Life Gets Easier When You Don't Owe Anyone

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“Normal is broken, common sense is weird,”

so we're here to help you transform your life. From the Ramsey Network and the Fair Wins Credit Union Studio, this is the Ramsey Chef. I'm Dave Ramsey, your host, George Campbell Ramsey Personality, I'm the one bestselling author in and host of co-hosts.

The smart money happy hour, he is my co-host today. Open phones at Triple 8, 825, 5225. Hannah is with us and New York Syracuse to be precise. Hey Hannah, what's up? Hi, how can you go in?

Better than our designer. How can we help? Yep, so I have been around 87 to you. And I have a husband who is way more of its better than I am.

And it's gotten to the point we started the plan January, and it's gotten to the point where I am now having to put money aside in a safety account, diverting it from my paycheck, because if I don't do that, he ends up spending it. And it's coming soon.

How old is this child? 23. Okay, does he actually have a psychological disorder? Is he just immature? Yeah, so our income is two years ago.

We were close to, I want to say in 125. And in the past, year and a half, our income is going up to 275 years. So there's been this massive shift in the amount of money coming in. And whenever we talk about it, he's very dismissive of it. He feels like it's fine.

We make plenty of money, and we'll pay the debt off eventually.

We'll never be able to get on the same page with that.

And that's what I'm calling. Okay. Well, I mean, you can't hide the liquor under your bed to keep your husband who drinks too much from drinking.

“You have to address the drinking problem.”

And so this is a behavior problem in a marriage breakdown. And there's not a tactical step that you can do to fix that. And so, if I were in your shoes, I'm going to force the issue. Because I disagree, I've tried. I worked at it really hard.

I tried to out-earn my stupidity. I'm really good at making money. And I never was able to make enough to be more of my income was bigger than my stupidity. Congress is trying it.

They're not able to either. And your husband is unable to either. And so the arrogance that goes with that, that says, "Oh, I make a lot of money. I'm bulletproof."

I've experienced that. I've looked at that idiot in the mirror. I know what he looks like. Looks like me. And so, it doesn't work.

It's not practical. And it's not addressing, you know, this lack of self-discipline. It's like, okay. I'm in good shape. And so, I can eat whatever I want to eat and get fat.

You know, it doesn't make sense. You know, it's like, no. That's not the where the good parts of life come from. They come from learning to delay pleasure for a greater good, not just being hedonistic and buying anything I want to buy,

whenever I want to buy it, and pushing, filling up my card on Amazon and hit Submit Submit Submit Submit. And think that's where happiness is found. Instead, you know, actually achieving some goals.

Now, you don't have to live on beans and rice. Your income's gone way up. Maybe there's some things you can do. Depending on how intense you want to be on things,

“but you need to at least be intentional.”

And when you're panicking to the point that is behavior is this bad, that you have to quote hide the liquor bottles under the bed, it doesn't work. You're still going to get drunk. Right.

So, you guys need to see a marriage counselor. Okay. If he's dismissive of you to the point that your vote doesn't count, and he can't hear this concern and address the concern, and come to some kind of mediated point where,

okay, we are going to spend some money, but I'm willing to write down and agree to the money we're going to spend. Then that's fine. I mean, in today's world, Sharon and I can buy, most of the day, then we want to buy.

But we still don't, without A, talking to each other, and B, making it part of a holistic plan. And so. Right now, you've got our money, but it's his plan. He does what he wants.

It's not our plan.

You guys never aligned on this.

It sounds like you never were aligned with your financial values. You value being debt free, and he doesn't give a rip.

That are in the relationship and in how he's treating you. And even how you're treating him. And so instead, okay, I want to treat you in a place of honor and respect.

“And the only way I can feel comfortable doing that”

is that we are being mature about how we're handling this. And I don't feel like we are to the point that I'm wanting to hide money from you. That's weird. And you really have to address this.

Yeah, the problem is it takes two emotionally mature and healthy adults

to follow a plan and do it together. It's really hard to do it alone. You can kind of drag the other one through it. You can try to do it on your own, but man, it's going to be a grind. Yeah.

And we just don't, you know, all the data that we've gotten out from having done this for 45 years. That this coaching people, the data is pretty thorough. And the data tells us if you want to have a high quality, long lasting, sustainable marriage, a quality marriage, not a perfect marriage. But one where we, you know, we introduce conflict and we resolve it.

And we're aligned to certain values and we, you know,

and we like each other as a result and we want to hang out,

not only love each other, but we like each other and we want to hang out together. But that takes work and alignment and constant adjustment.

“And that's why we admire people that have been married 50 years and didn't kill each other.”

You know, it's like, you did, how did you do that? Because I think I'd be dead by now. You know, it's like, right? And so, you know, and the same thing with wealth. We don't see people building wealth.

I mean, again, very often, but statistically, the data says that couples that work together, very high probability of actually becoming wealthy. And the couples that don't work together and have to hide the liquor bottles under the bed. These targets bags under the bed or hide the money in a savings account.

Because my husband who makes $275,000 a year can't seem to be a grown-up enough to limit his spending. Then, you know, those couples don't succeed financially or relationally in the data. And so that's what we want for you, guys. Hannah, we love you and we want you to win. And so we want you to go all the way to the source of this down in the roots of this thing.

And clean it up. Yeah, that's the problem with this.

“That's why the show has been so popular for so many years.”

Is it's not really about, you know, one plus one equals two or ten plus ten equals twenty. It's personal finance. And so we get to deal with all of our trash. And, you know, that all of us have and George and I are authentic and tell the truth about our own stuff. And Rachel is, all the people that own here, all the RMS personalities are, it's one of the things we do is this is a human problem.

It's not a math problem. Because it's personal finance is 80% behavior. Only 20% head knowledge. So relationships and how you function in them. Huge indicator.

And you add more people in them, multiplies the drama, the complexity, the emotions around it. So you really need to be aligned in order to win. Oh, wait, you're saying children throw fits in one stuff. Yeah, the tantrums aren't going to help, especially when it's coming from a grown adult. That makes it even more difficult.

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Hi, Alyssa, how are you? Good, how are you?

Better than I deserve, what's up?

I just have a question regarding taking a loan out against the house.

“What if these smart could do that a refinance in order to pay off $14,000 worth of car?”

What we owe them a car? Absolutely not. Because we're just occurring more debt, right? Yeah, you're not paying off the debt, you're just moving it. So what is your household income?

$15,000 on this car. Yes. What's the other car worth? We only have one car. Okay.

And what's the interest rate on this? I think it's six. Okay, that's not too bad.

I was afraid you were going to tell me 18.

No, no, no. You only have one car. Yes. And what's the car worth? I think it's worth $24,000.

And you owe $15 on it? Mm-hmm. And your household income is $40. Yes. Mm-hmm.

Well, what I would do is sell it in buy a $9,000 car and not have any payments. Mm-hmm. Okay. And then I would with no payments. How much are your payments?

Uh, therefore, 70 a month.

Okay. And then, for the next 10 months, I would pay myself a payment. 11 months, and I'd have $5,000, and I'd go buy another car, so that we had two paid four cars, a $9,000 car, and a $5,000 car, and no payments. That's actually a good idea.

“Do you see how that just broke the cycle of payments in your life?”

Yes. Pretty incredible. Now, here's the thing. You don't have to panic because you're not about to get repowed. You don't have to give the car away.

I want you to get $24,000 for it. I don't want you to sell it from 19. Okay. Because you need that nine, so that you get a good car, as your main car, and then while you're driving that in a good $9,000 car,

then you save up and get a $5,000 car. And here's the fun thing. It's not necessarily how life works, but from a math riddle perspective, if you just want to say, I'm like those old members. They may not have had them when you were in school.

When I was in school, they had math word problems. And we had to solve the problem. They told a little story and you had to solve the math problem inside it.

“And so make it kind of into a math word problem and say,”

all right, if we had a $5,000 car, ten months from now, that was paid for, and a $9,000 car, ten months it was paid for. Ten more months from now, we could sell the $5,000 car for $5,000, and put $5,000 in cash with it and have a $10,000 car. And ten months later, we could move the $9,000 up to a,

or 14 months later, we could move the $9,000 up to a $15,000. And we could have a $10,000, and if you map that out and kind of play it out, that's about 36 months, I just outlined there. And three years from the day, you could be driving a paid for, $15,000 car and a paid for, $10,000 car.

If you just keep paying yourself one car payment of 500 bucks a month, which you're already paying somebody else, that car payment. But you're going to have to be on a budget to do that, because once you don't have to pay the bank to avoid repo, it's harder to save money than it is pay payments.

Discipline laws. I'm curious, do you guys have any other debt? We have school loans. My husband has school loans, Carlos. How much?

We have about 1/47,000. Is he the only income in the house right now? I do get a disability, but he works at the post office. Yes. What was his degree in?

He didn't end up graduating. What was he pursuing at the time? Video game development. Well, the income is the other lever to pull here, because these two loans, they're going to be hanging around.

You can't get rid of these things. You can get a degree in video game development. Apparently so. He didn't, but people can. Yes.

Wow. Yeah. Like a four-year degree.

Someone's got to make him. I am a lot of touch boomer. Just put me in the category. Just put me in the boomer bucket.

I never thought I'd see the day.

I'm sure it's a new or degree. But you can make good money doing it. You'll have to. I knew that. But I always thought it was somebody that kind of was self-taught techy.

Yeah. Like a developer who went, oh, I can figure out something. Somebody that played Call of Duty. So much that it became their duty. Or something.

I don't know. I mean, I just thought it was kind of learned that way. I didn't think it was. I didn't know there was actually four-year freaking degree. I wouldn't be surprised that a technology place may be had a certificate or something

in it.

But I'm a little shocked that somebody's actually offering a special degree in video game development.

It is a big industry. I guess it's logical. It shows how out of touch I am. That's what I'm, how irrelevant I am.

“All right, Gideons and Phoenix, I Gideon, what's up?”

Oh, nothing too much. How are you doing? Better than I deserve. How can we help? So, I've got, I'm a college student.

I've got an employer sponsored IR at 411K. Excuse me. I'd like to start a personal IR, because I won't be at this job for other. And I'll need to roll with 411K into my IR. How would you recommend I go about doing that?

Well, your roll over IRA will be different than the IRA that you add to. There'll be two different account numbers. Roll over account numbers don't technically combine with individual IRAs that are opened.

Does that make sense? And so. But if you are interested in doing some investing and you want to learn about that, you could get in touch with one of the smart investor pros that we recommend. It's really not that big a deal.

It's not that hard. I mean, if you ever open a bank account. It's kind of loud that I think so. Okay. How old are you?

19. Okay. Well, it's about as much paperwork plus a little bit of opening a bank account. Like if you go open a checking account or you go open a savings account,

“you have to fill out four or five pieces of paper and you know,”

put your social down four or five times and that kind of thing and it's like, you know, they, they, and then poof you have an account. And the same thing's true of opening an, an IRA. See, an IRA is not technically an investment. You're actually picking a mutual fund in this case.

That was what we're recommending to put the money in. And then the IRA is the blanket. The individual retirement arrangement is what stands for. The blanket that wraps around the mutual fund and keeps it warm from taxes. The IRA itself is not an investment.

It's how the investment is treated for taxes. And you want to make it a Roth so that it grows tax free. What year of school are you in? I'm going into my, well, it's kind of weird. I did some through enrollment, so I'm technically a sophomore,

but because I did classes early, I'm also technically a junior. Okay, and so what are you studying? I'm getting my bachelor of physical studies and admissions from Crown College of the Bible and Tennessee. Mm-hmm, good. And how are you paying for all of this?

I'm working through it, working through college. My parents are helping a little bit, but I'm working mostly. Good for you. Good for you. Well done.

Do you have a Roth option with your employer for that 401k? I don't believe so. It's just a 401k. I put in 3% day match. That's all.

Okay. That's okay. Let me back up three steps since I before you did a 401k before you did an IRA.

My first concern is that you graduate with a degree that is usable

in the marketplace that you can go get a job and make a living with that set of information and that you pay cash for that degree. If you do that, that is a better investment than a mutual fund. Not only is knowledge as the tools and the tool belt, not the degrees, but the knowledge and your tool belt is what makes you set you apart

in the marketplace and you will be worth more than that mutual fund will be ever. So I'm more concerned that you do that first before you do either one of these other things. But if you're already doing that, then it sounds like you're on a ministry track, which is wonderful. Good.

“And then you have a 401k and if you want to add to that in addition to an IRA, that's good.”

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That's worldwatch.News/Ramsy. [Music] It would feel like a rat in a wheel with your money where you just run, run, run, run, run. Don't seem to get anywhere. If you reach the point on that that you're sick and tired of being sick and tired,

and you're ready to say, "I've had it." Then you start asking questions on this show. And you start going, "Okay, Ramsay, what do I do to get from here to there?"

“What is the shortest distance between running like a rat in a wheel?”

And actually having some money where I'm actually controlling my destiny, where I can retire with dignity and not have to eat outpo at retirement, because I counted on social insecurity. "Hey, there's a plan, work your whole life and count on the government, which is well known for their ability to handle money, to take care of you."

Well, that would be stupid. So once you kind of break through that stuff and you go, "I don't think so." And you're ready. What's the shortest path? Well, we call it the baby steps, and we've helped millions, tens of millions of families, become baby step millionaires by working through this process.

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“Sophie's in Brooklyn. Hi, Sophie. What's up in your world?”

Hi, Dave. My George. Firstly, I just wanted to say how much I appreciate the way that you're show, and Ramsay, while being, you know, safe space and in values is still inclusive and useful, and relevant to those who maybe didn't share all the same beliefs and values. I think that's where in media today, and to listen to your show for the last four years, I think I'm much more able and open to respect and appreciate the opinions of those that don't share those.

So, thinking not only for what you've done for me financially, but also helping me become less of a dumb, bigot. Wow, that was cool. What a great phrase. You're awesome. How can we help you? So, my question is around giving with intentionality and being generous with integrity. Currently, my giving consists of three charities that I've selected based on sort of my values and things that are important to me. And there are an automatic, you know, monthly debits, and it feels like I'm just picking a box each month.

Those are being intentionally generous, you know, as mentioned, I'm not mentioned but insinuated. I'm not part of a faith-based community, but I love what I hear on the show about typing. You know, as I hear of giving to a community with shared values, where you are both involved in and can tangibly see how those funds are used. Yeah. I'm currently on baby steps four, five and six, on tracks of seven in the next six months. And want to make sure that I'm approaching, you know, becoming outrageously generous. I want to make sure I'm doing it with integrity and intentionality.

So, I love your question. Someone like me. Just an excellent answer. That's okay. It's an excellent question. Thank you. Thank you. Very, very well thought out. Thank you. Okay. So, um, well, as you said, what we're going to suggest is you find something that aligns with your values and something that,

Okay. This thing matters to me for whatever reason, either it's something in my history or something in my family's history or I just care about it for some reason.

“And it makes my heart, because, you know, the weird thing is is that not everything that's valid is going to be yours to do.”

Those things, some things that are valid, they're not yours to do. There's somebody else's because they care about them. So, I want you to find something that does do that.

And then what we have done at Ramsey in the family is, um,

we started out with, we were looking at that, and then we wanted to get a touch more sophisticated and really look into how that particular charity was operated. Yeah.

“For instance, let's just say you were giving to something that was feeding hungry children.”

You were worried about food security. Okay. Then you would want to know that a high percentage of the donation is actually going to feeding a child, not the bonus plan of the president of the charity. And so you can, you can look at their books if they will disclose them. If they won't disclose them, we don't give to them. Okay. If they're ashamed of where their money is going, then we don't, we ramsey don't give to them. So if they're transparent, then I can look and I go, hey, you know, 10, 15% of their income goes for administration and salaries and overhead to operate the thing in the other 85 or 90% or 75% or whatever goes to the actual thing, the drilling of the well to create the clean water for that community.

“Or whatever it is you're doing, right? I don't want that flip flop. I don't want 85% going to salaries and 15% going to the hungry kids. I don't want to give that $100.”

You follow me. So I'm looking at the way the things operate and how well it's operated. In our case, we don't give to ministries or charities that borrow money because that would be inconsistent with our families belief with met, it would make us seriously hypocritical. Now, that wouldn't necessarily be true of you. You could decide if you want to do that or not, but I'm just saying at our, that's one of the things we've decided. So then back to your original question, what we do is we set some things on autopilot like that where we're automatically giving just out of, not necessarily because the thing is tickling us every month and tickling our heart and making us smile every month.

Instead, we just want that rhythm of generosity to be there as a part of who we are as people, not as a part of the thing. Then that's one bucket. The second bucket is we do look for some things that make us cry. That when we give to it, we read the letter from the person later and we cry and I really want some of those. And then the third thing we do is that we, we allocate a small amount and some of it is a small amount relative. It's not a small amount, but it's a small amount relative to the total budget of the foundation.

My daughter runs the foundation and she's authorized to just randomly bless something. And I carry a pocket full of hundreds and I may just randomly bless something. If I'm standing at the gas pump and I'm looking at a lady and her kids clothing is not great and the tires on her car are bald. She's probably a single mom 52% of which live below the poverty level. And God might speak to me and say, by that lady's gas and roll her car over there and put some car tires on her car. And I got a money my pocket just to go do that when those are so fun.

That's the most fun, you know, because that's really in your place. I don't know listening to an episode where you said that and I also heard an episode where you said, you were in Australia. I'm Australia and you love the Australian people. And I said to myself, if I told Dave in a restaurant, I would be buying him dinner. Oh, you're sweet. Oh, you're sweet. I hate you on the random access. Yeah, but I mean, but the random acts are actually the most fun. Because you're right there in the face of the thing, the second most fun or the ones where you hear back later and say, you know, we just did a huge fundraising event at our farm the other day for a sex trafficking.

That's an inter-introduction organization. Meaning they send the ex-military guys in and get the girls out of the situation and sometimes very forcefully.

And it's basically really and truly saving somebody's life. And so we just did a fundraiser for that. And you meet some of those girls that were dragged out of that and saved. Oh, my gosh.

And that's, there's no ticking a box on that. Your heart's changed forever. You know, and so on.

So you probably want some different kinds of buckets, some spontaneity of your generosity, pump-gmoving.

And get someone's you can get involved in. The closer you get to it, the more intentional it's going to feel. Yeah, because if you can serve them, we have ministry time here. We actually can go do that for a week. At least likely to give to some big invisible thing where we have no connectivity to them at all. I mean, we do give to some large ministries, but we end up with some connectivity in there. Somehow, I want, I want our family somehow to get the psychological income from the generosity. If you're planning a summer trip, you're probably spending a lot of time getting everything ready because responsible people prepare for things that matter.

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Speaking of fun things, and she was a fun caller for sure.

Love that. Dave, I'll take a moment. Thank you in the team for the work you do. I'm a hospice chaplain. Wow. I spend my days walking with people through some of the most vulnerable moments of their lives.

Your teaching is shaped not only my own financial journey, but I'm working my way.

“I'm working my way through baby step two and it's also giving me tools I've been able to share with the people I care for at end of life.”

One of my patients wanted financial freedom more than anything. She told me her goal was to die without owing anyone money. Together we work through the baby step slowly and faithfully and she made it all the way to baby step four before she passed. Because of her hard work her kids will be able to sell her house and have a little something left over. The piece she felt knowing she was not leaving debt behind was profound.

It was one of the most meaningful parts of her final months. She loved the every dollar app. By the way, I gave her a sense of control and dignity at a time when everything else was slipping away. Thank you for giving me the tools to be successful in my own life and for equipping me to help others find hope and freedom as well. Her story reminds me that it is possible and that the work that you guys do reaches further than you will ever see.

Wow, that is not when I've run into that special. That's why.

“That's an angel walking among us right there.”

For sure. That's the Lord's work. And what a cool story to have to have a go. This is the goal I want. This is the legacy I want to leave from my family.

Is that a freedom. And she did it. Pretty amazing. Taylor is in Orlando, Florida. High Taylor, how are you?

Hey, doing great guys. Thanks for taking the call. Yeah, so first of all, listening to all these other stories of all the stuff you guys are doing. It's super impactful. So it's really cool to just not know that it's not just me out here having all these questions but really cool stuff seriously.

Thank you.

But my question is whether or not saving 20% of the down payment on the house is actually like mission critical or if that's something that's.

You know, kind of give you the background of we recently discovered the baby steps. You know, we had enough cash to just pay off all the debts right away. Wow. I decided to go get debt free. Good for you.

That was hard. And yeah, well, it was, it was a lot. But we've been blessed. And we both have good job as my wife. I guess fiancee technically.

But soon to be wife is about to start a new job and start making about 60 grand more than we had previously.

So we have a lot of income that is coming in.

“We just now having recently paid off the debts.”

Don't have as much cash saved up as we used to. And we are debating whether or not it makes sense.

We've never owned a home.

So whether to do an FHA loan because we have enough cash to cover the payments. I know you guys teach to like the 15 year. But if we're going to do stuff like that to afford it. We need to spend a lot more time saving up. I just trying to weigh.

You could purchase less house. There. Okay. That would work. Good point.

But anyway, you're way to go. Congratulations. Thank you. The thing on the 20% down. We don't slap our fist on the table on that.

We just remind people that if you put 20% down on a conventional loan.

“You avoid PMI private mortgage insurance, which is about 75 dollars per month.”

Per hundred thousand dollars borrowed. So it's a lot. Yeah.

And it's basically foreclosure insurance meaning that you're buying insurance.

The private mortgage insurance PMI is your buying insurance for the mortgage company. That pays them in the event. They have to foreclose on you and lose money on the house. Because you don't have a big down payment. They're worried that they're going to be upside down on the house at a foreclosure.

And that's where that comes from. So, but no, we don't do that. We just say it's going to be more expensive if you don't. Most first time home buyers on the Ramsey Plan don't put down 20%. Okay. Most of them put down 5% or 10% or something like that.

And they do do a conventional loan on a 15 year fixed. Where the payment is no more than a fourth of their take on pay. The FHA loan, you can get in for a little less out of pocket. That's the biggest difference in it. But it is more expensive. The closing costs are higher.

The gotcha fees, it closing or higher.

“And the interest rates are a tick higher. Just a little bit.”

Gotcha. So, it's not a horrible deal. But it basically was designed for people to buy their first home or to buy a home if they don't have much money. And you pay a premium to get into that to save a little bit on the down payment stroke. But if you'll be patient and now that you don't have any debt payments, build up a good, strong down payment, not 20%.

But you know, five or so and get you a good fixed rate, 15 year conventional. That's going to be what we'll recommend because that's the best deal for you guys. Right. And the 15 year by the way is cheaper.

The interest rates always lower on it than it is on the 30.

And you'll save way more on interest over a 30. Yeah, that was kind of the quick, because I know you guys talked about the 15 and I've been following the math as I do research here. I was wondering if having the 15, but having the more expensive monthly or if you set up like additional payments beyond this, you know, if the 30 year has payment once a month, if you pay a little bit more than that. But as if this is all my payment worth. As we're sitting here talking, the 30 year is three quarters of a percent more than the 15.

It's sitting at about four and a half. Our bounce right about six and a half. And the other is at about five and three quarter of 15 years. Okay. So it's considerably cheaper.

It's almost one percent. I mean, so if you borrow like $300,000, that's $3,000 a year. More you're paying so that you can wiggle around in your plan you just laid out. Right. And that's how you're doing.

You're just trying to wiggle your way into it. Just be calm. Be a little bit more precise. Slow down and build the cash up, build the cash up. And then it's your first house.

You're not going to buy the freaking Taj Mahal. You don't need a money mansion. Just get some, you know. Move out of the city and have to the country. Get something that needs a little bit of work and get something that not everybody's like thrilled that you bought it.

If some of your friends make fun of you, you probably bought the ride house for your first one. But you know what? The stupid thing around Orlando, Florida will go up in value. I mean, just put Mickey ears in the front yard. It'll go up in value.

You know what I mean? It's going to go up. And you're going to make good money on it in a few years. And your guys are going to be making more money and you'll be able to move up. You know, it's your first house and Tyler do not buy this house until you are married.

Yeah. Period. No exceptions. Do not buy a house with someone you're not married to. I don't care if we call on the fiancee or not.

You're not married. The law doesn't go, oh wait, there are fiancee. The law says you're not married. It's your roommate. And that's a general partnership that has wholesale different set of laws on it.

Do not buy a house people or someone you're not married. If you listen to the show long enough, you'll hear that call. And if they're in a nightmare situation, and they thought, well, I thought I'd be okay.

Yeah.

“And now you don't have the protections that you would have if you were married.”

So here's what's interesting to also, Tyler.

But it's different set of 15 to 30. I guess I've been doing this. It's coming up on 40 years now. And I've had the question from day one. Because if you add up the total 30 payments on a 30 year and 15,

I mean, the 360 payments on a 15 year and a 180 payments on a 15 year, for your 15 year mortgage. And you add up including interest and principle. And you add up 360 payments for the 30 of the 30 year mortgage. And you look at them.

It's hundreds of thousands of dollars more you pay for the same house. Hundreds of thousands. And every case. Especially if I'm using that example to go, never do a 30.

For 40 years I've been talking about this.

People go, well, I'm going to take out a 30 and promise to pay it like a 15. Here's an interesting stat for you.

“I'm promising to do stuff that you're not going to do.”

The FDIC has studied that. And they say that 97.3%. That's all of them. Of the loans, the 30 year loans are not systematically prepaid. They're often prepaid, but they're not systematically prepaid.

Meaning, I'm going to add the difference every month. And I'm going to be very precise and very disciplined because I'm the one human on the planet. No, you're not. That's just absolutely bull crap, you're not. I'm very disciplined in my life.

There's a lot of things I'm very precise on.

I don't miss on, and I'm not going to set myself up and make that promise to myself.

And I teach this crap for a living. Instead trick yourself into doing smart things like signing up for a 15 instead of a 30. Hey, what's up, guys? It's Jade Warshot. Now, I know a little something about saving money.

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Maria is in Los Angeles. Hi, Maria. How are you? Hi, hi, Dave. Hi, everyone. Thank you for taking the call. Sure. How can we help?

Yeah, so I have a husband and I are a B&B number of five. And we have five to nine for our daughters. The youngest is 10. The oldest is 20. And the new company counts just came out. So we were debating whether to get an ESA, or do the Trump accounts.

Not the $1,000, but the regular investing. And I want to know your thoughts on which one we get already. You said you already have five twenty-nons? Yes, yes. And we learned about the ESA's doing the same step. Mm-hmm.

But I'm just wondering. I would just keep using your five twenty-nons. So much smarter for college than the Trump accounts. Because the Trump accounts are going to be taxable income. The five twenty-nine, if you use for college, is completely tax-free.

And it stays in your control. Mm-hmm. Okay. So as far as the financial benefits, the five twenty-nine wins every time. Mm-hmm.

Well, how much is in the five twenty-nine so far? For each one, about 1,500? Okay. You started doing this. Good. You got it going. You got it started. Good for you.

That's one of the most people most people just talk about it. You actually did it. Good for you. Thank you, thank you. The other great thing is the five twenty-nine way higher contribution limits. There's really no practical limit compared to a Trump account's five thousand dollars a year.

And the ESA is two thousand dollars a year.

“So you're good. The five twenty-nine plans have come a long way.”

And you always pick a five twenty-nine plan that has the, uh,

you have the right to pick the mutual funds and move the mutual funds that are inside of it. So if I don't like one of them three years from now, I can get out of it and move it. Some of the five twenty-nine are fixed. You're locked in and you don't want to do those. But the mutual, the proper five twenty-nine, the ones we like and recommend, will allow you to select the mutual fund, put in the five twenty-nine.

And if it's underperforming, you could deselect it and select the different ones. And just like you could do with an Roth IRA or something like that, same exact process. And that's going to give you the best rates of return and have give you the best tax benefits and the most flexibility over over the ESA and over the, uh, Trump accounts for sure. The Trump accounts are all right, but largely, it's a Trump thumb, my chest thing.

It's something Trump's going to look how great I am. You already could do most of the stuff that the Trump accounts do. It's not like it's something really substantially earth-shatteringly new other than it's got a big T on it for him. I did get my 3000 bucks, Dave.

For my little guy. You are getting free money from the government.

If you have a child, George is on welfare now.

Yeah, apparently. I, you know what, I thought, I've given so much money to the government this year. I had like a little bit back. So thank you for that. Oh, that's it.

It's not actually government money.

“It's actually some of my money coming back to me because I've already given you more than that.”

It's a tax-free with that. That's better than welfare. So thank you from the government. Yeah. But if you've had a child born in 2024 or five, six, seven, then you can get that free

thousand bucks. So you got two of them. I got two. One was born in 25 and one was born in 23. So she missed the the boat on that one.

But we shall see.

It is cool as a retirement vehicle for your kids because what you can do is once it becomes

a traditional IRA day teen, you can do conversions to Roth and let that grow tax-free for the rest of their life. Now, which is an interesting math rattle to run out. But again, the practicality of you actually doing all of that all the way through is almost zero.

Well, it's good reminder. Parents need to be investing 15% into their own retirement for us. Yes. Then say for college next because that's coming up a whole lot sooner than your kids retirement. So this is a nice to have.

It's like you become really wealthy and you get bored and you're trying to come up with something else to do with money. It's like a baby step seven item for most people. Yeah. And beyond.

It's like trying to figure it out. It's kind of like, you know, I did what I did today. It was in that category. So the kids were teenagers and they were working. Some here at Ramsey and some at the mall and some babysitting and dog walking or whatever.

So I filed a tax return like on Rachel Cruz Ramsey at the time. Only she was 13. And for some reason I remember it. It was $1233.

“I don't know why I remember that all the time.”

Let's go, Rachel. But it's right. I remember numbers. It's what I do. It's $1233.

I filed a tax return and the taxes on it were like because she's, she could not take a, a standard deduction because I'm using hers at dependent. So, so I had to pay taxes on the 1233 because I filed that extra turn for her on that. But that enabled me then you can put up to your earned income into a Roth IRA. So she's 12 years old I opened a Roth IRA and put 1233 bucks in it.

And I paid a little bit of taxes those were extra them dollars coming out of my pocket. Didn't cost the kid a thing. The kid made $1233 put it in or I want to buy a car account. That's what she did with it. But I actually filed a tax return on it paid a little bit of taxes.

And then put the 1233 out of my pocket and put it in there. And then I ended up doing that subsequent years on all three of compounded for the next. So by the time they get out of college all of their earned income had been put in the Roths by me. As extra but that's beyond the baby steps. That's way past you're out of debt your house is paid off.

You're got you're doing everything you want to do with generosity. And I'm just going what what's a math fun thing. But I mean you take that for a 12 year old what's 1233 become by the time there's 76. A lot. One way more than thousands of dollars tax free.

Pretty cool. And so in addition to the other thing. So you can do some stuff like that. I would do that kind of thing before I'd screw with a jump account. Yeah, I just want someone calling in and go and hey my kid had to go into a bunch of student loan debt.

But hey they've got a thousand bucks in a retirement account. That's not what you want. Don't do it in that order. You're exactly right. Stick with the baby.

I'm in place for it. Good point. I just shocked to hear your own welfare. This is a new thing. Jonathan's in Jackson, Mississippi.

Hey Jonathan, how can we help? Hey Dave. Hey, how you all do? Better than I deserve. What's up?

Well, I got good news. You could take good news too.

About $62,000 total. House and everything? Well, the house was already paid for. Why do you go, Jonathan?

“How do you feel to not have a debt in the world, dude?”

Yeah. Good for you, man. Well, thank you. I appreciate that. It was a lot of hard work.

My wife and I both worked for Tom Jobs to get it done. And she worked actually for Tom full time and part time while pregnant.

We had our first child in January.

Then we had to quit our part time jobs. But we still didn't quit paying bail on it. Good for you. Good for you. What's your question?

My question is, I have a really, I've been so focused on that. I haven't really looked at our retirement accounts. So my question is, I have an old I already got from years ago. And it's got to grant some of the two sons in it. And my question is, should I keep start re-contributing to that?

Have my wife open up her own? Or should we do like our joint retirement? There's no joint retirement. There's no joint. There's no joint.

There's no joint. There's no joint.

There are always one name on them.

You can name hers at beneficiary. She can name you as a beneficiary in the event of death. And if you get divorced, the judge will make you split it up anyway. But it's in your name and/or her name. So you're just, you she can have an IRA.

You can have an IRA. And you can have that. We'll take that old IRA and start it. And so sit down the smart Vester Pro and start planning out your new found ability to save and invest. Just jump online at RemsySolutions.com.

That'll help you pick out one with a heart of a teacher.

“And you guys sit down and figure out whether you need to roll that old IRA into some good mutual funds.”

And all the stuff you're going to want to do now that you don't have any payments. I'm so proud of you. If you run a business, you already know this.

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I'm good. Thank you, Dave. How can we help? My question is, I just got married about five months ago. My husband is retired. He has like 10 properties. And he's retirement income is from renting those properties.

When we got married, he says, you know, I came in with debt. I have about $48,000 worth of debt. And so he says, you just pay your bills. Use your money because I receive a pension. He says, use your money to pay your bills.

You know, don't worry about any of the expenses. So, you know, he buys all the food. He puts gas in the car. He takes care of everything. He's just kind of absorbed me into his health.

His home.

“So, I'm just wondering, is it okay to stay separate in our accounts?”

While I get out of debt and then should I talk about moving into one account? Or is it because he's so well established? And maybe he should stay separate to protect his income. Because he has to be protected from you. He shouldn't have married you.

Well, maybe that's a wrong choice of words. Thank you. I don't know. I just wonder, if you guys want to do this, you do whatever you want to do. I wouldn't recommend it.

All the years of doing what we do. We see the couples that have the best marriages and the best wealth building probabilities

Okay. And so, we don't have one playing daddy and one playing little girl. It's okay, little girl. I'll just take care of you. Mommy's going to put me on an allowance.

I give my, I work hard to give mom the check and then she tells me what I can do. And he's 60 years older, 40 years old. Mommy's telling him what to do in the form of his life. No, that's not the healthiest form of relationships that we see. It sounds like you guys are both okay with it.

“If you want to do it, you're free and it's America and you can do what you want to do.”

But you're called here asking if you should do it. No, I don't think you should. I think he should go check today and pay off the debt that you have. And your pension ought to go into the same account that his income goes into. And we sit down and decide what we are going to do with our money.

Because we are now married. The preacher said, and now you are one. Okay.

If you listen back to what you said, you basically said,

I'm going to be punished until I pay off my debt. And then maybe he'll let me into his financial world. Right? Well, or he or he's just being real sweet and saying, I'm going to take care of you little girl while you go clean up your mess.

Yeah. That's, that's just not a cool. I don't like that vibe. Yeah. What is your income compared to his?

He's, I'm not sure how much comes in from the rentals. He's got 10 properties. He's very, he was very humbly.

“I mean, he doesn't even tell anybody that he has these properties.”

He's only me and his son knows that he does. That's fun. So he's not asking for it on a billboard, but he should tell his wife. Yeah. But if you make 2000, he makes 10.

It's going to take you decade to pay off your student loans if you're lucky. Yeah. So that's where I'm going. If you combine this, it's done so much faster. Yeah.

He probably has the money sitting around to just knock it out. And, and oftentimes, Hurty, again, you guys, if you guys want to do this, it's whatever you want to do. You can do, but you asked us. So we're obligated to tell you what we think.

We love you. And what we think is going to be best for the two of you.

This comes up most often in second marriages that are later in life.

We don't have to broke 22 year olds asking this question. Hey, they don't have 10 properties, right? But there's this weird thing that happens that you feel like, you know, like, you're bringing the new family, the new marriage down. And he feels like he brought more to the table.

And that's just not how it works. It's a combining of our lives for unity. And so you've got to work through the emotions of that both of you. And he's humble. He doesn't tell anybody.

Well, you ought to tell his wife, hello. I'm pretty humble about some things. And I ought to tell my wife. I mean, this is what we made this year. You know, this is what our tax returns say.

This is what we just, you know, we just close that. We just got that thing signed.

And here's what we made on that.

And she has very little inner working knowledge of a lot of that. But she ought to know what's going on. Sharon wants to know. She needs to know. I get hit by the proverbial milk truck.

She's going to need to know what, you know, how this is going to work out. And how she can function without me paying all the bills. So forth. And so these are two standalone adults. So not what we would call a kept woman.

“And so that's what we would want for you guys.”

We would want some more of that. And guys, it's interesting. I didn't even know this. I'll found it out later as we've been talking about this and teaching it for all these years. The old marriage vows.

I mean, you've heard the most people heard the standard marriage vows in sickness and health for richer for poor unto the, you know, and so on. Right. But there's an actual set of marriage vows in the ancient book of common prayer. Like if you're orthodox or something, you would find it there.

And it says, in sickness and health, unto the, all my worldly goods I pledge at the altar. It's not like it's one of the preach all of my wealth income toys. It just became hours. It's now a week. It's not a mine.

And it's not like I'm going to patch you on the head and take care of you because you're somehow deficit, and I'm superior. And he's not that guy. This guy here is not treated husbands a nice guy. Yeah.

He's a sweet person. And he's not being that that condescending. He just lives so long in his own world. He's going, hey, let me just say the bills. Take care of it.

I got you covered kid. I got enough money. I'll take care of you. I'll love you. And that's all he's saying.

But the down side of that is, is then the true he doesn't, you know, she doesn't have

And she should as his wife. I think.

“Well, and there's a lot of unity and excitement of just going, we're going to build wealth together.”

Versus, hey, let me handle it. You do your little thing over here. I got this. I'll cover the bills. And I, I, I, I run into it.

Truthfully, it's, it's a blue collar thing more. The neighborhood I grew up in. It's like the mom takes care of the money. And dad just works shift work and comes on. Bring the check on variety and plops it down.

So, and they always call the wife mom.

I call my wife mom. I call Sharon mom or Mimi. It's what I call her. We're on the golf course. And I'm like, hey, mom, you know.

And they're like, sure, mom. It's not only Cooper, it's the mother of my children. But the, so, but that's, you know. And so, that's the neighbor. That's the, the vernacular I grew up with kind of thing.

But it's like, you know, mom only gives me so much allowance. And I can't do so much. Says a 45 year old guy working 60 hour weeks. And it's like his wife is his mother. He'll ball and change.

They'll ball and change. It's exactly. Yeah.

And then because she's assumed headship in the household.

And he just differs to her then. I'm all in allowance. And I can't stop buying. I can't do that. We can't go fish and charity.

I don't have the license. You know, all the, all this stuff. It's that stuff I heard my whole life. It's like, well, you know, it's like, oh, are you a child or are you like a man?

That can't be a quality fun marriage. It's, it's just very, it's just the way it's actually. It's almost a cop out. Like, I don't want to be responsible. So I'm going to let her or him be that.

And Trudy's not any of that. Now, but this just, there's all this, this whole discussion though goes in the same bucket. But Trudy's is much,

“honestly, much more functional than a lot of the things we hear.”

Yeah. And there's a kindness coming from her husband. I heard. Yeah. She received it as kindness.

You said, hey, you'll be fine doing it this way. But it could be so much better. Yeah. I think it'd be better if two of you both stood up like two adults. And we, you know, I brought you, you know, this is me, you're my wife.

And we're going to write a check today and pay off the step. He's got, that guy has the money in there as a count right now. Pay off that debt. And then it just uncomplicates everything. And you didn't marry him for that.

Or you wouldn't have gotten married. He wouldn't have, he wouldn't have gone for that. He would have smelled it a mile away. Exactly. [MUSIC PLAYING]

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You don't want to sell your house to cheap. You know, we had to call her the other day, George, that had listed their mother-in-law listed the house. So boy, for $335,000, it's sold in two days. The appraisal came back at $375,000. And he was wanting to know how to get his mother-in-law the contract because she had sold her house to cheap.

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or click the link in the description if you're on YouTube or podcast. Andro is in Cincinnati. Hi, Andro. How are you? Don't pretty good.

Thank you David. Do what you take in my call. Sure. How can we help?

So my question is, well, first I want to start off by giving the context,

I recently just gave my life over to Jesus Christ. And I'm taking the Bible seriously with my life.

“And I've discovered, I've discovered that I have a PhD in B and B.”

Just like you would say. And I'm new to the Ranzi baby steps. I have $41,000 in debt. $25,000 a part of that total combined debt of an auto loan. $9,000 and one credit card to about 1,300 in another credit card in a $5,000 debt that I owe my parents.

I've heard of my girlfriend on 32 years old. Okay. What about your girlfriend say that again? So I just work up with my girlfriend. She didn't want to get a church.

Didn't believe in God. So I want to do a 180 with my life and be a good student. I'll lead her to myself and my community in my future family. Man, you have been through it. Look at you.

You're on. You're on. You're on fire. Good for you. Okay.

And what do you make a year, sir? I make 52,000. I have my primary job. My secondary job is the real estate agent. I've made about 25,000.

Okay. So 75,000. All right. Very cool. Very cool.

Well, as you've already figured out by poking around the Ramsey stuff, we are also Jesus' people. And we build the systems that we use based on biblical principles. Now, not everything we teach is from the Bible. Some of it is the implications are from the Bible.

But like the Bible says, the borrower is slave to the lender. So we take from that. I don't want to be in debt, which is why you called. So that kind of is the way we fit. Now, how do we do that?

How do we get out of that? Well, that's not necessarily a biblical thing. But it is, it is a cool thing. Because here's part of your young, your young faith experiences. Your brand new and all of this, what you're going to discover is that God is going to use this money subject

to help you with the transformation you're going through in all parts of your life. Because you're going to become a different person as you go along. The process of getting out of debt and as you go along the process of handling money properly. And becoming the different person is actually the goal. The money stuff is a side goal.

Does that make sense? Yes. And so I'm real proud of you. Thank you for giving us all that context and I'm proud of where you are at this moment. Okay, so $75,000 a year.

And you've probably heard about the baby steps. They're not in the Bible. We made those up. But they work. It's in second opinions.

It's in second opinions.

Second hesitations, yeah.

And so yeah, you're going to first save up a thousand dollars. After being on a budget. Now being on a budget is a biblical thing. God talks about planning all through Scripture. She just said, don't build a tower without first counting the cost.

Let's just get halfway up and you're unable to finish. And I'll see you begin to mock you and say this man began to build him was unable to finish. So you don't build a house without a blueprint and you don't build a life without a budget. So you're going to do a budget on every dollar. We're going to hook you up with that and pay for it.

The upgraded premium version will give you a year's worth of it. When we get off the line here. So you're going to do your budget and any of your budget. First thing you do is you find a thousand dollars and set aside as your starter emergency fund. And then we're going to list these debts.

Smallest to largest. $1300 for the credit cards will be your small one. And we're going to pay minimum payments on everything. But the little one and attack the little one with a vengeance.

“Now are you paying your parents payments on the 5000?”

Yes, sir, I am.

Okay, so keep paying that minimum payment.

Keep paying your car payment. And keep paying the $9,000 payment. And then all other money we squeeze out of the budget after we've got our baby step one $1,000. We're going to throw it at $1300 credit card and cut up all the credit cards when you get off the phone. Okay.

Yes, sir. Get a debit card. It'll do everything your credit card looks up going dead. And where I broke up with my girlfriend, she had her house on land contract and I hope her pay all of that. And so of course I wasn't able to pay down a lot of my debt.

“So I think my next question is, I literally moved in with my parents.”

Should I seek independence and just go rent? While I'm doing this, should I live with them? Should I take it for a home? How exactly should I go about that? So you've been there for two weeks?

Yes, sir. Yeah. Well, you don't want to stay there indefinitely. But you're in the middle of a chaotic, transformative period of your life. Okay.

“You have a breakup, a move, a reset spiritually.”

You are adjusting, you know, you're the other parts of your life to align with the spiritual connection with your foot, newfound faith. And so all of those things are good. I'm okay with you using your parents as a safety net, but not as a hammock. Yes, sir. So I would establish a period of time.

I'm going to stay here assuming that it's not a toxic environment, assuming it's a good environment. A period of time I'm going to stay here and after that I'm going to be out. And so, you know, maybe you sit there six months and you use that six months rent free to really knock out a few of these small debts and get some wiggle room in your budget. I don't think a 32-year-old is going to want to stay there for three years unless you're willing to stay there. Does that make sense?

So I mean, so let's just kind of find that some dates and maybe maybe six months is the number. Maybe three months is the number. I don't know. You look at it and you figure it out. Yeah, let's get our feet under it and get, you know, touch ground here and then say, okay, based on that wisdom and what my budgets telling me, I'm going to be a make a much better and much more informed rental decision.

I mean, I'm going to rent the cheapest thing I can possibly rent, but be out on my own and have my adult dignity back, so to speak.

But using them as a safety net is fine. And so people often, how I was to, we're going to we're always hard on parents have their kids and their basement and all that kind of thing.

But people always say Ramsey says never do that. No, we actually do think there's a moment in time that for a short period of time that mom and dad can be a great safety net for adult children. You just don't want to be a hands-on position all of that. Yeah, we don't want to be a hands-on. And not for Andrew, because he's not in this situation, but, but for, you know, everybody else, I mean, that's the thing, I am. If everybody else, you know, the an eagle that doesn't leave the nest is a turkey. So you just can't, that's a problem.

So we've got to work that out. But, you know, can you come home and heal if the eagle got, you know, got damaged? Yeah, you can, and he's in a healing period of changing a metamorphosis period right now. And so, good for you and good for your parents that that's available to them, available to you that you got a good relationship with them. So, yeah, let's do a little bit of that and then you go, but go ahead and figure out how long that is. Is it three months, six months, nine months, what is it? [Music]

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“These questions come from Michael in Alaska. How do you protect your debit card while shopping, either online or in a store?”

I'm worried about accessing my bank account funds. Simple question. I've got a lot of ideas here as sort of the mixture of my worlds of tech and finance. Have at it. One of the main things, and this is great with modern technologies Apple Pay.

Block your actual card number at these transactions, and it's a tap to pay. Your card is never actually used or exposed.

That's one way. It's encrypted. Another one, and this one's actually a new advertiser on my YouTube channel. But I've used them for a year. It's called Privacy.com, and they create virtual card numbers that you can lock two merchants with spending limits, time limits, one time use. So I use those when I shop online because your actual debit card number is never exposed. It's a virtual card number that's attached to your bank account or debit card. So that's pretty cool too. Most websites, including hours, and you know, I've learned about this because of owning RAMSI.

Otherwise, I probably would have never learned about it.

When we accept your debit card to purchase a total money, make overbook or Georgia's book on our website, the number is not stored literally. It is tokenized as what they call it in the tech world, and so it's encrypted in other words. And so we have a token and encrypted token on you then that when you come back, you can use the same card very easily.

“So like if you return to a website of any kind where you do shopping, that's what's happened.”

If it's a decent website, if it's sophisticated in any way, you know, they will have tokenized it, meaning they're not in their database to be hacked is not your entire card number. We simply do not have your entire card number. It's gone. But we have access to your account through that token only, and so it keeps fraud from actually happening because we would have some liability if you got hacked through here. We don't need the PR problem of that. So if you're dealing online, you're going to run into that a lot with reasonably sophisticated sites.

The second thing is that you are not liable for charges on your debit card that were fraudulently made, just like you're not on your credit card.

So I've heard people incorrectly, and that's a minimum, ignorantly, say on other financial shows, well, you never get a debit card because credit card protection in the event of fraud, debit card gives you the exact same protections. Look it up on Visa.com, look it up. It's zero liability policy. It says, it says it right there. It's got a little paragraph called the zero liability policy on all Visa and MasterCard products, whether it's a Visa credit card or a Visa debit card, a MasterCard debit card or credit card, zero liability in the event of fraud.

“So if someone steals your number and buys stuff, and this actually happened to Sharon, a week and a half ago, oh wow, our bank contacted us and said, did you buy $10,000 worth of Louis Vuitton in South Carolina last week?”

And we're like, no, we did not. We're in South Carolina and Louis Vuitton was not on the Christmas list, so it didn't happen. And they're like, okay, $84,000 worth these people, whoever they grabbed her number, wherever they scarfed her number, they hit Louis Vuitton and coach all over America. And I don't know how they were doing. Wow, must've been hitting my wife. It was hitting my checking account with my wife's debit card, and you know what it cost me? $0.0.

I don't know, but it was 80 bucks. That was a lot. I think they knew whose card they'd gotten old. Yeah, they went ding ding ding ding. I think we just hit the lottery. So we don't know what happened, whether it got picked up, whether somebody took a picture of it in a back room or where it happened, but that happens with credit cards that happens with debit cards. They've got the identity theft and there's fraud online and there's fraud in stores and there's ATM, you know, gas pumps or have it, you know, the artificial thing, where they's the quickest scanning your number and keeping your number and that kind of thing.

I've heard of all of these things happening. I have never lost a dime.

And I've had a debit card for as long as there have been debit cards, probably 30 something years. Wow, I've never lost a dime. Now I have a head. All kinds of situations where the bank sends me the email, this is, is this you or the fraud department will call and say, is this you and the 800 number rings on the phone, right? And, but they do that with your credit card as well. They'll check if we had out of the country. We just spent three weeks in Argentina. If we had out of the country, we email my banker, my private banker and say, we're going to be in Argentina. That is us.

Those charges are us. Look for that because that'll trip the algorithm and the hosting thing will get shut down. I'll be down there with no money. That's not a good idea, right? So, but I let them know, but, but the algorithms are all, they're excellent. They're getting better all the time. The identity theft protection that Zander has is there as well, but I've never had to access that for any of this. The debit card is as safe as the credit card. Period. And, especially if you keep up with your stinking banking, you have a big part of just paying attention.

Never look at your checking account, but once a year, well, no wonder you got screwed because you're screwing yourself, you're doing a bad job handling your money.

“You need to know what's going on with your money. So, the same thing.”

So, you know, I get text every transaction that comes through.

Yes, to my phone. Really? Yeah. Every single transaction. I would drive me bananas. I guess it's probably when you're using at a point of purchase. I don't get it. I don't get it at all. I don't get a single. You're missing out. It's a good time. It's the only people that text me. It's my bank charge. I can't get a hole in my wallet.

It's a banker party. It feels good to get a text on the phone. It feels like a party to me. No, that would drive me bananas. I don't need all that activity, but I do need the protection though. I don't want, you know, some crook loading up on Louis Vuitton with Sharon's name.

I don't want that anymore than they tried.

“And we're happy to sign, I think they sent, oh, they did. The bank sent over an affidavit.”

Because this was an unusually large. Yeah, that's like a police report level. Yeah. So, we signed affidavits and everything to put in the file. But they did with search of your house to make sure there was no Louis in there. Well, they would be fine, Louis in there, but they would be older than last week.

And they've been actually paid for by us. So, yeah, and not stolen by us. But, you know, wow. Yeah, not in my closet, but in my wife's. But anyway, yeah. So, I covered all of this, Dave, in my book, in the credit card chapter, breaking free from broke, I literally have a spot about the fraud protector. That's the archetype of the credit card user who says, well, credit cards are safer.

And I go through all of the nitty-gritty details, the electronic fund transfer act. And all these 17 ways you can stay protected, and it's really nothing burger. It's more parent-away at that point in a justification to keep your credit card more than it is reality. So, I want to just convict everyone out there and go, I don't want to cut it up, because fraud could happen. There's a higher likelihood you put yourself into debt than fraud happening.

If you're using that credit card. Well, fraud, you really should, you don't know what you're going to catch it on your credit card. As if you look at the statement and go, I didn't charge this.

“The only way you're going to catch it on your debit card is if you keep up with your statement.”

And then charge this. So, you actually have to freaking pay attention to your life. Or you're going to crash, because there's crooks everywhere. There's more people, there's people that work harder being crooks than they do with their job. And they're even better at it than they are with their job. And if you lose your debit card, you've got to lock that thing immediately.

So, like Fairwins, which has been an awesome partner, I've got their debit card. If I lose the Fairwins debit card, I go into the app and hit lock. No one can use the card. So, I'm pretty sure our bank has that one too. Yeah, there's a lot of these protections these days that it's actually safer than it's ever been to use a debit card.

Yeah, and it may actually, because it's more of the algorithms are more sensitive, it may actually be even safer than a credit card. I believe it. But they do have the same exact fraud protection. You get charged zero.

[ Music ]

Welcome back to the Ram Z Show in the Fairwins Credit Union studio.

I'm Dave Ramsey, your host George Campbell. Ramsey personality, number one bestselling author is my co-host today. Mike's in San Diego. Hey, Mike, what's up? Great to speak with you guys today.

You too. We'll call you to find out if you all think we're, I mean, my wife and I are potentially contributing too much to retirement. Do time when maybe a little bit further down the road, we won't have access to that money for a while, and there's other things we could be doing with it. Okay.

Are you out of debt? Yes, sir. How's it, everything? Yes, sir.

Good, way to go. How old are you guys?

We are 41 and 39. Good for you. Okay.

“And how much is in your retirement accounts now, total?”

So, because we have two different jobs, we have access to a number of different accounts. So, between the 401k, the 457 and the 403b, we have 600k. And then in an after tax brokerage, we have 600k.

And then we've got 100k in a 529 and then 40k in an emergency. Excellent. Okay. And then what do you have 600k in a brokerage account? I send the 600k in after tax brokerages invested in good and mutual funds.

Yeah, well, it's between that and F&P in that fund. Okay. Well, good mutual funds. Yeah. I mean, you're earning market returns then on 1000 investments, which means that 600 is going to double about every six years or so. Okay. So, when you're 47, it'll be 1.2.

And why would you need more than that before you're 59 and a half? Well, by the way, when you're 53, you'll have 2.4. If you don't add anything to the brokerage account.

“Right. I think that the key there is, we have the ability to contribute in pre-tax money.”

Right. So, saving has quite a bit of an income to both a 401k, a 47, and a 529. Yeah, but you said, well, your question was am I currently putting too much into retirement? Well, not your question. Correct. Yeah, we're maxing out all of the accounts.

Yeah, but it's only 600k. And then the other 600k is an after tax, right? Correct. Okay. And you said, I'm afraid I'm going to have too much of it tied up, and I won't be able to get to it.

But my point is your 600k is going to be 2.4 million before you get to 59 and a half.

And that's if you don't add anything to it, and the brokerage account. Right. That's a brokerage. Yeah. What do you, and the other account will be growing faster because you're putting more into

it. That's, that's me saying if you don't put anything into the 600k. So, what is it that you think you're going to need to buy that's millions of dollars before you're 59 and a half? Well, we are in San Diego.

So, the houses are not cheap. Can you not own a home yet? And what is it called? What's it worth? Probably 1.7.

Why do you guys have done so good, man? Congratulations. You have a lot of money. So, what's your income? Hacom is around, depending on the year, in bonus, maybe around 300.

Okay. Man, you guys are just, you've done a wonderful job. So, what are those future goals? So, there's other things that we want to do. What are the, have you guys laid those out to see what they're going to cost when they're

going to hit? Well, the big one for us is we'd love to either invest in real estate locally, which given the area where it is, is a challenge, because it's so expensive.

“Or you think the country got great in house, but given where we're at, right?”

You need wrong and wrong direction and your taxes go to the roof or whatever else, with respect, you know, homes here. But, you know, because we're contributing close to 75K to toward retirement, if we were able to reallocate some of that. Are you putting money into their 600K after tax account at all?

Not right now. Okay. No. Okay. All right.

If you guys make $500, you can invest more than that. Your house is paid for, but it doesn't sound like you're contributing so much.

where you don't have access to those, you can go to the brokerage.

Yes. That's a real estate.

“The answer overall is to be investing and you're doing that.”

And so are you going to have enough at retirement? Yes. You're going to be in great shape. You're already in great shape and you're only, you know, you're only 41 and 39 years old.

Because you've just done a wonderful job. So, now it just becomes a nuance of how we want to flesh this out. If instead of maxing out all available retirement and keeping the government's hands off of it, if instead of doing that, you said I'm going to put 15% into my Roths and my 401(k) Roths and so on, and the rest of it, I'm going to put over into this other brokerage

because I want to do some other things like buy some real estate for cash. And that's going to be my other investment that I want to do. And that's a decision and you're not wasting the money. Both are going towards investments, both are going towards good quality investments. So I don't have a problem with it at all.

You're going to have plenty for retirement.

“Now, what I would challenge you to do is to monitor that as you go along.”

So let's say that you said, all right, we're going to put 75(k) into retirement. That's 15%. Like it was baby step four. You're not it, baby step four anymore. You're at seven. But let's just say, okay, we're going to put 50(k) in everything else.

We're going to put in the after tax, because brokerage count. And when it gets big enough, we're going by a piece of real estate with it. That's okay. But what I would do is you're doing that, then, is I would monitor going along and say, you may look up some day and go, okay, now I've got enough in there or I'm putting too

much in that 600, I could be keeping the government's hands off of more of this money by maxing out a few of these other things and come back and max out everything. In my case, what I personally did in your situation, my income was different than yours. But I maxed out everything to keep the government's hands off of it and then piled up cash for after tax investments.

And I still do. I still use a simple brokerage as in P500. I don't even have any brokerage account, it's just an S&P. And I just throw cash in there, I get a big royalty check from a publisher and I just chunk cash over there and when that account gets big enough, I go by a piece of real

estate with it. That's my personal strategy, it's not any fancier than that. And so, but I'm maxing out all the other stuff, even at 65 years old, just because I get so pissed off about how much of the government takes from me and I want to get it all in any kind of tax protected account I possibly can.

But you could limit that for a little while and get that 600 up to 2 million and then start

that plan.

“Yeah, that's really the key there, which is kind of, it's hard not to contribute to some”

other accounts because of the tax benefits, but I also want to do these other things sooner than I'm going to be able to if it's all over in that other account. Yeah. Yeah. So maybe max out the ones with the best tax advantages and then move to the brokerage once

you get that piece of property. So if you put 75 away in your retirement, how much more could you throw at your after-to-ex brokerage account beyond the 75? You depend on how much we want to have fun during the month. I know.

I know. I know. How much you think? I think it's really five grand. I just said that I'm motivated to be able to get.

How much you think? A couple thousand at least. Okay. Then that's not a big deal. Yeah.

The big thing is going to be keeping it invested well and it's going to double on your investments but in six years, seven years. All right. Let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates.

But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling.

There are people you can trust to have your back from the first call to closing day.

Find a Ramsey trusted agent near you at RamseySolutions.com/agent. That's RamseySolutions.com/agent. Thanks for joining us America. So the network, network calculators happening, George. Oh yeah.

Coming up in a few episodes, I'm going to be walking through the latest data on net worth

And I want to know how our audience stacks up and here's my bet.

I bet you that our audience has a much higher average net worth than most of America. So here's the challenge. We're going to include a link in the show notes of this episode to our Ramsey network calculator. Here it is.

Go calculate your net worth. Let us know in the comments your age and your net worth, wherever you're watching. We're going to compile the comments and see how our audience stacks up against the data. So head to the show notes if you're on YouTube or podcast. Take the net worth calculator and put it in the comments with your age.

That'll be fun. And we'll link it directly in the show notes a few down there. Okay. That's the easiest way. Yeah.

Because it's my scientific research. Sheep in the internet there on the Ramsey page. There's a lot of Ramsey solutions pages.

“So net worth calculator is a good measure because that's what we need to teach people better”

to use that. We're actually working on adding a net worth calculator automatically. Does it inside your every dollar budget? Oh, to track that. Where it tracks all your stuff and then constantly is updating, like you hook it to

your mutual fund accounts and you hook it to everything. You don't add that as much as you can.

That's what I always say.

You don't have to do your real estate by hand, but it would just be just open up your every dollar and you go, oh, my net worth went up. Like Warren Buffett says, stock price goes up on Berkshire Hathaway, isn't that worth goes up? Yeah.

I always get it just calculate the stock price. You know, so same kind of thing. But the net worth is an actual measure of your financial health. As opposed to say, the stupid but fico score, you got an 850 with negative net worth. You're not crushing it.

You're crushing paying the bank too much. And so if you said, I actually have a net worth, I mean, most people have a negative net worth, by the way, you owe more than your worth. If you got nothing in savings and debt, I've got a hundred thousand dollars in student loan debt and I live in an apartment.

You have a negative net worth, okay? So that, you know, because your net worth is what you own minus what you owe assets minus liabilities, which is the actual measure of financial health.

“If you want to set long term goals, like 50 year goals, 30 year goals, and you say, I want”

to be a millionaire, well, a millionaire is a net worth goal.

That's your, what's your own minus what you owe equals a million dollars.

If you owe nothing and you own a million dollars worth of stuff, you are by definition, a millionaire. And people like, well, I don't make, you don't make a, it's not, I don't make a million like a millionaire day. This is not a, how much you make thing.

This is a, how much you keep thing. A lot of people make a million dollars and got nothing. Welcome to sports world, right? Welcome to the NFL, okay? I got nothing honey, but I made a lot of money, or other people didn't make nothing, and

they saved all of it. And they got millions of dollars. So your net worth is actually not your income, is actually your measure of financial health. So one of the primary measures, and we've gotten away from it, because the banks have taught

us to get screwed by them. They've taught us thoroughly, what's in your wallet? Not your card, my money. That's my answer, Samuel L. Jackson, I'll tell you what's in my wallet. I got nothing to do with you, nothing to do with you.

“Actual Benjamin Franklin in my wallet, looking at me smiling, that's what's in my wallet.”

So I mean, you know, but they've taught us over and over and over with these dad gum, you know, more money is spent advertising, Visa, MasterCard, and American Express and Discover, than almost any other product in the world. That should tell you something. Hundreds of millions of dollars a year spent advertising, teaching you that you can't live

without those goobers. You need the rewards, you need to up your score, you need more lines of credit. That's what's pitched. Yeah, you're walking through the airport, and they're yelling from the table. You can get airline miles signed up here, like a corny.

It's like a corny, and just like the corny, when you go over and pay your money, you don't get the stuffed rabbit because the game is rigged. Just like a corny, only at Southwest Air, is the corny, and they're standing in front of you while they're telling you to put your seat belt on, selling you a credit card from the aisle and the stewardess is doing it.

You don't think these people are good at what they do, they're better at what they do than you are or what you do because you bought it, people. So the banks, their job is to sell you on believing that the FICO score is a measure, which

So why, so you can borrow money, is this a dog chasing its tail or what?

“Is a dog chasing its tail with NASCAR stickers all over it that look like banks.”

So look, visualize your dog, put Bank of America, fifth, third, put all the bank, little stickers

on your dog, and then teach your dog to chase its tail. Now you've got a FICO score. It's a great representation. It's exactly what's going on right there. So you look like NASCAR.

It looks stupid. So don't do this. I had a fun interaction on Delta Flight, the stewardess walked up and he said, "Close your ears." And then she did the shit.

She recognized me, and she said, "I'm sorry George, I have to do this, it's my job." She apologized the head of time. Doesn't appreciate that. That's funny. I can't hear you.

George standing behind her going, "No, don't do it, it's not worth it."

I have on the grenade, George.

“I'm not a good salesperson for your credit card, but seriously, if we did, on the Ramsey”

Show, just a tiny bit as good as they do selling debt about selling the net worth, calculator, which is an actual measure of winning because your debt goes down and your savings, investments, and real estate values go up, you are winning. That's the definition of net worth. If we get this net worth calculator to be the thing, rather than the FICO score, wow, the issue

is. You're net worth is intangible, whereas the debt gets you the thing you want right now. The net worth takes time to build. The net worth requires that your emotions be mature, the FICO score requires that your emotions be immature.

They want you to be impulsive. They want you to be a child, a baby child. I want it. I want it. I deserve it because I work so hard.

They'll tell you that in the marketing. They'll literally say, "You work so hard." You deserve it. And we say, "You work so hard." You deserve a break today, right?

Oh, that's right. Yeah. That's good marketing. You deserve a big Mac. Is that all I deserve?

Wow.

“I'm really not doing very well, Lord, if that's all I deserve is a big Mac.”

That's my dark future. I think fine dining is what I deserve. You deserve a stake, but settle for a Mac muffin. settle for a Mac muffin. Get your Mac rib.

We're not sure what that rib came out of, but we're just saying it's a rib. Whatever it is. It's not alive anymore. It's all we know. If it ever was, it's a zombie rib.

Yeah. Oh my gosh, guys. Hey, net worth, net worth, net worth, net worth is how you measure success.

And if somebody says, "Well, a million dollars is not enough.

It's not enough for some of the things you want to do. A million dollars will not buy you a jet. Not a good one anyway. A million dollars will not buy you seven cars. People that have a jet in seven cars are billionaires.

They're not millionaires. A billion is 1,000 million. If you have 1,000 million and you spend eight million of that on a jet, you're okay. If you have eight million and you spend eight million of that on a jet, that was dumb. Okay.

So, I mean, this is how the net worth works. Right? I mean, you're looking at your ratios and you're going, "Okay, that makes sense. That's a million. No one should have a million dollars.

A millionaire is a net worth is a math thing. It's not a moral construct. It's not a spiritual discussion. I can have that argument with you, too, and teach you about capitalism how it is more intimately moral and ethically moral than any other form of government or economy.

But that's not going to do with being a millionaire. It's just the buy product. Millionaires, the buy product, to being free, having liberty to get up, leave the cave, kill something and drag it home and not have it forcefully taken from you by your government. Oh, wait.

They do that. It's called income tax. of terms. 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.

Go to RamseySolutions.com and try ask Ramsey today.

That's RamseySolutions.com. Jennifer is in Philadelphia, hi, Jennifer. How are you? Hi. I'm great.

How are you guys today? Better than we deserve. What's up? What's up? So, I had a question.

I'm a bit stuck right now. I am recently divorced.

My ex-husband and I, we own a home, it's probably worth at least $300,000.

We have about $125,000 remaining on the mortgage. He's offering to let me stay in the house and split the equity leader, but I have some student loan debt and card debt. If I sell, get out of the house, I feel like the equity would wait about all of my debt and leave me with a decent emergency fund.

“So, I'm just wondering, should I sell the house to get a clean break or try to stay?”

How old are you? I am 47. Are you kids at home? One, 19, 19 years old. Yes.

How long were you all married?

We were married 19 years. I'm sorry. Yes. It's a hard thing to go through. It absolutely is, yes.

What do you make? I make so gross pay this next year, I'll be making a little over $100,000. And you said you're 47, yeah. What's the mortgage payment? The mortgage payment right now is 1890, and that's something that I've struggled with.

My answer is more emotional than it is mathematical. And I'm answering this is what I do if I were in your shoes. But it's the way I function, so I'm not sure it applies to you. You'll have to decide that, okay?

“But for me, I think you make $100,000 a year.”

You're 100% free if you sell this house. A hundred percent of this heartbreak is in your rearview mirror. You're not walking into the same bedroom anymore. You're not walking into the same kitchen anymore. And you have zero debt, and you make $100,000 a year, you turn the page and chapter two

begins. Okay. I love the cleanliness of that. And what that opens up your world is a world of possibilities. Your life becomes a new adventure after this tragedy and this heartbreak and whatever

rewards we want to use for the past year and a half that you've gone through this or whatever it's taken to get this done. And it's just been hell. And to put all of the burning embers of that trash fire that dumpster fire in the rearview mirror for me and I'm making a hundred K and I'm completely free.

I can do whatever I want. I like that more than I like this house. I agree. Because that is my thought recently it would be, it would be a great feeling to be debt-free and planning for the future and the next chapter.

Yeah, knowing what I know now, I'm going to turn the page and chapter two is going to be a chapter of possibilities, not burdened by anchors from the past. Yes. I personally think I get great hope and joy out of that idea. Ah, yes, absolutely, and that is what I need right now.

I need some joy and happiness back in my life again. Yeah, it cleanses some of the heartache and hope replaces some of the rage and, you know, I, you know, anytime you go through a life-trashing thing, I mean, I've not been through a divorce, but I've been through a bankruptcy lost everything and, you know, and what I say about bankruptcy is it's a fresh start, well, only if you do it right, you know,

and only if you clean off everything when you do it and we did and we had our fresh start, but man, it was, you know, we're standing there in ashes for a fresh start, you know,

“and in a sense, a little bit, that's what you're doing, but you got, you know, you got”

there's a lot of positives in chapter two already, freedom, adventure, son is out,

you got two two-year-olds to deal with, I mean, no, you know, yes, I'm very, I'm very close.

Yeah, the 19-year-old can figure it out. Well, that's not, we're not that far off and exactly. And not put them in the therapist's office too quickly, anyway. Yeah, yeah, yeah, yeah, I'm encouraging him to listen to you and your show and your team so that he makes responsible decisions, especially over the next few years of his life. Yeah, so that he doesn't, he doesn't use this family not turning out like he wanted it to

to be an excuse to do something dumb financially. That's a good idea on your part. Wait a, wait a go. So yeah, I don't know George, I like this plan. Well, I think should you sell the house just to pay off the debt? Probably not, but for the reasons you mentioned, I love and then the buy product of that is, man, I guess I just get rid of this debt, have an emergency fund,

probably the first time in a long time. And you can build and buy a house pretty quick and I personally rather live in a different house if it's me. Yeah, my guess is if you chose again today, you'd probably choose a different home based on your season of life. I probably would. I went as a similar style, but maybe just to downside the debt would be perfect. Yeah. Yeah. I don't know if I was single, if I would live where I live.

I never thought about it much, but I guess I would. I don't know.

A lot of the reasons we're in there is because of Sharon, so I don't know what I'm saying to think. So, reason we're in that particular neighborhood. Sharon wanted to live in a society day. If you wanted to live in the woods, there you go. You know, she went. She won.

“Her vote mattered a little more on that. Well, yeah, it's because that's how we've been married”

for 45 years. I told her she leaves. I'm going with her. She's like, "That's hard." We're not doing anything else. Yeah. Yeah, I love that. I think it's a fun thing about having an encore. I got talked about an encore career. You lose your job and your 40s or 50s. And it was your big thing. And a lot of people end up with her encore career. And you think about what an encore is. The curtain goes down. The audience is on their feet cheering. The curtain goes up.

You take a bow. The curtain goes down. And then the curtain goes up and you play another set. That's the encore, right? And so that's what this is. It's the turning of a page chapter two. The curtain has gone up. It's your encore. It's like the old channel of commercial. But wait,

there's more. You always love that. We always want more. Genzu knives. It's not over.

It's a comarica dude without infomercials. I love it. Cuby C went bankrupt. No way. They did.

“Dave, you should have been supporting them. Probably not. Yeah.”

You can't see Dave calling in. Micro. One thing. You know, Micro's career started on. Everybody was surprised. He started on Cuby C. That's where he was. Yeah, it's where he started. That's fantastic. They found out he had a great voice in the inner theater because of his voice. He doesn't. He doesn't. He left Cuby C when he did. When I would give him a voice that deep and rich and a great singer, too. He does like opera. Oh, yeah. Big time. Big time. Fantastic. Yeah.

And he went from 38 or to 30 jobs. Now figure that one out. But yeah. He's around a song's man. Well, that he is for sure. That an interest of that idea. That chapter two thing is a good thing. Well, you can eat your own life. The next, what's the next thing? And there's just all this freedom and adventure. And you know, I'm going to backpack your upper something. I mean, I'm not, but what is it you want to do? I'm just one of the traveling pants. What's your thing? Yeah.

I love this this concept of most people either treat it like a comma or a comma. You get to choose. Are you going to let this be just like a sermon? That's like a sermon. That's like a sermon. I might, I may be I sold that from the past, right? You might have stolen it. You can't take Sunday morning sometime. But I just love that idea. That's a great line. Are you going to let this control you keep you frozen stuck? Or are you going to go, all right, there's a comma. The sentence is

not over. Yeah. That that thought might be, but it's a, there's a continuation here. So, you know, that's when we file bankruptcy, I did have that, I had a period of time where I just sat

“around and moaned and blamed everybody else. And you know, through us, that's what you do when you do”

something stupid. You blame other people, right? And like McDonald's serves hot coffee. Who knew? You know, it's like, you know, I'm going to sue you. You serve me hot coffee. Well, you sue me if it was cold, you know, because you're that guy. But, um, yeah, but instead, you know, I sat around playing with other people for my stupidity. And then I, I actually went to breakfast with a buddy of mine, I was whining. And he said, you're whining a lot. Ouch. He goes, you need to, you got a lot of

lemons. You probably have to make some lemonade stop the whining. Oh, don't you love a good friend. Come on, not a coma. You can use that one, Dave.

between vacations and road trips and camp fees and events. And all the extra gas and grocery runs,

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“you need. Danielle is in Toledo. Hi, Danielle. How are you?”

Great. Thanks for taking my call. Sure. What's up? Our my question is our youngest child will be going to college in just over two years. So, I've been reading about applying for financial aid filling out the fasts that all of that stuff. And I keep coming across suggestions that it is better, it's the parents, and especially the child, use their cash. And I'm not comfortable with that. We've had our fund take the Foundation's course. We've gone through financial

peace and diversity. He's been saving up from his church job for college and that goes against what we've taught him and we feel he should pay for part of his college, but we also don't want to mess up our chance at financial aid. Well, there's several types of financial aid. There's

“scholarships, obviously, that are based on financial need. They're based on academic citizenship”

other things. And we always suggest you go and get as many of those as you can. And there's billions

of dollars of those out there floating around, literally. And we also, you know, there are grants that I have to do with specific situations, nuances, demographics of your life or whatever, and grants are fine. There's nothing wrong with those. Financial aid that is needs-based, like a pill grant, is for poor people. And when a website or a person suggests that you spend all your money in order to qualify for welfare, that's like saying, "Quit your job so you can get

welfare." No, that we're not doing that. Like you said, that runs against what you believe, and we're not doing that. So that's the spirit in which these people are, you know, but financial aid is not all income or asset-based. But that that that is for poor people, and if you're not poor people, then don't spend your money or hide your money and act like you're poor people. So don't do that. You know, and then that solves your problem. So what I would tell

you to do is to, again, to look at the cost of a particular college versus another college, that is a bigger difference number than anything you're going to find in FAFSA. Okay. And FAFSA really is a funnel to get people on a student loan debt. It's mainly what it does. That won't be allowed to be no student loan debt. Yeah, good. And, you know, and if you qualify for a certain type of scholarship or grant,

fine, take it. There's nothing wrong with that. But you're probably, you know, based on what you're telling me, you're probably not going to qualify for pill grants. Yeah. I mean, it's interesting to see the actual formula. I was looking it up. Your parent income is the biggest factor. So spending down all of your savings and cash is a very small proportion of this. For the FAFSA formula, the student aid index is what

they call it. It's what they use for the formula. The parent assets is only 5.64%. So $10,000 savings is only going to add 500 bucks to the parent's portion that is counted towards FAFSA. The student portion of the assets flat 20%. So he's got FES 10 Uranus saved up 2,000 would be

matters. The truth is is that we don't find people hardly ever that get through college using FAFSA.

That's just in what you say you're student loans. Yeah. Now, you know, so FAFSA is really not the ticket. School choice, school choice is the ticket working while you're in school is the ticket playing for scholarships is the ticket. Those are the three things. And we find people doing all three of those all the time. I mean, we had Christina Ellis, it was with us for years here, is a world renowned on getting scholarships. She wrote a book called How I Got a Half a Million

Dollars and Scholarships. She ended up going to Vanderbilt and getting her MBA paid for in full and all of her undergrad, too. And she was the daughter of a single mom who had no money. And so, you know, but it wasn't FAFSA. She went and she made it her job in her junior and senior year of college of high school to apply for scholarships. Her mother made it her job. She wrote

so many essays, her fingers blend, you know, kind of thing. But she got a half a million dollars worth.

Hello, that's means free college anywhere you want to go. And so, and it's the book was a best seller. And she's still out there and she's wonderful if you can find her information anywhere.

“So, yeah, but that concept is there and that's what I would lean on. And then I would lean on”

school, school choice and what mom and dad can contribute and so on. But I wouldn't, I wouldn't burn a lot of my brain calories trying to manipulate the FAFSA formula as the moral of this story. Yeah, not worth it. You're better off taking that time to just save up and pay cash. And for sure, don't, you know, don't spin down. Oh, god, man, people are saying,

that's a, you know what this is? It's the, it's the quintessential discussion between a scarcity mindset

or an abundance mindset. A scarcity mindset says the government will have to take care of me because I could, the little man can't get ahead. So, therefore, why try? And therefore, I'm stuck or I or spend it down or move all your money out of your name so that you go into a Medicaid nursing home. And that way, the Medicaid, the nursing home doesn't steal your money. As if they stole your money, they provided a service. They don't steal money. They provided a service. They took care of you old

“people. That's what they were doing. And, you know, but they stole, they took all the nursing home,”

with the nursing home got paid. You go to a restaurant, you pay them for the food, you go the car dealer, you pay them for a car, you go the nursing home, they stole all my money. See, that's a, that's a scarcity mentality. Now, go for an abundance mentality. And when I'm going to stack cash and scholarships and a good inexpensive school and study something because knowledge is the key, not degrees and not where you graduated from.

Your knowledge is what moves you forward. Your degree is freaking worthless. And the only thing more worthless than your degree is where you went to school. That's so laughable. It's so stupid. I can't believe it. So choosing a school where you get quality knowledge to use in the marketplace and paying a reasonable fee for that. And your kid works while they're in school. And let me tell you what, working while you're in college is not child abuse.

Most of us work while we were in college. Shut up, you entitled, "Brat, you're going to work while you're in college. We don't have any money. We're broke." And we're not going to take out welfare. You're going to work.

“That's how this is going to be. We're going to go to school. Well, my friends, you're, I don't”

give a crap what you're friends. My girlfriend, I don't really don't care what your girlfriend's doing because she won't even be your girlfriend by the time you get there. Yeah, that break up is impending. I tell you from personal experience. This is how a boy from Boston ends up in Southern Mississippi. Yeah, that hurt. Dave doesn't even know where I got my degree from. If you tell that's how, that's how little he cares. I missed it. I missed it. I got it. I got it though the day we were

telling the story the other day. That's a good good. But it really, it's Danielle, that's a great question. Thank you for calling in with that. And thank you for being a good mom and thinking this through and get that senior front and center on all this decision making where they're emotionally bought into what they're going to have to do to get through school. 54% of the people that start college finish. Wow. That means colleges are failures. If you get a 54 on a test, they give you an

F. 54% of you the start college finish. Ever. So then think about the ones that took the last thing you want is an almost degree. That's a really bad degree. They all most degree. That's a really

people who pay for their school and their parents are paying for their school have a higher degree

of completion. You know why? Exciting a game, baby. Scanning a game. I put this hour 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 peace. And that's to walk daily with the Prince of Peace for

Ice Jesus.