, baby. That's worth getting out of there. A lot of paying it forward there.

That's a triple hero. [MUSIC PLAYING] When people hear my story of paying off debt, they say things like, "Dang, that must have been so hard." I can never do that. And I tell them, sure you can.

It's a short term sacrifice for a long term gain. But do you know what's really hard? Working your whole life and never having anything to show for it. Never having the long term gain. Just feeling broke, stressed, and maxed all the time.

And sadly, that's the hard that most people choose. Listen, you're capable of transforming your situation and living a life of freedom. But you need the right tools to do it. Like our every dollar budget app. In minutes, it'll build you a step-by-step plan that's tailored to your money situation.

And every day, it finds ways you can free up extra money in your budget. So you can get rid of your debt and actually build wealth. So make the choice today. Short term sacrifice, long term gain. Choose the tool to help you get it done fast.

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It is better that you should not vow. Then that you should vow and not pay. John Adams said there are two ways to conquer and enslave a country. One is by the sword, the other is by debt. Sally is in Philadelphia.

Hi, Sally. How are you? Hi, Dave. I'm doing great. Thank you.

I first wanted to thank you so much with your guidance and the grace of God.

I was able to pay off all my personal debt many years ago. Wow.

“And now my question is, how do I view business debt?”

Because I was able to get out of my personal debt. And my father is in a farming industry. So he was not able to have a lot of money. So he and I decided about five years ago to buy a farm together. The farm is in such that it's an orchard.

So that at least takes five to seven years before return can occur. So for these last five years, I've been basically bang rolling it myself with my cash. And getting a mortgage to the farm credit. And we did get a line of credit. And now that line of credit is due.

And either I can choose to pay use a get a full loan for that.

Or I can get a pledge line from my quote unquote fund money that I was able to also save on the side, which is different than my retirement. Okay. So you have personal investments equal to what? And does that include the mortgage on the farm? No personal investments. You said fund money and retirement.

Yes. So you have a retirement account.

“And then you have a non-retirement investments that are how much?”

Yes. My non-retirement investments are about $440,000. And what is your line of credit? My line of credit is only $120,000. Okay, it off today. Okay. And the question says, do I pay it off by selling all my investments and the capital game?

Yes. Or use the, okay, pledge line of credit. Yeah, I'm not borrowing money. Okay. We stopped borrowing money until we got to apple orchard and then we started again.

Yes. Stop it. So do you-- So what's the other mortgage on the apple orchard? Uh, scary. I think it's like 360. But the thing is--

And it hasn't made a profit yet. No, sir, because it takes five to six years. Yeah, how long have you been screwing with this thing? Five years. So it should be starting now.

Yes, sir. In next year, it's hopefully when we're going to start having money coming in to be able to pay off all this debt and not incur any more debt at all. And please tell me the projections are ridiculously good next year. You put five years at alligator in it. Yes, sir. It's actually great. It's quite great.

So like how much do you think you're going to make profit next year? Well, after the following year, it's going to be another 550,000 coming in. Out of that, it's going to be about 120 in cost. Okay, so you can pay off the mortgage out of the profits next year. Yes, that's the goal is to get out of debt as quickly as possible when the money comes in.

Yeah, you don't need the money off of the orchard. You did this both of you did it as a side gig and you have funded it. I assume with your brother, you have clear documentation that you're getting all the money, you put it into it back before he starts putting money in his pocket. Well, yeah, actually we're in a 50 50 because he's doing all the work on the finger, right?

I mean, I'm the only orchard. He's the one that's doing all the on the groundwork.

“So the only way the debt gets paid is 50 50.”

Your 50% pays off the debt?

No, no, we first pay off the debt, but then after that everything 50 50.

Okay, so he doesn't get any money until the debt is paid. That's a great question. The way that I do it is that he's putting in the money now by working on it. So it would be. So the mortgage payments you've made are equal to his labor, essentially.

Okay, so this is what I'm worried about. You guys don't have a clear plan for when this thing does start becoming profitable. How quickly you are made hold. And I'm okay with that because I'm thinking of this as a long term investment. Well, yeah, you're already five years in and made nothing.

Yes, sir. So yeah, but you guys really need to think about it and have it detailed out. Exactly how that you clear up this debt and then then, you know, we don't just start raking chips off the table here while there's still problems.

And you're getting ready to pay off this line of credit and you need to recoup that. The debt now is owed to you. Yes, sir. That has to be paid back to you because you just use your personal money to do that. Otherwise, this is, you know, we're starting to value his labor at about three hundred

thousand dollars a minute if we're not careful.

Yeah, and that's basically, you know, that's basically what, you know,

a consultant would be charging in this situation. Three hundred thousand dollars a minute. No, no, no, no, no, no, no, no, no, no, no, no, no, no, no. That was like, wow, I'm in the wrong business. Yes.

“So, yeah, my point is is that you need to, you guys have to have a real forced ranking of what happens”

to the cash when it starts coming in. First, we recoup that you put the money back in your pocket for this line of credit that you pay off today. Do you ever recoup the money you put in earlier? And then we pay off the 360 before he starts making hundred thousand dollars a year

and out of apples. We need to get all that cleared up. And then we can split 50, 50 after that. And if your 50% is due to the money you put in earlier, that's okay. If you don't recoup that, that's okay.

That's your investment and your return is on the cash flow after that. That's all fine. But when the way people end up getting sideways in these things is they don't have real good, clear, detailed explanations that they're both aligned to on where the cash goes all as it goes down the list of priorities.

And you're very generous and open-handed with this. And he works hard, so I want him to get some out of it. That's fine. Just build that generosity or that open-handedness into the clarity and into the decision that you guys make.

Interesting.

“Lisa is in Auburn, Alabama, high, Lisa, how are you?”

Hi, I'm doing well. How are you? Better than I deserve. What's up? Okay, so I'm a single parent and I have a six year old boy and I'm a step two of the

things that, and I'm just wondering, I'm worried that it's going to take me about 10

years to pay off my debt, and I'm wondering if I should go ahead and basically buy some

play gym equipment for our backyard, so he has to think to do. He's an only child and he just gets too much screen time right now, but I know that was the way me paying off my debt. How much debt do you have, honey? 110.

On what? Other than my mortgage. It's 75K student loans, and then 9,000 in a personal loan and the rest is credit card. Alabama taxes and medical. Yeah, what do you do for a living?

I'm actually a tax accountant. Okay, so what do you make? Right now, 86. Why would it take you 10 years to pay the shop? Well, I guess with my minimum payments, I just wasn't sure if I could pay off more than 10,000

a year, unless my income goes drastically up. Yeah, you're going to get your income up, and you're going to get your lifestyle down, and scorched earth. You're not doing a detailed sacrificial budget. Or you'd have more room than you've got.

Okay. I have, I do have every dollar. It's just my debt payments right now. We're about 40% of my take on pay. Okay.

“And what are you talking about spending on playground equipment?”

Really, really just getting a sense for a backyard and getting like just the swing set or just something back there so that he can actually endure a backyard. How old is he? He's six. I'll tell you what we just did Lisa.

My wife on our Facebook Marketplace and in these Facebook groups, they are giving this stuff away. Just hoping someone will pick it up. You don't need to go buy him a new place that, you know, for $1,000 to make him happy. Just go get something real cheap off Facebook and he'll be just happy with the cardboard box. I'm a, we're not getting the cardboard box.

We're getting to get him a nice thing off a Facebook Marketplace for just a few pennies here. There literally people wanted out their backyard. And you might not need a fence if he's six and knows to stay in the backyard. I don't know. Right. I'm, I guess I'm old school, but I'm just like, don't leave the yard.

There's an idea. Dave had electric fence growing up. He knew he'd go past it. Didn't have it, you know. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it.

And the meantime, remember, there's ultimately only one way to financial piece.

And that's to walk daily with the Prince of Peace, Christ Jesus. This is the Ramsey Show. The Ramsey Show live is your chance to actually be part of the show.

Finally win that money argument in your house.

My mom occasionally asks us to borrow money. That's to know all the way around.

I'm a spender. He's a safer.

“I'm a tight water. How many tight wats are out there?”

Thank you for making yourself known. You do a free free enough? What's a free free enough?

“I don't know. I thought there'd be something.”

The Ramsey Show live is your chance to be in the room with other people that are on the same journey as you.

There's always something you can do to better your situation.

We don't sell magic ones.

“And so that person, the mirror, they are really the secret sauce.”

They are the solution. I'm really, really proud of you. It's awesome. That's pretty fun. You guys are great. The Ramsey Show live, one night only coming to a city near you.