Transcript of Build Wealth Faster by Understanding Opportunity Cost

Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broken, common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. Open phones here at 888-825-580. Com. It's a free call, and some say the advice is worth exactly what you pay for it. Ken Coleman, Ramsey personality, number one best-selling author and host of the Uber-popular Front Row Seat Interview Show on the Ramsey Networks. He's my co-host today as we take your calls and your questions. Thank you for being here. Ray starts us off today. Hi, Ray. How are you?

I'm doing fantastic, Dave. How are you?

Better than I deserve. What's up?

First off, it's an honor to talk to you. Me and my wife found you back in January. We both read the total money makeover. And actually this Friday, we drove to town and sold my dirt bike. And with that check, we'll be able to pay off our auto loan and be debt free.

Wow. Look at you, man. Game on.

Yeah, we're excited. My question today, though, is about our family business. So I'm a third-generation farmer. I'm 27 years old, and we have had a tough couple of years on the farm. We've racked up about $2 million of debt these past two years, and we see things getting better in the future. So we'll hopefully be making more money, markets and all the other factors going into that. But we've had to do a lot of deferring updating equipment and a lot of other things to make it buy to this far. And so my question is, how How do we, from this point on, be debt free, but also trying to not go back to going into debt in the future when things get tough again?

Wow. $2 million of losses in two years?

Yes. So I guess I should say, last year we made about 12 million in revenue. And milk markets is our main exposure to price risk. We milk quite a few cows. And so it's very regulated on the federal milk marketing order. And so we don't really have a control over how much we get for our milk. We mainly have control over the expenses. So we've had to go without updating equipment. We haven't been able to do a lot of different projects that we've been wanting to. A lot of our amazing employees and guys we work with have been going with smaller pay raises these past couple of years just so that we can get by. And we've had to liquidate cattle to try and break even, and it's been difficult. We see it getting better in the future, but- Why? We're going to want to Say it again.

Why do you say getting better in the future?

A lot of it has to do with my dad. I trust him a lot. When we talk about what markets look like in the future, whether it's ag in in general or just milk prices going forward, we see things getting better, and I trust his judgments. To be honest, we've gotten as far as we have because of him. Many other friends that are in the similar boat as we have, probably 5X times amount of debt, and they don't see a way forward. I'm grateful for what my dad has done to get us to this point. I'm confident and trust him in that aspect. I'm not his experience. As you can tell. I'm only 27, so I haven't seen you much advice.

I appreciate that. I appreciate your honor and your dad. That's awesome. Just a blind trust of him is not what we need. We need to have a reason that he thinks the market is going to adjust so that you can become profitable. I don't know enough about it to comment on that one way or the other. The thing is, obviously, you keep expenses down, revenues go up, the difference is called profit, right? That's no kidding, huh? As that happens, you clean up the debt first before you do capital expansions. From this point forward, you start setting aside percentages of your profits for retained earnings so that you build a cash war chest. If the markets were to cycle down like this again in the future, they don't take you out. That's what we do at Ramsey. We take a percentage of our gross revenues of our net profits every month and set them aside as additional savings called retained earnings. When COVID hits and we lose a bazillion dollars worth of revenue for a few months there, we don't go out of business because we're sitting on a war chest of cash. That's how you build up in the future.

But of course, in order to get there, you've got to experience a turnaround in the marketplace, which, again, I have no expertise to comment on that one way or the other.

Yeah, we're flying blind on that. I do want to ask a derivative, though. What is the biggest driver of you going into debt? Is it that lost revenue, or the expenses are out of control? What is it?

Well, it definitely is lost revenue. Well, last year, my best, I don't have the numbers in front of me, but say about 12 million in revenue, whereas in some years, back in, I think it was 22, we made well over 16 in revenue. So there is a lot of swing, especially these past couple of years in milk prices. And we've tried to cutting expenses, like I said, and trying to make do with the small margin that we had.

So am I hearing, is it a drawback from consumption because of pricing that's caused that $4 million gap?

Well, in terms of... Our production has stayed pretty consistent. But in terms of pricing, there's a lot of factors.

It's a government They took the price control, and then they just took the price down. Yeah. Okay. So they drive you out of business is what they're going to do. If they don't turn it around.

It's not competitive. It's price competitive, right? It's not in the state.

Well, and so the reason I'm digging into that, I wanted to make sure I totally understood that. I don't know how you can have confidence, and I'm just circling back to something Dave said. I think there's some wisdom there. I love the honoring your dad, but if this is a government problem, then I wouldn't have a ton of confidence unless the milk lobby, and I'm speaking in general terms here, I know it exists, but that's your only weapon to fight this or else you're stuck. So as you're looking long term, and again, I don't have great knowledge of it. I can look at it from a macro standpoint and understand it, but I would be looking at that and making sure that I know what's going on. Am I talking to the lobbyists? Do I know what they're projecting, Dave?

Because- I mean, your hope is, and your dad's hope is, is that the pricing structure moves you back up and you're in the 16 range again instead of the 12 range, which makes you profitable. You clear the 2 million and you pile cash up so the next time this happens, you don't go into debt. You pile cash up so that you can do your capital improvements with cash above your emergency funding. The next time you have an upswing, you use it much more wisely.

What do you do, though? Again, I'm asking from a macro level.

I have no control over what the government does. When they're going to just set the price somewhat arbitrarily. That scares the crud out of me. As a business person, I'm going to enter into a business that I live and die based on the whim of the latest administration? Oh, my God. Yeah. Shoot me. That scares me to death. I don't control my own destiny here. The markets aren't... And even free market is not controlling the pricing. It's just a subsidy situation. I don't know. You got to figure all that out. And long term, you got to figure out, do you want to be susceptible to this? If collectors are You're throwing up your phone every day and you're living in constant fear of the next call, you're not living, you're surviving. You don't need more noise or more stress. You need help you can trust. That's why I recommend Guardian Litigation Group. Guardian isn't a call center reading from a script. They're real attorneys who can step into the courtroom and fight back when creditors try to sue you. Debt settlement isn't glamorous. It's not the preferred path. I'd still rather see you pay it off the old-fashioned way.

But if you're overwhelmed, out of options, and trying to avoid bankruptcy, Guardian can help quiet the chaos and give you a real way forward with no upfront fees. Their attorneys have helped more than 55,000 people settle over $600 million in debt. When the noise stops, you can breathe again. To learn more, go to gardienlit. Com. That's gardienlit. Com/ramsey.

Attorney advertising.

Results may vary and no specific outcome is guaranteed.

Tom is with us in Sioux Falls, South Dakota.

Hi, Tom. Welcome to The Ramsey Show.

Hey, Dave. Thanks.

Sure.

What's I am a master electrician working for another master electrician for the last four or five years. I recently discovered that we're about 20 weeks behind on payroll It's about $18,000. I'm looking for some advice on where am I live in here. I'm sorry.

You haven't been paid in 20 weeks, but you recently discovered that?

I've been getting paid, but not two pay periods in a month or three pay periods in a month, not four. And it's accumulated into... Yeah. In February, the most up to date pay period I have is October fourth.

Why are you just discovering this?

Well, that's a phenomenal question. It's definitely my fault that I have failed to realize it for this long. I've been building a house. I just had a baby. I got married this year, and it just- Which would be all the more reasons I counted all my paychecks. Absolutely.

Okay. Why is the guy not paying you what he owes you?

Well, it used to be a company of five employees, and then everybody left, and it was just him and myself. Then he got stiffed on a $25,000 job. He put a lien on the property but never got paid for it. I think he just transferred that deficit from supply stores and lines of credit to not paying me because I don't charge interest.

But never bothered to discuss this with you?

Correct.

When did you discover this?

I discovered it the week before last on a Thursday.

Okay. Have you found a new job yet? Well- I'm not working for a crook. Why would you?

Yes, sir. I agree with you. My biggest concern is that I file a wage claim and he declares bankruptcy.

Oh, that's probably very likely.

Yes.

That's They're not going to get the money by sticking around, though. You discovered he's a snake. Now that we've established that, we also know one thing about snakes. All they do is bite. They don't do anything else. Don't be shocked and don't think the snake is going to turn into a rabbit. It's a snake. Leave.

That's part of the moral dilemma I've been I'm having- It's not a moral dilemma.

It's common freaking sense.

Well, I have not been working. I made it clear that I don't want to work until we're paid up. But my thought was, by creating the illusion that I would continue working for him, maybe I could get some of this money paid up before I tell him I'm leaving.

Okay, let me try one more time. This guy doesn't pay people and he lies about it. That's not going to change based on any action you take. This is a guy. This is what he does. He's a liar and a thief. That's who he is. The best thing you can do with liars and thief is to distance yourself from them so that you don't get lied to and stolen from.

Agreed.

I'm afraid, sir, you've lost your money because you didn't keep your finger on the pulse, and that's on you. It's also on him because he's a snake. But, dude, you need to get a job yesterday and quit trying to figure out a way to get this snake to not be a snake. He's a snake.

Yeah, I just think you're afraid of something. That's why you're doing this moral stuff and throwing these words around. That's all that is, is you justifying your lack of inaction. You've just been two lessons you got to learn here. You have not been paying attention on what's going on. Cost yourself a lot of money. Number two, you're afraid to step out. You think this guy is the only guy that's going to pay you, and you're in one of the most sought-after trades there are right now.

There's a massive need. There's a line around the block of people hiring master electricians. There's such a shortage of people in the trades. You can go get something tomorrow, and you should have yesterday.

He offered to transfer the titles on some trucks and trailers to me. Do you think I just take that and run?

Yes, instantly.

That's the best case scenario.

Yeah. I won't file a wage claim if you give me a truck and a trailer worth what you owe me. That's right. 100%. I don't want to file a wage claim on you with the state. Yeah, he needs to do that. That's redemption for his thievery. Okay? Yeah, take them. Hey, maybe you set up shop for yourself then. If you got a truck and a trailer, let's go, baby.

Yeah, that is the plan.

That's a guy I can trust, the guy in my mirror, right? Very true. But now you're going to have to have someone help you with the books because you don't pay attention to them much.

Very accurate.

Sorry, Tom, you walked right into it, buddy. I love you, man. But Yeah, you can be a good electrician and a bad businessman. Be careful if you're setting yourself up in business that you learn the business skills, too. Wow. You know what that is? That's a guy who works his butt off. That's right. He works hard, and most of everything he's got, and he's outworked everybody else. Yeah. He thought he could outwork this. Folks, when you get in a situation like this, what you I can't do, and Tom's a nice guy, and he's an honest guy and a good guy, we're picking at him a little bit, having some fun, but we've all done things like he's done. What he did is he took his personal character of high work ethic, high honor, high integrity, and tried to superimpose that back on the guy who's a snake because he thinks other people are going to be like he is. What that will leave is a scar.

Yeah, it already has. Here's the great news. Until the very end of that call, we thought he was getting nothing. The lesson here is, and again, not picking on Tom, but there's fear. We didn't have time to break it down, but for him holding on, and I'm going to tell you, fear of the unknown just holds so many of us up, us, all caps. I've done it. When we don't know what's next, whether he goes out on his own or he's got to get out on the street, you will put up with things that you would not normally put up with. I'm telling you, for everybody listening and watching, there's a lesson here. He's terrified of something. Maybe just change. And that's normal, by the way. It doesn't make Tom a weirdo. That's all of us. So learn the lesson there that when we have that fear, the fact that he called us today is good. Get some insight from other people, Dave, because what will happen is you get into this in this loop that I can't- The rumination. Thank you. That's the word. And it's really dangerous. It can hold back a lot of progress.

So I spoke at a church yesterday, and between services, go out and talk to people and all this stuff. A guy came up and he's like, How do you get over the fear running your own business? I said, I'll let you know.

Yeah, great statement.

The editor, John Johnson of Ebony magazine said, The entrepreneur is the only person that could go from sheer terror to sheer exhilaration and back every 24 hours. That's right. I got me a truck and I got me a trailer, and I have the skill, but now good. That's scary as good.

It is scary, and I want to acknowledge that, right?

Yeah, you're right, too. That's very good. Well, I tell you, that's a good guy. A couple of lessons, though. If you listen to this show, you can learn things. That's the idea. It's not just entertaining, although Ken is quite entertaining. Thank you very much. But the two takeaways is, one, you got to pay attention to what's going on in detail because no one else is managing you but you.

That's right.

Then two is, don't try to make a snake into a rabbit. They're just snakes. Just because you might be a good person doesn't mean you can expect that of other people. You can't always expect other people to react the way you are going to react to do what you would do in that situation. Because let me just tell you, if Tom was in charge of the payroll, the first day he couldn't make a check, a payroll check, he would have been sweating and terrified and would have sat down and told the guy. Day one. That's right. He would not lie to him. He wouldn't hit from him. No. Running a business is hard work. You're the CEO, the accountant, and the sales team. You don't have time to Moonlight as your own benefits department. That's where Health Trust Financial helps. In fact, health insurance is one of the biggest and most confusing line items in your budget, and most of you are overpaying because you're stuck figuring it out alone. You don't have time to figure out all the fine print about networks and deductibles. My friends at Health Trust Financial have been helping Ramsey listeners for over 20 years.

Their focus is simplifying health insurance and serving people with empathy. No pressure, no games. They give you clear, unbiased advice that fits your life and your budget. Most of their clients save hundreds of dollars every month. That's real money you can put back in your business or into the baby steps. So stop wasting your time, your energy, and your money. You run the business. Let Health Trust Health Trust Financial, handle finding the right health insurance. Go to healthtrustfinancial. Com today. That's healthtrustfinancial. Com. Ever wanted to see the person who's calling in to ask a question? Be in the room when we answer it? Well, now's your chance. The Ramsey Show is going back on tour. You can experience live Q&A, crowd debates, local debt-free screams, even raw confessions. Yes, we're going to be in Charlotte doing one show. We're going to do one in Denver, one in Phoenix, and one in Anaheim all in April. There's around 300 seats a night. Last year, we sold out in 72 hours. Grab your tickets right now at ramseysolutions. Com/events, or Click the link in the show notes if you're listening on podcast or YouTube. Ken, which of those are you going to be in?

All four, Dave.

Oh, wow. They got me in the anchor spot. I'm trying to keep things somewhat controlled and on the rails. You're trying to keep Deloney and Rachel on the rails? It's hard work.

That'll be a lot. It's hard work. That's a lot to ask of one man.

I'm excited. It's going to be fun.

Ethan's in Salt Lake City. Hey, Ethan, what's up?

Hey, Dave. I'm so glad it's you on the air. I've been listening to you for a little bit. And I'm like, You know what? I need a good butt chewing from Dave, and I was hoping it was you today.

I'm just going to leave the studio. I've never heard anybody ask for it, Jeff, plainly. Wow. Careful what you ask for.

No, I need it. So a little bit of what's going on. I got a really great job. I make six figures. I made about 140 last year.

Good. What do you do?

I've honestly been really blessed. Industrial refrigeration.

Good for you. Well done.

Okay. So, yeah, really good trade. Work for my dad. He takes care of me. But recently bought a house from my dad. They moved And he took a hit on selling the house to us but gave us 100,000 gifts as a down payment. And that also left us with 150,000 in equity. And I was like, I mean, this is a step up in life. Might as well take it. And the payments, they were like, Oh, it'll be tight, but you should be able to do it. And my first mortgage payment come out, and we're getting ready to have a kid, and I just paid out right for the kid, and I watched my checking account go, and I was like, Oh.

And then- How much is your mortgage payments, sir?

So it's 3,250 and about 3,700 total with utilities.

Okay. Mortgage payment is not your problem. It's your truck payment. How much is it?

I actually don't have a truck. My company pays for truck and gas and everything. Got a car for my wife because the other vehicle we had broke down.

How much is your vehicle for your wife's payments, sir?

514.

Okay. What other debt do you have?

So recently also found what I thought was a good investment on some mineral rights in Idaho. And so bought that. That's about 400 a month. That's 4,000 1,000 total there. And then I thought I was a big boy with a big boy job and saw a pedal bike, but it's the Ferrari of the pedal bike world, and decided I wanted that.

You just keep going about buying and buying and buying and buying. So have you figured out that's the problem? I guess you have. Yeah. So sell the pedal bike and sell the mineral rights and get yourself on a budget and stay out of restaurants and quit buying crap. Is that going to work?

Yeah, that's what I've been doing. I just- Yeah.

So what will the Ferrari bike bring?

So it's actually pretty good return. I'm trying to sell it for 9K, which is about 5,000 under what it should sell for.

But I owe- What do you- That's what I owe on it. Okay. Yeah, you can get rid of it. Okay, what about the mental rights?

So it is a lease to own, so I'm paying the guy. I could reach out to him and see if I can cancel our contract.

Yeah, let's do that. I don't know what that entails. Yeah, just say, What do I need to do to be out of this because I can't afford it. I bought a house, I got a kid on the way, and I'm broke. I got to have some relief here. What do I do to get out of this? Just quit paying you. I'll lose the rights. Sure, done. I'll give them back to you. I'll sign them back today. That's That's probably what it is. You just got to work through everything like that. What you do is just figure out the last time something made sense and go back to that point and undo everything since then. That's what I'm doing.

Before I bought the house.

Yeah, the house is probably a bit much, but I don't think it's really your problem. I think it's all the other crap. You don't have a plan. You're not living on a plan. You just look and see how much is in the checking account, and that tells you if you're okay or not. That's not a budget. You need a budget, you You need to get on every dollar. I'll give you a free trial on it and get you started. You and your wife sit down the night, give every dollar a name. You make freaking 140K. Stay out of restaurants, don't go on vacation, get rid of the Ferrari bike in the middle rights, and let's get this thing to balance. I think you can do it. That's a pretty light butchering. That's not bad.

Just realistically, I've been on the edge of this because we really like her car. It's really reliable for her and the kids.

You probably I need to sell it, too.

You think you need to sell it?

Yeah, probably.

I think if I get rid of everything- What if you didn't have any payments about a house payment?

I think your life would be pretty good.

It would be amazing.

Okay. I think your budget would balance, and all of a sudden, you wouldn't have been calling Dave. But you keep buying crap and just going, It's going to be okay. It's not going to be okay. You got yourself into a mess.

Yeah, paycheck to paycheck.

Is anything about that feel good to you?

Does this work? I mean, you could get her a $10,000 car. People don't die in $10,000 cars. I own a couple of them.

How old are the kids?

He's got one. My son's four, my daughter's two, and baby's three is any day.

My point is, those littles don't need the nicest minivan or the latest SUV. They don't care. They're just going to throw goldfish on the carpet anyway.

And grind them in with their grimy little feet.

We hear this all the time. It's a rationalization. You're not the only person that ever does it. Well, I've got two I got a third on the way. Got to go get a car I can't afford. Nobody cares.

Get you an old worn-out minivan that just gets you from here to there until you've got a little money piled up and then pay cash for her a little better car. But you guys, you just been acting like you're in Congress and spending money. You got to stop it. You know what to do. You already knew what to do before you called. That's why you set the call up the way you did, which was humorous and fun, by the way. But really, look in the mirror, you and your wife go, grown up-time, three little babies, and stupid butt stuff has to stop. This has grown. What do the kids call? Adulting. We're adulting now.

Okay, Dave, question for you. I haven't asked you this in a while. Freaking furred. What is going on in the mind of a human, because we've all done this, where there's this awesome feeling about getting the Ferrari of pedal bikes. You know deep down that you can't afford it, but you still do it anyway. What's going on?

No one looks at whether they can afford it. What happens is when you do not have an overall plan, like a budget, and a detailed game plan of this is what we're going to do with our money on purpose. It could be a Ferrari bike. I don't care. I mean, you can buy whatever is in your detailed plan. When you say, Can I afford this couch? And you look at it as a part of your overall life plan and the numbers, then you can tell if you can afford the couch. When you're just walking through the furniture store and you're disconnected from all those other numbers, then you go, Of course, I can afford the couch. It's only whatever. Of course, I can afford a $9,000 battery bicycle thingy, whatever. But it's the Ferrari. Tesla of bicycles. Probably catches on fire. But what it amounts to is I can afford that boat. I can afford that. When you don't look at it as a part of a hole and you look at it as a stand-alone thing, Then you go, I make $140,000 a year. I can afford a $10,000 thing. That would be true if you don't look at it as a part of the overall picture.

But when you plug it into the overall picture, it screams insanity. Same thing with your car purchase, same thing with your house purchase, all these things. And you just go, Yeah, if I didn't have anything else to think about except this one couch, sure. But lots of time. But we never do that. It's compartmentalizing rather than looking holistically causes us to be insane. When you've saved up and paid cash for a reliable used car, you want that thing to last. The best way to keep it running for the long haul is to take care of it with people you trust. That's why I'm proud to welcome Christian Brothers Automotive as the official auto repair partner of The Ramsey Show. At Christian Brothers, they treat you like family. You'll get digital vehicle inspections so you can see exactly what your technician sees, a complimentary shuttle to keep moving, and every repair is backed by their nationwide nice difference warranty. They've even been ranked number one by JD Power for customer satisfaction among after-market, full-service maintenance and repair providers six years in a row. Visit jdpower. Com/awards for the details. If you want your paid-for car to keep going and going, trust Christian Brothers Automotive.

Visit cbac. Com/ramsey to find your local shop and get an exclusive Ramsey discount of 10% off your visit. 10% off, up to a $250 value.

See store for details.

Patrick's in New York City. Hey, Patrick, what's up?

Good afternoon, gentlemen. Thank you for taking my call. Sure. I'm 66 years old in relatively good health, still working. I own my own business. I have a net worth of $9. 5 million, and I want to make sure it's in the right place. And by the grace of God, and a lot of years following Dave Ramsey from a bunch of different shipyards throughout the US, the discipline paid off.

Man, you're amazing. $10 million net worth, dude. I'm proud of you.

Yes, sir. Wow. Just to be clear, I've never lived high on a hog on first-generation Irish Catholic out of the Bronx, so I'm not impressed by, I heard you say Ferrari before and that thing. I live very simply and I'm very content.

Good for you. Good for you. How can we help you, sir? You're amazing.

Right now, I have approximately $580,000 in cash in the bank. I have another 3. 9 million in CDs with various maturity dates. 401(k)s from my corporate life in my earlier days working for people. I have approximately $3 million. I have approximately $1. 4 million in properties. There's no mortgages, and they generate about $8,500 a month gross before any taxes and that thing. I own three vehicles that are less than a year old. They're all paid for. And my Dave Ramsey emergency cash fund in the proverbial cookie has about $30,000 in cash in it.

Well, plus 580 in checking. Yes, sir. And 3. 9 in CDs. Okay, wow. Way to go, man. How can I help again?

And I'm still working. Should I move that cash, that roughly $580,000 in cash? Should I bring that into... I don't really need it. I'm not trying to sound highfaluten. Should I move that into CV? Should I put that in some other investment? I have two adult children that are self-sufficient And obviously, please God, when my time comes, all of that will be done. I do have a will, but I do not have a revocable living trust will.

You don't need one. I do not have that much of a percentage of my networth in cash, in CDs in cash. Instead of doing that, you don't need that 3. 9. You're not even using the income off of that 3. 9 or that 580 for that matter. Those could easily be put into something very simple, very low-key into some mutual funds and make you about three times more money. If you got $4 million and it earns you 3%, what is that? $120,000 a year? Did I do that right? Yes, sir. Okay. If it doesn't earn you 3%, but it earns you 10%, that'd be like $360,000 a year. That money sitting in CDs cost you a quarter million dollars last year. Good Lord. It should have been invested well. It's something to think about. Here's the thing. If you got it in good mutual funds and the stock market doesn't earn what it always earns. Last year, it was ridiculous. It was crazy. We made 26% on our money last year, but that's not real. This year, we're down 5% year to date. But we have a little war going on and a couple of other things.

But the overall market, let me look. I just pulled it up a minute ago. No, it's down 2% year to date. You would have lost a little bit since January 1 after having made ridiculous money last year. But the average is you're going to make way more than you would on a CD. That's why I don't park that money in cash unless I'm using it for something like retained earnings here at the company. We've got a substantial cash position with that. But in terms of my personal investment portfolio, very small percentage is actually sitting in cash. If I'm parking money, like I've got some money right now, as an example, parked in an S&P 500 fund, so just a mutual fund, and I'm going to be buying some real estate with it later. But instead of leaving it in a CD and waiting to buy real estate, I'm leaving it in a CD and waiting to buy real estate. I'm leaving it in there earning three times more on average than I would have made on a CD while I'm waiting. Now, right now, that money has lost 2% since the first year, but I'm really not worried about it.

It's 2% doesn't matter one way or the other because I'm probably not going to touch it next few months. And by then, I'm sure the market will be back up. Anyway, all that to say, you've done an incredible job. I'm so proud of you. If you leave it exactly the way it is, you're not doing anything wrong. But could you turn the knob a couple of clicks and make another $200, $300, $1,000 a year on this money? Probably. By sitting down with a smart Vesta Pro and learning about some places to park that instead of CDs and instead of in Cash equivalence.

Patrick is going to lose a little sleep tonight off of that revelation that you gave him. But he's done so well. This is, by the way-He hasn't done anything wrong. This is the baby steps, Millionaire right here, living on less than he made. Ten Millionaire. I know. Unbelievable. Just incredible. Right at 10 million.

Way to go, man. I'm just so proud of it. It's great. But this is like, you did a 99 or 98% great job, and all we're doing is just clicking it on that 2% so on. Nobody's criticizing you, Patrick. You got it, man. If you leave it exactly the way it is, you are a stud. I'm so proud of you. Very, very well done. Folks, here's the thing you want to think about, and this is the concept we're teaching right here. It's called opportunity cost on your money. When you take a block of money and you put it in one thing, by definition, it cannot be in the other thing. It loses the opportunity to be in the other thing. If you take $100,000 and you buy a car, you not only bought a car, but you lost the opportunity to invest that $100,000. That's what opportunity cost me. Let's say you had that $100,000 invested last year, you would have made $25,000 on it last year. Instead, you bought a car for $100,000 that is now worth $40,000. You traded $100,000 for $40,000 instead of 100 for 100 and a quarter. That's the opportunity cost.

Now, it's okay to buy a car, and they all go down in value. I've got cars, and mine all go down in value. There's no exception to that. But anytime you're looking at something going, You were talking a while ago about making a purchase decision. When you're buying the Ferrari of bikes, what else could I have done with that money? What's the other option? What opportunity did I miss out on? If you got a million dollars invested or sitting in a coffee can in your backyard in cash, and it didn't make a dime, or it could have been in a gross stock mutual fund last year and would have made $250,000, you lost the opportunity by doing the coffee can to do the $250,000.

Yeah, it's a great illustration.

I actually did have a guy call in one time that had money buried in a coffee can. How much was it? It was not that much. It was like a half a million. But I'm like, Dude, do you not understand that cash in a steel coffee can, the old metal coffee can, it's going to rust, and then bugs are going to get in there. The cash is going to actually get destroyed. So when your relatives dig it up, it's going to be like this little green powder. That's all that's going to be left. And that's what you traded your half million for because you're a paranoid freak. And so, oh, my God, literally buried it in the backyard. No kidding. I actually know a few people that their relatives will be out there with the old metal detector looking through the backyard when the old man kicks it because we know he's crazy and he buried the money back there. But you miss the opportunity. That's what you need to think about. It's always a good thing to say, Gosh, if I buy a $100,000 Mercedes, and 20 years later, what would that $100,000 be worth?

And 20 years later, what's that Mercedes worth? That's the opportunity you miss by going wondering. You miss the opportunity to drive the Mercedes, by the way, if you put it all in investments and have no life. You got to get a good car, too. That's okay. But just think about... Try not to think about the idea of the purchase or the investment as a only this. It's if I do this, what am I else could I not do? What opportunity am I missing? I guess in modern lingo, we might call it FOMO. Yeah, that's exactly right. The FOMO of finance is opportunity cost. That's what we're talking about with him. If he had that 3. 9 million invested instead of sitting in CDs, he missed the opportunity to make another quarter million dollars.

Hey, let's play a quick game of Would You Rather. Would You Rather keep overpaying your phone company every month or save 600 bucks a year with no contract and no price hikes ever? Easy answer. That's why I love Boost Mobile. With their low rates, you can unlock lock up to 600 bucks in savings over the so-called big carriers. You can bring your phone, keep your number, and pay just 25 bucks a month forever on the unlimited plan because you've got better things to do with your money.

So go to boostmobil.

Com/ramsey to make the switch today. 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, 2026. See website for full details.

Welcome back to the Ramsey Show in the Fairwinds Credit Union Studio. Ken Coleman, Ramsey personality, number one best-selling author, is my co-host today. The number is 888-825-5225. Angie's in Chicago. Hi, Angie. How are you? I'm fine. How are you? Better than I deserve. What's up?

Well, I just wanted to get some advice. My My husband and I are retired. He's 65 and I'm 70. Our home is paid for, and so are both of our vehicles, but we have a lot of credit card debt, and it's choking us so that it's hard to make groceries even. So I'm just looking for some direction.

How much credit card debt do you have?

We both work part-time. It's probably 35, $40,000.

Okay. And you both work part-time and you're collecting Social Security?

Yes. And he gets a small disability pension from the military, and I have a small pension from- So when I pile all of that together, what's your monthly income? About $3,000.

Both of you're on Social Security, and both of you are working, and both of you have a pension, and you only got $3,000 coming in?

Right. It's a very small pension.

Very small Social Security.

Yeah. He gets 16,25, and I get $1,250.

Total?

Right.

Does that include your jobs?

The jobs, I get it $400 a month, and he gets paid by the job. He does trailer repair. So it varies.

Okay. And what are your cars worth?

My car is probably worth $5,000. He's got a truck. It's probably worth Just $15,000.

What's your home worth?

About $300,000. Okay.

How is your health and his health?

Good. We're both so far. It's good.

Good.

I have about $13,000 in an IRA.

Good for you. Okay. All right. Well, two things come to mind immediately. One is you can't do this backward and expect it to work. You don't pay the credit cards first and then figure out how to eat. You eat first. Keep the lights on first. Keep the homeowners insurance paid first. Keep gas in the car first. Then with what's left, you pay what you can on the credit cards. Credit cards are not first in line, they're last in line after you survive. It's not like after we pay our credit cards, we have the money for groceries. No, it's after we buy groceries, we have the money for credit cards. You see the difference? Yeah. That's the first thing we adjust. The second thing we adjust is, you're only 65 and 70. Get a job.

Well, we both are working.

Part-time, making nothing. Right. $400? I mean, you're starving to death. You're too broke to retire.

Well, that's true.

Yeah. I mean, what if you guys went to work for a year, like full-time jobs, and made 30 or 40,000 bucks each, and you paid off all these credit cards?

Right. Yeah. I thought of that.

That wasn't what you... You didn't think you was going to hear that today, did you?

It's not what we wanted. It's just a lot physically honest, even though we're in good health.

I'm not telling you to wait tables, but I'm talking to an intelligent lady that carry on a conversation. There's a lot of customer service stuff you can do. It's not physically draining.

Here's the question I have. I'm listening to your stats, Angie, and I don't think I've ever been on a call like this where I've heard somebody who has a paid-for house, paid-for cars, and you have $35,000 to $40,000 of credit card debt. So what is the cause of that?

It's just accumulated over time. There's just always been a lot of more expense than we had income, and it just accumulated. Then when we couldn't buy groceries and we put it on a card or when I needed $1,500 worth of car repairs and didn't have $1,500 on me, I put it on a credit card, things like that.

Well, we're going to have to spend enough more years in the workforce to reverse the trend, to get your income up and a little bit of a nest egg built to where it doesn't leak again down into this, but cut up the credit cards and let's go crazy and get them paid off. I'm not asking you to sell your house, but before I keep this credit card debt around five years, I would sell the house. Instead, if it's me, I'm going to roll up my sleeves to go do something and just get rid of this mess. It's just lingering. You guys are walking around acting like you're retired and you're broke. The good news is you still got your health, and In today's world, 65 years old is not that old. I am, and I work. At least they claim I work.

I think we could call it work.

I show up pretty regularly. Yeah, you can do that. You can go do something. I don't know what your past career was, but go pick up a job doing that as a consultant or anything, and him, too. Again, you don't have to go swing a hammer. No. You don't have to do something, carry a waitress tray of 800 pounds or something. I'm not asking to do that. But I think there's something you guys could do to generate a few thousand dollars a month and a few thousand dollars a month to make this credit card debt go away. Because it needs to go away forever. This is not a sustainable situation. So first thing is reprioritize and take care of you, what we call the four walls of your house, food, shelter, clothing, transportation, and utilities. Before you pay any bills. You eat first, then you pay bills. You don't pay bills and then hope you can eat. Then secondly, we got to get your income up to be able to address this overall issue, or we got to start selling stuff to cover it. I don't think that's viable here. I don't think your house is crazy.

If you're living in a million-dollar house or something, I'd probably have you move down in house and clean up this mess. But your house is not out of control. Your cars are not out of control. Thank God, they're paid for. But your problem is you just do not have enough sustainable income to live on. That's what caused the credit card leakage to your part. That's right.

There was a margin issue. Here's why Baby Steps 2 and three are so important. You've got to get that debt paid off, but then you've got to have that 3-6 months of emergency fund so that you aren't tempted to solve the problem with a credit card. There just was no margin for you to be able to have a rainy day fund. It's really It's important at the advanced age here to have a really well-funded- Hey. I know. Hey, look, man, I'm not far behind. All right? I'm trying to catch you. But it's really true, though, because if you have limited income at that age and a car goes out for $1,500 and you don't have an emergency fund- You fix it.

That's what they do. That's the things that we would tell you to do, kiddo. Hang on, we're going to set you up with a free offering on every dollar, the app. That helps you put your budget together, and you and your husband sit down and look at the numbers. The numbers are going to tell you, eat first, pay bills last. That's a short-term fix. Your long-term fix is create income to clear off these credit cards and shop them all up. Light a candle tonight and have a plastic surgery party.

Finally, mortgage rates have dropped, and you know what that means? People who've been sitting on the sidelines are about to jump back in to the housing market. If you've been waiting to buy, this could be your window, but you got to be prepared and do it the Ramsey way. You need to contact Churchill Mortgage. Their Home Buyer Edge program gives you peace of mind in a wild market. You can cap your rate for 90 days. So if rates go up, you're protected. If rates go down, Churchill will drop yours automatically. And get this, Churchill will even back your offer with a $10,000 seller guarantee. So if your loan falls through due to financing, the seller still gets paid. That's how confident Churchill is. Plus, when you shop as a Churchill certified home buyer, it's stronger than pre-approval. It makes you look like a cash buyer, which makes your offer rise to the top. So don't let this moment pass you by. Get ready now. Go to churchillmortgage. Com to get started today. That's churchillmortgage. Com.

This is a paid advertisement.

Own Buyer Edge and Seller Guarantee are available qualifying borrowers and select loan types only and not available in all states or locations. Nmls ID 1591. Nmls consumeraccess. Org, Equal Housing Lender.

Bethany is in Ashland, Kentucky. Hi, Bethany. How are you?

I am so thankful you took my call. I'm doing well, Dave. How are you guys?

Better than I deserve. What's up?

My husband and I are ready to sell everything and change our entire lives. We need your help.

Okay.

We started out with $750,000 in debt when we first started our journey and we met you. We got that down to $450,000. Well, actually $439,900 now.

Way to go. That's a bunch.

It's crazy. We have this unique situation where we bought a house on 125 acres in Kentucky. It's a beautiful farmland, but we've always known we would want to build our house one day. The house that's on it is not our ideal home, and I know your principal is if you don't love it, maybe you can consider selling it. That's where we are. The The house we bought was for $190,000. It was a steal.

The house and acreage?

Yes, sir.

That includes the $125,000. The house and the $125 acres was $190,000? Yes, sir. I got you. I'm catching up. Okay. What is the 439,000 in debt?

$250,000 is what is left of my husband's medical school student loans.

So your husband's a doc?

He is, and he's a great doc.

Great. What's he make?

Currently, he makes $325 annually, $16,000 a month is his base salary.

Okay. You have 250 in medical, and I assume you have this mortgage or something owed on the land. Is that right?

It is 162,000 outstanding.

Is that the two debts? That's it, isn't it? That's the whole thing, isn't it?

No, sir. It's 19. 5 for a car. It's actually a 10-day payoff. I just called today, and the 10-day payoff is 19. 5 on our Honda Odyssey. We have five boys, ages six and under.

And so is that your only three debts?

8,400 less on a sawmill for a total of 4,39, 900.

And all of this was purchased before you decided to decide to get out of debt?

I'd like to say that, but we got married in 2016, and that's when we moved from Ohio to Kentucky and bought a house because the land was a steal, and we had not yet been convinced of the- From the time you started getting out of debt, did you buy a Honda Odyssey and a sawmill? No, not since we've got this. Okay. Not since we've got this.

Okay, so you're not falling off the wagon. You're just plowing through past mistakes.

Yes, sir. We want to get out of this stuff, and we're ready to sell everything.

You make $325,000. You've already paid off $300,000. I don't know why. I mean, and your mortgage is a portion of this. Mortgage is baby step six. I think you can be debt free with that great income. You should not have any personal overhead to amount anything. You pay off the sawmill in the odisey pretty quick, and then let's tear into the medical debt, and you should be done in a couple more years, shouldn't you?

Well, sir, I love that. My husband and I have been discussing this, and we think that we could get 450 easy out of our house if we sold it today.

Okay, then where are you going to live?

And sold everything. Because we can sell the house for 450 if we put the offer for 500. We can sell the sawmill for 30K. We can sell the dozer for 30K. We can sell our car for 195 and buy a beater. And then we're like, Where are we going to live with five boys? Do we rent? Do we buy something for about 100 to 150 with whatever equity, whatever what, after we sell everything, you know what I mean? All the assets. I'm talking full liquidation. Go Dave Ramsey. We are done.

Well, full Dave Ramsey is not necessarily full liquidation, okay? We're going to liquidate with wisdom and to accomplish the goals. That's what I'm calling you for. Then to accomplish the goal you want to accomplish. But for sure, I'm selling a bull Those are in a sawmill, no question about that, in a heartbeat. If you want to move, if you don't like the property and you want to move, well, sure, you could move down, and that's not as a temporary measure. But then you're sitting there with $325,000 income and zero debt. The first thing you're going to do is start stacking cash to buy another piece of real estate, right?

Right. Yeah.

That's okay. But just think through where you're going to live and what you're going to do. Let's not do this impulsively. I want to have a strategy. Okay, Okay, my desired future is to be debt-free. What must be true for me to get there? Well, I could sell everything. Where would I live in the meantime? Okay, what would I drive in the meantime? You got to solve for that. If you solve for that and you're okay with the answer to those questions, then do it. But it's not the only way out. You have a fabulously large income, and you live in an area with zero cost of living.

Yeah, I've got a question. If we could just eliminate terminate the debt, some generous person comes along and pays off the debt, would you want to stay on that property and build a really nice house where you are now?

No, sir. That's the downfall about the property. There's no other house seat to build on.

Okay, then sell it.

See, that, to me, is the ultimate on should you sell the house.

Yeah, it's not because of debt. It's because you're not going to stay there anyway.

Yeah, so do it. So sell it.

I love it.

Listen, I rented for two years.

You love it, but you're not going to stay there.

Right. No, I think she loves the strategy.

We want to build a house for sure. My husband and I have a dream of building a business that's multi-generational impact for our boys to grow up into, and it could be a family thing that they want to.

Okay, so that land and this house don't figure It doesn't fit into the equation, true or false.

That's true. Then sell it. Then sell it. But that's different. It doesn't fit into the equation for your future. It's different than I'm selling everything, including every stinking thing I love, and I'm going to cry when I sell it just to get out of debt. That's a different answer. And so you're not doing that. You're selling stuff you're going to sell anyway because you're not staying there. If you win at the end of the game, you're not on that property. And so sell it now and advance the piece around the board. That's what you're saying. And yes, definitely sell the sawmill. I don't know whether you sell a stupid car or not. Again, you've got a $325,000 income. You ought to pay that car off in a couple of months and keep it since you got a tribe of youngens to run around in a hodisey with. I don't care. You make enough money for that to not be my problem. But yeah, you get rid of the mortgage and the sawmill and the medical debt hanging around your neck. You rent something for two years and you buy a big old piece of ground somewhere for cash.

Then you start talking about how we can build a house on that ground. You work your way back out of this. It's a five-year plan. Three of those years are probably going to be somewhat uncomfortable. We'll call them the adventure years.

But with all those boys, five boys under that age group, they're going to tear it up anyway. Just go rent, let them have some land, get a ranch with plenty of rooms. I love this idea of now you've got this doctor who's got a huge upside, zero debt. You're actually really fortunate to be in this situation, to have this land.

Considering the mess you made, yeah. I'm with you. Okay. Took me a minute to catch up. I just want to make sure you're not only doing this. I do want people to get out of debt, and I do want you to sacrifice to get out of debt. I do want you to do this, but I want you to do it with a plan and with a strategy, not just Dave Ramsey said. That's not a strategy. That's right. A strategy is I want to be debt free for my family so that I I get control of my largest wealth building tool, which is my income, so that I can invest and change my family tree and create a generational business. That's exactly right. You work your through your so that's. That's why you're doing it. I just want to get there as fast as I can. She's saying, Well, do it. Sell it. It's over. Pull the plug on it. By the way, go ahead and put the sawmill and the bulldozer under the stupid column. You need to put a check there.

One of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of rip offs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family? The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance all about. They shop the term life companies to find you the best options, and they've been around for over 95 years, so you know they'll be there when you need them. Zander is the real deal, and that's why they've handled all my personal insurance for over 25 years. I trust them, and you can, too. Visit zander. Com. For instant online quotes or for a more personal touch, give them a call at 800-356-4282.

Are you sick and tired of working so hard and have nothing to show for it? I feel like a rat in a wheel, Dave. Run, run, run, run, run, than that. You don't have to live that way. Our Every Dollar Budget app will help you find the extra money in the margin to start to clean up the mess and then to build wealth and increase your generosity. Yeah, it gives you a personalized plan to beat death and become wealthy. In 15 minutes, you're going to find thousands of dollars in hidden margin. We know how to do it. We're going to show you how. Then you're going to have us in your pocket walking around, like me telling you what to do, the other Ramsey personalities telling you what to do the whole time. Start every dollar for free in the App Store or for Google Play. Amber is in Kansas City. Hi, Amber. How are you?

I'm good. How are you?

Better than I deserve. What's up?

I apologize. I'm highly emotional. I am in the process of getting divorced, and I am terrified I'm going to lose my home. I own this home with my daughter prior to getting married. I had $100,000 inheritance put down as a down payment. So my mortgage was $118,000 total. After that, and I met my husband, and he got the mortgage in his name only, but my name's on the deed, too. And I found out that accidentally, he had ran up a bunch of debt.

On the house?

Against the house and in loans and credit cards. The situation became very dangerous. So I got a no contact order, and the judge ordered that he pay for X amount of dollars for so long, and he purposely did not pay, which got everything behind.

So what did the church say then?

The only we used that as a means to get him to sign a divorce, like settlement.

So you let him off so he would go away?

No, I didn't have a choice.

Yeah, you had a choice. You just chose to let him off so that he went away. I don't blame you, but that's what you chose. Okay, so how much is owed on the house now?

214,000.

Right. And what do you make a year, hon?

Last year, I made about 47,000 gross.

Okay.

All right. I own my own business out of the home, and I have somebody that's willing to help cosign.

No. And we get- You've already got a mess. You don't need to make it worse. What's the house worth?

315,000.

Great. Okay. What other debts did you take on to get rid of said deadbeat?

Just what he put in on his house.

So 214,000?

Yeah, about 100,000 because the mortgage was 118 before he came around.

Yeah, but you got a 214,000-dollar debt now on a $300,000 house, you make $47,000 a year. All right. How's your business doing? Is it growing?

Yes.

How long has he been gone?

He had to move out in July.

Okay. You're safe now, right?

No.

Why aren't you safe now?

Because he still comes on the property. He's highly intelligent. He shut down my cameras.

Shut down your what? Did you call the police?

They won't do anything.

You have a no-contact order. Of course, they'll do something.

You can't prove. When somebody shuts down your cameras, you can't prove it.

What is your business?

I run a dog daycare and boarding business, and I make a lot of money compared to doing social work, which is what I did before. And this is what I meant to do because I've asked God Okay, kiddo.

Listen, stop a second, okay? You can't breathe because you're terrified. So we have to solve for making sure that the abuser goes away or goes to jail. Otherwise, you have to go away and reset your life somewhere else so that you can breathe again. This is not sustainable. No one can live in this stress.

I I know, but it's a process because he was drugging me and raping me. I have stuff turned over to the police.

But that was all before July. He's been gone since July and the only thing since then is cut down cameras, right?

Yes. Okay.

Here's the thing.

I can't move because if I move it, the same things will happen. Running from it isn't the answer.

Why would the same thing happen?

Because he messes with the technology. The other day, he started with, Apparently, you can get an app for a soundbar.

Okay, just a second. Wait a minute. Now we're starting to sound… Okay. You need to contact You need to contact your attorney, you need to contact the police, and you need to contact your pastor, and you need to get some people in your corner. It sounds to me like just in the few moments I've had with you that I'm talking to a terrified lady who is dealing with extreme trauma. That's what it sounds like to me. It sounds like my little sister has been through hell, and now you're looking over your shoulder at every shadow. I really don't blame you for that because you've been through extreme stuff, kiddo. But it sounds like you're probably going to have to go start a fresh life somewhere else. The good news is you know how to care for animals, and you can restart a business somewhere else while you work another regular job to get that started and take your 100,000 out this house, and move cities, and go somewhere else, and let's just start fresh. You need a lot of distance between you and all of these events and this moron. Do you agree with that?

Yes, but I have to- And he's not all powerful. He cannot find you when you just simply leave. He's not all powerful. He's just a moron.

He works in IT. He's highly intelligent.

You've told me that three times. I don't think he's highly intelligent. I think he's a bully and an abuser and a twerp. He's trash. I don't care if he's highly intelligent. He's not that intelligent. He's got you believing he's omnipotent, but he's not omnipotent. I'm not impressed. You need to leave and go get you a life, kiddo, somewhere. You've got to do something different. This is not working. Staying there saying he's highly intelligent and he keeps coming on your property and nobody can do anything about it is not a solution to your problem. That exasperates the problem. We have to throw some dynamite in this situation as something has to change. I don't give a crap if he thinks he's highly intelligent. I doubt it, actually. I think he's got you believe in a bunch stuff that's simply not true. He has completely got you what we call Buffaloed. But I don't blame you. You've been traumatized by the jerk. But I'm telling you, if I'm you... Oh, wait a minute. Where we go. Okay. Hey, Amber, do you not have family in the area?

No, they live a couple hours away.

Good. Go be with family this week. Pack your suitcase, get your kids, Just call your clients and tell them you can't keep dogs this week and leave. You need some distance between you and this. Does that sound like something smart to you? You're going to have to take some action steps up. Because your dad and your brothers need to know this so they can beat the hell out of this guy. Somebody needs to stand up to this guy, okay? And it's not you. Somebody needs to get between you and this moron, and you got to get some distance between yourself. You need to check yourself into a domestic violence shelter, or you need to go be with your family tonight, right now. Get off the phone, go pack your suitcase, and go do that right now. You got to put somebody in between you in this mess to where you can start to get your perspective back. But you have some options. They're not pretty, but you have some options. The Ramsey Show Question of the Day is sponsored by YreFi. If your private student loans are in default, it's a mess. But YreFi can to help you clean it up.

Yrefi helps borrowers refinance with low fixed rate payments and a clear plan forward, so you can clean things up and get back to making real progress. Go to yrefi. Com/ramsey. That's the letter Y-R-E-F-Y. Com/ramsey. Might not be in all states.

Today's question comes from Declan or Declan. Let me say that right. I think it's Declan in California. I'm 20 years old, run my own business, and I'm on track to earn $250,000 this year. The income Isn't consistent yet, but it's growing. I have $100,000 in savings, and my only debt is 20,000 on my current car, which is worth about 25,000. I'd like to buy a used C8 Corvette for 50,000. I could pay cash, but I was thinking about financing part of it to keep liquidity in my business and build credit. My business relies heavily on personal brand and social media. Image and perception matter in a car like this could help with credibility and marketing. I don't want to make a decision that looks successful but is dumb financially. Is buying this car a reasonable move if I can afford it? We have a lot in that question. Well, first of all, we want you to follow the baby steps. You've got 100,000 in savings, and you're only debt is 20,000 on the current car. When you pay that off or sell it. At that point, then you're looking at the used Corvette for 50,000.

The question, Dave, I bring you in here. I know our formula on assets like a car, which is not actually an asset, depreciates. If it's in his business and he can pay cash and it's for his business, is that a viable option there? Again, assuming he's got the cash.

No, I wouldn't buy it for that. But if you make $250,000 a year, can you drive a $50,000 paid for car? If you pay cash for it, yeah, you can do that. It's that simple. But all this other crap about I'm going to look successful or whatever. Here's a good way to look successful. B Be successful.

Yeah.

It feels like some. Quit worrying about how you look. Instagram is not the real world. Even if you are making your 250K on YouTube or Instagram as an influencer at 20 years old. That scares me. But if your income is steady at 250 and above, you really think you're going to be making that, can you afford to drive a $50,000 car? The answer is yes, if you pay cash for it. Right. I would sell my current car and I would buy the Corvette for cash, but I wouldn't do anything about... I wouldn't run all this credibility and marketing and all that BS through your head. Just go, I want a Corvette. I've got the money, and it's not a big percentage of my Overall world. Our rule of thumb is if you can pay cash for it, it's not brand new. All of the things that you own with wheels and motors are less than half your annual income because they all go down in value, then it's okay to purchase that. And don't buy a new one unless you have a net worth in excess of a million dollars. Those are our three contact rules on vehicles of any kind: cars, boats, pop-up campers, whatever else.

I was in a city, I'll just say, in Ohio last week, doing We were out there traveling, and we went by. I guess that city they make, or maybe the manufacturer or something of a... Rvs is there. I've never seen so many thousands, thousands of RVs parked all across the side of this hillside. It just blew my mind. I thought, That is a lot of rust. That is a lot. Because every one of those stinking things is probably 100 grand. Oh, yeah. And more. There's thousands of them. Where are those things going? It just blew my mind. I felt like a country boy going to town. I'm like, What are they doing with those things? But it's crazy.

It's funny they're making money on the financing of all of those. That's where the money is at.

I guess because, man, they're sitting out there in a field, rotting down, looked like to me. Oh, my gosh, really. I'm sure they're being shipped to China or something. I don't Wow. Wow. Crazy. Yeah. So, Declan, in business, when you do anything for appearances, you can write that down under the dumb column. We don't do stuff for... We do things that give return on investment in business, and trying to appear to be something is never a return on investment. Just be the thing, and then people will figure out that you is the thing.

Yeah. If you're basing all year for success on the car that you put in social media, TikToks or Instagrams. You don't have to spend cash on that. I'd go rent a car like that. That's where you start rationalizing big purchases.

Yeah, a number of these guys are music artists, and they rent a jet for the day to do their video, and it never leaves the ground. That's exactly right. Like they had a jet. Such an illusion.

It's hilarious. So play the game and that's a fraction of the cost.

Yeah. Julie is in Houston. Hey, Julie, what's up?

Hey, we're big fans. Thanks so much for taking my call today.

Thank you. How can we help?

Well, okay. I have a question about a specific long-term care option. It's an indexed universal life insurance policy.

No, it sucks.

Okay. Here's the back story is, so my husband and I are nearly 60. We're pretty healthy. I'm still working husband, semi-retired.

What's your next day? He's in college.

We have about 2 million in mutual funds. We have no debt.

Whoever's trying to sell this to you, stay away from them.

Okay. We're getting a little money from an inheritance, about $100,000. So that's been our question is, for two $50,000 premiums, we could buy this thing, which, of course, if we do get sick, there's six years of a really good payout, or we could just put it in with the rest of our- Put it in with the rest of your investments.

If I had $3 million, let me tell you, I'm 65, okay? Networth of hundreds of millions. I have zero long-term care insurance. I want to buy long-term care insurance for people. I want people that have a million dollar or less networth to buy long-term care insurance because a nursing home stay is 100, 100 and a a year right now, and the average time is 2. 9 years. You got a $300,000 exposure is what you got on average. You can self-insure that with $2 million. Yeah.

Okay.

Just to self-insure it. I would not. I would just... If he has to go to the nursing home, and by the way, he will before you on average, 75% of the ladies outlive their husbands. Yeah, well- That's the average.

He'll be a beast in a nursing home, so hopefully he will.

Well, or maybe it's long enough that the 2 million is 10 million and you just hire somebody to live at the house and take care of him.

Yeah, okay. That's what we were wondering. It sounded good, but- It isn't good.

It's a piece of crap. It's whole life life insurance that you're prepaying up front, and then supposedly the cash value will cover your long-term care insurance. You'd been much better off to just invest the money and let the interest off the money by your own long-term care insurance. But even better yet, in your situation, you guys can self-insure through it.

Yeah, okay.

But long-term care insurance is excellent if you're over 60 and your networth is under a million, million and a half.

Oh, interesting.

Okay. But never, never, never, never, never use life insurance as an investment. 100% of the time, those policies suck. This one sucks particularly bad. Index Universal Life is one of the worst products on the market today, and it's only sold by those goobers that sell it. Everyone else in the financial world looks at it and laughs at these morons like they are the payday lender of the middle class. Again, if this is your financial planner pitching this, you need a new financial planner. I don't know who's pitching this to you. Or if Charlie over at the church, then you just need to distance Charlie to no business with Charlie at the church. If this is what the crap he peddles is. Hope I wasn't unclear.

Just be careful of Charlie. He's not all smiles and handshakes, folks. By the way, my favorite line of that is, he would be a real bear at the nursing home. She knows I got to get a nurse for my husband. He would terrorize them.

A large nurse ratchet.

Welcome back to the Ramsey Show in the Fairwinds Credit Union studios. I'm Dave Ramsey, your host, Ken Coleman. Ramsey personality and number one best-selling author is my co-host today. Naomi is with us in Los Angeles. Hi, Naomi. How are you?

I'm good, man. How are you doing, sir?

Better than I deserve. What's up?

Well, first of all, I want to thank you for taking my call. I have $112,000 in debt. I have four credit cards, and I also have a car loan and a personal loan, some student loans. The student loans right now are deferred. I currently have… Totally, I have actually three I have two jobs that make me about 90K a year. Then I have another job, which I'm a waitress, and I make about 12,000 a year, and that's the cash paid.

Okay, so that's like 102,000 is your income, and you have $12,000 in debt. Agreed?

Yes.

Okay. How old are you?

I'm 40.

Okay. Are you single?

I'm a single mother, yes, of two.

How old are your babies?

One of them is 18, and the other one is seven.

Okay. All right. Eighteen-year-old adding some income to this equation?

He's starting to.

When?

He has a part-time job, and he's seeking a full-term job. Yeah.

Time to be a man, my son.

Yes.

Yeah. Because his Princess Warrior single mom mother has helped him get all the way to 18, and now he needs to not be a burden, but instead be a blessing. Okay, that's one thing. Okay, cool. All right. It sounds to me like that you've been raising two kids on your own in the Los Angeles market, and this is a very tough road, and you work your tail end off and you feel stuck.

That's correct. By Friday, I'm going to have $9,000 in cash, which I'm trying to pay a credit card off, and I I have my emergency fund of a thousand dollars in Euro money.

Euro? Why is it in euros?

I was stationed in Europe, and so I brought back some money that I had myself.

So you were in the military?

Yes, I am.

Oh, you are now? Yes. Okay. Thank you for your service. I would convert the euros to dollars immediately. We're not playing foreign currency. We're just trying to have a thousand dollars. Okay? That's correct. Then I'm going to list all of your debts, smallest to largest, and I take it your credit cards are probably your smallest debts, correct? That is correct. Yeah. List them smallest to largest. We're going to pay minimum payments on everything. Cut up the credit cards and get in attack mode. How much do you owe on the car?

On the car, I owe 30,000.

That's a lot. Okay. The student loans, are they on hardship deferral?

They're on defer.

Good.

They're 30,000 on that.

That's where they need to be right now. Okay. That's 60 of your 112. Is those two things. Then you got a personal loan. What is that? Just at the bank or credit union or to an individual?

It was through a credit union.

Okay. All right. How much is it?

That one I believe it's 24,000.

Okay. All right. Here's what I would do if I were in your shoes. It sounds like you've got this on the run a little bit. At number one, 18-year-old starts bringing some money to the table and he at least carries his own weight, no pun intended. Number two, we're going to list our debts, smallest to largest, and attack them in that order after we've converted the €1,000 into €1,000. That's probably going to give you a little extra to throw on the other things. We're going to list the debt smallest to largest, attack them in that order. We're going to get on an every dollar budget. Every dollar needs to behave. What you have tried to do and have successfully, somewhat successfully done, is survive. While you were surviving, you just thought, I can work hard enough and be real careful and everything will work out, and it didn't. You work hard. You work like a crazy person. You're a hero. You took care of your kids. You're amazing. I'm so proud of you. Are you getting child support on the seven-year-old?

No. Why? He makes about almost, I think, about $150,000 to $1,000, and he pays zero child support.

Why?

I don't know.

Well, I think you I should drop by the Jag office and say, Gentlemen, I need some help. I think Jag will help him pay. They're really good at it, by the way.

Okay.

Like tomorrow.

Yes. Yeah.

Give him all of his information. Say seven years, he's never paid a diamond child support. That's what Jag's for. They're for you. They're going to help you out. They'll take care of this. It'll be a It's amazing how efficient they are at it because in the military, they do it all the time. So you guys take care of you, and you should be taken care of. All right. So that'll help, too. I want you on that every dollar budget because I want every dollar to behave. I want you to pretend like I hired you and I'm paying you $100,000 a year, and your job is to get these bills paid. You would be very detailed if I told you that, right?

That is correct. Yeah.

So I'm going to give you every dollar and get you signed up for it because it's going to guide you on what to do, and it's going to help you lay out every dollar as an assignment for the whole month. I just want to commend you, Ken. To fight what she has fought for all these years as a single mom working her way through this, it gets lonely and you get tired. Yeah.

Well, you got three jobs, and that doesn't even count the waitressing job. So you get three and a half. So you're not going to be stopped if you've got a plan. But two things I want to circle back to, you need to take this deadbeat to the law and make his life so miserable, he starts coughing up money. Don't get weary on that. Take that warrior mindset to That's what I'm looking at. The second thing is, if you have any equity in that car, do you have any equity at all in the car or are you upside down?

I should have equity. How much? It's a Toyota. I don't know.

All right, here's what I want you to do. Okay, look it up. Because that $9,000, if you've got some equity, pay that car off. I mean, sell the car, rather. Excuse me. Sell the car, take what's left over that $9,000 and get yourself a functional car. Because that car payment of yours is pretty big, I'm guessing. What's your monthly car payment?

$740.

Ma'am, that's $85. That's $9,000 raise, essentially. Sell the car and use that cash to get a functional car.

Can we It's a paying down the credit cards. I agree with Ken.

I just want to get you some more breathing room quickly.

Let's pretend that the $30,000 debt and the car is worth 35. If you can sell it, get that five in your hand plus this nine and buy you a $15,000 paid for car. That's a nice car. Now you got no car payments. Zoom, zoom. We just kick this thing into high gear. Because that car is 750 bucks. Jeez. Wow. Yeah, That's a good catch, Ken.

I walked right by that. I missed it. When people hear my story of paying off debt, they say things like, Dang, that must have been so hard. I could never do that.

And I tell them, Sure you can. It's a short-term sacrifice for a long-term gain. But do you know what's really hard? Working your whole life and never having anything to show for it. Never having the long-term gain. Just feeling broke and stressed and maxed all the time. And sadly, that's the hard that most people choose.

Listen, you're capable of transforming your situation and living a life of freedom, but you need the right tools to do it, like our EveryDollar Budget app.

In minutes, it'll build you a step-by-step plan that's tailored to your money situation. Every day, it finds ways you can free up extra money in your budget so you can get rid of your debt and actually build wealth.

So make the choice today.

Short term sacrifice, long term gain. Choose the tool to help you get it done fast. Download the Every Dollar app and start for free today. One of the best things you can do for your finance is to have a really good tax pro in your corner that you can trust. They'll help advise you on the best moves to make your situation for your small business or whatever. Yeah, save some big money on taxes. If you've had big life changes in the past year, yeah, you need to think about that as well. A divorce, a death, a new big job, something big happened, good or negative, you need a tax pro in your corner, and especially you're running something complicated or a small business. Ramseysolutions. Com/taxpro to find CPAs and enrolled agents that have been vetted by the Ramsey team and are Ramsey trusted. David is in Mobile, Alabama. Hi, David. How are you? Hey, David and Kim. Thanks so much for taking my call. Sure. What's Well, first of all, 15 years ago, I was in a bad place, lots of debt, more than I care to admit. But thanks to you and your team over the past 15 years, my wife and I are now in Baby Step 7.

I've been on the debt-free stage.

I've been on the cruise, been to your place, and we're Baby Steps Millionaires.

Why are you going? I'm proud of you. Thank you guys so much for all you guys have done. Good for you, man. Along the way, we've raised our kids to be Ramsey kids, I guess. And so my oldest son, he's been married now for about a year. He and his now wife have been through the high school curriculum.

They went through Financial Peace University during their marriage counseling.

No debt, cash flow college vehicles, everything, no debt. And they've just gotten approved for their first mortgage to buy a home, very reasonable house. And they've got $30,000 to put down. And the mortgage lender threw us a curveball the other day, and she told them if they would take $5,000 and put it in an account and use that to secure a $5,000 note and pay it for six months, that would give them some credit and potentially lower their rate by up to one %. And I guess I know the answer. You're being overcharged. Okay. If you go to Churchill Mortgage and they do manual underwriting, there will not be a difference in the rate. Okay, well, we're actually waiting on Churchill's proposal to come back now. They can do manual underwriting, no credit required. You're saying the kid has absolutely no credit at all? Zero credit. Perfect. Yeah. Okay. Has he had a job?

He does, yeah. They both have a job for a year now.

Both have good jobs.

She's a school teacher. He's an engineer. They've been paying rent during that time? They have, yeah. And they have $30,000 to put down? Yes. There's no rate difference whatsoever. Great. So the mortgage lender that you have is incorrect for whatever reason. I'm going to be gentle. Okay. All right. Well, that's good. Like I said, she has applied at Churchill, and she's waiting on that information to come back, but that threw me a curve ball when I heard that. Yeah. Hang on. I'll have Christian pick up, and we'll make sure our team holds their hand and connects them into Churchill because I don't want them to do this other deal. I them to get a good manual underwriting mortgage loan. We do it all the time and have for decades with no credit at all. There is no interest rate difference. This lady, at a minimum, is not Just does not know how to do it, and so you need to get away from her. It's that simple. Ken, George Campbell and Whitney bought their first house that way. John Deloney bought his house that way. Lots of other people, thousands and thousands and thousands of others.

But a lot of mortgage companies don't know how to do it. I don't know what hook or crook this lady is trying to pull here, but that's scary right there.

They don't want to do it either.

They don't want to screw with it. But Now, what manual underwriting is before... See, I got my real estate license in 1978. Before there was a FICO score, the banks actually used to do an analysis of the individual in detail to figure out if they could pay the freaking bill. It's called underwriting. They would send out... When I would write a contract in 1978, 1982, they would mail They would mail out a VOD, a verification of deposit to the local bank, and the bank would verify that the $30,000 is in the bank. They would mail out a VOE, Snale Mail, a verification of employment to their employer, and he would send back, This is how much they make, is how long they've working here. They would mail out to any creditor's landlord and get a record on how they actually paid their rent. That's called underwriting a loan. You're doing an analysis of the person's life to see if the indications are that they can pay the bill. You have their income, you have their track record with their rent, you have their down payment verified, you do all of those things. That's how loans used to be written.

Then along comes FICO. Fico is like a monkey can make loan. It's like they look at the number and go, You got the loan, or, You don't have the loan. The mortgage business has been dumbed down to where people like this lady is telling this guy to go get a stinking secured loan with her company so she can create a credit score so she can go, Got the loan. It's exactly what has happened here. It's just dumb. But this is the ridiculous thing of FICO. Fico has got way too much power. It's not that accurate to start with. But Churchill Mortgage and a few other mortgage companies actually know how to do manual underwriting, which doesn't matter if you don't have a FICO score. This kid does not have a FICO score because you can't have a FICO score if you don't borrow money. It's the only way you can get a FICO score. A FICO score measures how much money you've borrowed, how you paid it back, what type of money you borrowed, and how quickly, and all that stuff. It's all It's an I love debt score. If you don't love debt and you haven't borrowed any money and you don't have any open accounts for a year, your FICO score will just disappear.

I haven't had one for 30 something years. Apparently, I'm not here. I'm not real. I'm a hologram because I don't have a FICO score. What? Yeah, what? Look at me. I make cash for stuff. It's crazy. You go to a mortgage company like a Churchill Mortgage that can do manual underwriting if you have no credit, zero credit. Now, if you got bad credit, that's a different problem. Like you haven't paid your bills on time for two months or two years, you got a different issue then. But zero credit is a wonderful place to be, and you get the exact same rate as someone that's stupid enough to have an 800 FICO score, which means you paid the bank sometime or another 100 grand in interest because you've been paying and paying and paying and paying and paying Playing their game, playing I love debt score game. And that's what people get into. So this kid is second generation and doesn't have a FICO score. That's so cool.

It's cool. Well, I mean, again, dad starts paying attention to the Ramsey ways. We were raised up in that.

Fifteen years later, he's a millionaire. Some of that sticks, right?

He's a millionaire. He's a millionaire. So the son gets it. But see, this is the whole thing. You mentioned the word game. It is a game. These banks, they understand what they're doing. They need you paying interest. That's where they make their money. So it's a game. So we're going to create this system that everybody needs to play ball by.

Diana is in San Francisco. Hi, Diana. How are you?

I'm doing great. Thank you for taking my call. I think you guys are terrific.

Thank you. How can we help today?

I'm 79 years old. I have no debt except for my house, I I have $125,000 at less than 3 %. I have $96,000. I've heard you speak of stock market and mutual funds, and I understand the four ways you put in. I'm wanting to know, actually, if I can do something like that with what little I have. But my initial question is gold, silver, and you have coin, you have solid, you have paper. How are you feeling about gold, silver?

I buy my investments, Diana, based on track record. The track record on gold over the last 50 years is it's earned about 3% a year. Average. Meanwhile, it takes you on a roller coaster ride that makes you want to throw up. But the average is out about 3%, so I don't own any gold except some cufflinks. That's the only gold I've got, or silver. I think I'd probably sit right where you are. If you want to move a little bit of that into some mutual funds, you could, but be very calm and very careful and learn a lot about it before you do it.

Hey, guys. I've got big news. The Ramsey Show is going on tour, and this is your chance to be more than just a listener.

You get to be part of the show. So hear questions asked live and experience the momentum that only comes from being in the room.

We'll be in Charlotte, Denver, Phoenix, and Anaheim with a limited number of seats in each city.

So last fall, we completely sold out in 72 hours. So do not wait.

Get your tickets at ramsey solutions. Com/events or by clicking the link in the show notes.

Good friend of ours just dropped by to talk about his book, Restored. Chris Brown is a pastor, author, speaker, radio personality, church leadership expert. He planted a church here in Columbia, Tennessee, just south of here, just a few years back. I spoke over there yesterday. Thousands of people coming out. It's an incredible young church exploding. It's like, Ken, it's like going to a youth conference. A lot of young people. It's A lot of fun. The praise and worship is a blast. It's a lot of fun. Anything but boring. Chris and Holly have been friends of ours for 20 years. Chris was on our speaking team here for a while, so me and Ken and Chris have shared the stage many, many times and shared airplane seats, for that matter. A lot of hours flying around all over the place and working together. But the book is Restored: Transforming the Sting of your Past into Purpose for Today. Chris, Ken and I, of course, know your story. We've heard you tell the story many times from stage and heard you walk through what God has done in your life. But was there a specific event in your life that made you want to tell this story now?

Actually, it was a story from being at Ramsey It was a story of my first time I ever spoke at Catalyst, that conference, back in 2015. It was probably my first big event. We had a time where we got in a boardroom and we dissected the talk in front of the bored, and I was super stressed out about it. And we dissected it, and I was talking a little bit about my past, but I was not peeling off the layers, and I was not vulnerable. And someone spoke up in the room. I won't mention anybody, but his initials are D bar. Yes, right.

Sounds familiar.

He spoke up and he said, Hey, Chris, people are going to see you on that stage, and they're going to perceive something like a silver spoon guy who's always had it right, and you need to be more vulnerable. And I was scared to pick that scab of a traumatic childhood and some really bad things that have happened in my life. And it was that moment I realized that I need to be more vulnerable and more honest about my past and to steward it. Of course, we are all big, huge fans of stewardship and love to raise the banner of stewardship all over the place. But one thing that we need to steward, all of us, and those of you listening in, is we need to steward our past and steward what's happened in our past so that we can have purpose today with that pain.

You know our audience well, Chris. You know some of the emotions. You know the stories all too well. Inevitably, there are a lot of people right now watching and listening to you, and they're in some deep pain. Maybe some relationship stuff that is causing them to make financial decisions that are causing more pain, whatever it is. To the person who is in the middle of it feels almost like it's unbearable. What would you say to them?

Yeah. Actually, a lot of the book, I kept this audience in mind, because being on this show, call after call of mistakes, of shame, of regret, of guilt, of money mistakes, relational mistakes. I would say the goal is that we would take our pain and it would turn into somebody else's hope. I want someone to read this story and read the things that have happened in my life. It's the same thing with you, with your bankruptcy. We hear what happened when you came out of the bankruptcy, and it gives people hope of, You know what? If he can get out of that hole, then I can get out of the hole that I'm in. And so I think Proverbs 13: 12 says, Hope deferred makes the heart sick, but a longing fulfilled is a tree of life. And so the goal is to, just like the mission statement here, is to inject hope into people's life. And if you're listening in today and you've made some mistakes, I love this line when you're speaking, you said, Who here has ever made a mistake in your life? And then everyone goes, raise their hand, You know what that makes you?

And you say, Thirteen. We've all made mistakes with money. And so that would be my prayer, is that everybody listening in would say, Hey, yeah, I have made a mistake. I can own it. But I want to steward it and maximize it for future. I want to inject hope into someone else's life.

Sometimes the mistake you made, and sometimes it was a mistake other people made. I mean, the trauma in your childhood is not your fault. That's just situation around parents that were screwed up and family situation that was dysfunctional and all that thing. It leaves you without food, or it leaves you without shelter, or it leaves you without comfort. You're a victim of that, but it's still something It's still a part of your story, and it still has value.

Yeah. Well, you meant you use the word victim. Of course, you guys have all heard it before. We can have a victim's mentality or a victor's mentality. The sting is going to be there in your past regardless. So it's what are you going to do with it? Are you going to suck the nutrients out of it and make sure that you use it and maximize it and leverage it. For me, I'm a believer. I'm a faith-filled person. So for me, it's leveraging it for the kingdom, leveraging it for eternal impact. But all of us who have made mistakes, those of you who have made mistakes with money, take what you've learned, the principles you've learned, and then help your neighbor, help somebody in your class, help somebody in the workplace. And that's what the whole book's about, is to leverage whatever's happened in your past. You can't change it, whether it's happened to you or you did it to yourself, and maximize that for the Kingdom or maximize optimize that for a maximum impact here on this Earth?

The book is restored, Transforming the Sting of your Past into Purpose for Today. Chris Brown is our guest, local pastor, friend of ours, and a member of our team in the past, and we've gotten to work together all these years. So one of the things that people ask all the time since we're people of faith, and they ask you the same thing as a pastor, I'm sure, is, okay, if I'm in the middle of this stink, maybe I caused some of it, maybe some of it was brought on me by other people. Either way, I'm in the stink. Where's God in the stink?

Yeah. The Bible says, and I believe it's in Matthew 7, I believe it just says, There will be troubles in this world. But Jesus says, But I have come. Take heart, I have overcome the world. And so we do have to know that there is evil, there is darkness in this world, so things are going to happen to you. And we have a responsibility to be the light in the darkness. If you've heard it before, a thermostat or a thermometer, we are to bring the light, and we are to stay close to Jesus. Whatever you're struggling with today, and you just need to know that Jesus is right there with you. That's been huge for me, to know that my hope is not just in wishful thinking, but my hope is rooted in the promises of Christ, a hopeful expectation of a better tomorrow based on the promises and the character of Jesus. It's just a big difference between that and hopeful thinking.

I've run into so many people that verified the same experience I had 30 something years ago at the darkest moments. I see absolutely no way out, and I have this strange peace anyway. It's like this does not even make sense that I have less anxiety, and I have no idea how I'm going to get out of this and what it's going to look like. But here I sit at the bottom with a baby and a marriage hanging on by a thread, bankrupt, and I have no idea what all this is going to happen, of course. But I remember distinctly sitting there having this peace that passes understanding. Yes. It's strange. I think that's God just showing up and going, You're going to be okay. Even if your brain doesn't tell you that, it just soaks through the rest of your body, and the rest of your body goes, For some reason, I think I'm going to be okay.

Chris, I know you write about this in the book, and your story is very powerful.

I'm very excited about our audience checking this out. But one of the things that we humans have to face in the process of healing is dealing with shame. Shame is such a powerful emotion, even years later. How did you unlear shame, if I could word it that way, or what would your response be to someone who's just wallowing in some shame?

Yeah, I think shame is just... I think it's a gap between your expectations and what actually was a reality. So I think for all of us, we just need to understand that we are going to make mistakes. So when you make one, you're not shocked. It's not if you're going to make a mistake, it's when and how big is it going to be because we are fallen humans. Romans 3: 23 says that, that all of us have fallen short of the glory of God. And So for me, that fell off me when I'm like, Don't be surprised when you make a mistake. Also, the fact that we learn from our mistakes, and that really helps us in the future, and it builds our character. So that fell off of me really, really fast that way. And then anytime that you're helping other people, it helps reduce the shame because now you've leveraged something out of it. The Bible says in Proverbs 11: 25, Those who refresh others themselves are refreshed. And so for me, I've used even my bankruptcy that happened in the recession in 2007, 2008. I've used that to take biblical principles that I've learned from Dave and learned from Ramsey Solutions, and I've tried to just maximize everything I learned as a clot and clot out of bankruptcy to be successful with money again.

And try to restore that shame. The refreshment now just trumps the shame. Yeah, it's good.

Pastor Chris Brown, we're proud of you. Thank you. We love you. Glad you're glad you're stopped by again today. You're welcome anytime. The Book is Restored, Transforming the Sting of your Past into Purpose for Today. Be sure you check it out. Hey, guys. Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same help anytime with Ask Ramsey. Ask your money question and get Answers, built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions. Com and try Ask Ramsey today. That's ramseysolutions. Com. Our scripture of the day, Proverbs 16: 8, Better is a little with righteousness than great revenues with injustice. Albert Einstein said, Try not to be a man of success, but rather try to become a man of value. There you go. Felicia is in Chicago. Hi, Felicia. How are you?

I am so well, Dave. It is a beautiful day, and I'm on this side of the grass, so I am praising the Lord.

I love it. How can we help?

All righty So I am a 23-year-old blue-collar homeowner from the Midwest. I'm in a pretty, I'll say, uniquely blessed financial situation that I can't really find many resources on just how to navigate. So from age 18 to now, really, I guess, I made a lot of really dumb financial decisions. I wrapped up about $15,000 dollars in credit card debt, bought a brand new car in 2021, got underwater in payments, and I even took out a debt consolidation loan on those credit cards.

You did all the stuff.

I did all the stuff, yeah. They say you make up for the mistakes you make in your early 20s and your later 20s. I'm doing it now. But I kept using the cards on top of paying my mortgage. At worst, I was over, I want to say, just over $25,000 in consumer debt. In November 2025, my mom passed away from cancer and left my sisters and me, the beneficiaries, series of her life insurance policy, and I used that money to completely wipe out all of my debt. So now, at 23- Including your house? No, I still have my mortgage. I'm sorry. Okay.

So you're debt Do you accept the mortgage and you make what a year? Yes.

I make just about a little over $80,000 a year.

Good for you. Okay. Your question's what? Thank you.

I guess my question is that, just how should someone who just escaped debt manage money responsibly when they've never had a savings before? I just saved my first $2,000, and I I feel like a little kid and your mom just gave you a $10 bill. It's like and all that.

First and foremost, I would use the story that is your life as my motivation. In other words, if I misbehave with money again, that is bringing shame to the legacy that my mom left me. Sure. I don't want to disappoint her if I'm you.

Right. I never thought of it like that. That is a fantastic way of looking at that.

When you look at it and say, I've got to do this because mom got me cleaned up this time, there's not going to be another one of those if I'd screw up again. I need to honor that memory, cherish that gift. And the way to say thank you for it is to be a grown up going forward. Now, then once we say that, we say, Okay, how do we do anything well? Well, it starts with a plan. I mean, if you want to get in the car and leave Chicago and you say, I want to go to Florida, you don't just start driving, you actually load a map on your GPS, and it starts to give you a step-by-step first. When you leave Chicago, you're going to go to Rockford or whatever, and then you're going to go to, and you're going to go to, and then you're going to go to. If you keep doing, and then you're going to go to, you'll look up and you're in Florida. If Florida is wealth, what are the steps? What's the map look like to wealth from where you are? We're going to lay out a game plan.

That's a budget. We're going to give you every dollar and give you a trial run on it where you take this app and you download it and you take your income. I want you to tell every dollar of your income what to do as if it was your job to manage money for you, incorporated.

Okay.

It's your job now to be an adult, not a child, and manage money responsibly for you, incorporated. You Incorporated. And you have to report to your boss. You have to look, and turns out your boss happens to be in your mirror. Okay? So your job is to manage money for you because you make too stinking much money, and you got this wonderful one-time get-out-of-jail free card, and you can't screw this up. So I've got to make this money behave. As you said, I've got to be responsible. And I love your attitude. I think you're awesome. And I think you're going to be able to do it. I talk to some people sometimes, and I can't tell if they're going to do it or not. I think you're actually going to do it.

I appreciate that, dude.

Thank you so much.

And listen, let's get Gazelle Intense in the baby steps. You know them well, so you are on your way to fulfilling Baby Step 3, right? What's the target? Is it three months expenses? Is it six months? What are you going to do?

Write down a number.

Write down a number and just-Chunking money out of your income to get there. That's right. Then once you get done with that, now it's 15% of that income, and we're going to start investing for your future. At 23, you're going to be a multimillionaire.

If you save 15% of your income with an $80,000 income, you're going to have $10 to $20 million when you get to $65.

Oh, that is so hopeful. Oh, my goodness, dude.

I'm looking forward to it. That's the gift your mother gave you if you're a grown up. If you're a child, you'll be broke and living on social insecurity. So choose I will.

I sure will. Oh, that is fantastic.

You got it, kiddo. I'm proud of you. You can do this. Lay out a written game plan and then use the money that you find in the budget to walk right up those baby steps as Ken indicated. That is perfect for you. We're going to do it all in mom's memory, all to honor the free get-out-of-jail free card that she gave me. I get a clean slate. I get grace. I get the chance to start I get a do-over. I get a do-over. Remember playing football in the backyard? You get a do-over. I love do-overs. That's what this is. She got a do-over, man. She gets another shot. That's so cool. Ben is in Austin, Texas. Hey, Ben, what's up?

Doing good. How are you, gentlemen?

Better than we deserve. What's up?

All right. Things are going well financially. Two years ago, my wife moved out. We're going to separation. Counts of blocks below your feet. To help me out at one point, a friend gave me a loan for $26,000. Good Lord. The backup, this has been the most expensive thing in my life. That was originally backed up against my 401k, and he said, Look, you know what? You come March, go ahead, and if we need to, we'll do that. I'm typically net cash positive unless a bunch of legal stuff comes up, and then all the positive that I was goes out the window. So here's my question. Cash Cash out a 401k and pay that off, or I've been finding some personal loans through the union that's upgraded, so 5, something of those other things that will end up costing me an extra $5,000 over the term to hold. So if I cash out my 401(k), I'm getting 20 grand. What do you make? A hundred and ten.

Are you past the divorce now?

No, sir. We're still on the thick of it.

Okay, so how are you going to cover the future legal fees?

That's part of the issue. I am currently- So this guy loans you $26,000, and he wants it back before the drama is over. When he lent it, it was- The deal The deal was he would have it back by March.

Yes, sir. What made you think you were going to have $26,000 by March?

Honestly, sir, at the beginning of it, well, a couple of things. One, I thought I was going to be net positive enough to pay off most of it.

Net positive on what?

Well, so, sir, typically I'm making net positive $2,000 a month.

Oh, you're talking about your income. You were going to make enough income to pay him back by March. When did he make the loan? Yes, sir.

September of last year.

Well, honey, you're not going to make 26,000 dollars from September to March at $2,000 a month.

Absolutely. So initially, the plan was I wasn't going to be able to pay off the full 26 by then, but I was going to pay off a lot of it. To be honest, sir, I need to pay the lawyer, and that was where I was at.

How are you going to pay the next lawyer?

Not sure.

This is a mess, dude. All right, so I would borrow money to keep from cashing out your 401k because it's less interest to pay your friend off. You guys got to slow down and do a little math here before you do these deals, son. That puts us hour of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.