Transcript of Building Wealth Starts With Setting Aggressive Goals

Live from the headquarters of Ramsey Solutions. It's the Ramsey show. We help people build wealth, do work that they love, and create actual amazing relationships. Jade Washaw, Ramsey Personality, is my co host today, number 1 best selling author, and we're here to answer your questions about your life and your money. Open phones at 888-825-5225.

Andrew starts off this hour in Miami. Hi, Andrew. Welcome to the Ramsey Show. What's up?

Not too much. Thank you so much for having me, mister me, mister Ramsey.

Sure.

So I had, 2 questions regarding whole life insurance. I know your general principle, but I've never actually heard you discuss these 2 characteristics of whole life insurance or these 2 scenarios. So I was kinda curious of your opinion, regarding this subject, if you don't mind.

Sure. I'm an expert on my opinion.

So the first question so the first question is like this, today in America, if a person is a single person is earning $150,000 a year or less, they can put up to $7,000 into a Roth IRA, that grows tax free. But at $150,000 after tax is about $130,000 a single person pretty much anywhere in America still has plenty of money. So let's say you're putting money into investment brokerage account. My question was on whole life insurance, it also grows tax free. I know it doesn't have the same rate of return, but if a person wanted to increase their long term tax free savings, would that still be would that be something you would consider as a viable approach that they've already maxed out their Roth IRA or if they have a a company that a Roth 401 k, they still can only max out at 7,000.

Yeah. How how long ago did you take your job selling whole life?

I have actually I've only sold a couple of policies, but, but, no, I don't, I'm not actually involved in the industry specifically. If you don't How

did you sell policies if you're not involved in the industry?

Oh, I I am a licensed agent, but I haven't done it in a few years.

Because you pretty much spouted their line perfectly. This is the whole life sales line. That's how I knew you were selling it. You you nailed it. You like, you were just trained, like, 3 weeks ago.

That's what that's what it sounded like. Not picking on you, but you this is you you are representative of the industry. Okay. So let me help you with this. Let me help you with this.

Whole life whole life does not grow tax free unless you lose money. And your basis for tax purposes in a whole life policy is the total of your premiums. So if you pay in $100,000 over a bazillion years into your whole life policy and your cash value is $90,000 you have lost $10,000 and so of course there's no taxation. Or you can borrow your own money and pay them an interest rate to borrow your own money. And by the way, 100% of the time, borrowed money is not taxable.

So whole life in and of itself does not grow tax free. That is a falsehood.

Mhmm.

If it actually made money and you took the money out, it would be taxable. But they never do because they suck so bad. The rate of return is horrendous, and the fees are so high. And so, no, I would never consider that as an option. Instead, I would listen to if you put your money in a fruit jar as your side investment after you maxed out a Roth, you're gonna end up with more money than you will screwing around with the whole life policy because they lose money.

I'm impressed that you sniffed that out as quickly as you did.

Too much time in 30 years being hated on by whole life people. So

That was pretty impressive. I'm not gonna lie. I I I'm

impressed. Well, I mean, the the it's a scripted thing that that Clearly. It's a it's a tax tax free growth, which is a complete lie, y'all. It's not tax free growth. If there is growth and you take it out, it's taxed.

Mhmm. Period. But there never is because the rate of return is so horrible and the fees are so high. So so here's the way Whole Life works for those of you listening. And he's talking about it as an investment only, but let's talk about it as an insurance product, which is what it is purported to be.

And that's you only have to have a life insurance license, not a securities license to sell the crap. So the which is easy to pass. If you can if you can roll out of bed, you can probably pass your life insurance exam. It's not that hard. Securities exam, on the other hand, very hard.

Now whole life is 20 times more expensive than the same amount of term on the same person. So a 30 year old buying a $100,000 policy, if say, for instance, they did that for $5, whole life would be a $100. K? So where does the extra $95 go above the cost of insurance? Because term is only insurance.

That's right.

It goes into an investment called cash value, which is what he was bringing up. Okay? The investment called cash value, the 1st 3 years on a whole life policy, your investment growth is 0. 100% of your $95 a month in our example, the extra 19 times you're paying for this, you get 0 in your investment. So you open a bank account and you put in $95 a month for 3 years, and the balance is 0.

No 1 would do that, by the way, if they understood that.

They do it all the time, but no 1 would do it if they understood that. You're right. Which is our goal here is to make everyone understand it. Then once it does start making money, the average whole life policy in America today averages 1.2%. With an inflation rate of 4.7.

Losing money.

And so after you get past those 2 things, here's the worst part of the whole thing. So this little couple buys a $100,000 whole life insurance policy. They pay into it for 20 years. They have $20,000 in there finally after they got 1.2% and has nothing for the 1st 3 years, and then he dies. You know what they pay?

They pay the life insurance.

Just the premium?

The face amount. What happened to the money I've been paying $95 extra to build up in my savings account? Insurance company keeps it. You do not get the face value plus the cash value.

Well, let me ask this because

I Let me finish

real quick because

so you have a savings account that the first 3 years you put money in, they keep all of it. After that, you make 1% on it. And when you die, they keep your money. Who would open this savings account? Nobody.

But people do every day. It's the biggest let me tell you. It's the payday lender of the middle class. It's crap. Sorry, Andrew, but you asked.

So when do they a guy like Andrew, if somebody said, I'm interested. Let's say they had built up a certain amount of cash value. When would a guy like Andrew say, here's the right time to get at that money so you'd so, you know, it's all a risk game, but so that you can get it before you die.

Well, you can't get it before you die. The only way you can get it is cash the policy in. Because if you borrow the money out

Then you're paying it.

Before you die, they repay the debt to yourself to make sure they keep the whole cash value before they pay out the face value. So if you borrowed $20,000 and a $100,000 policy, and you died with the loan out, you get $80 instead of $100. They pay back the loan, so they make sure they get to keep it.

Wow. Wow. Wow. Wow. Wow.

Wow.

So the only way to get to keep the money is to cash out the policy.

And then at that point, what was why get it to begin?

And you have lost money on it, so it's not taxable.

Terrible. Terrible. Terrible.

No. You're better off putting money in fruit jar, darling. At least when you die, it's there. Assuming the family knows where the fruit jar is buried. But, be careful with that 1.

That did happen to 1 of my relatives. We got we got we got cousins out there with metal detectors in the backyard trying to figure this 1 out, but don't do that don't do that 1 either. This is the Ramsey Show.

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Jade Washall, Ramsey Personality is my cohost today. Thank you for joining us. Open phones at triple 8-825-5225. Hayden is in Nashville. Hi, Hayden.

Welcome to the Ramsey Show.

Hey. Thanks so much for taking my call. Appreciate it. Appreciate everything you do.

Thank you.

So, basically, I'm calling about my mom. I'm very concerned for her. She has a, bad track record for being financially smart. And recently, she just got into a relationship. It's only been about 6 months, and he has a lot of money.

So she thinks that she wants to quit her job, and live off of his money and then sell her house, and then that's her retirement. So I don't I just don't really know, like, how to give her advice, and she has asked me for advice.

She she did ask. Interesting.

She she did ask

for advice.

Because the 1 thing that changes the whole discussion is the marriage date. When are they getting married?

That's exactly my point as well. Like, I am telling her you need to get married before you decide to quit your job or decide to move in with him. Like

But is there a deal

If you quit your job and move in with somebody and sell your house that's rich, that's called a sugar daddy. We have a name for that.

The guy. He's a really he's

a really nice guy. Sugar daddy.

But still

He might be a nice 1, but that's what he is. No. You don't do that, mom. How did you get to be mom and not know that?

Trust me. I don't know.

So what have what have you said to her what have you said to her so far about it? What have you told her so far?

He wants to take care of her, and she you know, he supports her in any decision she wants to do. If she doesn't wanna work anymore, That's okay. She'll she'll pay for, you know, all the bills, and she wants to sell her car because she also has a she has 20,000 on her car right now.

Uh-huh.

8,000 in credit cards. You know, she's not good with her money.

And I'm saying what have you told her about this? Have you told her anything yet?

I told her I told her that, 1, she needs to get married if she wants to, you know, rely on his income. Mhmm.

Did you tell her why?

Most oh, yeah. For sure. And it's hard it's hard for her to listen to me because, like, I'm not married. So

Okay. Another strand. Well, it's you're her kid. That's strand 1. And

And that's another thing too.

Yes. And then you've not been in the type of relationship that she's been in. At least that's the way she's gonna view it, which is true. So you're fighting again. Like, you're fighting a current 100%.

Let me tell you what. If you ask your mom's dad, he's probably gone. Right?

Yeah.

Yeah. But if we were to ask

him have a good relationship.

They didn't know. That's probably not a good example. But if we were to ask her uncle, he would've said, no. I'll bunk him on the head. No.

Right.

Or, I

mean, even if you flip the script and put yourself in that situation. Although, I I would love to think that she would tell you to do the the opposite, but she might tell you

to do

the same thing that she's doing. So

She she would smell that 1 out.

I

I don't you know, your question is how to convince her of what all 3 of us know that this is a bad idea. Okay? Yeah. So I guess the thing is this. Okay.

Here's the thing. Anytime, mom, you're making a great huge decision, and there's a series of great huge decisions you're making here, you have to play out the decision. Is it a happy, happy decision? Now the way that works is this. You're happy if this works, and you're still happy if this doesn't work.

If it all works and you just play house and the sugar daddy takes care of you, it worked, you're happy. That's your plan. But what happens if he dumps you in the street

Mhmm.

For a 10 year younger version, trades you in on a new model, mom, because he can do that pretty easily here by waving the exact same care that he waved in front of you, and be sugar daddy to somebody else. So when he puts you in the street with no house, no car, and no job, where are you gonna be?

Mhmm.

Exactly. You don't make big decisions like this, mom, when 1 of the possible outcomes is devastation.

Mhmm.

Bad risk management. Bad lack of wisdom. Lack of wisdom.

I'm also just not in a position financially to help her. She's asked me in the past for money.

That doesn't that doesn't enter into how stupid this is.

Unless, you're

gonna have to give her money or not doesn't mean this is smart.

And you're gonna have to accept the fact that she's gonna do you could lay out the best argument in the world. Like, perfectly just eloquent, everything makes sense, and she could still go and make this choice, and it's gonna be bad for her. And you're gonna have to just learn how to live with that and accept the fact that she's a grown woman, and she's making a bad mistake and there's nothing in many ways, there's nothing you can do about it. And that's I think that that's the hardest part of being in a relationship with anyone that you really care about is they get to choose.

Is there anyone in her life that's wise that she trusts?

Her brother.

Have him call her and scream at her. I'm serious.

She real he he really likes the guy, so I haven't seen him, like, acting really

for him. I asked if he was wise.

Oh. If he's wise,

he doesn't think this is a good idea. I'm not saying the guy's a horrible guy. I'm saying this is a horrible deal for your mom without put a ring on it, buddy.

Well, the guy probably thinks if this is a a I'm gonna say in air quotes, a good guy, this guy probably thinks he's offering your mom the world. So maybe somebody needs to get in his ear and make him see, hey, we we like you. We we we think that you're probably trying to take care of our mom, but can you do this the right way? Yeah. Because this way, the way that you're doing it now makes us nervous.

Because if for some reason it doesn't work out, she's on her butt. Right? So maybe that's the way to go at this is if there's somebody that has the right relationship to talk to him. If he is really the good guy that you guys say he is, that should give him a light bulb moment to go, oh, I get it. Yeah.

Right.

Put a ring on

your mind.

Just needs a reality check too.

The problem is she's not looked at the downside. Anytime you're making a big decision, you have to look at the downside. What's the possible negative outcome from this? And it'll keep you from doing some stupid butt stuff if you don't only consider that, you know, sunshine, rainbows, and skittles. You know, it doesn't always turn out sunshine, rainbows, and skittles.

Especially when the deal is set up poorly from the start, you're kinda asking for it.

Yeah. That's true.

You're asking to have your butt kicked. Life's gonna come along and go, you were stupid. Here's your butt kicking. Ready? Here you go.

And we all get to pay some stupid tax. We've all done some stupid butt stuff, and she's signing up for 1 here. This is a trip that's gonna be harsh. Please don't do this, lady. Please don't do this.

Put a ring on it or don't do it. It's pretty simple. Because I gotta tell you, it changes the chemistry.

Well, I was gonna say there's no, like, balance of power in this relationship. She sells everything she has. There's no way in the world she could live in a house probably that he that he lives in on her you know what I'm saying? She has no ability to keep up life.

We need to bring back some of the vernacular from bygone eras. Let me hear it. A kept woman. Oh. You ever heard that 1?

Yes. That's very, I don't wanna say the word old, but

That that's that's ancient. Yeah. But that's, a kept woman. She's being kept Yeah. For use.

Yes. Oh. Yeah. I don't like it. Give you a little chill?

Give me a little chill. I don't like it. My my dad's stuff my grandpa stuff gets angry right then, so I just can't put a ring on it. Michael is in Charlotte. Hey, Michael.

What's up?

Hey. I'm good. How are you doing?

Better than I deserve. How can I help?

I had a question. My wife and I are in the process of buying a house. We are preapproved, and our loan officer, told us she doesn't advise 20% down payment. We're in North Carolina. She says the appreciation rate in North Carolina.

I don't advise you using this loan officer. She's stupid.

Yeah. I figured you would say something along those lines. But I'm just I don't I have a hard time understanding how that works out, how it would be.

Her thing is is the borrowed money has no risk, so borrow all you can.

Okay.

My thing is I've met people who are up to their eyeballs in a mortgage and can't get out. They're stuck because of some idiot loan officer like this. By the way, she gets paid on what? What's her percentage on the loan amount. Conflict of interest in this advice.

Hello.

Hey. You need

to go to our money if you don't put down so much.

He needs to go to our real estate hub and find some folks who are gonna actually help him.

Go to ramseysolutions.com/realestate. There it is. That's easy. A whole bunch of stuff there that'll help you, Michael. Yeah.

But she's getting paid on that. You do need a loan officer. This woman's not smart. This is the Ramsey Show. I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable.

Yeah. And what's so hard is I feel like 1 of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly, and they don't have life insurance. When you have to think through how am I gonna pay my bills

How am I gonna pay next week?

Yeah. In the middle of all that grief. Like, it's just it is. It's terrible. And so life insurance is the 1 thing, especially as a mom with 3 little kids that I'm, like, so big on for people to get because it's inexpensive.

Zander is the place that Winston and I actually get all of our life insurance.

And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not gonna be here. You gotta say it out loud, and you gotta say, I'm gonna say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost are stinking pizza.

To get a free quote, call 800 356-4282. That's 800-356-4282, or go to zander.com. Jade Washoe, Ramsey Personality is my cohost today. Thank you for joining us. Today's Ramsey Show question of the day is sponsored by WhyRefi?

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Alrighty then. Today's question comes from Ashley in Illinois. She says, my husband and I will be debt free in about 3 years. House and everything. Congratulations.

The house we currently live in is the house that he lived in with his ex wife. I would like to get a place that is new to us, that we can create our life together. Is it stupid to get a mortgage when we are debt free? That's a very good question. The simple answer is no.

It's not bad. It's not the worst thing. You could definitely do worse. And I the reason that you're wanting to do this, I understand it. I just wonder if you go ahead and you are debt free within this 3 year time frame.

I wonder if what the market will be like, and if there's something that you can just simply say, we're moving from 1 house to another, you may not have to go into debt. Or if it's a small amount, I'm not mad at it. I just think that you're really gonna love the feeling of being free, and so when that time comes, you're gonna step very lightly. You're probably gonna be very lenient on the amount that you would be willing to borrow, and I think that that's a good thing. Yeah.

It's not to answer your question, it's not stupid, it's not bad or evil. We just don't like debt. So if you have the ability to do something in cash, I think that that's a great thing. But I definitely wouldn't go go crazy on this. Dave, what do you think?

Here's what's interesting. That it is assumed that I have to move up in house to move out of her house.

Yeah. They might be able to get something

Move down in the house.

It's a novel concept.

So now we're getting to the root of why we really wanna move.

That's good. Dave, that is listen. You're not wrong.

I saw 1 with a Jacuzzi and a skylight. Mine doesn't have that.

They might be willing to consider that because she hasn't felt that freedom of no mortgage yet. Well, I'm just saying that

These are not necessarily the same thing. You could move down in house or you could move to the exact same price of house and be out of the ex's house, which I completely would definitely wanna do it.

I worry. But you're right. There's

probably part that's

like Yuck.

That would gross me out.

I want out of her house, and I also want into another nice nicer, better house.

Well, I mean, moving up in house is 1 question. Moving out of the ex's house is another question.

But even moving up

in house

There are 2 different questions.

There there are 2 different questions. But even if she just simply said it like that, I I personally still would be like, listen, if you told me you're taking on at that point, it's like, hey, Jane, we're we're moving up in house. It's gonna cause us to take on a $100,000 mortgage. Then my question would be like, well, how quickly could you save to get that done? You have no house payment.

Yeah.

So when you put it like that in

case go rent for 2 years.

Yeah. Exactly. When you put it that way, it's like, well, it's a small mortgage. Then if it's a small mortgage, you could probably pay cash for it just as quickly. So

I can tell you, once I got out, I heard a horse's couldn't have dragged me back in.

You ain't going back. I know that's true.

Includes a dissatisfied wife. Ain't nothing nothing nothing gonna drag me back in.

You ain't going back. I

know that. Going back. So we might I I get you wanna move? Let's just go. We'll go rent.

I get you wanna move? We're gonna move down. We're gonna get this little condo

Oh, yeah.

Where the x hadn't been. I I get the move, but you're this lady is asking the same question we get when we have someone say, hey. I have a $10,000 paid for car. It just got totaled. I I don't really wanna go in debt to buy a new car.

Well, you don't have to. You get the $10,000 check from the insurance company, and you buy a $10,000 car. But instead, you're using the car totaling as an excuse to move up to a $20,000 car, and somehow that equates to payments, and you're gonna act like the car being totaled caused this. No. You moved up in car.

You just went up

in the car. Yeah. The

exit didn't cause this. It's not that's the they didn't cause the move up. They didn't cause the move out.

That's the other question of this. I'm like, listen. If your if your plan was to go into debt for a mortgage anyway, then why are you waiting 3 years till you pay this thing off? What's the what's the point?

That's a good idea too. That that's a really good that's I like that the best thing we've said. Doug is in Saint Louis. Hey, Doug. What's up?

Hi. How's it going? Thanks for taking my call.

Sure, man. How can we help?

Hey. So I've got some good news, and I've paid off a lot of debt. And, but I wanna talk to you about the emotional side. The guilt is still there.

Oh.

So yeah. So we had some major medical bills and some home repairs, found ourselves over a $100,000 in debt. We decided we didn't wanna pay the minimums anymore, so we paid off a third, settled a third, and then when my 99 year old grandma passed away, we got a little money. So that with the exception of our mortgage, my wife's 2 loans, and a very small car payment, which we're gonna pay off early. We are out of debt.

K. What is what is it you feel guilty about?

The just still, if we even if we budget for it, a big purchase, it still feels uncomfortable. Or if you're, you know, going to the kids' activities and you run out of time and you work swing by McDonald's and you're, like, you feel the occasional purchases, it still feels guilty.

Are you doing a budget?

Yes. Yes.

Does your budget account for those occasional purchases?

Yes. We still have a lot

of money. Your other goals with the occasional purchases?

Yes. Yes. It just still feels weird.

Do you feel bad that

you didn't pay is it because you didn't use your earned money per se to pay off all the debt?

It's more a mixture of I guess, I'm afraid to go back and then, you know, I've I've really drastically increased my income.

Mhmm.

And, so I feel a little like, you know, people who are having a harder time.

Yeah.

And then the other part of the guilt is, so I have a 3 year old and a 5 year old. And, because of the medical stuff and because it just it was just easier with my wife being home. We when she's home, we meal plan better. Mhmm. We we save more money because we don't eat out.

We don't save money because my 3 year old would have to go to day care. We save more money that way. But anytime you go visit family, friends, anything, it's the first when did she go back? And it's like, well, I've increased my income. I think we'll be okay.

They don't get a vote. Who gave them a vote?

I know. It's it's in my head. And I I guess what I'm trying to say is how do I get we're doing fine. Mhmm. But how do I get all that voices out of my head?

I assume that once you cut off the debt, it still takes a little bit before you fill that release.

Listen. I'll I'll be honest with you. My husband and I paid off a a big amount of debt, and immediately, you're like, yes, this debt's gone. But you do feel the residual effects of that throughout, like, your day to day life. For me, it's I would go to the grocery store, my armpits would still sweat when it was time to swipe my card.

Still, to this day, I have to stop myself from checking my account to make sure the money is there. So there's there is that part of it that your body is just used to a certain response when it gets in those familiar circumstances, and I do think that that starts to fade over time. I think the best thing for me, 1 of the best anecdotes for this has been anecdotes for this has been the budget and just going over it and saying, okay, I planned for this, and and reminding myself that I'm still doing all of the things that caused me to be a financially responsible adult. I'm still doing my investing. I am still, you know, planning for the future.

I'm still being generous. Like, when I tell myself, Jade, you're checking all the boxes. This is okay. Then it kinda causes my heart

beat to go. All the boxes are checked checked including taking my wife out to a $300 dinner dinner.

Okay?

No. I'm not talking about that. I'm talking about Oh, I'm I am.

I'm talking about that.

Maybe. I think

this woman needs somebody to take her to dinner, sounds like.

And sometimes to Dave's point to Dave's point, I do think you need to bust through those barriers a little bit and remind yourself why you did this. Why did I pay off this debt? There's a so that to it, and the so that wasn't so that you could be at home and and fretting about every small purchase. That wasn't the so that. Right?

Mhmm. Exactly.

Yeah. That's a good point. And as far as the other people getting a vote, I can tell you there's a high correlation between people that build wealth and those that don't give a crap what other people think. Right. So you pretty quickly go, you know, whatever you wanna think about.

That's fine. I mean, I got people that wanna tell us what to do, but they've even voted wrong for president. So, you know, I don't even why do I wanna listen to them? You know, you gotta be careful who you're listening to, man. You don't get a vote.

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I'm not.

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I have a couple of guesses. My guess, it involves diamonds.

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Okay.

Hello? Yeah. Yeah. So click the link in the description on YouTube or podcast or bramsiesolutions.com/ stowa. Kyle is in Salt Lake City.

Hey, Kyle. What's up?

Hey, Dave. So I'd I appreciate you taking my call. Yeah. I messed up big. Went behind my wife's back, racked up 26 k and credit card debt in 4 months.

Pregnant wife, I should say. And now she's filing for divorce.

What what where'd you jack what'd you jack up 26 k on?

Pokemon cards. Trying to buy a bunch and then sell them online, which didn't work out.

Oh, okay. Alright.

And she's filing for divorce.

Yes. She already filed and

Sounds like things were pretty rocky before.

Yeah.

It's not because of these Pokemon cards. That was just the final straw.

Mhmm. Yeah. Correct. And we have 3 boys together, 2 to 5, and, our first girl on the way, she's 15 weeks pregnant.

So what went on before this? Why what were the straws before this? How have you been behaving?

Angry, short, not not not pleasant at all to be around, to be honest.

I appreciate your honesty.

Yeah.

So let me ask you if you were to put her shoes on for a minute. What do you think regarding this purchase that she's angry about?

The deceit, the betrayal.

Good. Good. That's good self awareness. Mhmm. Yeah.

In our world, we call this financial infidelity because it's you busted the trust almost as if you slept with someone. Yeah. That's the way it it's the same part of the brain that you damaged. Yeah. That that's what's going on.

And so that's why I pushed her over the top. And then so so the net net of the thing is, have you been able to sell the Pokemon cards yet?

No. I'm going, here on in a few I'm just getting everything together so I can take it to 1 of the local shops here in Salt Lake to sell and pay back some part of this debt. And and What do

you think they're gonna bring?

I'll be lucky, honestly, if I probably get $5.

So how did you mess this up that bad? I'm confused.

So what had happened was I I I was trying to build a platform on social media. So I I built a Instagram account where you buy followers, and, I paid a lot of money on giveaways on an app called Whatnot. Mhmm. And that's how I really racked up the debt was buying these expensive giveaways to try to get people to come online.

Didn't really buy $26,000 worth of Pokemon. You really spent some of this money on the website.

Yes.

Yeah. Trying to build a false front. Yeah. Yes. Looked like you're bigger than you really are.

Yeah. 100%.

Did you tell her any part of this? And she said don't do it and you did it anyway, or you just kinda did it all?

Yes. I started at we were at 4 grand, and that's what she knew of 45100. Mhmm. And then I went, and continued. As things were already going to rocky path, I felt I just I'd self indulged in myself

Yeah.

And went all in and on myself out of selfish greed and lust for fame that wasn't real.

Are you in counseling?

I am. Yeah. She went with me in my today, went to my appointment. Okay. That's good.

Yeah. Yeah. I asked 1 blank.

I say that because you sound like you're you sound like you're working through this mentally. At least, it sounds like it in this very short call. It has she said anything to the effect of, here's what I need to see in order to stay with you, or has she just said, that's it?

She did. I looked up a video from you guys. That's how I came across your number last night, a financial infidelity. She used that word. And I told her I said, look.

I know I'm gonna be served papers tomorrow next day. So if there's even a chance you'll stay with me, I would burn all these cards right now, work overtime, and do whatever it takes.

Wow. What did

she say to that?

She she

said, no. I wanna go through therapist appointment.

Good.

And, the therapist said, why should she stay with you? I said, logically, she shouldn't. I said she has no room to stand on that she should. And I said, but if there's even a chance, even if in the end, it's it's worth it to give a chance to my family. So I mean

So let me give you a parallel, and, we we're not counselors. Doctor John Deloney is our counselor, but we work with people in these situations and have for 30 years so much that the parallel she's looking for I'll tell you what. Go pick up this book by doctor Henry Cloud. It's called Trust.

Trust?

Trust. That's what this whole call is about. Mhmm. Broken trust. And in in his book, he talks about how to build trust and how to rebuild trust when trust has been broken.

Also recommend it for your wife.

Okay.

Because it'll give her some it'll give her the correct things if she's willing to demand of you that are the right things to demand of you. Okay? And it should sound something like this. What you're trying the way you rebuild trust is over a period of time, you establish a pattern of never repeating the major offense here, and you already told me what the major offense here was. It wasn't buying on things on the Internet.

It wasn't Pokemon cards. It was lying. Yeah. That was the major offense. And so if she enters back into this, if she were my daughter or my little sister, I would tell her to give you a shot, but you get 1 strike.

Yeah.

Never again do you lie. You are so unbelievably honest that it's awkward all the time around your house. Do these jeans make me look fat? Yes. You have to tell the truth all the time.

And you have to cordly. And be proactive about making sure there's no place for mistrust to live. So you're sharing all the account passwords, you're putting the pin, you know, you're sharing your location on your phone. I I always say, make it to where there's no foothold for that to even get in. Yeah.

In that way, there's no questions.

Right? Let me let me kind of give you a correlation a little bit in my life. There wasn't, deception, but my wife did lose faith in me when we went broke because I was stupid

Mhmm.

Which was valid. It took years for her to trust a 100% in my judgment. We made all decisions together and still make all decisions together, which gives her comfort that I'm not off chasing the moon somewhere like you were. You went off chasing a get rich quick thing, and now I did too, and that's how I went broke. Yeah.

Didn't cost me my marriage. It did cost me bankruptcy because I was an idiot. Okay? I did it with more zeros than you did it, dude. So, she but it took her I mean, we've been married 43 years.

That was 35 years ago we filed bankruptcy. To this day, if I say a phrase a certain way, I'll I'll see her head tilt because it it reminds her body. It reminds her emotions of those old days, and and then I have to stop and rephrase and go, okay. Here's what I was really trying to say. I'll I can see her body react to this day.

Now it's not much. It's very seldom today because it's been a lot of years of a good pattern. Trust has been rebuilt. She trusts my wisdom now. And and but it's with you know, I had 30 years to work on that.

Absolutely.

So you gotta rebuild trust in your integrity. No strikes. No lying. No purchases that she doesn't know about.

The rest Little and big.

Of your life. Not a freaking pack of gum. Mhmm. The rest of your life. Period.

And it's like if you're if you're an alcoholic and she says, I'm done. And but I'm gonna give you 1 more chance. 1 more time, you fall off the wagon, you're gone.

Yeah. Yes.

You're you're on you're on a 1 strike deal. And then then you gotta lean into that, and and it sounds like you're ready to do that.

It does sound like that. It does sound like that, but I you know, time will tell.

She may not be ready. She may not wanna do it. But, this is how it works, folks. You've got to tell the truth and you gotta work together on money. High correlation between that and winning with money, High correlation in not doing that and losing with money.

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We help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Jade Washoe. Ramsey Personality is my cohost today. She's the number 1 best selling author. You're on the show with me, and we're answering your questions at 888-825-5225.

Rex is with us in Columbus, Ohio. Hi, Rex. How are you?

Hi, Dave. Hi, Jade. I'm doing well. It's pleasure to talk to you 2 today.

You too. What's up in your world?

So I'm 27. I got married just over a year ago. Bought a house shortly after. We're on track, baby steps 4, 5, and 6 to pay off our home in about 4 years from now. Our first child is on the way due in 5 months and my question is 1 about priorities.

I really want to keep paying down this house ASAP. So my wife not have a job in the future other than caring family, but I also want to be generous with others. And a buddy of mine went through a separation recently. He's a hard worker, not a bum, but he's starting from scratch, saving up to buy a car. And I'd like to give him a beater for Christmas as a way to bless him and advance his future, but I worry if this is reckless financially while I still have a mortgage.

What's your pregnant wife say?

I just brought this up with you yesterday and she's mixed about it. She's more hesitant than I am, but surprisingly she was, not averse.

What's your household income?

Between 2.25 to 2.50 ks a year.

How much do you have in your household?

At least 6 months of expenses, about 6 months.

How much?

So I want to say it's like 30 to 35.

How much you're spending on the beater?

I'm thinking no more than 1200.

Oh, I'd do it. $1200? That's it?

Yeah. Car's gone down a little bit.

So, I

mean, they used to be in pricier, even the beaters.

I mean, I'm just telling you, if I woke up in your shoes today, I I would do that in 2 seconds. It's a very small part of your world.

It's a good point. But if I may add 1 more piece, I am considering career change relatively shortly. Although, again, I'm making a 100 k and the rest about 125 or so is is my wife. I'm I worry about my my future at this company. I don't feel as though I'm doing a good job as I have in other roles.

It doesn't seem like a good good fit for me. So

So you fear that

you make a 100 k if you lost your job, $1200 don't help you.

That's a good point.

Yeah. I mean Okay. For me, that doesn't change it much. What you're talking about is how far in the future. You know what I'm saying?

So for me, I mean, if it really made you feel that weird, you could say, well, I'm gonna I'm gonna spend $1200 on this, and then I'm gonna add an extra $1200 to my like, you could balance it in a weird way to make your brain feel better. And I think when you do that, you'll realize, oh, this wasn't that big of a it wasn't that big of a deal.

What's interesting is is that this tiny little bit of stress really put shined a big light on your career thing and means you need to get off your butt and do something about that. That's a

good point.

Alright.

You need to act on it instead of wait and let something happen to you. Yeah.

Are you concerned that when you have this baby, your wife's not gonna wanna go back to work after leave?

I don't think that's the case. She'll she's working from home now, so it's it's relatively manageable.

Okay.

But but I do still wanna have I won't give her the opportunity to Yeah.

Not feel trapped in her job. Yeah.

I hear that. $1200 does not keep her from coming home. You losing your job might.

Right.

So these are way different decisions. One's a 100 k. One's 1.2 percent of a 100 k.

But kudos to you for thinking in in the way of generosity like that. I love things like that. It's the reason that you go through and do the baby steps so that you can do those sorts of things. So really good.

And you yeah. And also, what's weird is this, 10 years from now, you'll forget you did it. Yeah. It's such

a small yeah.

It's such a small

He'll remember it the rest of his life, but you won't. I promise you. I don't remember what I have done. Yeah. I don't.

I

don't Good.

Have no idea. Bailey is in Fort Worth, Texas. Hi, Bailey. Welcome to the Ramsey Show.

Hi there. Thank you for taking my call.

Sure. What's up?

Hi there. So, my husband and I, we have recently been binging your guys' show, and, we are preparing now, with our baby step 1 and are about to start our baby step 2. Looking at our debt, we've made some real dumb decisions. And my husband's credit cards, there are several. We have let all go into default, over the last couple of years.

Mine, however, are current. I have 3. And so when listing them, since we know we've we've gone all gotten all the information about paying them in full, you know, settlement in full with a prepaid debit card, all that sort of stuff, but I just don't know how to go about listing them, smallest to largest since they will be a sum, you know, lump sum.

I would do 2 separate you

mind first.

I

would do 2 2 debt snowballs. 1 for current debt and work it first, and then work the old bad debt second.

Okay. And then our car loan is actually now a personal loan from a friend. Should that be

gross?

Yeah. That might I I'd I'd wanna attack that very quickly.

That that's on your list that's on your list of current debts. Right?

Right. It is just 1 of the larger ones, because my credit cards are all relatively small. However, because it's a debt with a friend, it really is hanging over my head. So should

it still go back? It? How long have you had the debt with a friend?

1 year. We've been paying and we've been we're current you know, we're paying them all monthly. But,

and how long will it take you to pay off the the first few things in your snowball, those few credit cards?

My first 3 are only 10,000, so probably about 5 months.

What's your household income?

Currently, it's at a 100, but in the next 6 months, we're gonna go up to 1.60.

Good. It's not gonna take you that long then.

Yeah. I I Better

you better get you better get more than $2 a month rolling out of 1.60, kiddo.

Yeah. It's just not gonna go up until February, so we are impatiently waiting.

Okay. Well, and you need to jack you need to go ahead and cut your cut your eating out off the budget too.

Have you been paying the friend or you haven't been paying the friend?

We have been. Yes. Okay.

What do you owe on the car?

10,000.

Oh, you'll knock it out. Yeah. You'll you'll be it'll be gone by summer.

If it makes you feel better, just tell them, hey. We're doing this debt snowball, and we list them smallest to largest. You're number 4, and we're hap our plan is to pay you off this year and so that we're not running this thing out.

Yeah. You you should be done you should be done with them by April or May.

Yeah.

Okay. That is our hope. And then just go ahead and No.

It's not a hope. It's a math thing.

Yeah. Hey. Run the math out. Have you done the math on this to see what what your projected date is? Because if you haven't, you need to jump in every dollar.

You need to do your road map so that you know

We have downloaded we downloaded every dollar, and we are using that.

Okay. Then that's then that is the accountability there. And just for from somebody who's been in your shoes, you need to speak that way. Because if you run everything, if you verbalize everything as if it's, it might happen, it might not, then chances are it might not happen. So you need to verbalize it in the way of, well, we'll be done with that in April, and then when we're done with this 1 in January.

Do you see what I'm saying? You need to use that and let that be your vocabulary because that's gonna inform what you actually do, to accomplish this goal.

Yeah. How how fast do we go through 20 grand? 10 in credit cards, 10 in car

Yeah.

Making 100 bleeding into 1 60. Hello? Pretty stinking fast.

Yeah.

Pretty stinking fast. This is The Ramsey Show.

This show is sponsored by BetterHelp. Alright. Hey. It's that time of year when it's getting a little colder. It's getting dark earlier, and sometimes we just want to stay inside and get cozy.

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That's betterhelphelp.com/deloney. Hey. What's going on? Doctor John Deloney here. I'm excited for our next money and marriage getaway coming up over Valentine's Day weekend 2025.

This is your chance to invest in your marriage, strengthen your communication, and get away from all the noise and chaos of everyday life together with your spouse. You're worth an incredible marriage, and trust me, it's way better than the chocolates and flowers you had planned. Tickets start at $799 per couple. Go to ramsey solutions.com/getaway to get your tickets.

Jade Washaw, Ramsey Personality is my cohost today. Open phones at triple 8 825-5225. The old motivator from another generation before there was a Zig Ziglar, before there was a Tony Robbins, before there was a Dave Ramsey, Earl Nightingale said what you can conceive and believe, you can achieve. Jade, with that last call, you said the same thing to her. You need to be so dialed in on your numbers that you are speaking the future, March of 2025, as if it is fact.

That's right.

Because the math is telling you that it is a fact, and you don't use language like I hope.

Maybe.

Maybe.

Hopefully.

Sorta. Kinda. Tells me you haven't dialed in your numbers exactly. Mhmm. You need to get a little bit nerdy with your numbers.

And because here here here's what really happens out there in the real world. Mhmm. In the real world is, almost always you will get out of debt faster than your first plan you lay out thinks you're going to.

100 per that is so true. You know, I remember because some people know this, some people don't, but I used to listen to the show long before I ever got to work on the show. And I remember you used to say, Dave, when you start working the plan, intensely, you get on a moving sidewalk. It's like at the airport when you go and you can either walk normal or get on that little sidewalk and it makes you walk a little bit faster. That is so so true.

I think you just open yourself up to opportunities when you say I'm gonna go light lightning fast. I'm willing to do whatever work it takes. Then you begin to see the opportunities around you to go faster.

Yeah. I think god just looks down and goes, oh. Yeah. There's a smart 1. I think I'll help this.

He wants

to do it my way. Yeah.

Yeah. They wanna get out of debt? I think I'll just lift them right along here. Fly, little bird. Yeah.

That's right. And you just you you look up and you well, that's supposed to take 9 months and it took 7.

That's right. But what I was saying to you on the break and and this really does segue into every dollar is most people have never said, I am going to do insert specific task and I'm going to do it in this time frame, insert specific time frame, and this is going to be the exact outcome. And once you do that for the first time, and a lot of people for the first time they do that, it's when they do their every dollar budget and when they pay off their debt. Once you do that, it creates a confidence on the inside of you that, oh, I can actually say something, do it, and hold myself accountable. That is it breaks open a whole new world of possibility and confidence in yourself.

So that alone

You know, like, we're approaching the 1st of the year. We're gonna talk do the goal setting talk. Yep. And, we always do that. And it's something I've taught entree leaders for 25 years, and I learned it when I was 12 years old going to these motivational seminars with my dad and the real estate business.

But, I want to lose weight is not a goal. No. I want to lose £30. Okay. Over 10 years?

And how many times?

Mhmm.

You won't lose £30.

Gosh. Hopefully,

just less. Likely. Well, I mean hello. So, okay. So this is not these are still not a goal.

It's a wish. Mhmm. It has to be specific. It has to be measurable. It has to have a time frame.

As soon as it has all 3 of those things, then you will do the long division math immediately that you learned somewhere around the 4th or 5th grade, hopefully. And that is, I want to lose £30. When? Oh, 90 days. Oh, you mean £10 a month.

Oh, you mean £2.5 a week. Oh, I'm gonna increase my aerobic activity, my water intake, and decrease my bread and sugar intake, and I will lose £2 a half a week. It's magical. You don't even need Oprah. I mean, that's how it works.

That is how it works.

Because you dialed it in, but it's specific. It's measurable. You spoke it because it's in a certain time frame. Yep. And then you know if you're not on track or not.

Yeah. And that's

what really

that's why that's why doing your every dollar budget works.

That's right. Because you can look at it and go, am I am I accomplishing what I said I was accomplishing? And so yeah. Let's get into it.

This is how it works, ladies and gentlemen. So check it out. You can download EveryDollar for free in the App Store or Google Play. Do not miss this. People who win at anything are doing that intentionally.

Winning is a series of intentional acts. David's in Fort Smith, Arkansas. Hi, David. Welcome to the Ramsey Show. Uh-huh.

Hey. What's up?

Oh, I got a problem. My, insurance company is wanting to they say it's illegal for them to insure my automobiles because I have such a low credit score. I've been very wise with my money. I have no bills. I don't borrow a lot of money.

I don't need money.

Who's your insurance company? Who's your insurance company?

Shelter Insurance.

Shelter. Okay. Yeah. Okay. The agent that you're talking with is either an ignoramus or a liar or both.

They sent me a letter.

Oh, okay. They're they're lying. It is not illegal to issue insurance to someone with a low credit score. It might be unprofitable for them, And here's where this comes from. The University of Florida, in conjunction with the University of Pennsylvania, 25 years ago did a study that shows that people with low to no credit scores file more claims more often.

And so the insurance business across the board took the FICO score and used it to raise rates. But it has nothing to do with legal. So my credit score my credit score is 0 and has hey, David. My credit score is 0 and has been for 30 years. Do you think I have trouble getting insurance?

No. But I have old automobiles, my I have a 2007, a 2014. I have nothing new. I have a 2011 Harley and a 2,000 I have nothing old. Everything's got a lot of guilty insurance on.

You see what I'm saying? I have nothing with full coverage insurance. Don't need full coverage insurance.

You have debt?

No. I'm debt free.

You have a 0 credit score?

I have a 0 credit score.

Okay. Well, then what you need to do is fire your stupid insurance company because they're stupid, and get you another 1. So go to ramsey solutions.com and click on ELP for endorsed local provider, and you can find the insurance for home and auto. It's called P and C, property and casualty insurance. And those agents don't work for a single company.

They work for you. They will shop among many companies and get you the best deal. And you can decide, you know, how to do that. But it is not illegal to issue insurance on someone that has a 0 credit score. They are following a false premise because the research that I just referenced that's 20 years old or 25 years old was incomplete research in that it is valid in the sense that if you have bad credit because you don't pay your bills, you are more likely to file a claim and a higher claim.

That does make sense because you're broke. Now, but if you have a 0 credit score, I'm not more likely to file a claim. I'm a multimillionaire. That's dumb. I'm less likely to file a claim.

That's dumb. Alright? So, obviously, the research is incomplete for a guy like David or a guy like me. David's got plenty of money. He just drives beaters because he wants to.

That's what he said.

And That reminds me of that same, way of thinking with rental cars. I feel like it's the same thing. You know, I just came I was leaving where was I leaving? Denver, and I wanted to rent the car and then drop it at another airport. Oh, no.

You are right. And they said, you

cannot do that if you don't have a credit card. And I said, what's that got to do with it?

Because of the theft. Yeah. There's a there's entire gangs that are running debit card theft on that. They're stealing these the size of the rental car business is unbelievable, and the size of theft that they deal with is unbelievable.

That's what the guy was telling me.

That's exactly what does it. So we learned that when we had Dollar Rent A Car as a sponsor here for a while. We talked them into being the the world's best, debit card only, Or they took the debit card for Ramsey listeners.

Uh-huh.

And we did that for a while. And then of course with COVID, everybody went bankrupt, including Hertz that owned them. And so then they come back as dollar. Dollar came back as $2 Rent A Car, and, they got a new CEO and a new leadership team and decided they weren't gonna take debit cards anymore, which means we had to take them off there because we can't endorse them anymore. So, we lost a sponsor and they lost a bunch of customers because that was stupid.

But anyway, that we learned all this. They showed us the data back in the day, why it was so risky, because it's they're literally, and I'm not making this up, gangs that steal cars from rental car companies.

On debit cards.

And they use a debit card to do it. And so and the worst 1 the worst location in the world is Las Vegas, by the way.

Yeah. But yeah. For some reason, if you pick it up and drop it off at the same location, you can use it's fine.

Well, that's because they think they're gonna get the car back and leased. Yeah. The idea that the idea that you're leaving California and never coming back is scary to them. This is the Ramsey Show.

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Get up to 30% off best sellers and life changing gifts that won't break the holiday budget. Ramseysolutions.com /store. Jade Washall, Ramsey Personality is my co host today in the lobby of Ramsey Solutions. Casey and Jesse are on the debt free stage. Hey, guys.

What's up?

Hey, guys. How are you? Hey.

Welcome. Where do y'all live?

Ruston, Louisiana.

Oh, fun. Welcome to Nashville. How much debt have you 2 paid off?

We have paid off $205,960.46.

I love it.

How long did this take?

23 months.

Woah. You're cooking. And, what kind of what kind of income range during that 2 years?

110 to 140. Wow.

Oh, nice.

What do

y'all do for a living?

I'm an, equipment manager for a golf course.

Okay.

And I'm a payroll administrator.

And what did you sell? And all these numbers don't work. Yeah.

Exactly. We we,

sold some land and a Rent House Nightmare. Oh. And a lot of other things. We sold so many things that kids thought they were next.

I love it. So what did the Rent House Nightmare bring?

It brought a 122,000. Good.

And what the land bring?

About 4 not even 40, 25.

Okay. 1,000. Okay. Cool. And what kind of debt was the 206?

A maxed out home line of credit on the nightmare rent house. Uh-huh. Camper, car, credit cards, phone loans, and medical bills.

Y'all were normal.

Everything but student loans. Yeah.

You were normal. You had it all. Yeah. Yeah. It sucks.

We had that all.

It really did.

It was horrible.

How old are you 2?

I am 36. 38.

And, how long have you been married?

17 years.

Okay. So 2 years ago, 3 years ago, you had a I'm sick of this, sick and tired of being sick and tired moment. I've had it. Mhmm. What happened?

Tell us the story.

So I actually listened to your book a few years before our journey. We were already drowning in debt and I listened to the total money makeover. I was like, he is so right. We have got to get out of this debt. We'd have so much margin in our life, but I don't wanna listen to your plan.

I wanna do my plan. So we You're

the first person to ever do that.

We've raised the limit on the maxed out home line of credit and maxed it out again

There you go.

And then found ourselves in even more debt. This was the 3rd time we consolidated our debt. Each time we doubled the debt.

And didn't change habits, go back into The habits changed.

So 2 years ago, we're drowning again. The renters hadn't paid rent in 6 months and we had a variable interest rate on the rent house. So the feds were going up, so we went from $300 interest payment to $900 interest payments. Yeah. It was bad.

We couldn't do it. We we literally couldn't pay.

So then I listened to your book again and this time it sank in. It's okay. My plan obviously isn't working. I had prayed numerous times, god, please increase our income so that we can get out of this. And he said, no.

I'm cutting you off. You obviously are bad stewards of my money.

You've gotta learn this lesson.

So then I said, let's do this. And at the time, our marriage honestly was on the rocks. Casey was dealing with some heavy depression.

Mhmm. And I

was like, I'm not sure how I'm gonna get my spouse on board because he wanted nothing to do with the finance.

I was I I'd given up. I was I was done.

Well, did the in the the weight of this add to the issue with depression?

Correct. It was it was a it was a big portion of it. Okay. A lot of

it.

So I did the only logical thing, which is say, hey. I'm going to sell this gift that you bought me on credit a few years ago. Why don't you ride with me to make sure that I'm safe as I sell this item? Uh-huh. And I trapped him in the car listening to Total Money Makeover.

It didn't go well. He made fun of the book. You know, it can't be that easy.

Just 7 easy baby steps.

A baby could do it. It's so easy.

He's not

a believer at first.

You're not listening. He says it's not easy. So I'm like, okay. I'm on the phone. Give it a few days.

So when he comes home and

I'd listened to a few of the debt free screams. I started listening to the podcast and heard a few of them, and it was very inspiring, very emotional for me. And I said, you know what? If these folks can do it, who some are worse off, some are not as much, but they were able to do it. I thought why why can't I?

Made it real.

Yeah. It did. It finally did. I thought I saw it.

And now you're here doing that for somebody else.

Thank you. That's it. Let

me let me ask you a question because I'm I'm researching this exact thing. There was something that when you first heard the baby steps, you had an emotion that caused you to say, I'm not gonna do it exactly like they teach. I'm gonna do it my way. Casey, you had an emotion that caused you to say, this guy this is not a baby step. This is, you know, for adult, whatever you thought.

Yeah. What was that emotion that caused you to initially kind of back away from it?

The the

Was it fear? Was it, I

It seemed insurmountable. It seemed insurmountable. Like, this is impossible. I thought I was gonna live to my death working and in

debt. Uh-huh.

I I grew up knowing it. I was in the mindset of, can we afford it? That's that's the culture I grew up in. It's not can we afford it, can we afford the payments? Uh-huh.

That's the word. Yeah. That's how I grew up. I'm like, this is this can't be done.

And what about you, Jesse? What was it that caused you to say, I'm gonna do it my way. This sounds good, but I'm still gonna do it my way.

Well, I don't wanna take the time to have to go through all of this if I can just wipe it clean and have a $400 payment in 1 thing versus working and taking years. I mean, when we initially looked at the snowball calculator, we were at 2031 paying off all this debt, and we did it in 23 months. That's right. It was just But

the snowball calculator did not include selling off everything.

Right. Right. At first. It did not. Yeah.

When you when you plugged that in, it changed the numbers. It did.

It did.

It did.

And we had I mean, life happened. All the plumbing busted when we had a freeze in that rent house.

Oh my god. This house is cursed.

It was. The renters had destroyed it. I mean, flooring was gone, there was a lot of fecal matter everywhere.

Oh, great.

Animals. Animals.

But, we did have a real estate pro, Ramsey Pro, and he helped us through the whole thing. Yeah. I mean, I would work at night, get off work, go to the house, and clean. And then Casey worked a ton of overtime. We DoorDash, you gave plasma.

Yeah. Yeah. Sure did.

Wow. But once you start going, and I need some debt free chart trackers as well, it just kept us motivated of knocking this out and getting ahead.

How's it feel to be free?

Amazing. Amazing. It's so it's so nice. I wish everyone could feel this way.

Like It's awesome.

Our daughter, made homecoming court, and we're like, we have to go buy 2 dresses now, and we could just afford it. It was

This was in the past month.

Margin. Yeah. Last month. Yeah. It's been so fantastic.

Get we get to buy. Yeah.

Exactly. Yeah. Yeah.

Yeah. Yeah.

That's so good. Very cool.

And then, very neat.

The Facebook group, the baby steps community that y'all have really helped as well. Just looking through and seeing other people's stories, which JEG became a personality about a few months since we started.

Uh-huh.

And your story really helped motivate me a lot, you and Sam. I was like, okay. They have way more depth than I did. I don't feel nearly as bad. Let's do this.

Oh, I'm so glad. So what would you say to that person who's listening? And and there were you there were you were, Casey, they're going, this is not as easy as you think it is. Jesse, they're saying, I'll I'll do it, but I'll do it my way. What would you say to that person?

You can do it. It's not impossible.

Just start. Yeah. Budget and start because if you just look at it as a whole, it is. It's overwhelming. You're like, we're never gonna get out.

But if you just start and really follow the steps and start with baby step 1 and then start with baby step 2 and pay off that little debt, each credit card down was just so exciting to us. Like, now we have more money to throw at that debt. That's right. I mean, we started at only being able to put an extra $200 a month towards this debt. By the end, we were throwing over $3,000 a month at it.

Come on. Yeah.

Ding. Ding. Ding. Ding.

Yeah.

Yeah. And 23 months out of your 17 years was hell. Oh, wait a minute. A lot of the other was hell

too. Okay. Yeah.

But this hell got you out.

That's it. Yes.

You got it. Amen.

You paid a price to win. Mhmm. Way to go. I'm proud of you.

Good.

Alright. Bring the kiddos up. Let's get their names and ages. Looks like they survived the cutbacks. They sure did.

They

sure did. We got Emily here. She's 15. Way to go.

Homecoming point.

Just turned 13.

I I love it.

I love it. I love it. Well, this is excellent, you guys. Proud of you all. Thank you.

Well done. Who was cheering you on?

Friends and family.

Coworkers.

Yeah. Yeah. Coworkers. Yep. Sure was.

Everybody was pretty much cheering us on especially when they heard how much we owed.

Yeah. I I love that you're debt free. My favorite part of your story is that cloud of depression is lifted off your house.

Yes. Yes.

That makes me cry. That's a powerful

element. Now. Yeah.

Marriage is way better. We're the transformation over the past 2 years is unbelievable. I mean, I had given up on our marriage practically, but after counseling and this, I mean, we're stronger than we've ever been.

Y'all are amazing. Well done. Alright. Count it down. Let's hear a debt free scream.

3, 2,

1. We're debt free. Yeah.

206,000 paid off in 23 months. Oh, but everything in the house is transformed. Hello. Depression, marriage, everything's transformed. See, the debts all tied into this.

It's not a stand alone subject that you can compartmentalize. It's woven its way into your life. It's time for you listening to get it out. They were here to tell you that. I hope you heard it.

This is the Ramsey Show.

Hey. If you're like me, this time of year feels bananas. Thanksgiving just flies by, and then you blink, and the kids are out of school, families in town, and somehow there's glitter everywhere. Pure chaos. Let's face it.

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But let's be busy enjoying our families instead of stressing out about money. Head over to the App Store and download EveryDollar right now to get started for free.

Jade Washaw, Ramsey Personality is my co host today. Hey, guys. If you didn't know, I love talking to you about money. We also help small businesses, about 10,000 of them across America. And, we have a podcast called EntreLeadership.

It was actually the very first podcast we ever did at Ramsey, and it was run by, other Ramsey personalities and interview style and stuff over the years. I took it over about 2 years ago and started taking calls from small business people about leadership and small business questions. It's called EntreLeadership podcast. It's very popular in that world. And if you wanna be part of that, and you run a small business, you got a question about it, you can call and leave us a voice mail there at 844-944-1070.

844-94410 70, or you can go to entreleadership.com/ask. Leave your question, and our team will get you set up to be a caller on there. Also, a reminder that this is the last portion of the show that is broadcast over YouTube and podcast. There's another portion coming up, that is on the Ramsey Network app and on some talk radio stations around America. And so if you want, the Ramsey Network app is completely free.

So you can finish this version of the show, video or audio, or both, and just jump over to the Ramsey Network app. It's completely free. There's all kinds of stuff you can do there, like search calls by subject, find out what we gotta say about any certain thing, type it in. You can type in an email and send it to us. We'll answer it here on the air.

We do a lot of stuff that's really fun over on the Ramsey Network app, so be sure you check all that out. Ryan is with us in Hartford, Connecticut. Hey, Ryan. Welcome to the Ramsey Show.

Hey. How are you guys?

Sure. What's up?

Hey. So I have a bit of a problem. I never thought this was gonna happen. So, in 2018, my father passed away, and he left me and my brother a 401 k plan. Fast forward 5 years, I got a check-in the mail this morning, for about 245,000.

The original account balance was about 300,000. And what's happening is they gave me the check, and I have to pay the IRS that 55,000 difference from the 300,000 and 245. I called them and asked them if they could roll it over. And they said once they issued the check, there's nothing that can be done.

Who told them to issue the check?

Not me. Apparently, the the company my father for I didn't either didn't read or

I didn't I didn't hear you. You you cut out. Apparently, the company your father worked for what?

Yeah. They they have a 5 year plan, I guess, for the death benefit that if it's not rolled over to something else within 5 years, they must close the account and just issue a checkout. It's super confusing. The way they explained it to me, I was on the phone with them for an hour and a half this morning with, my 401 k, company. And they pretty much said, once we issue the check, there's nothing that can be done.

There was no workaround.

Yeah. There is.

They had they had until this that's what I'm saying.

Yeah. They had If you don't I'm sure you don't have an extra $55 laying around.

No. So the way it worked is my account balance is 300,000. It started, like, 215. And over the years, I added up to 300. They issued me a check for 245.

They already took the money out Yeah. And sent it to the IRS, and it issued me the difference.

Yeah. They have to withhold 20%. That's the rule. If you if you take a withdrawal. But this is an involuntary withdrawal without no without any contact to you or anything, which is completely, at a minimum, unprofessional.

What caused you to wait what caused you to wait the 5 years as opposed to rolling it over?

Because the 4 0 1 k plan my father was invested in had really good options. Like, I built up

All of those same options exist in the open market?

Yeah. And I I have my own personal investment accounts, and I do it with that as well. The the you know, it's you know, don't rock the boat if the boat shouldn't be rocked. So the way I figured is the 4 0 1 k plan was perfectly fine. I kept it in there just because the investment options were fine.

It was just it's a retirement account. I was treating it like a retirement account. I wasn't gonna touch it till I was 65. I'm 30 now. Yeah.

What do you make?

It was I make I'm a truck driver, so I make about a 110,000 a year. And I also own a small business that I make about the same. So

Okay. Under the secure act that Biden passed, you have 10 years to liquidate the 401 k completely. You should have been liquidating it, at 1 tenth a year from the time the secure act passed 2 years ago, and you've not been doing that. So,

I didn't know about that.

I know. The so I'm I'm trying to figure out how that plays into this and how hardcore alright. Let's pretend that we figure out a way to lean on them, and they cancel the check and put the money back in the 401 k so that you can roll it over within 30 days, which is what they should do if they're, are people of integrity. This is a problem. It's not technically unethical.

It's just so nasty that it ought to be unethical, what they've done.

It's a big it's a big money.

It's gonna cost you it's gonna cost you, you know, 20, $30,000 and that you don't have.

Right? Me 2 years. It cost me 2 whole years of of gains because of this. And No way. I mean, it's like, I never thought I would be upset to get a huge check-in the mail, but I did.

And Well I'm upset because I should've had it rolled over.

It should've been future. You should've called me.

Yeah. Alright.

So here's what here's what here's what I'm gonna suggest you do, and I don't think it'll work, but it's the only thing I can think of. Alright?

Okay.

Go to ramseysolutions.com and click on SmartVester and find a SmartVester Pro in your area that you like after talking to them on the phone. They may be able to call on your behalf and, talk them into undoing this and immediately rolling it, and they'll help you with the rollover.

Okay.

They may be able to cite, something that a regulation or something that I'm not aware of, because this is, when you started talking, I thought you were going to tell me this was a tiny little 401 k, like a $10,000, and they were just cleaning out all the little ones. Sometimes they do that when a company sells or in the event of an inherited 401 k like you've got. But this is huge. This is a lot of money, and so this is and with no notification at all, this is particularly nasty. And so I if they had simply notified you, you could've quickly rolled it over and avoided this.

Right?

And they said they notified me, but I I Oh, wait a minute. Like

You're a truck driver.

You're a truck driver.

You didn't they did notify you then.

My accounts. They said they did, but I never had any notification.

So you never see evidence of them?

Case relentlessly.

Yeah. Ask ask them to prove that they ask them to prove that they did.

Okay.

K.

So

idea.

I mean, I don't definitely. I don't think you've got a basis for suing them, but I'd be tempted to. I really would. I mean, because you're talking about 25 or $30,000 cost here.

That is unnecessary. 5,000 they took out. They they No. It's not my

it's given my IRS

taxes. On 55,000. The 55,000 is gonna be taxed, not penalized.

No. No. They when I got my, experiment, like, the summary of what my original account balance was 300,000.

They cut

me a check for 245.

I understand. They took 55,000. They sent it to the federal government as tax withholding, and it's not all taxable. So they because the entire because you're gonna roll the rest of this. If you take the check-in your hand and you roll it to a 401 k, the only harm that's gonna come to you is the taxes on the 55,000, which is gonna be $15 or $20.

Oh, so I'm gonna have to pay another $15?

Honey, you haven't paid anything yet. Okay. They withheld your money, 55,000, and sent it to the federal government. Then what you do is you file a tax return of what is actually due, and what will be actually due is not 55,000. It'll only be the taxes on 55,000 if you take the check-in your hand and put it into an IRA traditional within 60 days of right right now.

So you need to get on the phone with a SmartVestor Pro right now because at least we need to do that.

Okay. I will.

But the so the worst case scenario, if you follow through on what I just told you, is taxes on $55,000 because the government has 55,000 of your money as if you're gonna get taxed on the whole thing and you're not.

Okay.

Because you're gonna roll the portion in your hand, which is 80% of it, into a traditional to keep you from getting taxed. You got 60 days to do that from the time of withdrawal. So folks, you can pull your money out of 401 ks, they have to withhold 20%, but you have to put a 100% into an account within 60 days to avoid taxation.

That's what we're talking about. But you can't do

that because they got 55 of his money over at the IRS now. And so if you just take the take the 55, then you're gonna pay some taxes, but not 55. So there we go. This is the Ramsey Show.

What up? What up? It's doctor John DeLoney from the doctor John DeLoney show with some amazing news. The latest episode of United States of Anxiety is available right now exclusively on the Ramsey Network app. This docuseries follows real people from my show as they embark on a 90 day journey to transform their lives, and I personally walk alongside them every step of the way.

Okay. Now, here's a sneak peek of what the new episode is all about, and don't forget to click the link in the show notes to download the app. What's up, Kelsey?

So I've lived with crippling anxiety for as long as I can remember. How do I stop it from constantly coming up in different areas of my life?

What does crippling anxiety mean? Paint me a

picture of that.

Alright. So you ready to jump in?

I'm ready to jump in.

So we're

gonna check-in with Kelsey 30 days, 60 days, 90 days.

I cannot even function because I'm just crying. My mom left us when I was 4.

I truly felt like for a while I had no family.

She's experiencing things that really hurt a long time ago. Tell me about this boy.

He triggered me a lot.

Scared of losing Paul, scared of doing the wrong thing, scared of not being enough.

It just feels like it would be exhausting to be Kelsey. It is. Whenever somebody's playing whack a mole with their anxiety, when it just keeps moving, that tells me the underlying system's not okay.

How do I get my inner child

out of this relationship? Because I feel like she's running the show.

1 of 2 people that's supposed to never leave took

off. How is this how is this burden?

A new burden. That's right. To the 1 person who should carry it.

All of it.

Did you ever tell that little girl that it wasn't her fault?

I don't know what to do.

Do you either have to choose to let this guy love you or you gotta choose to let this guy go?