Start Telling Your Money Where To Go

>> Brought to you by the every dollar app,

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

this is the Ramsey Show. I'm Dave Ramsey, Jade Washall, number one best selling author, and Ramsey personality is my coach today. The phone number is triple eight, eight, two, five, two, two, five. The call is free and some say the advice is worth.

Exactly what you pay for it.

“Savannah, Georgia, Sally is calling, hey, Sally, how are you?”

>> Hi, thank you for taking my call.

>> Sure, what's up? >> So we found y'all through our church through FPU that a year and a half ago, and we are on baby steps forward. And my in-laws kind of talked to this idea to us about six months ago. We have, we bought our house about two years ago,

and it has a very large unfinished picnic. And they have had this idea that they may retire, which is going to be my follow-up on the retirement at the end of the year, that they want to kind of put some money into our house and finish off. I think spent for them to kind of be smaller to be here in the south and then go up north.

And then eventually kind of transition to living with us in our new couple of times. And I'm not totally against the idea, because we have a good relationship, it's great for our kids to have grandparents close by. But I'm a little bit concerned about the long-term effect of this. You know, they wouldn't really have an ROI putting money into our house.

“- Do they know them? - I think, yes, we told that that.”

And my concern is just, you know, like, what happens if we do this? And you know, and five years from now, someone has a stroke, and now they need more care, and a lot of their money is tied up in our house. - Or you decide to move and take a different job. - Yeah. And my husband said that to them, and they kind of were like,

"Oh, well, I guess you just mean that two more people are moving again." - Oh, boy. Listen, there's a difference between having grandparents close and having them in the basement. - That's a major difference. - Yeah, I don't know, I want to be, you know, I want to be a good sort of, you know, what we've been given,

and, you know, to help out how we can, it's more just new long-term. You know, we're 33 and we're... - Listen, hey, I'm going to stop you. - I got to stop you because you sound like someone who knows what they want to do, but you don't feel firm enough in it that you're talking yourself in circles about it. - Yeah, you know, there's not a good idea, but you're afraid you're not being nice.

And you're classic southern, bless your heart. You know, bless your heart. So no, no, no, no, no, they don't need to move in there. That's a bad idea. - There's more downside than upside. I think so. - Yeah, and I just found out to you that they got an immunity, and I've got Georgia's book, and I heard that, like, that is not good either.

And so I'm concerned about, like, their financial future and their money. - Yeah, I would rather than use their money to buy a nice low condo in your area, and that's cheap enough that they can use it and still snowboard, and they get still bare-round and maybe sit and see the grandkids, but they have their own life over there, and it's not tied into your home and your decisions.

“- That's what we told them, and they said that they don't think they're going to have”

some money to do. - But that, this is a snowboard thing. It's not their primary residence. - Yeah, but they want it to be eventually. - Right, but it's not today, which means they have a place somewhere where there's equity building, and he is retired from a job, so there should be some sort of retirement something. Some nest, I don't know how big or small. - Well, bottom line is,

whether they've got the money or not, doesn't determine whether this is a good idea. So, my infections, they don't have the money yet further ensures that this is not a good idea. If I woke up in your shoes, I would say, Mom and Dad, we love you. We'd love to have you close, but not that close. - Does your husband degree, or is he, why, for the English? - No, no, he does, and I think my concern is, you know,

and we're actually seeing them next month, they're like, really talk about this in more detail. And they, based, like, I told my husband like, if I find out, you know, they have, like,

$5 million in their next nest, they don't have 100 million to drop in our basement as it may be a big deal,

but- - No, the Davis rate, the money that I, I don't care how much money they have. I don't care how responsible they are. This is a bad idea,

if something goes sideways, and somebody needs help, or whatever, your, your are stuck once you get in this.

And there's no way out, and that's the problem with this, and you are not being mean by saying, "No, we have to figure out some other way that you guys have a sustainable life." That's not mean. - No, that's not mean at all. You're not, you're scared of death, you're not going to be nice, because you're a sweet person. You can just be just smile and be kind and say, "No." And you don't need to have the meeting next month either. There's no reason to lead these poor people along.

“You need to just, your husband needs to call his mother and say, "No."”

You need to stay out of it. He needs to tell her, "No, not you." Because you'll be labeled the wicked witch of the West forever.

25 years ago, I wanted to move in her basement. She wouldn't let me at that witch.

You know, that's the kind of, that's how that stuff gets started. - You're not wrong, right? - Yes. And so that starts a whole narrative then, and you'll get blamed for it. So, no, make him have a backbone and tell his mommy, "No." And, um, and don't have a mid-detail meeting discussing it.

I really would, I really would not do this. - I wouldn't do it either, because there's no, how does this end well? - Well, then it doesn't end well. If you have the meeting, it looks like you're considering it. - I know, I know. And that's not fair, that's not fair. That's not fair at all. And so, um, you know, but, but if you, if I do move in,

I can't think of an exit strategy that works unless both of them died in their sleep. - No, everything begins. - I mean, other than that, I can't think of a good exit strategy here. - No, and then everything begins. I need to do that in conversation.

“- You need to do that in conversation. - You need to do that in conversation.”

- Yeah, I mean, no, this is just no. No, no, no. There's going to be aging problems and disability issues and care issues and you all, and boundary issues and you guys, there's like 99 things that can go wrong and only one that can go right. - Yeah, and all the risk is on you guys. There's no risk on them, because they get built in health care. - Well, take the risk on them.

- And if you sold the house after they did a bunch of improvements. - Yeah, that's true. - That's the risk on them, but still, they need to use their money more wisely. - Yeah. - And have a good life that's fine to be close by, but we need good, healthy, physical boundaries. It's a good thing. So, you know, we are now getting calls in the last three years that in 40 years of doing this show, I've not gotten much of, just this idea of multi-generational

housing. - Yeah. - The parents, we're going to, I mean, if I had the mother-in-law question, we're going to build a mother-in-law apartment, right, where we want to add onto our house, and she wants to give us $200,000 to do that, and then she's going to give us that at her death, and she's going to live over there. That question I've had. But now we're seeing this thing of the family compound, you know, and four families are moving on to one single piece of property,

and there's no exit. These things, you know, and they're doing it because they think it's more

“affordable to do it. - Yeah. - But you guys have got to be real careful. You have to think”

through what happens in divorce, what happens in disability, what happens in death, what happens when the sister-in-law across the way you start to do in cocaine? - What happens when you decide you just don't like these people? - Well, that can happen each, you know, this is family after. [Music] Let's talk about something nobody wants to think about until it wrecks their budget, medical debt.

Medical debt is one of the biggest financial landmines in America today, and that's why health trust financial is the only health insurance provider, Ramsey recommends. You guys a lot of people have medical debt, even with health insurance, because you can pick the wrong plan, pay big monthly premiums, and still get slammed with huge out-of-bocket costs later. And if you're self-employed or you run a small business, you're paying a hundred percent of that bill. But health-trust financial

shops multiple top-rated carriers with no extra costs or pressure to help you get the right plan while finding you big savings. And they don't just look at the cheapest one, they help you understand deductibles, networks, out-of-pocket costs, so you don't get surprised later. And most

people who work with health-trust financial, save up to 50 percent on their health insurance costs.

That's real margin you can put towards working the baby steps instead of medical bills. So don't let one hospital visit sabotage your financial plan. Go to healthtrustfinancial.com and protect your budget. That's healthtrustfinancial.com

Ella is in Dallas, Texas. I Ella, how are you?

I'm doing great. I hope you can hear me okay, and I hope that you guys are doing great too. We are better than we deserve, what's up? Um, so I am actually calling because my husband and I are working through the baby steps. We are on baby steps too right now, and we are fully aligned and we want to follow the steps all the way through, especially right now. He's, he just turned 40 on 35. We have a four-year-old,

a two-year-old, and I'm currently pregnant right now. Wow, that's 29 weeks. Yes, so it's really great, but of course we change our mind that because of this, understand that we really need to do

“a lot of planning the future. Um, so right now, getting out of debt is pretty important for us.”

So at the beginning of the month, you know, me and my husband, I go through my spreadsheets. I'm the

finance person here and the budgeter. Um, we go to a spreadsheet together at the beginning of the month, and you know, we are like, okay, we're going to make sure that we're straight, we don't buy anything, just what we need, um, so that we can press as much as we can to our admit. But then definitely through the month that my husband and I go through a whole, and he starts wanting this spend money. You know, he starts looking at his soul. He wants stuff for his hobbies. He's very

much into guns and motorcycles and things like that. Um, I am, uh, stay at home, right now. Um, my kids go to their, you know, two to three times, you know, that part time just to give me a little break. Um, he's really the soul income earner right now. And, um, he works very, very hard. His job

“is really mentally draining on top of that he's like in traffic, 45 minutes. There are 45 minutes”

back. Um, so I feel like this spending is just less relief. Has he always done that? Has he always

been somewhat of an impulse spender? Uh, yeah, he's a spender of the family. Okay, what we have to do is change the, uh, the way this is being built. Okay. Okay. So I'm going to take you off a spreadsheets because he doesn't do spreadsheet. He doesn't speak spreadsheet. Oh, no. And I'm going to put you on our every dollar budgeting app and there's one on his phone and one on your phone for the same account. Okay. Okay. And the two of you sit down at the first of the month and both of you get a vote.

Not just you. Okay. Both of you get a vote and both of you emotionally shoulder the weight of winning with money at your household. We have three little babies soon. And we need to carry the weight of this on two adult shoulders. Okay. Yeah. And based on that, I'm a man not a little boy that is taking care of my family. And so I'm going to look at this with my wife who's a woman, not a little princess. And we're going to make two adult decisions that are

good about our future. And we're both going to speak into that and lay out the game plan on the every dollar budgeting app. And then once we've both looked at that through that lens and we both agree to it, then later in the month, if we decide to be a little boy again, we have to be reminded that we're a man. If we decide to be a little princess again, but you're not his mother. He needs to step up and say, for the good of my family, this is what I'm going to do for a short

period of time here. We're going to clean up the debt mess that we've made with our immaturity and impulse spending. And that means no motorcycles and no guns right now. And to take it to even a more practical level, if for, and this is for anybody who's an impulse spender, there are practical things you can do to stop that behavior beyond just saying, I'm not going to do it anymore because if that's not working for him, the practical thing is to

agree and look in your wife's eyes and make her a promise. Yeah, but you can also do it like, if you know, you've already identified, hey, the temptation is, you know, guns, motorcycles, cars, you know what the temptation thing is. Now the next thing is, okay,

“then you've also identified like what the queue was like, what causes him to get in that mindset?”

Okay, it's his commute home, stressful work. So then it's up to him to go, okay, I already, I already know that I'm setting myself up to be in this situation. Instead, let me replace it with something that's actually helpful for me. So now his new routine needs to be, I don't come home and plop on the couch and get on my phone and start scrolling the next product I want, I go and I mow the lawn or I go and I work on the budget or I go, he's got to replace that

relieve by spending. And that is just, I mean, that's psychology, that's how that's how you change

a habit. So yeah, I completely agree. So what, let me reset this one more time, Melinda, because what's happening right now is the two of you have agreed on a concept and then you went and implemented the detail. And I want the two of you to agree on the detail. Pinky swear and spit shake and have a contract between the two of you. This is what we are saying together that makes our household go where we want it to go and then you go do the detail. You execute the

detail. But I want him looking at every line item on every dollar and agreeing, this is what we're going to spend on food. This is what we're going to spend on lights. This is what we're going to

spend on whatever. And by agreeing to that, we're also agreeing that we're not doing anything else.

Right, not bearing off. Yeah, yeah. And he's not doing that in advance. Instead, he's way up above it

“in the clouds going, I think it'd be good to get out of that. We got babies, but I really want to”

go and, you know, and you know, because he's not, he's not gotten involved yet. That's right. And I want to get him more involved in the detail, not in the execution of it. You can do the execution. You're the nerd. You're good at it. But I do want him to be involved in feeling the emotional weight of the plan that is going to be executed. The detail of the plan that's going to be executed. That's right. And even in every dollar when you can see that road map in front of you and you know,

it's going to take X amount of months and something that you think is small three or four hundred

dollars a month, that adds up to time that this is going to take to finish this. So we're having a kitchen put in more of the houses that we own. And obviously, my wife's going to be really involved in that design. You think? And so she's real involved in the design. I'm real involved in the design.

“Because I want to oversee it. Yeah. The builder is understanding the design. And the three of us”

have gotten in depth detail agreement with the kitchen designer of what is going to happen on paper. Then they build the cabinets. We don't get halfway through the cabinets. And then I walk in and go, well, that wouldn't really what I was thinking. Yeah. You know, it's going to be, you know, and that's a proper way to build a house, too, by the way, build it on paper before you break ground, every detail. And if you have 42 change orders, as you go up, because you didn't think

this through, it's the most expensive and slow way to build a house and you'll end up hitting your builder and he'll end up hitting you. So instead, you got a stinking plan and you stick to the stinking plan with rare exceptions. And everyone is aligned in the detail of what the plan looks like. And then someone can go, but we all three aren't going to build the cabinets. Matter of fact, none of the three of us, the builder and me, or Sharon are going to build the cabinets.

A cabinet builder is going to build them. But it's the same thing, right? Yeah. We're getting aligned on the idea ahead of time, both strategically and tactically. Mm-hmm. strategically is alignment and the philosophy of debt free. Tactically is the alignment of we're not spending this, we are spending that. Yeah. And then she can write the checks. Yeah. Well, then you can also both all three have

accountability and in their case, all two have accountability to be able to say what something's going off plan. Yeah. And I appreciate you honoring him for him working so hard, but that does not give him a pass on being a man. Lots of people work hard, call the whambulence. I work hard, shut up. Okay. Seriously, that doesn't mean I work so hard, so I get to be stupid. That's not a line that anybody should ever say. But we do. We say, "Well, I work hard.

I feel like I earned it. Earned what? Stupidity. Earned not being rich. Earned being deeply in debt. What did you earn with this hard work? Yeah. You know? No, I want to get somewhere with this hard work. I want some dead gum traction. I want to be a millionaire, multi-millionaire. I want to be outrageous, a generous, blow people's minds. I want to be torn up with this whole thing,

“guys. And that's what hard work should do. Not give me permission to go. I still, I work so hard,”

so, you know, now I get to be a little boy and to be irresponsible. No. No. And by the way, by the motorcycle or guns, not irresponsible, but it is why you're trying to get out of debt. If you run a business, you already know this. Bad information leads to bad decisions.

is built on the best data. That's why I recommend NetSuite. NetSuite is the number one AI cloud ERP

and more than 43,000 businesses run on it, including us here at Ramsey Solutions. Their AI isn't bolted on. It's built in. And it connects everything that runs your business. Accounting inventory customer data all in one place. Because when your numbers are connected, AI actually works like it's supposed to. NetSuite's AI helps flag cash flow problems, spot inventory issues, close your books faster, and cut down on manual reporting. If your revenue is at least seven

figures, go to netsuite.com/Ramsey for a free product tour. That's netsuite.com/Ramsey.

“John is in Atlanta. Hi, John. How are you? I'm doing good. How are you? Better than we deserve. What's up?”

I steal that line. So I hope you don't have a trademark. Nah. I stole it somewhere. I just forgot where. That's funny. So it's an interesting predicament. It's not really a predicament. I'm really fortunate to be in a position that a man and Lord is treated me great. But it's essentially the last two years I've made about $300,000 plus or minus good for you. Thank you. And it kind of seems like the money just disappears. I'm not a big spender. I mean, I bought big

things, but I'm not a big spender. But I don't have as much money left over from that as I should. And what the change is is yesterday, I made a pretty big amount of money. And I mean,

the first thing I did was log on and talk to people on how to build a shop on my property.

And I kind of stopped myself once I was like, "All right, this isn't what I'm supposed to be doing." And so I'm 28. With this one's money, I'm trying to take a step back and be like, "All right, how do I turn this into more without spending?" And just wanted some insight on it. Good for you. Are you single? I am, yes, sir. Okay, I'm cool. All right. Well, the good news is you don't have anybody to control, but you, the bad news is there's no body to grip at you. I mean, you have no

accountability. How do you make the money? What kind of business is it? So I'm a land broker. So I sell like farm ranch and hunting insurance for you. Good for you. That's fun. I've got a friend of mine that does that. He makes that kind of money and more. Yeah, well done. That's great. I'm really fortunate to have a job that I love. Yeah. Yeah. I get to walk around on beautiful land all day long.

“That's neat. All right, our drive on it. So here's the thing.”

The emotion that you're having is that it's regret. It's discussed. This says, "I make too much money to have nothing to show for it. Yuck. It's a bad taste in the back of your mouth, right?" Yeah, and I want to use that and say, okay, I'm going to lean into that and use that to say, that's going to force me to fix this because you don't want to wake up 10 years from now

and have made $4 million over the last decade and have zero, except a new shot in the back of

your, you know, and that's what you're saying. You're saying that out loud. So the first step solving a problem is recognize there is one. So you're right on target. The way you fix it is, you develop a detailed game plan before the month begins. Okay. And so download the every dollar app and we'll give you a year free on it. Okay. And I want you to start with saying, okay, this is my monthly budget. Now, your budget is erratic because your income is, but it's also

cyclical, which is why this is important now. Exactly, but we also need to let a base line of what it takes to operate survival per month. Okay. So if you're making $300 and we said, okay, we're going

“to spend $10,000 a month. That's $120 to operate the household. That's it. That's what it is right now.”

Okay. With mortgages and I do see that plural and not a bad guess then. Okay. So if it's a little bit more a little bit less, I don't care. But some, but set that baseline and lay that out and say,

a name. And then beyond that, I would do one of two things is I would have a list for strength of where extra money goes. For strength, meaning the first dollar beyond $12,000 this month that comes in goes to this number one thing until it is completed. Then the number two thing until it is completed. Then the number three thing. And so you've got a prioritized spending list beyond your operating monthly budget. Does that make sense? It does. That spending could be

generosity. It could be buying a shop in the backyard. It could be investing. It could be paying off the mortgage. But you know, if I get an extra 10 grand, the first $4,000 is going to this and the next $6,000 is going to this. And have that done before you get the money. You know, it's laid

out and you're just going to like doing it to do list. The most important thing I'm going to do first

and then I mark through it. And only then do I move on to number two and I mark through it and then only then do I move on to number four and mark through it. And I've lived off of that system for 30 years because I've always had an irregular income because I've always been self-employed.

“Yeah. I think one of the hard things for me, which I see hard. It's not, I mean, it's very”

doable and I know it is. But I've been in real safe for seven years. Of course, here I made 12 grand, second year it made 24, third year it made 76. And it wasn't till the fourth or maybe fifth year. We're really started to pick up. So, I mean, that was really traffic, not scrapping. But I was really, you know, having somewhat pinched pennies and people's fortune enough to have a support of family. But like putting this amount of money in this spot when they're big numbers like this,

mentally is really tough for me. I know it's the right tip. Like I completely agree with everything you're saying. And I'd be dumb if I didn't. But like I tied 10% of all money that I let me rephrase that. I donate instead of using the work time, I donate. I actually have a question on that at three of the time. But I donate 10% of all the money that I make. And when that goes away, and then I have taxes and then after that, it's like that number just shrinks.

Yeah. Yeah. So, the way that it makes me nervous that I don't have cash. Yeah. Well, I mean, think about, I get a a royalty check in from a publisher that's a substantial number. And I'm a tie there. I'm an evangelical Christian. I give a tenth of my income to my local church. And so, 10% gone and 40% gone for taxes. So, 50% of that check is gone before I even start the budget.

“Yep. And that's what you're saying. Yeah. And that's real. That's just reality.”

Yeah, you're just one of those evil rich people that you should be taxed into oblivion. So, we just have to tell yourself that off the top. Like if you know, oh, I've got $20,000 coming in. Yeah, he's like, you don't even let yourself go. I don't have 20. I have 10. Yeah. That's just the way your brain needs to start working on that. And that 10 is already spent on this prioritized list. Yeah. And so, I don't care what you do with the money because I know if you do it on purpose,

you're going to do smart things. That's right. You know, you're very few people say, I'm going to budget half of my income to completely blow it. No one says that. No one does that intentionally. They only accidentally do that because they don't have a plan. Well, that's what they do. And I've been guilty of it. It's the, I account for all the necessities, mortgages, car payment, you know, whatever those insurance. And then the rest is just

in a pile called treat yourself. And then that's where all the money goes because you think, well,

I budgeted the most important things. But that's the zero-based budget teaching, which is,

I don't care if you treat yourself. But just write it down. I might not. Just say,

“you know, and if you want to give yourself the whole thing to treat yourself,”

make yourself write it down. Yeah. And then you're going to go, that didn't really what I want to do. Yeah. I really do want to treat myself, but I don't really don't need $10,000. That's right. I don't really need $100,000 for that. I need $2,000. And you're in control of it at that point. Whether you do or you don't. So it's the old thing Maxwell John Maxwell says, you know, a budget is people telling their money what to do instead of wondering where it went. And John,

that's really the crux of your question. You tell your money what to do instead of wondering where it went.

And, you know, you always have some fun in there. You always have some generosity in there.

You always have some investing in there. And fun equals lifestyle. Yeah. That's a lifestyle purchase. That's a couch, a car, a trip, a shop in the backyard, a gun, a motorcycle, a nod door, a last caller, right? That kind of stuff. So that's all lifestyle stuff. And that all works really well. Once you've gotten yourself rid of the consumer debt. Now,

maybe step two. That's scorched earth until you're out of maybe step two. You get your

every all except your mortgage debt. You get everything cleaned up, but that's not John's question.

“John, the question is very simply, you have to tell your money what to do before it gets there.”

Some kind of a system, some kind of a plan I gave you, an example of one, or it will leave. And you will wake up with this financial hangover wishing you hadn't made that much and have nothing to show for it. [Music] Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.

You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack,

and suddenly everything changes. Yeah, and that's why you've always said that having

term life insurance from Zander is essential because it protects your family if the worst happens. Yeah, that's right. You need 10 to 12 times your income, in coverage, no gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long term disability insurance. Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance

steps in while you're alive, but can't work. So it replaces a large part of your income, so the bill still get paid while you get back on your feet. Now, if your employer gives you free disability insurance, great, take it. If it's a discounted there at a better price, take it. But if not, Zander can help you find the right plan. Whether you're single or married, it's not optional,

“if you're going to be out of work for a while, then you need to make sure the money still”

showing up. And that's why Zander is our go-to. They make it super simple to get the right coverage at the best price, no pressure, no upselling. I've crossed the Jeff Zander and Zander insurance for over 25 years and so is my family. To don't wait, it's fast. It's easy and they could make all the difference. Go to zander.com or call 800 356-4282. Protect yourself, protect your income, protect your family. If you have a simple tax situation, like you haven't had any major life changes or big

investments, use Ramsey Smart Tax. Ramsey Smart Tax is affordable. Keeps filing very simple. It's very accurate and it has built-in support in case you need a little help. Filing early means getting the best deals and you get that tax stress off your shoulders. So as soon as you get all your tax documents, go to RamseySolutions.com/marttax and start filing. Andrew is in Orlando. Hi, Andrew. How are you? Hey, guys. How are you, guys?

Better than we deserve. What's up? Hey, so my wife and I just got married this last November. And we've been working ourselves through the baby steps for in step two right now. And we've paid off more than half of our debt so far, but we have some to go yet. How much is that?

“We have about 19,500 on a car loan and then about 4,000 in a credit card. That's what's left.”

That's what's left. Yes. Okay, so you've already paid off 25,000.

Yes, correct. It's no whimper. Why to go? That's great. Yeah, that's been amazing. The load has been so good.

That's great. That's great. So my wife is legally blind in her right eye and we've been talking through how we can pay off this debt faster. We're attacking the credit card super aggressive. But the car, the payment per month is about $420 per month. And once we pay off the car, obviously we're going to pay what we're paying on the card and so on at the car. But a question that that we have is, should we look for something different? Should we look for a car that's maybe slightly older? Maybe a

little bit cheaper that we can pay off sooner or are we? What do we do? What's the household income? Right now we're at about $100,000 per year. Tell me where the blindness plays a role in this. Is it impeding her ability to work? Nope. Nope. She works for a time. She's in healthcare industries, selling healthcare insurance, everything. But it's mainly with like the distances in front of her,

everything. So that's depth perception. Yes. Yeah, I've got a friend that's, yeah, same thing. And is your issue with the car? What are you trying to do? Are you trying to save money on the car? Or are you saying, because of her blindness, she could wreck this car? Should we get a cheaper car that it's okay if it gets dinged up? Like what are you saying with all of this? We're just trying to pay off a debt. Okay. That's good. I like that. So if you paid off 25 since November,

“can you pay off 25 by November? That's a great question. I think we could. Do you like the car?”

Yes. We do like the car. How would you pay it off? Keep it in paid off. Yeah. Yeah. The problem I see right now is that it's a 2019. It's a newer car with, you know, more sensors and stuff like that. I'm just thinking like, man, like, if we do get repairs and stuff, can we afford some of those repairs? Yes, you can. You go like that. Yeah, you're driving a piece of junk. That's why you're in there. And you're a tight one. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. So here's how I'm answering the question

to give you the framework. I use two pieces or we use two pieces of information to determine if someone's car is their problem. And if the car is their problem, I'll tell you to sell it in a heartbeat. Because it's all from the problem. This car, this show sometimes is called the cell, the car show. Like the answer to every question to sell the car, right? But the number one, you do not want all of your vehicles added together. Anything with motors wheels, that includes your stinking lawnmower,

your c-do, whatever, all added together, your camper that's in the backyard, all if it's got a wheel or a motor, all your value added together should not be more than half your annual income.

“Which would in your case, it would be $56,000. Yeah. $59,000. So that's what I'm looking at.”

And yours is not. So it does not violate that. The second thing is if there's debt on the vehicle,

can we be 100% debt for accept the house within two years without selling the car? And if we can, do we like the car, then yes, keep the car. But for instance, in your case, if the car was your rate of debt reduction, you're easily going to be within that. And the car and your cheap car is less than half your annual. So you're in pretty good shape. The only difference was, she just had a nicer car than you all when you just got married. And so

she won that battle. But it had debt and yours didn't have debt. And so now we got to clean that up. But I think at the end of the story, two years from today with a fully funded emergency fund and your money going into retirement, we're going to be glad she's in a pretty good car, especially if she's got some of the newer features on that car with her debt's perception issues. So yeah, I think I'm keeping it. Yeah, I think so too. And you know, you can sell it,

if you want, if you just wanted to be free very, very quickly. You wanted to be free super fast.

It's not, you're not doing it wrong by selling it. But here's what's going to happen when you do.

You sell it, you get 3,000 dollar car and you're debt free in six months, four months. And then you go to emergency fund. And then what's the first thing you're all going to do? You're going to start talking about upgrading these cars because they're crappy. And you're going to do that with cash. And so you're still going to end up two and a half years from now in the same place that you are now with a paid four days of car. And so it's not,

it's not the cars not violating anything here. It's just kind of part of your old story. Yeah, I agree. Graces in Fort Collins, Colorado. Hi, Grace, how are you? Hi, get how are you guys? Better than we deserve. What's up? Well, I had a question related to the Gazelle intensity of being off the house. We might have to make save anywhere from 100 or 150,000 a year after our expenses and everything.

And it's hard to not kind of look at the numbers and think we've got 500,000 left on our house right now. To think, you know, let's just try to pay this off in five years. But my husband, you know, he's kind of the what do you need more to the investment side of things too, as far as so wherever we make should we do a portion of that towards the house and the rest

“into investments if we're already doing 15% into retirement. 15% into retirement is all you should be doing. No more.”

Okay, the rest of it out of the house. So there's 150,000 you're putting on something else. How much is in that account?

In what, well, so that's what we get basically at the end of the year. A lot of it comes from bonuses.

Yeah, but you're putting 15% away and then you said in addition to that, you're investing 150 grand.

Well, how you'll saving how much is in that account?

“About 70,000 right now. 70, how did 150 turn into 70?”

So at the end of every year will it will be about 150,000. So you just stock piloted until the end of the year and then you decide what you're going to do with it. What's in the last year was 150? How's it 70 now? So we just moved last year. So we put a good chunk of money down into the house, but we just kind of accumulate and then year-end bonuses and any money above 15% should immediately go in the house. Okay, not in savings.

Okay, and that's nothing like diverse. I know there's types of stocks or mutual funds or anything.

No, no, you're already investing your 15%. No, you want to know why? Yeah, because the data tells us that the fastest way for you to be a millionaire. We did the largest study of millionaires ever done at Ramsey, 10167 of them. And the typical millionaire in their first one to five million dollars of net worth sounds like this. They it took them 12 to 17 years from the time they started getting serious about getting out of

dead and building wealth to get there. They paid off their house in 11.2 years on average. And

there here's what their portfolio looks like. Let's say they've got a million six in

net worth. They've got a $700,000 paid for house and $900,000 in their 401ks and/or other investments. But the paid for house and the fully funded for the 15% going into the 401k is what we found every time every time. We did not meet millionaires. I said, oh, you know, we kept a mortgage and that caused us to have great investing and that made us millionaires. Nope, they got rid of the mortgage like it was a cancer. Because it is.

Most people don't struggle with money because they can't do math. They struggle because they don't stick to a plan. And when your bank makes your money feel confusing or hard to track,

“plans fall apart fast. And that's why I love Fairwin's credit union and their mobile app.”

Because let's face it. Most banks build systems that make it easy to swipe and hard to stay organized. But with the Fairwin's app, you open it and you know exactly what to do. No clicking through 11 menus just to move your own money. Just tap transfer and done. You can deposit a check from your couch by taking a picture. You can get real time alerts. So you're not guessing what's in your account. And you can add your Ramsey Beware debit card to Apple Pay and tap to check out.

See a lot of banks leverage convenience to make it easier to go into debt. But Fairwin's offers convenience to help you stay in control. It's a huge difference. That's banking that actually supports the baby steps instead of working against them. So if you want to bank some place that's both faster and riser, check out Fairwin's. Go to Fairwin's dot org slash Ramsey. That's Fairwin's dot org slash Ramsey. Ensured by the NCUA.

Welcome back to the Ramsey Show and the Fairwin's credit union studio. Jade Washaw Ramsey personality number one bestselling author is my co-host, Joey is in Los Angeles. Hi, Joey. How are you? I'm Dave. Hi, Jade. Thank you for taking my call. Sure. What's up? Yeah. We are recently debt free except that more mortgage is that I wonder yeah. And I'm thinking if I could afford to go to Europe to watch Wimbledon. I really love watching

tennis and I really want to do it. But then my husband and I were talking last night and the one he saw like how much we're going to spend. It's only going to be in my son. And he's like, "Oh, that's a little too much. It's going to delay our baby step number three." So you don't have any money saved? We do. We do have money saved. But then it's going to, I will take the money from there. And so it's going to delay our baby. Okay. So you have an emergency

“fund saved of how much? We have 15,000. Okay. And how much do you need in your emergency fund?”

How far the trip? No, how much does the emergency? The three to six months of expense. Oh, sorry.

The target. We think about $220,000. Or sometimes $350. If my husband goes in over time.

Wow. How much does the Wimbledon trip cost? Well, the tickets are about $1,000 for my son and I. And you know, the whole trip when we were... No, you're not going to London and buying a Wimbledon ticket for two grand. I'm talking about when you price this whole deal out the tickets,

“the air for the hotel. How much will it cost? How so the total is $9,000. Okay. Okay. That's what the”

the airfare alone because of what's happening. It's about $4,000. Listen, I'm not, I'm not mad at the number. I just wanted to get to it. And my question is with the $320,000 income. And when, when, actually, when do you have to have the $9,000 by? So we have the $9,000. All right. No, you don't. No, you don't. You don't have $5,000. Of $24,000. You don't have $9,000. Your, let's, let's clarify real quick. The definition of the emergency fund is for emergencies.

Wimbledon is not an emergency. So you can't say, I have $15,000 for Wimbledon. You don't. You have $0 towards Wimbledon. My question and what I'm trying to solve for you is how quickly can we get $9,000 on a $320,000 income and still make progress towards baby step three. Because the next question I have for you is the $23,000 that's your goal. Is that three months of expenses or six

months of expenses? That's going to be three and a half expenses. Okay. So I go back to my first question.

I want you to have three months of expenses in order for this to even be something for you to consider. And then you would have to be the $9,000 cash on top of that, not out of that on top of that. Does that make sense? Okay. So what do you guys have planned in the next two months that you can

“take off of your calendar and cut your budget to bear bones in order to finish the emergency fund?”

Because, you know, Wimbledon's in June and so you've got time, July, you've got time, and so I think you can probably, if you went to Squirtster, Jade's point is you're probably can do both. You can finish the emergency fund and come up with a money to go. It looks to me like you can because you're income is so fabulous. So yeah, work extras, if you got anything you can sell that you'd like to get rid of to get to cause this to happen. Have you got, you know, but I'm going to take everything

out of the budget and go Squirtster to be able to do this trip if it's what you want to do.

Here's what I want to do. I want to declare a trip to Europe and emergency. No.

It's not an emergency. Okay. I wish it was, but it's not. I could declare some things I want an emergency, but they're not emergencies. And so I have to, you know, at some point, I've got to categorize these things properly and say one is a wish, a want, a dream, and one is a necessity. Being ready for Murphy, if it can go wrong, it will is paramount for families to get ahead. And you, but you guys have been making good money and been broke for a long time and you finally

got yourself out of debt and you're finally saving money for the first time in your lives, probably. And let's talk specifically about why it's important. Dave just hit on the part that this is your emergency fund. You need it in case, you know, emergencies arise. But I do believe that when you're in an income situation like you, it's very easy to get lazy and very kind of like, oh, it's okay. I can afford it. I can afford it. I can cover it if something pops up. We'll just cash flow it.

You've got a guard against that, especially because you haven't like higher income. And that's the part where I think, yeah, you got it. You got to be extra careful.

“So, folks, here's the thing. If you have no money, none, none, that's not her situation.”

But if you're sitting there with no money saved, because you did stuff like this, you know, and not her situation, not picking on her, but have you ever noticed that when you're super broke, your life looks like a country song, like everything that can go wrong will, it's like you have a Murphy attractor beam. You know, it's like beep, beep, beep, if it can go wrong, it will. You know, it's like crap breaks. People get sick. The dog goes out in the street and gets hit.

Every, I mean, it's like a country song. Everything that can go wrong will. It's horrible. And if you ever notice that when you get a little money, all that stuff leaves, like if you got, if she's got $25,000 and makes $30,000 and no debt, you ever noticed that it's a different kind of song. It's like smooth jazz. Now, I mean, you know, it's not, it's, it's all that

used to be one freaking drama after another. And I don't have anywhere near those emergencies. I don't,

“I think I think an emergency fund is Murphy repellent. I think, well, I think it keeps him away.”

I think it does, but more than that, I think it changes the definition. It changes like,

I'm the type person I am never going to touch the emergency fund ever. I don't care what I have to do.

Not even for an emergency. I will do whatever. Move hell and high water to make it work. Yeah, I agree. That's Sharon. We have an emergency fund for our emergency fund. Yeah. So we never touch it. You know, I mean, it's like that. But here's the other thing is this, when you got a little margin in your budget, a flat tire, you just fix it. You just cash flow it. But when you're broke, a flat tire is an emergency. You know, the alternator goes out on the car.

It's 500 bucks for the bucks. You just fix it. You don't think anything about it. That's not an emergency anymore. But when you're broke, every little thing like that is like, Oh, God, the world's coming to an end. And the drama queen's doing a dance between your own. I mean, it's just like, but yeah. So it's very interesting that the, the, the, well, the, the over arching thing of what I'm saying is, when you get a little bit of money in

you have a system and you're not just called hard broke, your anxiety level just goes way down. Mm-hmm. But if the drama goes way down. But if you get a little bit of money, you don't have a system. You're going to be looking up. Then you don't be back to having no money again.

“Uh-huh. That's why I third of people who make $250,000 or more are living paycheck to paycheck”

because they thought they could out earn their stupidity. Ooh. I tried it. It doesn't work. Maybe my stupid was just bigger than my income, but I tried it. It didn't work. . Hey, guys, George Camel here. Listen, we need to talk about your phone plan. Because for a lot of you, it's like a bad roommate. You know the one, unpredictable

moods always asking for money, hard to get rid of. And they never do the dishes. And that's what

the so-called big wireless carriers are like. They're counting on you overpaying forever. But boost mobile flipped the script. You can unlock up to $600 and savings per year over the big guys when you switch to boost mobile on their unlimited plan. There's no contracts, no hidden fees, and no surprise email saying, "Hey, your bill went up because reasons." You see, with boost mobile, you bring your phone, keep your number and pay just $25 a month. $25, and that price is locked in forever.

So if you're thinking, okay, George, that all sounds great. What's the catch? There isn't one. Boost mobile backs set up with a 30-day money-back guarantee, which means you can try it without feeling trapped. People kick the bad roommate out. Head to boost mobile.com/Ramsy to make the switch today. That's boost mobile.com/Ramsy. Based on average annual payment of AT&T, Verizon and T-Mobile customers compared to 12 months on the Boost mobile unlimited plan as of January 26. See website for full details.

“Michael is with us in New York. Hi, Michael, how are you?”

Hello, Dave. Thank you so much for taking me. Sure. What's up? I appreciate it.

I'm 52 years old. I'm basically starting over. I had some major health issues, and I've been

permanently disabled for the last 16 years. Whoa. Yeah, I've got the skills to rebuild a high-income trades business, but I'm also gaining traction as a published writer. If you and me, where would you put your focus for the next year? Was the nature of your disability and how have you overcome it? Well, I was a teacher, and I taught trades. I taught welding metal fabrication, heating, ventilating, and air conditioning, and I became environmentally ill from the welding

fields. Okay. So I had a neurological disorder, basically paralysis. Whoa. And I, you know, I've learned about juicing and things like that, and that kept me alive. And I had, thank God, long-term disability policy that gave me my salary all these years. And about a year and a half ago, they offered me a settlement. I didn't take it, and then I looked at my wife one day, and I said, you know, I said, I can't live like this anymore. And I decided to call the insurance company.

They offered me the same settlement. I decided to take it, and I took some radical responsibility,

and I'm ready to rock and roll. Wow. So the nature of the disability is completely healed and gone. No. I mean, I'm still probably permanently disabled, when I'm paper, but it's not affecting me anymore. I can breathe at seven liters capacity, even if it's only with one long. Okay. I feel great. I green juice every single day. I ground outside. I jump on a rebounder. I'm doing everything that I had to do to gain my health.

Like I said, I had 40 pounds around the whole thing, man. That's amazing. I graduated.

That's amazing. Thank you. Well, I, I, I, I, I, I'm sure if they're so so. I can't imagine you going back to welding. No, I'm not, I'm actually a master of electrician by trade. Oh, I'm so. So, and, and I, I basically did electrical work and mechanical work. So, I was planning on maybe starting there with a service business, just like I end business basically myself. Why wouldn't you, while I write? Yeah, good. You know, you know, it's, I, I want to be cautious

because of my health. I don't want to go backwards. I know. No. Young, beautiful family. No. So, I wanted, I want to do it as intelligently as possible. Yes. And my question was basically, you know, if it was you, like, what steps would you take not only to ensure that I, I don't overdo it because, you know, I figured I could probably do it three days a week, six, eight hours a day.

“I think you, I think you are an expert at monitoring the metrics that are associated with your health.”

You've rattled a lot to us. It's been the whole soul focus of your last decade. And I don't think you're going to overdo it because I think the instant you do, you're going to know it. That's a very true. Yeah, it's not a permanent thing. It just would be fatigue. And you'd say, okay, I got to take a week off or I got to slow down back to two days instead of three. You're going to know the metrics are going to talk to you because you're doing such a good job of managing

your health. So intentionally, congratulations. So yes, I think the electricity, electricity and thing is a very good paying gig. It's 100% predictable that you're going to go get some money, where the publishing, the publishing is very hit or miss. And as you know, it takes a while to get it moving. And so I think, you know, your, your foundational underpinning is the electrician. And then the icing on the cake, the gravy on the biscuit is the publishing stuff. And if the publishing stuff

finally takes off enough that you never have to do the electrician again, so be it. That's awesome.

“Is the primary, is the primary drive for you financial or personal fulfillment at this point?”

At this point, financially, I don't have to worry about money at all. I didn't think of anything. Everything I own for is completely paid for my home, my cars. I have a brand new truck that's paid for, so I can use that to store work. I mean, I, you know, I don't want to buy a van right away. No, I want to, I want to build up to a van when I have the cash to buy a good. That's just the kind of person I am. I think you can make a really good money and start a day a week. And then

two days a week and then three days a week. And if it starts to wear on you, it would go back to two days. And if it doesn't, occasionally, you can pick up four days. And you can make a lot of money in the trade right now. I agree. And I would do that as a foundational thing to give you patience with the publishing thing. That is also going extremely well on my dad. How much are you making? What's extremely well? What are you making? Well, am I really making any money from the yet,

but that's not extremely well. Okay. So, so basically, we measure this on money.

Yeah. Yeah. Now 150 or so in articles, not paying any bills. No. No. But that's for it's for filling.

“And that's what extremely well means. And you enjoy it. And that's what extremely well means.”

And you're getting some notoriety. That's awesome. But you're still working for free. I basically. Yeah. Yeah. And so you're not ready to turn, you're not ready to turn your financial destiny over to $150 articles. So the working for as an electrician running my business could pay for all that for pretty much no pay for your life. And you got it. You can continue to rebuild and build a good life. And then again, if the publishing ever, the income from publishing,

ever starts intersecting the line with the electrician. Then you can start to slow down the electrician. And you know, because now you're making a living publishing things. Awesome. And that's where you need to get to, not just the fulfillment piece. But that's the problem. It's they give you, uh, it's all, it's so gamified. They give you feedback and make you feel like you're really winning. And then you add it up and it's like, I'm making 400 more. But to your point,

right now, his success is defined not monetarily. But that's good. Because he's got the other thing

trampoline to the juicer. Yeah. I mean, that's that's very, very cool. Congratulations. That's taking the bull by the horn. Yeah. I'm not going to, I'm not going to be defined by this. I'm

“going to define it. Yeah. That's a big deal. Dustin's in Des Moines, Iowa, high Dustin, how are you?”

Good are you better than I deserve. What's up? I just had a quick question with the snowball method and cards that have deferred interest. I just started the snowball method about six weeks ago. I've been able to pay off about $4,000 worth of debt so far. Good. I have a credit card that I put a washer and dryer on, uh, we would have been 18 months ago. The deferred interest is going to be to do, or it's going to hit in next month. Um, it would take about $900 to pay that off,

which I can do. Okay. So, I mean, are you saying deferred interest, meaning the interest has a crude, but they've just not built you for it yet? It hasn't been applied to the purchase. What if you pay it off? Is there no interest if you pay it off early? You'd be no interest. Yeah. You want to do that. Okay. So, I can, I can pay off the food stuff versus just the smaller stuff. I can kind of go out of line there. I would, you know, just temporarily. It's only $9,000 bucks. Yeah, the zero. That's

nothing down. Zero percent interest until X. And then they back charged you at 38 percent. Yeah.

“That's how they screw you. And 89 percent of those contracts people do not pay them off in time.”

Yeah, if you can get out of that, that's wonderful. So, yeah, you want to, you want to knock that in the face. Uh, and, and you want to do it a month and a half, two months early. So, there's no question. So, they don't say, oh, we didn't post it. And now we really aren't going to charge you the interest because our, the mail didn't get here or bulk her up. Okay. Pay it and get herification a month early that it's paid. Okay. Because they're going to try to screw you. It's what they do.

Yep. Yep. I agree. Yeah. And clear it clean them up as fast as you can. I don't know how many of them you got. But I, yes, I want to get rid of those. And if you need to shift your data,

it's no ball around just a little bit because you're saving, you know, probably 30 or 38 percent

interest, something like that. Yeah. 20 percent of what it is. It's a 100 percent knock. It goes away if you pay it early. And so, and folks, that's the, the rip off of those nothing down, you know, the rooms there they went. Right. And, you know, you buy this couch and not pay for it for 24 months. No payments, no interest. And yeah, that's 24 months goes by in an eye blink. And then you get charged all that back. And almost nine out of ten people don't do it.

If you're at the point where you think bankruptcy is your only option, stop for a minute. You might have another way out. Guardian litigation group, most debt relief programs sell you on the illusion of protection. But a crappy legal plan tacked on as an up sale doesn't actually defend you when you get sued. It just leaves you confused and exposed. Guardian is different. They're not some call center. They're real attorneys. And with Guardian, you're assigned an attorney from day one.

That means if you're credit or sue, you're not scrambling and you're not hit with surprise legal fees.

“Now listen, I'm always going to tell you the best way out of debt is the old fashion way.”

Clean up the mess and pay it off. But if bankruptcy is staring you in the face, Guardian gives you a legitimate alternative. They've helped over 55,000 people settle more than $600 million in debt. So before you make a decision that follows you for years, go to GuardianLit.com/Ramsy. That's GuardianLIT.com/Ramsy. It's earning advertising results may vary in no specific outcomes guaranteed.

Well, I wish we could get to every call here, but we can't. The lines are always full and

I don't know a lot of you get a busy signal. Sorry about that. We do have an alternative, though. If you go to RamsySolutions.com, you'll find our AskRamsy AI tool there. And it's based the data in the AI tool is based on three years of calls into this show, plus financial peace and diversity lessons, plus the books we've written, plus the articles we've written, and so only Ramsy

It's artificial. If you hadn't heard, it's not real. And so it's going to produce and answer almost as snorkey as you would get here on the air. And so we haven't been able to add quite the sarcasm level to it yet that we have in person, but we're working on that. So the rest of though, the answers are exactly what you would get here on the air. AskRamsy, it's a free tool.

“You'll get the same answer, try it out. RamsySolutions.com, Steve's in Green Bay. Hey, Steve, what's up?”

Um, thanks for taking my call. I'm really excited to talk to you, and Jade. So I'm a very simple question. Um, I'm 62 retired. My wife is 60 and she's going to work for four more years. I want to know how much we should be contributing to my Ross now because my investors are telling me that I have a $500,000 in my investments and there's only 150 in Ross in the rest of our 401k and IRA. And I don't want to create a tax liability for my kids or grandkids. I have two

children and four grandkids. But I only have an effective tax rate last year of 10%. So I just thought I should be contributing more to Ross. And they said I'm good because of the way things are going to roll. And it's your opinion on that. Well, when I first started this stuff with when the Ross first came out, I was after we started this stuff, the Ross came about. Um, I was so excited

“that, you know, I was in my 30s and 40s that I could have tax free growth. And I was pushing”

everybody to get tax free growth. And I'm pushing me to get tax free growth. And so I had everything

in Roth. And then anytime I could convert something to Roth, I would. And so I was always moving

into Roth because I was getting tax free growth. Um, now that I'm 65, it suddenly has occurred to me that there's two other benefits to having everything in Roth that are even more powerful than tax free growth or add two. There's not more powerful, but they add to it. Number one, at 73, I don't have RMDs required minimum distributions. So all of your 401k traditional, you're going to have to begin to withdraw at 73 under the RMD rules. Whether you want it or not. So, and of course,

the more you have in traditional, the more that check is going to be. The second thing is, and in my case, all of mine's in Roth, so 100% of mine's just going to sit there and continue to grow,

tax free because I don't have required minimum distributions, right? The second thing is is that

the Biden, the Joe Biden passed the secure act and the secure act says that all inherited IRAs. In other words, if you name your kid as a beneficiary on your 401k or your IRA, and it's traditional, if they inherit that, they have to withdraw that money within 10 years, on a 10 year schedule. So they have required minimum distributions. So they're going to pay income tax on 100% of that, and they have to do it over a 10 year period of time from the time of your death.

On Roth IRAs, none, doesn't apply, because there's no taxing you.

“And that's why this kind of written this came up because my father passed five years ago,”

just left 50,000, but I'm still taking that all over time. Yeah. You're having to do the Biden withdrawal. Yeah. Within 10 years. And I'm just a lot of my grandkids or kids, because we live

simple. We can live on 50,000 years. I haven't delivered that, never had. And I just want to leave a legacy.

Well, here's an interesting calculation. It's tempting to move the money that you have in traditional gradually to Roth to keep you from having bracket creep. Yeah. That's a tempting thing. And you could run those numbers out. You're probably going to have to get a different investment group to help you with that, because apparently your guys don't think this way. But yeah. And if you want to get another opinion, you can go to Ramsey Solutions and check

with one of our smart investors and have them run those numbers out with you. But you could run, you know, like bump a couple of brackets, but not go all the way to 40, not go all the way to 39, right? That's one way of doing it and do a little bit of year and kind of dribble it out. The other thing that's interesting, though, is you think about like the last three years, you know, we had a 20, a 26, a 23% red return and an 18% red return on S&P. Now, that's not normal,

but we've had a ridiculously good last three years, okay, in the market. If you had just moved it all and paid the taxes three years ago, you'd have had all of that 60% of growth with no taxation. Sounds like you're a proponent. I mean, it's interesting. I, but, you know, if we have normal market growth of 10 or 12% a year, right, it takes you a little while to get it back. But if you're healthy and you're 62 and you move 7 or 800,000 over and that creates taxation

Well, I was telling that the very least I'd like to do is while my life is working and has an income,

I can do this for at least three or four more years. I would do Roth IRA for sure. Absolutely. Absolutely. I'm sure. 100%. Anybody tells you to not continue to invest in Roth IRAs? It's only

“80, 80, 600 bucks at your age, right? You can do. I think you agree with it. I think you agree with everything”

Davis saying, I think your hang-up is that that's not what your tax-perfect, that's not what your current relationship is. People tell me that. Yeah. But I think you can crunch the numbers out and understand it yourself with somebody and you'll figure out what I'm figuring out here. Actually, I took a call on this a week ago. Maybe you and I were on the air together. It was a guy I had. He had like 7 or 800 grand and I sat there and kind of was telling. Oh, I remember doing it,

you know, kind of doing it a little bit at the time and don't get bracket creep. And then it's suddenly at the end of the call. It occurred to me, you're missing out on all of that opportunity caused on that tax-free growth all those years. Well, you started around with dribbling it out into a void bracket creep over five years. You've all that money. Now has grown has been taxable.

“All that growth's taxable. And it wouldn't have been taxable. So, I mean, I think there's something”

to be said to doing it all and rip the band and stuff. Yeah, that's it. It must mathematically, I think you might come out ahead. You've got to run some numbers to be sure. I'm not positive, but it's something to consider and it's something to look at. And I would get a different set of eyes on it because you're in any time you have an investment professional in your life. They're job is to teach you not to tell you. And if they don't teach you, in other words, they start saying

all that stuff you go, okay, wait a minute, you're telling me I don't want to save and a tax-free account. Of course I want to save and a tax-free growth account. What do you know, you know, oh no, you know, yes. So, yeah, I do a Roth every year and my net worth hundreds of millions,

okay, the building I'm sitting in is 600 million, okay. So, the, you know, I and I do Roth,

I back to Roth, Sharon, and I do him every year. I'm going to keep the government's hands off of every stinking penny I can legally because I don't want him to buy a $22,000 toilet seat with my money.

“And that's what they do because they're idiots up there. And so I just, I don't want to give money.”

It's not good stewardship. Not if I don't have to legally. And so I'm going to do it. It's the time of year when I'm pissed off right now, it's tax time. So, I just just bear with me people. But that's it. I mean, that's the thing. Yep, absolutely. You got it. But the Roth IRA moving everything to Roth people. That ain't bad. Or over time. That's the move. It gives you two things I had not considered early on. And that's no RMDs and no inherited IRA forced withdrawals. And so your kids get a Roth IRA

zero income tax on it. And neither one have a state tax on them. That's not on a state tax issue. But it's an income tax issue for your kid because it's a taxable account that they inherited or non-taxable account that they inherited. Something to think about. And think about the,

what if they held, let's take a million dollars and they hold that seven years after you die.

Because they don't have to withdraw it under the wall. Wow, it's going to double. It's going to be another million dollars. The million will be two million. That's right. And what if they hold it 14 years? It's going to be four million. Building that wealth. And all of that is with that taxes. Yummy yummy yummy, honey. [Music]

Today's question of the days brought to you by Wi-Refi. If you fall in behind on your private student loans and have stopped making payments, it can feel like every door is closed. But Wi-Refi helps borrowers explore low, fixed rate, refinancing options, the fit their budget. Go to Wi-Refi.com/RAMSI. That's the letter Wi-R-E-F-Y.com/RAMSI might not be in all states. Okay, today's question comes from Nicole and Colorado. She says, "My husband passed away

which I typed on when it was received. I was able to pay off our home and put one million

into mutual funds and retirement investments. I pull from the non-retirement funds as needed for expenses. How do I tie it on the money I withdraw? I know I'm supposed to tie it on an increase and I want to make sure I'm honoring God with the blessings he's provided. It sounds like you already tied it on the money. When you received it, it says, "I tied on the insurance policy when it was received." You'd be typing on the growth. If the policy, I mean, if the investments

made $120,000 in growth, then that's your income for the year. And you would tie it on whatever they grew. Oh, I see what you said. You could do it one of two ways mathematical. You could either. I don't tie it on investment growth until I take it out. Okay, because it's tied up in, so I've got retirement accounts that have grown and I have not paid on that growth until I use that money. Okay, I don't tie it on the increased value of real estate until I sell it.

Okay, that's when I would tie it on it. And so what I would tie on in your case, Nicole, is whatever money you're taking out, if you're only taking out growth. Okay, so let's say you've got the million dollars in there. Let's say it made ten percent. That's a hundred thousand dollar growth. But you're only pulling out sixty thousand. Then I would tie it on the sixty thousand. If you're pulling out a hundred and twenty thousand, but it only grew a hundred, then I would tie the on the

growth the one hundred. Not that's not what you pull out. But what you pull out is that if you don't

“pull out all the growth, I would only tie the on what you pull out. That's what I personally would do.”

Now, let's cloak this in an understanding that you can't outgive God number one. So giving

you never hurts. You're never going to be, you can't overgive it. Yeah, it's such a technicality.

Yeah. And number two, don't get caught up in legalism because God doesn't love tithers more than he loves non-tithers. He loves everyone. Okay. And so if you mess this up, he's not going to like, okay, it's not a salvation issue. You're not going to get smacked around, okay. That's not that you can't, that's not, he's not, he loves you. He's got a plan for you. He has us to give, not because it's a rule and not because we're trying to please him. He has us to give

because we are the best version of us when we are givers. We are more like Christ, Christ like, who gave his life, right? You know, and the Father gave his Son were more, most were more like

“them when we are giving. And that's what he wants to tap into by teaching us to be givers.”

And the baseline for those of us, their people of faith is a tithe, a tenth of our income. But don't get caught up in the legalism of it like you're trying to please God with this. He's already pleased, honey. You're a widow. You have a special place in the scriptures to be taken care of and loved and blessed and prospered. And that's what your Father wants for you. So do this with an open hand and an open heart with no compulsion, no need to follow a rule. Instead, it's I'm learning

from my Father how to be a giver. He's teaching me. And so I'm going to give something. Be careful not to get caught up in the details. Yeah, agree. We'll drive you nuts. You can really get in what the old King James called the jot and tiddle, the crossing of the T's and the dotting of the eyes, the legalism.

“Yeah, Andrew is in Houston. Hi, Andrew. How are you? I'm doing all right. How are you?”

Better than I deserve. How can we help? Yes, sir. So my question is in baby step two. And when you're listing out debts and it has to do with an upside-down car loan.

So we we just finally got real serious about about debt and hate and being stupid,

started budgeting listed out all the debts. And one of our dumber decisions was this car that we're now underwater on. So my question is, and this is based on God has blessed us with the opportunity to learn to be mechanics on two beater vehicles. So we have those of the opportunity to learn to

Yeah, they the YouTube instruction manual. I got you. Yes, that is correct. So this car

“one, it's it's a turd mobile. But we owe about 113 on it and it's worth about 72.”

And so my question is when I when I listed in the list of debts. So I listed at the 113 or do I prioritize it at the negative equity with the plan to sell it as soon as we break even on it. So put it in there's a $4,000 level in the debt snowball or the 11,000 level in the debt snowball. Correct. I'd put it at the four. I would too. I'm glad you saw that. Okay. Yeah, I'm making this up right now. I don't know if I've ever had this question, but

well, because that's the amount that you're actually going to put into it. And we're trying to get out of it. Yeah. Yes, we give and I am dumping this thing and we're moving on. Now, what are you doing to replace it? Like, he's already got two beaters, right? Yes, I have two old forids that each

“have about 200,000 miles on them and they get where we need to go. Yeah, what's your household income?”

Combined after taxes and everything, it's about 77. And how much debt have you got? Not counting the house.

58,000 non-mortage. Okay. All right. That's a good for you. So here's what this sounds like to me.

It sounds like to me, you're going to have decent cars that you paid cash for in 36 months. Yes, sir. That's where I think you're going to be. In other words, you're going to be debt-free. Have your emergency funded, save up and move up in cars. And I think that's going to take you about three years. Okay. Yeah, you're a good man. You've got this figured out. I can hear it in your voice. You've got this dialed in. If your voice, if your wife is as aligned on this as you are,

you guys are going to become very, very wealthy over the next 20 years. Okay. Yeah, we are 100% in agreement. And yeah, there was a lot of like shame and fear about debt. We've sort of sat down and like, no, we're going to get serious about it. And there's, there's hope now. So yeah, yeah, you've owned it and punched it in the face. I hear it. I love it. And the level of personal responsibility you're taking in the verbiage and even the voice tone that you're using is

how you can hear it. We can hear that you're going there. That's pretty cool. Yeah, because, you know, what causes how we can read that from being on the air for years, both of us, right? And you know, this, we can, all of you can hear it, too. You're listening. You're hearty. The sky's serious. He's not screwing around. No excuses. Game all. That's the difference. He's thinking about ways to get this done, but they're not ways that are excusing work or excusing the process. It's all

about how can I do my part to get this done. I can't run the most efficiently. Yeah. And here's the reason that that is so, so indicative such an indicator, a metric on where his future is going to be, because personal finances, not a math problem. It's a behavior problem. It's 80% behavior, 20% math. About 20, the mathematics of becoming a millionaire, you learn by the sixth grade. You do not have to have a master's degree in business from MIT to become a millionaire. There's

nothing that they teach you in that they cause as a millionaire. Everything you needed to know,

mathematically, you learn by the sixth grade. The problem is the person in my mirror.

This guy can do some stupid stuff. This guy has a PhD into UMB. This guy likes donuts. I can be skinny and rich if I can control this guy. Welcome back to the Ramsey Show in the Fair Wins Credit Union Studio. Jade Wash all number one bestselling author in Ramsey Personality is my co-host today. Sarah is in Hartford,

“Connecticut. Hi, Sarah. How are you? I'm doing well. Thank you. How are you?”

Better than I deserve. What's up? So I have been watching the show for the past a couple of years diligently and during the past six months or so I've been trying to hone in on doing the baby sets and the debt snowball. My main question is today, should I decrease what I'm putting away

income household, everything. I have a car payment. I don't have a ton of debt, but I work full time

and my daughter's in school, but I ran into some debt over the past six months or so. We have the government shutdown. I have a government employee. I work in an admin position and we have a shutdown happen last year in October. So I was in pain being paid for a few months and you know everything

“is still coming in where you have to manage a credit card, the child care costs and stuff even though”

the mortgage was on hold. So when the money came in and I eventually got back paid, I started paying down some of the credit card and right now which is a credit card that's about 18,000 that I own credit card. You got $18,000 in debt in three months? No, no, no, no, no, no. I'm saying

I'm saying in total because I had a couple things like that. Oh, you acted like the shutdown

caused it. Oh, no, no, no, no, no, no, sorry. So I took out a, I had to do a bathroom remodel on my tub shower for what I bought my house and you know, it had pieces of the metal kind of cracking off and stuff. So I, that was a move of safety issue. So I had. Okay, so you have 18 dollars in credit card debt. How much do you owe in your car? About 30,000. Any other debt? And what do you make? About 75 to 78,000 here. Your car is insanity. It's half your income. It's killing you.

Yeah. So yeah, my car is, it's right around 30,000. Yeah, so we're in about a car twice for three

“times what you should have. Do you know what's worth if you were to sell it today? Oh, at least,”

I could at least get $22,000 for it. What I want you to do is double check that. I want you tonight to go on Kelly Blue Book and look at private sale and see what you would get for it. Not what car max would give you, not what you see them saying. See what it would be if you

sold it yourself. Because that probably be my first order of business. Because to Dave's point,

it is a huge part of your world right now. And it's a huge part of your dad. Way too much. Yeah. I really didn't want to get into this card debt. You know, when I did, I wanted to I tried to, you know, wait almost another year or so to get a new car. But you bought a 30,000 car. You're sure about a 10,000 car. Mm-hmm. Yeah. Let's get back to your first question, which is, do you stop investing in order to attempt this debt? The short answer is yes.

My question is how much have you been putting aside? Um, so we take it out of my paycheck every every two weeks. Um, so 500 goes towards my, yeah. And then that's your max is that. Okay. So 500. Yeah. I would stop investing $22,000 a month. Okay. Because that's that's by weekly. Right. I would stop investing immediately. Because you need your hands on that money to clean up this mess. Now, let's talk about why a little bit. Because you're, you're doing this. You're doing good

things. You're just doing them out of order. So let's get you back on the right track. Yeah. If you're familiar at all, have you heard the terminology of the baby steps? Yes. And I had the emergency fund put away. You know, we had the $1,000 put away. And I was good. Um, we went in the last year and a half. You know, I just, I, I got to boost two years ago and I was taking on a lot of the debt myself where I bought a new house,

I'm not, I do have that. And, you know, when you're pulling to live, um, I can't go to the fees and like the lawyer fees and everything, um, paying for a child care and now managing the mortgage and everything by myself. So you're feeling behind. You're feeling behind and you're feeling like I need to get caught up. You're not behind. Yes. You're, you're fine. You're doing fine. You need that $1,000 at your disposal temporarily. It's just, it's, it's a short term while you clean up the

18,000 debt and while you clean up the new $10,000 card debt because we're getting rid of the 30. Because it's like, it's, it's a total of $18,000 in tax because the bathroom remodel I owe about

“half a thousand on that. And yeah. But you, so, so you need to get rid of the car and pay off”

18,000 in the near debt free, right? Yeah. And get a $10,000 car and then you got to pay that off. So it's going to take you a little while to do this. But it's not going to take you 10 years. It's going to take you one or two years. Yeah. And you're going to be totally focused on cleaning up all the debt. Because if you didn't have any payments right now, but your house payment, you'd be okay. Yeah. And you could put 15. And you could put 15. And you could just read on the credit card.

It's killing. It's killing. No, the interest rate on the credit card is not killing you. What's killing you is you're out of control. And you're not pounding this debt. You need to be pounding this debt. List your debts smallest to largest. Stop all investing temporarily. Stop all lifestyle temporarily. Get rid of the 30,000 dollar car and knock these debts out. And that's when

off all of your debt besides your house. And then going to baby step three, three to six months of

“expenses, and then getting to the 15% of retirement. Because I think that's that's the hardest”

part for people. It's just temporary pause, temporarily pause. It would be the wrong answer. But it's not a permanent pause. It's temporary. But a lot of people would say, oh, well, it's just a little bit. I can get the match. But there really is a lot of thought behind that. And for me, the biggest thing is you want to make sure that you're setting your habits up the right way. Because if you're investing in a situation like this lady here, she's putting

money aside. Let's say she does finish, you know, get a little bit closer to paying off debt. But something pops up and she's like, oh, I need the money for this. She's going to look over at that retirement and go where there's some money over there. I don't have three to six months of expenses. Maybe that's some money that I can pull from. So it's not setting the foundation properly. Whereas if you say, okay, if I have all this money, I can get out of that even faster,

which means I can set up my three to six months even faster. It just puts you on a light warp speed

that allows you to accomplish those goals so that when you finally start investing, you never

have to touch it. You can set it and forget it. You never think about it because the money that you need is there in your emergency fund. It's there in your budget because you've paid off all your debt. Yeah, if you don't have an emergency fund, you'll use your 401k or a credit card

“for an emergency because you're going to have emergencies. 100% chance. Dave, you need to be positive.”

I'm positive. You're going to have emergencies. It's going to happen 100% of the time. The only question is how you're going to cover them. Are you going to have a plan and have a

rainy day fund when it rains? It's going to rain. Have an umbrella. It's going to rain.

Have an umbrella quit. Well, all around this is not about skittles and unicorns. Yeah. This is it's going to rain. You need an emergency fund because if not, you're going to put it on a stupid credit card and then you're going to go, "Why am I so broke?" Right? Or you're going to clean out your 401k for your emergency and guess what they do. They charge your 10% penalty plus your tax rate. So you just borrowed the money at about 35% interest

in taxes and penalties is what it works out. Well, that was dumb. Oh, you need an emergency fund. [Music] Listen up, folks. If you've got a complicated tax situation and you're putting off filing your return, it's time to talk with a Ramsey trusted tax pro. Not next week, not April 15th, right freaking now. Ramsey trusted tax pros know the tax code front to back.

So they can do the heavy lifting to help you file on time and explain things to you with the heart of a teacher. But they can only do that if you get on their schedule before they book up. Go to RamseySolutions.com/TaxPro to find a full-time tax advisor who serves your area with excellence. That's RamseySolutions.com/TaxPro. [Music]

The right insurance access a shield around your loved ones and your wallet when disaster strikes. Our free insurance coverage checkup helps you figure out if you have the right coverage by giving

“you a personalized action plan with clear next steps. It's free. Did I mention it's free?”

Go to RamseySolutions.com/TaxPro to take the coverage checkup and find out if you have the protections that you need. Donna is in Columbus, Ohio. Hi, Donna, how are you? Hello, I'm good. Good, what's up? Question about index universal life policies. It has been an iron going to stop. I know contributing. Now that we know better, but we have a little bit of a balance. Each of us has about 28,000 that we're going to be with

drying. I have to put it on the house or maybe or maybe into our boss IRA and wondering

Mortgage too. It's your mortgage, because you're doing baby steps four, five and six, right?

Yes. So you're putting 15% away in retirement already? Yes. Good. I put it on the house then. Yeah, that's okay. It's a big chunk, what do you need?

“That's what is that? 56,000. You'll take away from this? Yes. I love that.”

Oh, you both have 28. Uh huh. Oh, wow. What are you all on the house? 250. Oh, wow. Very good. Okay, so down to 200 and your household income is what? About 320. Oh, cool. You're going to not just house out in no time. Very good. That's what you want to get it out in about the year and a half. Yeah, you're on the way. Definitely throw it at the house. Now I'm getting real excited. That's fun too. That's fun. How old are

you guys? All right. 54 or 57. Yeah, your millionaires are getting ready to be well done. Very good job. Jesse's in an arbor Michigan. I Jesse, what's up? Hey, how are you, praise God? Yes, sir. How can we help? Well, I got a question for you. So I'm 58. My wife's 56 retirement's coming. I'm probably around my age 62. She won't quite be there yet. But the question is, is when we go both to retire from the companies and I want to transfer the

401k that I have and then what she has into an IRA a roll it over, I don't understand why can't we combine IRAs and 401k's retirement plans do not have a marital component to them. They're all for individuals only. I don't know why you would need to combine them because if you're both have access to the money because you know, you're working together. Yeah, but you can't look up in this window you retire just buying them into an IRA to get more of a compounding effect. Yeah,

it doesn't change it. It doesn't change the compounding at all. Two accounts of $100,000 each compound at exactly the same rate as one account of seven of 200. I got you. You get no compounding advantage by combining them. Zero. I got you. Yeah, so no loss there. No problem. It's just a legality, a technicality. And so you're 401k rolls over into an IRA and your name and you name your wife as a beneficiary. Hers rolls over into her name. She names you as a beneficiary. And as you

pull money out of either one or both, you're sharing the money because you're married and we're

“talking about this when you've a combined approach to life and that's how people prosper the most.”

So yeah, yeah, you're, you know, so you're right on track with all that, but you know, but my wife has been a full-time mom since she was 40. So the retirement accounts are 90, some odd percent in my name. I mean, we've gotten, we've done Roth IRA's for her every year, but they've not added up to nowhere near what I can put in my 401k or at Ramsey, right? And so I've got the vast majority would be in my name, but you know, she's got legal access to that in the event of a divorce.

She's got, you know, beneficiary access in the event of death. She's got practical access in the event of life because I'm obviously going to share it with her. She and my wife, if we need any of that money,

we're probably never touch it, but that's neither here nor there. So that's how, yeah, how you get at it.

But that's a good question. And you know, that's the common misconception mathematically. So in the way you can run it off in your head is, let's say that, um, yet $100,000 at 10 percent, that means you have a $10,000 growth. And you got another account that has $100,000 at 10 percent. That's another $10,000 in growth. Or you had a $200,000 account at 10 percent. That's $20,000 in growth. And the other two were $10,000. So it's exactly the same. And the next year, when it compounds,

it's exactly the same. It's just, it's just in one pile versus two piles. Our brain likes to see a big pile. The total, the total is still the same. The aggregate is still the same. And oftentimes,

“people run into that. So Johns and San Francisco, hey, John, what's up?”

Not much, how are you? Better than I deserve. How can I help? So I have a pretty weird kind of situation. I'm 28, my partner and I are looking at

it possibly buying a home. We don't know what we're currently renting. I have about a million

dollars in assets tied to some watches that I've been collecting and buying and selling things I was 18. And I don't know if I should possibly sell some of them or all of them try to put

I know. I have been really fortunate. I build great relationships with a bunch of

watch dealers and the cheap so I bought all of them I retail with the exception of like one or two.

“Okay. And I'm curious. Have you tracked how they've appreciated?”

Yes. Oh my gosh. Have I. I've been really fortunate. I have a couple of protects. I haven't often not in a notice. Those have both doubled in value of albums for under 100,000. I'm really fortunate. Combined me make about 400,000 a year. So how long ago did you buy them at 100,000 and then they doubled? That was 2018. I believe it was 2017. So this is before to kind of watch being sort of

happened. I didn't know what you think happened. I was going to say I didn't know there was a watch out. So a lot of people started buying and trying and COVID. I've been really fortunate. I got a bit

“earlier about it. Right. Walking to appreciated value. Well, in general collectibles, which watches”

would be guns would be art would be wine would be in general collectibles do not out perform the market in appreciation. The exception to that is if you add in some expertise. So an art dealer will make more on art than he would make in a mutual fund. You will make more on watches because you're completely freaking nerded out about them. Yeah, it's like OCD. Yeah, it's awesome. I love it.

And it's fun. It's amazing that you did that you have this. But overall, you just asked yourself

where 10 years from now, what would I rather own? And not just mathematically, emotionally, relationally. And so what do I want to own with my wife, 10 years from now? I personally went on a house more than I do, a collectible. I've got a bunch of cars. I've got a bunch of guns. And I would, if I didn't have a home, I would in a heartbeat get rid of those and move into move that money into houses. It's hobby for me. It's not anywhere near like you've got. That's

crazy John. That's me. I've never had a call from somebody at a million dollars in watches.

I mean, I play urgency into it as well. If it's not an urgent thing to buy a house, if you hold onto them a little while longer, you have a really nice income. You could start to cash flow more

“of that house and have to sell less of the watches. So I think that there's probably a play where”

you could keep some of these. The ones that mean the most to you and still cash full of the house if the home is not urgent. Yeah. I have noticed that sometimes when people are doing something like this and I've done this a couple times with me that, you know, I'm really enthused about it for a while. And then it's like, "Fate, this is out." Yeah. Yeah. Just dump 'em. I'm done. Fizzles out onto the next thing. , hey guys, Dave Ramt. Hey guys, Dave Ramt. Hey guys, Dave Ramt.

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 Ramzie. Ask your money question and get answers built on Ramzie principles we use on the show, whether you're making a decision or just want something explained, Ask Ramzie is here to help. It's fast, simple and free to use. Go to Ramziesolutions.com and try Ask Ramzie today. That's Ramziesolutions.com.

So here's an interesting thing. You guys have heard me quote this a hundred times some of you, but I'm gonna do it again anyway. We did several years ago, the largest study on millionaires ever done in North America, detailed airtight research to where if you disagree with the conclusions of this study, you're what's known as Rome. The data is that tight. And it's the largest study,

millionaires at any given moment in America. And a millionaire is someone who's net worth

is greater than a million dollars. Now, that's the definition of a millionaire. It's an accounting

thing. And your net worth is determined by your assets, minus your liabilities. What you own, minus what you owe. So if you have no debt, it's simply what you own. And so when you have a million dollars worth of things, money, 401(k)s, house, that kind of stuff, then you are a millionaire. Well, no one should have a million. Well, that's it's not a moral construct. It's an accounting function. It's not enough. That's not, that's not what we're debating. What we're saying is there's

a simple thing you either is or you isn't. It's an accounting thing. And it's not a million dollars of income. And it's not a million dollars of cash. And it's not a million dollars of liquid assets.

“And it's not, it's simply assets, minus liabilities. That's how you define it. Period. And if you don't”

define it that way, you're wrong. This is the definition of a billionaires the same thing. When

assets, minus liabilities equals a billion, which, by the way, is a thousand million. It's a lot.

So if you have a hundred thousand dollars, you're a lot closer to a millionaire than a million areas to being a billionaire. Like a bazillion times closer, say a thousand versus a tenth. Right? One thousand versus a tenth. That's a big difference. So all of that to say, we've studied these things. One of the things we figured out was we wanted to track and say, okay, what careers caused people to be millionaires most often? The number one career field that

became a millionaire, the most that appeared most often in the 10,000 that we studied was engineer. Number two was accountant. Number three was teacher. Didn't see that one coming. Number four, business person, business executive, someone in business of some kind. And number five was attorney. Medical doctor did he make the top five. They're

“number six. Wow. So you always think of the doctor and the lawyer be in the millionaire, right?”

But they are. But medical doctors are notoriously bad with money. They're stereotypically bad with money. They're like artists or something. You know, it's like, you know, a music stars notoriously bad with money, football player notoriously bad with money, same thing. But they're still number six. So, but what we couldn't figure out is how teacher lands in the middle of those things, because all of those are highly paid professions except teacher. Right. So how does teacher land in there?

And we figured out, was after studying it a little bit more, was that all of those, lawyer, accountant, engineer, teacher, business professional, they all have a process that they have to submit to and have to follow the process to do their career. So when you're an engineer, if you don't follow the process, the bridge falls down. When you're in a accountant, there's generally accepted accounting principles. There's not three ways to do accounting. There's one. It's not art. You don't get to make it up.

“When you're an attorney and you're in court, there's a process to do litigation and you have to”

follow the process. Are you'll be held in contempt? And so on. Teachers have to follow a process. They use a detailed lesson plan. So these are all process people. So they simply took that process mindset and applied it to building wealth. And that's how teacher ends up in there. Fun, fact is, Scott's on the phone in Spokane, Washington. Scott is a baby steps millionaire. And he's a teacher that teaches the Ramsey foundations high school curriculum. Is that right? Scott?

That is 100% correct, Dave. I wish I had a high school teacher that was a millionaire because he followed the principles that he was teaching me in his class. I would have sat there with wrapped attention. It is fascinating to watch my students when I walk into class because I teach the why. And when I walk in and ride and you watch those those light bulb moments with those kids because I tell them on day one. I don't want you to have to live the life that I had to live because I

learned the lessons of the same language and learned them days that I was in debt and I don't want you to be in debt. I want you to live your life the way I'm living it right now in your 30s, not in your 50s. Yeah, so how old are you? I'm 56. What is your net worth? My net worth right now is

1.83 million. Good for you and give me a little breakdown on that. How much of that's house and

retirement and so on? So about 700,000 is in my house and we just recently paid that off within the

probably $7,800,000 is in my retirement in my 401(k) and I have a pension attached with that as a teacher. And then

“we have other investments, irides, investment accounts, things like that. And then a small small”

portions and savings and checking accounts. Wow, way to go Scott. So how much of this did you inherit? $0.00. We have a small, very small amount that we inherited that helped us pay off that last little bit of my student loans but very insignificant amount. Yeah, it did not mathematically cause you to be a millionaire. Oh no, you didn't inherit your money. You got the old fashioned way, you earned it. Yes, as you say, you know, when you're broke you go to work. I hear you, that's it.

So, so you've been a teacher for how long? Over 20 years, so it's funny that you had mentioned engineer as well. I was a concurrent engineer and an actual engineer in the military. So yeah, I built those processes and applied them obviously. But the main thing is right when you are teaching the foundations, the kids, they just kind of glam on. It's interesting to watch those labeled moments with the kids because they really do start to process that information and you just kind of

watch them, you know, they want them like yeah, whatever. But you tell them in the curriculum, you tell them on the show. What we're teaching you is what grandma taught you. This is common sense information. They look at you like whatever. But as they go through, they learn and they start to process and begin to just kind of grind at it and they're like yeah, you're right, you're right. And they they kind of just figure it out and it becomes very hard, it's almost second nature.

And they they figure out really quickly that we need to avoid that. This is not something to they ever say, Mr. Scott avoided that. And he's a teacher and he's got 1.83 million. I mean, do they ever look at you and go, my gosh, I got a walking social proof right in front of me. Well, it's interesting because I am very, very honest and open up the kids and when I tell them my stories because I open up and when I tell them I had to work three jobs and my kids are like

dead when you never home. And they, I mean, some of the kids break down. Yeah, they probably

relate to it. Yeah, and they relate to it. And they, I have kids crying. I have kids. I have kids. I had one student come into a class the first day of school and go, it's easy for Dave to say, you know, you don't need a credit card. He has millions of dollars for weeks into class. He was like, I have a friend to ask you to credit card. How do I talk them out of it? Wow. Love it. Love it. Very cool. Well, how long have you been teaching the curriculum?

“14 years. I taught it before it was digital. Wow. I don't know the book. Wow. I remember that.”

Oh, my gosh. That's amazing. Very cool. Well, thank you for teaching it and congratulations on

being a baby steps millionaire and another hero in the American story right here. Absolutely incredible. If you didn't know, we have a high school curriculum called Foundations and Personal Finance. It's been taught now and 48% of America's high school, six million kids of graduated from it. So if you can help us get it into your local school, that'd be awesome. And sometimes you need to knock an organ on the school board. But you know, hey, whatever it takes, baby, that's what we're going to do.

When I talk to people on the Rams, he showed 90% of the problems I hear come down to one thing, not having a plan. They're not living on a budget. They have no idea where their money's going. Money is just happening to them instead of them happening to their money. And guys, that is so normal.

“But it doesn't have to be normal for you. And that's why I want you to go download our”

every dollar budget app. Every dollar not only helps you tell your money where to go with a budget, it also builds a plan to free up extra money so you can pay debt off faster and start building wealth. And the best part, your plan is completely personalized to your life. It's the same advice that you would get if you call the show. And it's right in your pocket. So don't keep living normal.

Our scripture that I John 114 in the Word became flesh and dwelt among us. And we've seen his

“glory, glory as of the only son from the Father, full of grace and truth. Bill Murray said,”

"People are like music, some speak the truth and others are just noise." Oh, Mia isn't Seattle. Hi, Mia. How are you? I'm great. How are you guys? And thanks for taking my call.

Sure, what's up? My question basically in a nutshell is two weeks ago for my 60 second birthday.

I paid my mortgage off 16 years early. Good for you. Well, all my friends, all my friends are telling me I made the biggest mistake of my life. And now I'm really terrified that they're correct to give in the current market situations and things. So my question was to try to get some guidance from you based on my current situation. I need to know for you.

Well, let me give you just a quick content. I'm 62. I'm single. I'm in the midst of an eight-year canceled battle. And my doctor said I won't be able to return to work for the foreseeable future. So based on that, my friends are telling me I took my liquid assets that I had to pay it off 16 years early. And that was a big mistake because my interest rate was 3.5% and I could have been making more all the things you hear. But now I'm afraid maybe they

were right. Do you still have a nest egg? So what I basically, I have is I'm currently my income.

I have a disability benefit from my former employer that separated me last June for disability of 7,000, 70 a month. And that will end by three years the way the policy set up when I turned 65, but it could end both previous. I get a $3,000 monthly SSDI payment after the taxes and the Medicare deducted. And then I've got my assets. I have a $80,000 emergency funding cash. And I have $23,000 in cash for insurance premiums that are going to be changed in November.

And then my investments, I've got $1,430,000 in its additional IRA. You're okay. You're friends or morons. And I'll go a bit further. They're talking about a stratosphere that they've not yet entered. So how can they know? You're the only one who's actually done it. So don't you think you have a better frame of reference than they do? They've only had debt.

Right. So I'm debt free. I've got $280,000. You're a debt free multi-millionaire. You're okay. Calm down. Okay. I'm just, you know, with the current situation.

“Current situation. What? Are you, if you're not not ran and being bombed, I think you're okay.”

You aren't Seattle, but. Because I can't, I can't go back to work.

I'm going to be answering your $10,000 a month income and a million dollars.

That's the current situation. Okay. You're okay. Well, I was worried that I'm really not okay. What do you think is going to happen? What, how would you not be okay? What current situation are you referring to? Well, so, for example, my, my medical is going to change in November. My secondary is quote, "My premiums are going to go up really high." To work on a million dollars.

But a million dollars really doesn't, they tell me go very far. Yes, it does.

“It goes a long way. Because it's making 100,000, is it invested in good mutual funds?”

Well, yeah. So, the traditional IRA is that. And then I've got 218,000 in a rock. I've got 100,000. It's all of that invested in good mutual funds. Yes, yes. Okay. So, it's all going to make around $100,000 a year that you're not even touching. Right. So, I basically structured, you know, how you, the, the four buckets that you advise, they're in, they're in the traditional and the rocks because I have to protect against Irma.

So, any capital gains I made days in the retirement. Good. And then, and then I've got 440,000 in municipal bonds and 342 in some core equities that's managed. So, but I'm trying not to

And you're going to have that for the, for sure for the foreseeable next three years. Well, the long-term disability benefit the way my employer wrote the policy. It could go away before three years, but the max I have left on it is three years. Yeah, depending on whether you remain disabled or not. Yeah. But even if even if it went away, you'd still be okay. Okay. You did not make a mistake. The only mistake you made was in choosing your friends.

Okay. Or in listening to them. I have some friends that I actually like that are also not smart, but that's okay. Okay. Do any of you over me? I just looked up how long it would take to wire the money and have it clear so that I got my letter saying the right off was closed on my birthday because for my present for myself, I wanted to death free cream. So, I told my, I told my friends and then they just, I was in tears because they were like, that's ridiculous. And I just think

that's jealousy. I do. Well, where did you see your bow? Yeah. Who in their right mind when somebody

has done something incredible like that would not celebrate them? Even if it's not your personal

choice that you wouldn't celebrate what somebody else views as a personal accomplishment. And it's zero detriment to them. Okay. So, but I still have like a 600-month H away. So, I have, you know, a lot of expense. Hey, Mia. Mia, you're worries and your math don't add up. Okay. Okay. Your worries are a 10 and your math is a 1. Or let's, let's, let's be as logical as humanly possible right now. Who do you think knows more about this situation? Dave Ramsey or your three

“little buddies at home? No, I, I get it. Okay. There you go. That's right. You need to breathe. You need”

breathe. You're okay. You are in great shape. You have done a wonderful job. I don't know what

the house is worth. If it's worth a million. You're in Seattle. It probably is. And you got a million

dollars. You're, you're a multi million air. It's six to two. I want you to concentrate on fighting cancer. Not arguing about whether you should have paid off your house or not. I want you to go beat it. Go beat the big sea. Yes. And live your life, Keto. Wow. Matthews and Phoenix. Same Matthew, how are you? Good. How are you doing today? Better than I deserve. What's up? So my question for you is, I'm recently going out on my own business wise. I'm in homey models.

I've been doing it for a long time. I'm just trying to, on my own now. My question is, I've been cash flowing everything on Facebook. Great for vehicle or truck. Everything's but they've worked. Absolutely. No credit card. My question is, where did it be a bad decision to take out a small business loan? Maybe 2500 to 500. Just to help back fund this. You know, I'm doing it. Back fund it. Back fund. Well, back fund. Well, I don't try to think of the right word. Just,

you know, when tools come up, that need buy stuff like that. You cash flowed everything. It can keep your cash flow. Don't stop now. Don't stop now. Don't fall into the debt trap. Because when you fall into the debt trap, you have to take jobs from customers that are unreasonable to pay the debt payments. And then you get an unreasonable, no fund business to operate because you're to put up with the butts. You don't want to have to deal with the butts. You want to deal with the

good people. And you don't have to, you can send the butts to your competitor if you don't have

“debt payments. So I think you need to, I've got, here's my competitor's business card. You need to”

go talk to him. That's so good. And let them, let them worry someone else's ears off. Instead, you go work with a good people, make some good money and do a good job and help those people and make you some money. And you're in a great line of work. Please continue to organically fund it with cash flow. No debt. Please, Matthew, please do that. Just swing that hammer, turn that wrench, baby. You got a great thing going. And you're sitting on a gold mine if you don't screw it up

by going into debt. Absolutely. I know lots of remodel guys and repair guys that are running

businesses that are half million dollars a year right now. And that's the profit. Hello. They,

you can really do good at this. 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. Christ Jesus.