Transcript of Getting Out of Debt Takes More Effort Than It Took to Get You In New

Brought to you by the EveryDollar 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 in the Fairwinds Credit Union studio, this is the Ramsey Show.

I'm Dave Ramsey. Jade Washaw is my co-host today, Ramsey personality, number one best-selling author.

Our phone number here is 888-825-5225.

The call is free.

And some say the advice is worth exactly what you pay for it. Sean is in Fargo, North Dakota.

Hey Sean, what's up in your world?

Oh, not much, Dave, just enjoying my life.

Good. How can we help?

So I am kind of stressed out right now, in a little— it's kind of in a pickle, feels like, with my family. They are, give or take, $5 to $6 million in their family business debt. And I am struggling to, um, struggling like to cope with like my dad is in failing health and he owns the family business and he is not worried about the major debt that his business has.

Okay. Do you work there?

Uh, part-time.

Okay.

Because I can't, I can't handle full-time there.

Can't handle it? What do you mean, him? You can't handle him?

No, just the ideology he has and the business dealings.

Okay. So why is it bringing you stress? You have a part-time job with a business that's in trouble. And with a guy whose ideology you don't, uh, agree with. Why would that be— cause you to be stressful?

I will be most likely be inheriting it with my 3 brothers, the business, which is probably worth around $10 million. Mm-hmm. And so I'm kind of in talks right now to take over the books and all the, like, the business side of it to pretty much be full-time.

When are you supposed to do that?

Um, probably within the next 10 to 15 years.

I'm so confused.

Okay.

Um, yeah, yeah.

I mean, so you're going to be part-time with a guy you disagree with while he runs a business in the ground for the next 10 years, and you're going to stand there and watch it happen, and then they're going to hand it to you and call that a blessing. Why don't you just say, I don't want it.

Yeah.

I don't, I don't want it.

So like, I mean, it's a good, oh, I shouldn't say it's a good business, but is it really worth, cause he tries to get me to go full time, like almost weekly on a weekly basis.

Well, you tell us the upside because you called in and said all the negative things. So it makes sense that you're saying—

Yeah, nothing you described there sounds like something I want to do. Why would you want to do this?

Yeah. So is it— so I guess I want to ask, should I try to like almost intervene and be like, yo, we shouldn't start taking out this debt? Well, because they're thinking about adding another $1.5 million debt. My, my family, your brothers. Yeah, my brother.

Who are your future partners?

Another million dollars in the debt.

Who are your future— who are your future partners?

I, I call my brothers.

Yeah, but you said it. You say your brothers are dumb as your dad.

You said it before yourself, uh, Sean. You said their ideology is completely different than yours, and I think you need to accept that, that that's the case. And you haven't said anything that shows any sign of them changing that ideology. And so if they continue down this path for the next however many years, they're just entrenching themselves further in that. And you're part-time.

What do you do for a living?

I operate heavy equipment.

All right. Are you, are you the baby of the family?

No, no, I'm not. Second old— no, third oldest.

Middle. Okay. All right. Yeah. Um, well, here, here's the thing. I don't think that these people are going to change. Do you?

No, I don't mind.

Okay, so you either gotta walk away from them or you gotta enjoy their bullcrap.

Yeah, it's one way to put it.

I mean, you really do. You're gonna have to decide which one you're gonna be. If it's me, I'm gonna let them have it. I'm gonna walk away. This sounds like a bear trap. Sounds like it's gonna tear your freaking leg off. It's gonna— the next 10 years of your life are going to be pure freaking misery till the old man dies. And then when he dies, now you got partners that were trained by him called your brothers. No thank you, I don't want in this.

For sure, for sure.

Yeah, I just—

I, I—

there's nothing here that aligns with who you are or who you want to be. This all sounds like misery, and there's not enough money there to fool with. Let them have it, they're going to screw it up, it's going to be worth nothing. Yeah, you don't believe that. You still— you think your wife thinks you're walking away from a million dollars and you're not. You're walking away from a million dollars worth of debt, that's what you're walking away from.

So 15 years—

I would sit down, if you want to have one final conversation with the boys and with the dad, and say, guys, I don't— I'm uncomfortable with this much debt and I'm not going to join the business as long as you guys continue to run it further up into debt and have no desire to get out of debt. 'cause it makes me uncomfortable. I don't agree with this. And I can love you, and if you want to go over there and do something that I don't agree with, we can still be dad and son, we can still be brothers, I can still love you.

Yeah.

But I do not want to personally be involved in this. It brings me great stress just thinking about it. And so if you guys want to commit to a path that gets us out of debt and keeps us out of debt as a permanent way of doing business, I would love to join and be part of this thing. I think it's got a future, but I am not going to get on this horse when you have this many bricks in the saddlebags.

Listen, I agree with that 100%. Clearly easier said than done.

Sure.

Because you're gonna have basically your whole family on this side and you're the Lone Ranger over here. Yeah, that's not easy, but I agree 100%.

Well, the thing is, you put everybody on notice and 100% chance they're not gonna do it.

No.

And so you're basically saying, here's why I'm gonna go on and have my great life over here, and I'm gonna love you. I've got family members— most of my family members don't know the stuff I teach, but I'm not in a deal with them either.

That's right.

And I still love them.

Some of them even vote wrong, and I still love them.

But that doesn't mean I have to go around and be in business with them, and it doesn't mean I have to sit around, be stressed, and I'm like somehow guilted into joining something I completely disagree with. No, walk away from it, son. It ain't worth it. You make a lot of money running your own heavy equipment operation without any debt.

That's probably the other part of it is there's the allure that maybe there's like that bit, maybe just possibly one day it could be good. Then you look back and you're like, man, I should have stayed part of it, right? He's probably thinking about that little 1 or 2%.

Yeah, it's like I'm gonna pet an alligator and hope it doesn't bite. What do they do? They bite. You know, it's dumb. You're just asking for it. Don't think they're gonna change. They don't— they only know how to do one thing, and that's bite. So don't, don't be shocked when they bite. I mean, it's just your dad. This is what he does. It's a predictable environment. Yeah, and he didn't hide it. He's not sure.

He just said, that's who I am.

Yeah, that's right.

And he kind of said, like it or lump it.

So I'd lump it. That's what I do. I mean, you know, it's just, it's hard to walk away from something like that, especially when all the family ties—

it feels like you're being drawn in by a tractor beam.

Gravitational pull.

Yeah.

Yes.

Drama has a gravitational pull.

I've noticed that drama, drama, family drama will suck you in and eat your life. Yeah. And then we connect a little $5 million debt to it just for the fun of it.

Yeah.

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Hi, Martina, what's up?

Uh, hi. Um, I, uh, 2 and a half years ago I bought a car and, um, it's a good car. It's a 2018 Corolla. Um, but I have a 16.5% interest on it and over half of my payments go only to interest. Um, I'm actually the cosigner on the car, on the car, and my mother is the main signer on the car. And I have had job instability, housing instability over the years, and I'm just now putting my life together. But currently, I haven't even been able to make my February car payment. So I also rely on this car as a source of income. So I don't—

what are you—

what is your advice on the car?

I would look for a different— I would start looking for a different source of income that's not tied to this car. My guess is you're doing some of one of the delivery apps.

Uh, yeah, I'm actually a Lyft driver. Um, I had a dead-end job, uh, that I quit that, but I got a new job that is a really good job. But, um, it just, it doesn't start for a couple more weeks.

Yeah.

And they're going to—

what is it?

How much are you going to be making at the new good job?

Um, about $3,000 to $4,000 a year.

It's— you mean a month or a month?

I mean, sorry, a month. I, um, I, I am a, uh, swim instructor and I'm contracting with a pool that pays very well for their lessons.

Okay. And then, uh, what's— what do you owe? What's the total amount owed on this car?

Uh, I owe $16,200 and I originally paid $18,500.

Have you looked to see what it's worth? If you looked on Kelley Blue Book, have you looked to see what it's worth private sale?

Uh, yes, it's worth $7,500.

Oh boy, what happened to it?

She's been driving Uber.

Oh yeah, that's true.

Yeah, destroyed the car.

Okay, well then your only choice here, you're— I mean, you're gonna have to pay it off because it's such a low value, um, and you're gonna have to work quickly to do it. Is it your only debt?

Uh, definitely not. I've got about $50,000 in student debt, and I ended up dropping out of school, uh, due to mental health issues. And I have about $25,000, $20,000 to $25,000 in personal loans and credit cards. And then I have an un— I don't even know how many thousands of dollars in medical debt. I don't even like know.

So you're going to be doing— you'll be doing swim lessons at this place. How long is it going to take you to build up your lesson pool to make $4,000 a month? Or is there a base pay?

Because I make— I'm going to be making about $30 to $40 an hour.

Uh, that's the plan.

But yeah, that's the problem is that it does depend on how many clients they get. They do get a lot of clients.

Yeah, I'd be looking really deeply into that, uh, first off. And my homework for you leaving this call is I would have something else lined up that gives me the ability to work, because you don't know how many clients they're gonna send your way, and you don't know how quickly your calendar's gonna fill up, and you've gotta get started on this debt ASAP. Because here's the thing, if you default on another payment, it's really gonna mess with your mom. I'm sure it already has, right?

Yeah, I feel bad for my mom, and my mom does try to help when she can, but she's already, she's a single mom raising my teenage brother with special needs, so she's already strapped a lot.

What we've gotta start with, let's go back to basics. All right.

Okay.

Before you do anything else with money, you take care of food, shelter, basic clothing, transportation, and utilities. Okay. Do you pay rent? Do you pay rent?

I do. And I live in the smallest, cheapest apartment I could find here in Phoenix. And I—

Perfect.

So you pay the rent.

So you pay the rent and you go to the grocery store. Wait, stop. You pay the rent. You go to the grocery store, you get the car current before you do anything. All the other debts can wait till you pay rent, get the car current, get, get food on the table. Okay, before you do anything, you got to build a basic foundation in your life, and that's food, shelter, clothing, transportation, and utilities. Okay, now once you're current on the car Then you can decide, let's reach out to the student loan people, let them know you need a hardship deferral, and send them some of the paperwork on some of the mental illness issues you've had, and just to let the bureaucrats have something to chew on for a little while while they wait around. You do nothing, you quit paying them for right now, and then you get this book of business at the, uh, the swim lessons full as fast as you can. And Jade's right, in the meantime and even after I want you to work all the time because what you need to fix your whole life right now is $16,000.

Yeah.

If you had $16,000 and this car payment was gone, we could really get after some of those other debts, couldn't we?

Yeah, it feels like that, that, um, car loan is a big wall between me and basically the rest of my life.

Agreed, agreed. So we need to go find an extra $2,000 a month for 8 months and smack this thing in the head. Okay, but that means like all you do is work, girl. You just work all— and it's not Uber. Freaking Uber's making the car worse. Okay, you're putting so many miles on it, you've destroyed the value of the car. So yeah, but if they— if you could—

if you can work 80 hours a week with swim lessons.

Just put your fins on and go, right?

Yeah.

I mean, if you can't get— if you can't get a bunch of hours down there, then let's find something else that you can do. That's the thing where you make the most possible money that's moral and legal, okay? Uh, and I want you to go cray-cray for a while because the way you bust this is you throw dynamite in the middle of it, and the dynamite is dollar bills. Okay, I like that. And, and you just say, food, shelter, lights and water, and pay off the stinking car. And that's all I am breathing to do right now. I breathe in and out every morning. I'm tired because I work all the time, but by God, I'm making progress for the first time in 5 years. Yes, you can do this. You can do it. What was the nature of your mental illness stuff?

Uh, I have a, uh, level 1 high-functioning autism, and that has made it hard for me to hold a regular full-time job.

Yeah.

Um, and then I also have, because of that stems, so like some anxiety and depression.

Yeah.

Um, I have over the last few months gotten on the right meds, got into the stable housing, and finally I'm starting to get my finances stable. I'm trying to do Baby Step 1 right now.

And here's the thing, here's what I've worked with them. In 35 years of doing this, I've worked with a whole bunch of people that both had high-level functioning autism, and I've worked with a whole bunch of people that had depression.

And the thing I know is the depression is made worse when you feel trapped and when you're not in action mode.

When you get in action mode and get in warrior mode and get in attack mode, it helps because it releases the dopamine and other things, and it helps to melt away the depression. And the autism can— the high-functioning autism can actually work in your favor in those situations because you have the ability to do extreme amounts of focus, don't you?

Yeah, I am really good at teaching people to swim, and actually the gym I'm working at is called Ability 360, and it's actually an adaptive gym, and most of their employees have some kind of disability.

Okay, and anything you can do to help people work out, if you could get a personal trainer thing going—

I was gonna say, you need to go to a specialist.

What we're gonna do is use all of this situation to your advantage to—

that, that's the thing that has been a blocker for you.

But you— because as you start melting away these debts, first and foremost, you get this car off your back, off your mother's back. Your brain is going to clear up the fog that you've been walking in, the stress-related anxiety of feeling trapped in 16%, and feeling honestly shame about signing up for 16% too. That was dumb. So you're not dumb, but that was dumb. So, you know, what you do is you get in attack mode, Warrior Girl. You put on your warrior stuff and you get after it. Complete focus.

I don't want you to pay anybody else.

Just let them all go bad. I don't really give a crap about your credit. You already don't have credit.

We know that because you had a 16.8% car payment.

So we know your credit's trash already. So I'm not worried about that at all. I'm worried about you. I want you to be free. So you hang on and we'll get you signed up for EveryDollar, and that'll help you walk through this stuff as well.

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Greg is in Nashville. Hey Greg, how are you?

I'm good.

How are you?

Better than I deserve.

What's up?

So, um, I have some whole life policies that me and my wife got like when we were like 20. I'm 50, I'll be 55 this year.

I'm sorry.

And I, I know, I know. I've heard, I've been listening to you for the last year or so, but my question is on it. Should we cash surrender those? Uh, there's each about $100,000 cash surrender. I don't think we have to pay on anymore. I think they've, we've had them since we were so young that the, I think they pay for themselves each year now.

Yeah.

And, uh, I don't know if it's worth— I don't necessarily need, uh, I mean, I could always use extra money, but, um, I don't know if it's worth doing the cash surrender on those policies or just leave them. They're small. I think they're $150,000 policies or something like that when we got them originally.

Okay. So you have $150,000 policy with $100,000 cash value. Is that right?

Yes.

And you have two, and you have two of them.

Like they sold you on that stuff when you're young.

No, I'm going to make sure I understand what you've got. Stop a second. Do you have two $150,000 policies and each of them have $100,000 cash value in them?

Yes. If we were to surrender them now, that's what I'm asking.

Okay, good. Okay. And so if you die, you know, they keep the $100,000, right? So you have $50,000 worth of insurance in essence. Do you follow me?

Yeah, that I kind of heard that the other day on one of your shows and I, that I didn't understand.

I don't understand it either. Cause it's the biggest screw job of the middle class in my life I've ever seen, but it happens all the time. So that's how a whole life policy works.

I do have a $2 million term policy that we got a few years ago.

Okay. So you're covered if you die, right? You don't need them.

Yeah.

No.

And, and my question is even about the term too, is like, do I need to keep that up if my value or like my personal value or me, my wife's value is over that amount? Should I like, do I need that life insurance or is it just worth keeping even after what life insurance is for is to take care of her if something happens to you.

If you have $5 million in mutual funds, you don't need life insurance. She's taken care of.

Okay.

Does that make sense?

Yes.

What life insurance for is to take care of you if something happens to her. And if you have a big pile of money and you're okay without her income, then she doesn't need— you're self-insured on all of it.

Okay.

Then back to the whole life. The whole life is paying an average of about 2% in growth on that $100,000. Had that $100,000 been in mutual funds last year, it would have made 24%. Uh, on average it would have made more like 12%. So you're losing somewhere around $10,000 to $20,000 a year in growth because that's so poorly invested. Oh, and by the way, when you die, they're going to pay $150,000 out. Okay, not a 100,000.

Do I have to pay— if we do the cash surrender, do we have to pay tax on that?

Your tax basis in a whole life policy is what you have paid into it over all these years. I suspect you've paid $100,000 into this over all these years.

I would assume that.

So your basis is probably higher. It almost always is. Uh, if it's not, it won't be by much. So you, if you have taxes, it'll be very, very, very small. But you're— if you just say, here's what my premiums were over this number of years and number of months, or whatever it is that, you know, the 25 or 30 years you've been getting ripped off, then easily you probably paid in $100K. You're going to get your money back out. And yes, I would cash it in. And if— what did you— what do you think your net worth is?

I mean, I think it's close to $6 Maybe I mean, if I were to sell everything.

Yeah.

If I were to sell everything.

So do you think the current asset base would generate enough income for your wife to be okay if you died today?

I mean, I think so. I hope so.

I hope so too. So yeah, I think, I think pretty easily.

That's, I mean, that was kind of one of my other questions is I got this, I got some industrial property that I don't necessarily need anymore that I have that I still owe about I mean, if I were to sell it, I could cash that out for about $2 million, maybe, you know, uh, after taxes. But I do make income on that.

It's up to you. What do you want your money invested in? That's an investment. And then you look at it and say, is this an investment that's given me enough yield on my money? I mean, long-term investments, you ought to be making 10+% on whatever it is, real estate, mutual funds, whatever. There's not really anything else that you should— that's fairly low-risk portfolio that'll do that. Mine make a lot more than that, and I don't take a lot of risk. So, but you got to look at that piece of industrial property. Is it making you a good return? And then dump that. But folks, the whole life cash value policy is the biggest ripoff in the financial planning world. I mean, it's like, it's like the payday lender to the middle class. You know, payday lenders screws poor people, right? And these people screw you. And it's a horrible rate of return. When you die, they keep your money because you've been paying extra for this savings account that you don't get. They only pay the face value when you die. It's that simple. And so get some inexpensive term insurance while you need insurance.

This guy didn't even need that anymore, probably. Um, and put your money, your investment money, in good investments that go up and they don't keep it when you die. And, and then you're not building a building in the skyline for somebody else. Where you think those life insurance buildings came from? They didn't come from Santa Claus, I know that. Same place those banks came from. They didn't come from Santa Claus, it came from them screwing you with credit cards all these years. And you're just smiling and going, I got airline miles. And you're just getting screwed over and over and over again. And it's just, you know, that's how this stuff happens. It's called a transfer of wealth from you to them because they're screwing you. So you just learn about these things and you go, never again. Changes everything.

James is in Columbus, Ohio. Hi James, how are you?

Doing well, how are you?

Better than I deserve. What's up?

Okay. Um, I have a, my youngest sister, she and her ex-boyfriend inherited a quarter million dollars about 3 to 4 years ago. Um, he has since passed from cancer and he, um, at the time I was going through a messy divorce and he gave me $6,000. To pay for my lawyer so I can take care of my divorce. I was going through a rough time, um, as a gift. And since then, you know, he's passed on, like I said, and she has blown through all that money, um, in the meantime and is back to square one again.

Wow.

And yeah, and she has not come out and said directly to me, but I've heard it through my um, other sister, and she keeps asking, you know, saying, hey, he needs to pay me back that $6,000, you know, that's— that was my money.

And so she's saying that he— the boyfriend got the money from her and lent it to you?

No, no, no, it was his, his parents. It was his inheritance from his parents.

Oh, okay.

Yeah, and, and I can afford to pay it back now. I'm in a good spot, um, in my life, and I can afford to to pay it back. I just don't feel like, yeah, I have to. I've helped her out with bills and stuff now that she's moved. They have a lot of money, like, you know, the occasional electric bill, things like that, where she's, you know, called me up and said, hey, can you know— I've done stuff like that.

Y'all are a hot mess, aren't you?

Yeah, yeah, right.

Are you, are you afraid that she's gonna do— you're just afraid, you're like, why do I give her another $6,000 to be irresponsible with, is what you're saying?

That.

And, you know, she has 3 kids with them. They're a little older, they're, um, 17, 18, in that range.

But, uh, I mean, there's— James, there's 2 options, okay? The third option is not keep whining about it, okay? I would either call her and say, your boyfriend gave me this money, it's a gift, I'm not going to pay it back, or I'd write her a check. But third option, I'm going to keep whining about this and y'all keep this family drama going on, on, on, and who said what and who told George and good lord, for $6,000, straighten it up, man.

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Leland is in Oklahoma City. Hi, Leland.

How are you?

All right. How are you?

Better than I deserve. What's up?

Um, so I've got a question. I'm 22 years old and I started a business last year and it's kind of just went backwards on me where I'm to the point now where I've got a piece of equipment that I'm sitting here staring down the barrel of a gun where they're basically probably gonna have to come repossess it the 1st of April.

So you started what kind of business, hon?

Um, custom dry fertilizer spreading business.

Okay.

And so you bought a— what is the equipment?

It's an applicator that applies dry fertilizer on fields.

And what, how much do you owe on it?

Uh, $178,000. My annual payment on it's $40,000 a year. And everything just went backwards.

I'm confused. I'm confused why they would loan a 22-year-old $178,000 on a piece of farm equipment.

Well, because I had a way to get into the business, and then since then it's just went backwards.

Since then I had the money for a down payment, put the money down.

How much did you put down?

$12,000.

But still, I mean, you were not even— were you in the business already?

I've been in agriculture business all my life.

You're 22.

Yes, sir.

Yeah. Okay. All my life is not long.

Um, well, I've been doing it ever since I could.

I know, honey, but I'm talking about what moron loans you $178,000 with a $12,000 down payment when you're 22 years old, there's nothing. There's nothing that says this deal should have happened.

Leland, you can't turn around and sell it?

I've been trying to, and I've tried selling it with an auction company, but they wanted me to put $100,000 up front before they'd even sell it.

Yeah.

And so you had grand plans of spreading a lot of fertilizer. What happened?

Um, I put my name out within a 100-mile radius, and the farm economy the way it is, fertilizer prices is high, and there's not a lot of people doing dry. They're all going different routes.

Cool. I'm sorry, hon. This is scary, isn't it?

Yeah, it definitely is.

Yeah, it's definitely scary to be sitting here in this position.

It's just been haunting me ever since, I guess.

All right, well, I went broke when I was 28, and I had more zeros on the end of my stupidity than you do, so I got you beat. Um, right, because this was straight up stupid, and the guy that loaned you the money deserves to lose $100,000. Whatever company did this— what's the name of the company?

I can't remember off the top of my head, and I—

you owe them $178,000 and you don't know the name of the company?

Well, I do, it's on a piece of paper at my house, and I don't have that information in front of me.

You bought it at a dealership, didn't you? What brand is it?

John Deere.

Yeah, I guess so. So you don't know John Deere incorporated the money?

No, no, absolutely not.

Okay. All right.

And my plan was, you know, do 10,000 acres a year. That can be done extremely easy. And I found out the hard way that it has not been near as easy as what everybody said it was supposed to be.

So the moral of the story is we don't borrow money to start businesses because things never turn out exactly the way they're supposed to in business. That's the rule of business. And so that's a lesson that sadly you have learned. The only good news is you learned it at 22. I learned it at 28, so I had the rest of my life to not do that stupid mistake again. And you have the rest of your life to not do this stupid mistake again. So the next time you have a bright idea and someone wants to loan you money to do your bright idea, you tell them no, right?

Yes, sir.

Okay, good. All right, so we've learned our lesson. Now let's walk through it. I'm so sorry, hon. So I do not know a way around this because I don't know your world. I'm still just sitting here aghast that someone loaned you that money, loaned you $178,000 to spread fertilizer. There's just so many fertilizer jokes that I could weave into this, but yeah, it just kind of comes— they just roll off the mind right now. But Anyway, the, um, the spreading of fertilizer is pretty thick here. But the, um, uh, so let me tell you what I think is going to happen and how you can handle it. Okay, I think you're going to get repoed at the first of the month. I don't know how to tell you to stop that with anything that's reasonable. One thing you could stop it with is a Chapter 13 bankruptcy, but that's a or Chapter 11 bankruptcy even in this case, but that's a pipe dream because the business idea is dead and there's no way to revive the cash flow. If you could revive the cash flow starting 2 months from now, you know, we could delay the repo and put it— by putting it into a bankruptcy, but I wouldn't do that here because I think this business idea is just a swing and a miss.

Right.

So I think they're taking it at the first of the month. Okay, then what's going to happen is they're going to sell the piece of equipment for X number of dollars at that same auction, and then they're going to come knocking on your door for the difference. It's called the deficit. Okay, so let's play pretend. Let's play pretend, and it's $178,000 owed, and they sell the piece of equipment for $100,000, and they come see you for $78,000. You're 22 years old, you don't have any money, right? That's where we're going to be. It's probably going to be a year before they knock on your door wanting the difference. It's not gonna be soon, okay? And when they do, uh, normally what happens is they push you and push you, and the person files bankruptcy, and they get nothing on their $78,000 in our example story here, okay? However, you have a year to prepare for this battle, and were you to save up during this coming year by working your little tail end off $25,000 and you offer them $25,000 as settlement in full on the deficit, they'll probably take it because they're used to getting nothing.

Right.

We settle deficits on car repos at 20-25 cents on the dollar every day. I've not done it much on farm equipment, so I don't know that world, but it's probably pretty close. And the reason we're able to settle those deficits at that is because they very seldom collect anything. Usually the person files Chapter 7 bankruptcy, they get a big goose egg, zero. Especially when you look at— look at it through the creditor's eyes, not to put you down, Leland, but looking at it from the banker's perspective. I'm trying to get money out of a 23-year-old who's broke. The likelihood of that's close to zero.

Right.

So if he stands up and offers me $25K, I do a little happy dance and take it. If I'm the banker. You follow me? So what are you going to do for a living now that your life is starting over, sir?

I mean, I'm pretty much self-employed and don't have— I mean, I don't have a college degree.

And what are you gonna do for a living, sir?

You're gonna farm?

You're gonna farm?

Whose farm are you farming?

Uh, some, some friends.

You're going to work on a farm?

Yes.

For someone else?

Yes.

And what does that pay?

It just depends. Sometimes $25 an hour, depending on who you're working for.

Okay. All right.

And then ask yourself, what do I want to be doing when I'm 32 that I'm a millionaire and it's not $25 an hour work? I'll help you with that.

Yes, sir.

And it's not going into debt $178,000 to spread manure. Oh no, this was dry. I'm sorry. Okay, but anyway, you see the point. Yeah, so you got to figure out what am I going to do next, because one of the things that I discovered when I went bankrupt, because I couldn't turn it around the way I think you actually can turn it around if you'll work like a crazy person and stack cash and keep your living expenses very, very low, I think you can scratch up some cash and settle the deficit when they do come after you 1 or 2 years from now. Don't call them, wait for them to call you, and in the meantime build a war chest and then settle it in full, in writing settlement. And I think you can get through this, I really do. And then you could just look at this in the rearview mirror as that dumb thing I did when I was 22. I can look at my life in the rearview mirror, that whole series of dumb things I did when I was 28. Yep, you can. You guys paid off you know, hundreds of thousands of dollars because of dumb things you did in your early 20s.

A lot of stupid things.

Yeah, and so it's, you know, you're talking to the choir here, okay? Singing with the choir. So, but I do want you to develop a future and a plan that doesn't involve a Hail Mary. You threw a Hail Mary into the end zone and got intercepted. Don't do that again. Learn, learn from the mistake. And we'll walk with you. Anything you need, Leland, you call me. And if you want to save up that money and when they mess with you, you call me. I'll walk you through it. I'll show you how to negotiate with them.

Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family. And then a curveball hits.

You know, we hear it all the time, uh, a car accident, a cancer diagnosis, a heart attack, and suddenly everything changes.

Yeah, and that's why you've always said that having term life insurance from Zander is essential because it protects your family if the worst happens.

Yeah, that's right.

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But there's another piece that people often overlook, and that's long-term disability insurance.

Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive but can't work, so it replaces a large part of your income so the bills still get paid while you get back on your feet.

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Protect yourself, protect your income, protect your family.

Welcome back to the Ramsey Show in the Fairwinds Credit Union studio.

I'm Dave Ramsey, your host. Jade Washaw, Ramsey Personality, number one bestselling author is my co-host.

Diane is in Chicago.

Hey Diane, how are you?

Hi, I'm doing well. How are you?

Better than I deserve. What's up?

Oh yes, same here. Well, I thank you for taking my call. Um, I currently have, um, uh, quite a bit of money in the bank, I feel. Um, and I am thinking about my retirement, and I'd like to know how invest— I should invest it in order to make it last through retirement.

How much is it?

Um, I— so I have $600,000 in the bank.

Wow.

Um, and debt-free. Um, I have just $250,000 in retirement, which I don't know what to do with because it's been with a payroll service since we had our own business. Um, and it's just been sitting there. I don't know what to do with it. I know nothing about it. I wasn't actively involved in our business. Um, I stayed home and took care of our kids, uh, raised them and, um, have decided to go into my own franchise. And so I know that I will be using some of that money for the franchise, but I don't know that it just sitting in a bank is the best place for it.

Yeah.

How old are you?

Uh, 57.

Okay.

And, uh, you said you were not involved in the business and now you're opening a franchise with the business money.

Yes. Uh-huh. Yeah.

Um, so your husband was running the business?

Yes. Uh-huh.

Where is he?

Um, he's, he's at home. Um, he is supporting me on my business. He's hoping at some point he'll be able to branch out and do something on his own. Um, but everything's been in my name. Um, The bank accounts, the houses, the business.

We sold the business last year, and then, um, that where the $600 grand came from?

Yeah, we sold it for $1.2 million, but we were given a large lump sum, um, and we paid off some unexpected unknown debts.

Like, um, okay, unknown. You're being cryptic.

I didn't I didn't know about it.

You're gonna have to tell— you're gonna tell us what's going on because you're not— it's not making sense.

My home— my home— my husband has a gambling debt. Oh, I don't know what he— he gets— he gets a set amount every month that comes in that he collects, and he uses that for extracurricular activities. I have no idea.

You don't know how much he's—

oh no, I know how much he gets. He gets $3,600 a month, and that's his play money.

Okay.

I get some of it.

So he's basically got a gambling problem that ran you guys deeply in debt and that's why everything's in your name.

Yes.

Okay. All right. That makes sense.

So who's supplying the $3,600 a month for him to continue gambling?

Um, we have $2,500 coming in from a rental that, um, that person bought the business and he has the option to buy by the end of the year for $350,000. If he exercises that right. Um, and then he also gets Social Security, $1,100 a month.

Okay. So at this point you're okay with losing $40,000 a year with your husband?

No, I'm not, but I have no control over that.

What's the, what's the plan moving forward? Does he know that?

Does he know that you apparently have a lot of control? You got everything in your name, right?

Everything's in my name. Um, he knows that I'm opening up this franchise, which will be approximately $125,000 to open the franchise on my own. He's just kind of like leaving, letting me leave the money in the bank, but I feel like it's not getting the best return. So I'm looking for ways that I can invest it.

I mean, we could tell you to get with a SmartVestor Pro and invest that money, but I really don't feel like that's the issue of the conversation.

Yeah, there's a lot, there's so much going on. Here's the problem: it's hard to fill up a hole while somebody's digging out the bottom.

Right.

And that, that's kind of what we're hearing here. But you, you feel like you've got him, his gambling addiction under control. And I question that because I've seen, I've seen so many. Well, I mean, but, but, uh, and so as long as you keep this stuff in your name, uh, I guess you have the option of divorce at some point if he runs up, you know, let's say he runs up a million dollar gambling debt and you don't want to pay it. With the money that's in your name, then you've only got one option at that point. So anyway, that's what you're facing. So yeah, I would take the $600,000 and I'd take the $250,000 and I would sit down with a SmartVestor Pro and begin to invest it in good mutual funds. If it averages 10% or more, it will double every 7 years. So you basically got $1 million in 7 years. At 50— at 64 years old, you'd have $2 million. At 7 more years, at 71 years old, you'd have $4 million. So you're gonna be fine if you do that and you don't piss it away with this franchise, if this franchise doesn't go belly up on you.

And so, and it sounds like you've never run a business before. He ran the business before, and now you're buying a franchise. So that's a little concerning.

Is the franchise in the same, like, field of expertise, or is it something totally different?

No, it's something that I'm passionate about, something that is for me, not for him. I don't expect his involvement in it, but I'm very confident and very passionate about this, and I'm expecting for it to be very successful, and I have a family that is willing to stand behind me and support me. So that's not even a question whether or not that's going to be successful. I'm confident that it will be.

Yeah, I, I got to tell you that that's, um, not true in the small business world. So there is risk that you're not perceiving, apparently. So yeah, you're going to buy it and you're going to do it, but I want to insulate you from you and this bad decision, if it's a bad decision, and I want to insulate you from him and his continuous bad decisions with $600,000 or more going over in a regular low-risk investment in comparison to gambling and in comparison to franchise purchasing. And so let's put some money over there so if these other two things go sideways and this plan doesn't work, then, you know, you've at least got that money working for you. So yeah, you need to sit down and do that, and you need to put a real limit on the amount of dollars you're going to pour into the franchise before it starts giving you money back instead of you putting money into it.

Absolutely.

And because if you don't, with the level of unrealistic optimism that you're coming at this with, and you're positive, uh, how positive you are about it, then you're going to end up going $300 grand in the hole on this thing. And if you want to put $125,000 in it and you believe in it, go do it. Go live your dream. I ain't got a problem with that. What I've got a problem with is these absolute statements. And I've been in business my whole life, and there is no absolute 100%. People are behind me. I feel positive. It's an area I'm passionate about. None of that may matter. You may still lose all that money. So don't, don't go into this $300,000 with all your positivity. If If you want to put $125,000 in it, do it. And then I'd put the rest of it over in with a SmartVestor Pro and some good mutual funds, and to where it's protected from this business risk and the gambling risk, and separate these things.

Yeah, I'm just, I'm gonna call it like I heard it. It almost sounded like this business for you was some sort of retaliatory thing against him to kind of prove that you're doing your thing over here. And my thing, I would just say draw a line in the sand and set some boundaries about how long you're going to endure this and to what point before you go and do the things that you need to do and make that separation, um, so that he can get the help that he needs. Because allowing this to persist doesn't feel like the answer. It feels like it's breeding resentment from you.

Oh, for sure. It kind of should.

Absolutely.

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Hi Nicole, how are you?

Hi, I'm good.

How are you?

Good.

What's up?

Um, so me and my husband live in an apartment and we're trying to decide if we should move to a bigger space because we do have 3 kids. So 2 are 5-year-old twins and then a 2-year-old baby girl. So last year we were able to pay off our vehicle, but we have $52,000 worth of student loan debt left. And we were going to use— we've been using mostly like our overage, which is about $1,100 that we have a month to put towards our debt. And then we also pretty much use like our tax break or whenever that comes in to throw a lot at it, just in and out. So we're trying to see, we want them to, you know, have a space to have a yard and like just more space. It's a little bit cramped up with all 5 of us here. So we were just wondering if we should stay or if we should kind of go. Like our budget would be tighter, but we're just trying to see what we should prioritize.

What are you guys earning between the 2 of you? Right now?

Um, gross would be $103,000.

Okay. The hard part with this is what you said. If you were to move from this apartment to a house, it's going to close the gap on how much margin you have to throw out this debt, which means there's going to be a longer period of time that you're going to be in debt, which long-term, that's going to affect your ability to build wealth. For that reason, I like the idea of home ownership, but I think the first step in that process needs to be eliminating the debt so that you can actually go wholeheartedly into the home buying process and actually do it the right way so that it's a blessing for you.

You're not even talking about home ownership, you're talking about renting a nicer place, aren't you?

Yeah, yeah, we were actually like looking to— our rent is $2,200, and so we were wanting to rent, like thinking about $2,500 as our max, but that doesn't include like gas and utility. I'm sorry, you know, okay. Understood. Yeah. So we just don't know if that's going to be— here's the thing with $400,000.

How much, how much debt have you paid off so far?

Uh, $36,000 with the vehicle.

And how long did that take?

Uh, that took us 2 years.

Okay. Making $130,000.

Uh, $103,000. Yeah.

Yeah. So you guys suck at this so far, Nicole.

We suck.

Yeah. $18,000 making $100 grand. $36,000 per year is not enough debt reduction. You guys are still out, you're still going out to eat, you're still going on vacation, you're still spending money, you're still not on a tight budget. And, and so you made a little progress, but you should have made a lot more progress. If you told me you paid off $36,000 in 6 months, see, then I can take that number and go, oh, wait a minute, you could clear up the rest of this in a year if you'd suck it up and get it done. But at the rate you're going, it's gonna take you 10 years. Yeah, that ain't cool.

That's true.

That ain't great.

That's how we feel.

Yeah. We gotta, we gotta not get stuck in that. And if you feel like you're never going to get out, then you just say, well, to heck with it. I'll just take a big old rent and go ahead and enjoy my life now and get the kids a yard. And you know, you give up, you're giving up is what you're doing because you're not making fast enough progress. And so I'm going to put you on the beans and rice plan if I'm you. I'm gonna sit down with my husband and go, look, we did a little bit here and we didn't do a bad thing, but we really weren't— it wasn't like we were spectacular. We kind of got the flu here and we need to really light this thing up. Instead of putting $1,500 a month on it, we need to take extra jobs, we need to sell stuff, we need to not go out to eat, we need to tight, tight, tight, tight, tighten down this budget, not go the other way. And let's get this thing to $3,000 or $4,000 a month going at this $60,000 that's left. And then we can get out in about 14 or 15 months.

Then we talk about building an emergency fund, and then we talk about buying a house, not renting one. Yeah, but what you're talking about is a 5 or a 6-year plan, and you won't even make it.

I agree. I, I— if you can have these kids— they're young right now, right? They're 5 years old, 3 years old. Now's the time that they can be squished, and they don't know the difference. You know the difference, but they don't know the difference. And I for one, would try to stay in that position as long as possible and save as much money as possible so that you can pay off this debt.

If they're squished and their life is miserable for one year, they'll be fine. That's better than them being not squished and having a mediocre to average life for the rest of their life.

You want to know what though? I, I think back a lot of times on the house that I grew up in, and I think back on the house that my parents grew up in with 6 kids.

Yeah, nobody told us they were tiny.

Nobody told us we were squished. No, we were, but nobody told us we were. It was a 1,000-square-foot brick ranch. Hello. And so, I mean, we went out in the backyard and played. They'd say, go play in the traffic.

Go outside.

You did have to play outside all the time.

Do you tell your kids to go play in the traffic?

You don't tell your kids.

I don't tell them to play in traffic.

I just tell them to—

My mother would say that all the time. Don't play in the traffic. Get out from under my feet.

Yes.

That's what caused me to be the way I am.

Dustin is in Coeur d'Alene, Idaho. Hey, Dustin, what's up?

Hi, um, so I'll get right into it. Uh, my dad incurred about $30,000 in debt. Uh, he has no retirement. His only income is Social Security. Uh, he now has dementia, and my brother and I are left kind of trying to manage this for him. Um, he's currently being sued on one credit card for $8,000, and he owes $13,000 on another credit card. And I guess my question is, should we try and settle this with them?

Does he own anything?

No, no assets.

Well, how would he settle it?

Uh, essentially my brother and I would have to help him out.

Why? Why would you do that? Just tell them, tell the credit card company to bite me.

He has no money. He has nothing to give.

They can't get anything. He doesn't have anything, right?

Uh, yeah, he has nothing. It's the only Social Security and I don't believe they can touch that.

They can't touch that. Does he own a home?

No, no.

He doesn't have any money in his bank account except the Social Security.

Yeah, it would, it would just be for me and my brother to have one less thing to, uh, to have to deal with.

I wouldn't deal with it at all. I got one less thing. I'm just going to show them the smallest finger on my left hand and say, that's all you get, nothing.

Are they calling you?

Uh, no, no.

I just tell them to, you know, tell them jump in a creek. You shouldn't have loaned money to a guy who had dementia. And no money.

Okay. And should I, uh, should I offer to have him sign a stipulated judgment to avoid additional attorney's fees?

Or who wouldn't tell—

who cares?

They're not going to get any of it. What I would do is call them up and say, if you want to talk to him, call him up and just say this. Say, I want you to make a note in the file, he has advanced dementia and zero assets. We're not going to have any conversations with you. You might as well write this off because you're not getting a dime. Okay, and just real simple, I mean, let's pretend he had passed away, okay? I just sent him a copy of the death certificate as a courtesy to let them know, and let them know that there's not a— there's no estate. And then after that, I'm not having any more discussions with these people. They're morons.

None of this can pass to you if you're worried about that.

No, yeah, I'm not worried about that.

I mean, it's his debt. I'm not responsible for that.

So it's just sad, and it's, it's one of this part— it's a sad, uh, subchapter, subparagraph in this overall sad story that you're dealing with. But what I would do is just say, I'm not going to worry about it at all. And if you want to have one conversation, just as a courtesy, you could, but I'm not going to have lengthy conversations. I'm not going to have multiple conversations, and I'm not going to give them a dime. There's no point in it. They shouldn't have loaned him the money.

Yeah, I agree.

And it's just sad. I'm sorry for you having to face that. And, um, you know, I've run into situations like that in my life. Dustin, how old are you?

Uh, 44.

Yeah, I've run into situations like that, and what I do is I say, okay, I got to help my dad out. Uh, in your case, this is what you're saying: I got to help my dad out. And this is a sad situation. And so what I'm gonna get from this is a lesson to never end up like this, right? I'm gonna do whatever it takes in my life to not end up this way. It's like, you know, I was working for a guy one time. He goes, I might be working in McDonald's at my retirement, but it'll be the one I own in St. Thomas.

Come on now.

So I'm gonna learn a lesson from those old people standing there working in McDonald's because they don't have any money. I don't want to be one of them. And so you look at this and you go, he's got no assets, he's got dementia. And the only positive thing in his life is he's got two sons that love him and are going to care for him. Other than that, this guy's a pauper. We would use old language, but it's very sad. And so take it as a lesson to go, I'm never, you know, and then you teach your kids, your grandpa ended up that way. Your grandpa was not a bad person, but this is how he ended up. And this is how we're not from this point forward. The family tree changes. We're shifting it. It's over. So take a lesson from it, at least. At least get that out of it. But no, I wouldn't give those guys any money. Not a dime.

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Well, we love debt-free screams. We love them in the lobby of Ramsey Solutions on our debt-free stage. We super love them when it's one of our Ramsey team members. TJ is with us here with his wife Alice, and he's a project manager on the EveryDollar team.

Been with us about a year, and they get to come in here and do their debt-free scream.

Welcome, guys!

Thank you.

Good to have you.

How nerve-wracking is this?

It's—

we're here, and it's finally real.

Love it.

How much have you paid off?

$165,000.

I love it.

How long did that take?

15 months.

Wow.

Awesome. Okay, and you've been here about a year, so you started on it before. How long y'all been married?

1 year and 8 months.

Oh, wow. So moving here, getting married, starting the debt-free journey, all in the last 2 years.

Yep.

Yes.

Wow. Where'd you move from?

Central Illinois, but we're originally from Chicagoland.

Okay.

All right.

So you got married and, uh, did you come to Nashville to take the Ramsey job?

Yep.

Okay. And project manager at EveryDollar. Well, that's awesome.

So you people out there that are using EveryDollar to get out of debt, it's all TJ's fault. All the things that are awesome about it, it's all TJ's fault.

He's one of the many talented folks we got on that team really, really working on this. So what kind of debt was the $165,000?

Yeah, it was $107,000 in student loans and then $58,000 in new cars. This was before learning about Ramsey.

Right, gotcha. Okay, very cool. How's it feel to be free?

Liberating.

Liberating, peaceful. It was the best sleep we've ever got— oh, I've gotten in the past 2 years— was, uh, October 30th when we made our final payment, uh, filled in the rest of that. I saw the thermometer that we had up there, uh, filling that in, calling those that supported us all along the way and just being able to cheer So, how did the order of events go about learning about doing the Ramsey stuff, coming to work here, getting married, all that?

How's that all that line up?

So, we got the Total Money Makeover as a wedding gift.

Okay.

It was not on our registry. We were not familiar.

It seldom is.

So, TJ read the book about 3 times, and then he started on this journey to try to coerce me into reading it. Um, he was saying that it's Bible-based, which really resonated with me. And then he was like, Dave's really funny, which I was like, hmm, let me see for myself. And I loved it. We had a conversation where we had combined our finances after getting married and realized that we had $2,800 of minimum payments, and we didn't feel like we were able to really live even though we had two pretty good incomes.

Very cool.

What do you do?

I'm a nurse.

Awesome.

Very cool. Good. Yeah, that is two good incomes.

Excellent.

Well done, y'all. Yeah. Okay, so you get married, you get the book, and you get on the same page. And then how does he end up with this job? That's weird.

Well, it all came down to— we were Dave-ish. Around Thanksgiving, I got to talk to my Uncle Matt and Aunt Gina, who were the ones that gifted us Total Money Makeover. And we're like, we're doing it, we're doing it. And they were like, are you really? Doing it. Oh, and we were like, well, we have $20,000 in savings while we're trying to pay down the debts. We, you know, we paid for our wedding and anything that was a gift we just threw at debt. And I'm like, that felt good, let's keep going. And they were like, hey, check out their website for additional resources. And I was like, okay, cool. So I started looking around, I saw there's a careers page, I'm like, all right, let's see what this is all about. Saw some jobs, I was like, I could probably do that. I applied. Previous role, I applied for hundreds of jobs and then eventually got my one. I was like, all right, Lord, if you open up the doors for me, I'm going to continue to walk through them. And however, was it 12 steps to get here?

Yeah.

The hiring process.

Yeah.

But, you know, it really felt like God called me here, able to serve, be able to be here and help spread hope to other people.

That's really awesome. So what are you going to do to celebrate?

We did.

We did.

We bought a king-size bed.

Yeah.

Nice.

On adjustable bases.

Best sleep of my life.

Yeah.

Oh, I love that. That's exactly right.

I thought he was sleeping better because he got out of bed.

I did too, but they got a new mattress.

Because he got a new mattress is what it was. That's great.

That's excellent.

Very cool. All right, so what advice do you have? What do you tell people when they say, how did you do that? How do you pay off $165,000 newly married in 15 months? That's over $10,000 a month.

Yeah, uh, God's blessings for sure. Um, everything kind of had to come right together. We wrote down October of 2025. And when I first— when we were writing that, I'm like, everything is going to have to come up right in order for this to happen. And God's blessings allowed us to be there. A new opportunity. She was travel nursing.

Mm.

Good money.

Which is where a lot of all of that came from.

Yeah, that's good money.

And it took a lot of sacrifice. I mean, I had to move down here and I was here for about a month and a half before she got to come down.

Oh, that is a big sacrifice.

So she was doing some roles that were about an hour and a half away. So a lot of long commute. And I appreciate all the sacrifices that we were able to make, both of us taking up multiple jobs to be able to get there and just want to be an inspiration to others.

So, so working here can be a mixed blessing because everybody's like, everybody's doing this, you know, it's like the positive peer pressure, but it's also pressure. I mean, was it helpful to have your team, you know, all up in your business, or, you know, your buddies cheering you on, or was that a bad— I mean, they're all standing out there, you better be nice. But I mean, is it helpful to be in this kind of environment when you're doing it or not? I think it could work against you.

Yeah, at least I can tell my side. It's been extremely— it's a support system. If we didn't believe in it, then yes, I think it'd be a whole lot of different pressure. They were like, oh, I don't really want to do it, but We believed in it. We knew that was going to be good for us. Changing our family tree, going through Financial Peace University, really seeing the whole scope of where your life can change and being able to use EveryDollar to keep us on track and on budget.

Um, it was a blessing for us because as far as our friends and family, it's still kind of a mixed bag, um, as far as, you know, their thoughts on our journey. So we committed to it. It was amazing for TJ to be working in an environment where we got that support. So it ultimately was such a blessing.

Yeah, cool. Very cool.

Any setbacks on the way?

Right after we got out of it, I had to— we had some— I had some health stuff that came up. So we got debt-free and then we were able to cash flow $10K in medical expenses. And now we're tackling on taxes, but we were able to cash flow it all. Yeah, car repairs and all that. We were able to cash flow it as we went.

So it's about time to celebrate with some of it. Oh my gosh. Yeah, that's enough. Enough already. So you're working on an EveryDollar, you're project manager on EveryDollar. The journey and now the freedom has to affect how you look at all those projects.

Yeah. Just—

I mean, you're not agnostic anymore.

You're in it.

You're able to just focus. It's, it's being able to say, okay, this— I'm a product of this. Yeah, I believed in it. Yeah, it makes it that much more motivating to be able to come in every single day, come into work knowing that I made a difference not only for myself but for everyone outside of these walls, which I know we preach very dearly here. Um, it's truly inspiring. It's just so nice to be a part of it, something that you believe in, and you're able to say, I'm affecting this, I'm changing this, I'm trying to make this better, I'm trying to make it easier to work the Ramsey Plan. Yeah, and That's all the motivation you need.

Amen. Amen.

I'm proud of y'all.

Yeah, excellent job.

Well done. And the team's out here gathered, and none of them are working.

They're all here to cheer you on, and, uh, this is great. I'm glad they're here to cheer you on. It's very, very cool. Congratulations, you two.

Thank you.

Very well done. All right, we don't ask— when a team member's on, we don't ask their household income because all their friends are standing around, and that's not fair. But, uh, they did pay off $165,000 $100,000 in 15 months.

Count it down, let's hear a debt-free scream!

3, 2, 1, we're debt-free!

Yeah!

This is how you do it, ladies and gentlemen.

Love it, man. You know, I can't imagine coming to work in a place like this right after I got married. The place I went to work right after I got married was bad.

I mean, lucky for them, it's great because now you're submerged by everything you need to get off on the right foot financially.

Yeah, yeah. I mean, it's like you don't have a choice around here.

I mean, well, you're on stage this morning, staff meeting, doing Walk the Talk. Oh yeah, we have a whole system here where we're not being hypocrites. The people that work here need to be doing the stuff we teach, you know. Hello, 100%.

100%.

The non-hypocrite system. Walk the talk, right?

On your honor. That's right.

Yeah, and these guys, they did it. I'm so proud of them. $165,000.

They were smoking it. 15 months.

Man, let's get it done. Get 'er done.

Logan's in Indiana. Hey, Logan, what's up?

Wait a minute, let me try again. Hey Logan, what's up?

Hey sir, how we doing? Thanks for taking my call.

Sure, how can I help?

Well, I'm trying to get some advice on my wife and I going into debt to start a cattle operation.

Okay, how long you been listening to the show, Logan?

Uh, about 6 months or so.

Okay. And so you know that about 95% of what we talk about is telling people to not go in debt and how to get out of debt, right?

Yeah, it is. I feel like I've heard a little bit of information with businesses that sometimes, like buying a business or something, that can depend on the profit that it brings and how quickly it can be paid off. So I wanted to see if that would work in this case.

No, that would be like buying it from an owner and the owner gets the profit— the former owner gets the profit until not borrowing $150,000 to buy cows from the bank. That's different.

Um, okay.

So I don't borrow money, Logan, and I've done that for 40 years. And I run a business and I've grown the business with the profits and the business without borrowing money to do it. And because the simple fact is this: business has risk. When you borrow money to start a business or run a business, you increase the risk 100-fold. A lot more chance that you're gonna go bankrupt. And so, um, what's your household income, sir?

About $120,000 to $130,000 gross, depending on overtime. Great.

Good for you. So if you took out a $150,000 loan, how fast could you pay it back?

Um, running the numbers that we ran, given the market now, you know, and obviously as long as it doesn't just completely tank out, Within about 2 years, um, to 3 at the most, by your third, your third round of calves, um, everything should be completely paid off and it would be profit after that minus operational costs.

Yeah. So what would be wrong with starting a little bit smaller and taking 4 years and making the thing cash flow its way to the exact same position? Buy, buy, buy a third of what you're talking about buying. With cash.

Okay.

And make that third buy the next third and buy the next third. You don't need any money out of this cattle operation. You could pour every single dollar of profit into growing it. Agreed?

Correct.

Yeah, that would be the plan.

Because you have a good income at home already. And so, um, I think it's what we call in business organically growing the business with your cash, your own cash. And that's what we've done here, although we weren't able to do it as fast as you're going to be able to do it. And that's assuming cattle prices don't do what they have done in the past, which is they're all over the freaking place, as you know. I'm sure you've looked at the trend lines on that. It's scary. So there's times the market has tanked, and, uh, it's an agricultural product, and so it's a, it's a lot more unpredictable than some other types of businesses. So you've got to be very, very careful. But if I were in your shoes, I would get— I would scratch the itch, but I would save up $50,000, $75,000 in cash by living on nothing, and I'd dump every bit of that in there. And then I'd take every dime of profit and use it to grow the business. And I think you'll be there 1 year later than you would have been there if you borrowed the money and everything went perfect, which by the way, nothing ever goes perfect.

That is, that's true.

Yeah, I mean, you get the cows get sick, there's all kinds of problems. There's, you know, the Brazilians decide they're going to come in and, you know, upset the beef market. I don't know. I mean, I don't know how this works, but there's always something, right?

Correct.

So, um, yeah, it— I would rather you do that and, and be tired and stretched on your cash, and then no one's going to take it away from you. You're not going to lose everything because you rolled the dice on this particular horse race. I just crossed metaphors.

That's all right.

That, no, that, that makes sense. A follow-up to that would be is if you were to cash flow this, what's your opinion on, you know, like leasing pasture and stuff? Do you look at that as is that looked at a little bit different?

No, that's just over— that's like— that's just like lease— that's like leasing a building to run your business in instead of buying the building. That's— there's no problem. I would rent the pasture for sure.

Okay.

Because now we've got two businesses. If you— if you buy the pasture, you got two businesses. You got the real estate business and the farming business. Yeah. I mean, it's like— it's like me, I've got this building here that's 650,000 square feet. Like, you know, $600 million property, right? So I've got this piece of real estate. I'm in the real estate business, and I've got a business that's inside the real estate. But I've got two things going on here, very substantial things— Ramsey and a big old piece of real estate, big campus here, right? I mean, I'm in the office building business, period. No matter how you cut it. And you can mix those two together and act like, well, they're all one thing. No, they're really not. It's— I've got a big old office building I could at least leased it. There's 6 of them right down the road down here. I could have leased another one and not put, you know, not put half a billion dollars into this thing, right? So that's the thing. So just no need to get in the real estate business. I just lease it. If you're gonna start a restaurant, for God's sakes, don't buy the building.

Oh gosh, please no.

Just rent the building and get started, you know. You start a daycare, rent the building, and just don't get in the real estate business until you've been in business a long time and you've got a predictable environment. But you don't have that there until then. So, wow, cool. I think we won that one.

Yeah, I think, I think he's gonna take your advice.

I think he's gonna do it.

I believe in him.

I like it. I like Logan. All right, that's kind of nice. I'm— I like getting one occasionally. Leona's in Cincinnati. Hi, Leona, how are you?

Hi, Dave. Hi, Jade. I'm good, how are you?

Better than I deserve. What's up?

Um, so I have a quick question. So my husband and I, we have a 1-year-old, and we recently moved— well, not recently, last year. We had switched from our apartment because of noisy neighbors and went to a townhome. Um, the townhome, when we moved in there, it was not great, and we sent several emails to the leasing office about the issues that we were having, and, you know, mold and spiders everywhere, and centipedes, and all these things happening in there. Um, we told them that we are not happy with the townhome, and they said they'll fix things. Months went by, they weren't fixing anything, so we decided to just break our lease because I have LegalShield through my job, and I reached out to an attorney through there, and they said, well, they failed to provide suitable living conditions. I have pictures of everything, and you don't owe anything. So you can break your lease and you'll be fine.

Oh boy, that was not good advice.

Oh wow.

Yeah, you got what you paid for with that lawyer.

Did you send them— did you send— I mean, did you get any— did you send them anything in writing? Did you do any— did you do your due diligence other than just making a phone call?

Oh no, so we definitely sent pictures. Uh, you mean to the leasing office or to LegalShield?

Uh, both. Did you send them— did you let them know that you were seeking legal counsel on behalf— like, did you go through the due diligence of making sure that they understand what's going on?

I—

yeah, so I called the leasing office. My husband went up there because they weren't responding to my emails. My husband went up there, up there. Um, he talked to them. They said, okay, we'll take care of things. Um, a couple months went by, nothing was happening. The most they did was change the tray in the dishwasher.

Okay, so stop it. It's just— stop. I mean, it's You just moved out when you got mad because you called LegalShield and they said you could.

Yeah, well, we weren't, we weren't planning to break our lease because we did that before to move to where we are now, and that was not fun. So we said we're not going to break the lease unless we get some kind of advice that we can. So after we called the head office, the property management company or whoever, we talked to the district manager. They said, okay, definitely send us emails and everything, all the pictures that you've been reaching out out to them about and everything. Did that, no response. Called again, left a voice message, not getting any response. So the Legal Shield attorney said they sent them a letter to the leasing office and the property management company and saying that they failed to provide whatever suitable living conditions for us and our child, so we don't owe them anything. So because of that, we decided to just break our lease because they weren't fixing anything. We asked them multiple times. Are you going to send me a letter?

Well, then this is on LegalShield. LegalShield needs to defend you for free.

Mm-hmm.

Yeah, they told me to call you back. You're gonna get sued, I can promise you. I promise you 100% this landlord's coming after you. You don't have the option of just walking away because I got some bugs. Even if you send them pictures and even if they don't answer you, even if they're jerks, even if they have horrible service, it's not how it works. I mean, so now LegalShield's bit this off. They need to pick it up and close the deal, and they're not going to be able to. This is going to be horrible for you.

Welcome back to the Ramsey Show in the Fairwinds Credit Union studio. Jade Washaw, Ramsey personality, number one bestselling author, is my co-host today.

Nicole is in Detroit. Hi, Nicole, how are you?

Hi, Dave, I'm good.

How are you?

Better than I deserve. Better than we deserve. How can we help?

Um, so I was calling, um, so basically my husband has refused to, like, give me financial visibility into his life. Um, he has put his foot down, like, you know, literally, like, no, you cannot see anything that I have going on financially. I can tell you about it, um, but you, you can't know anything that's going on. Um, and the reason why it happened is we were in a position to buy a home, and the, the housing counselor and the lender that we were working with asked about our finances. And I found myself saying, well, I don't, I don't know. Let me hold on. Let me hold on. Let me ask my husband. And then after our call was done, I told my husband, I said, you know, I shouldn't have to say hold on to anyone. Let me ask my husband.

Right.

I should know what's going on. You know, in that part of your life, it's like we're roommates. It's like you're over here.

How did that go?

He said, I'm a grown man. I do not have to show you anything financially in my life. I said, but you're a deacon, you're a deacon, and you're my husband. I said, we're supposed to be one. That you saying that makes us not be one.

And what did he say?

Me showing you my money has nothing to do with us being one. My husband is a deacon.

Yeah, but this is—

wait a minute, wait a minute. So where are we now?

So I moved out. Um, we, we were in a rental. Um, when I, when we came together 8 years ago, it was, it was his house. So I moved in with him. We've been there for 8 years. We were trying to work on getting our own house and because all this, I mean, it's so bad, Dave. It's so bad.

But what else is going on? Cause this was explosive. So what else is going on? I have a feeling that it wasn't This has not been the only issue is what I'm gathering.

Yeah, nope. So he has a 21-year-old son, um, and his son is very disrespectful. Um, he basically— it's basically like he runs the house. And if I try to say anything to him about his son, what his son does, if I try to tell him stuff that goes on when he's not around, he never believes me. So it's just, it's just bubbling over.

Yeah.

How can we help you today, hon?

So I just want to know, so we've separated. He has filed divorce papers, but I haven't signed them yet. I'm trying to talk to him, but he is not talkable. Gotcha. That's not a word.

Have you suggested some sort of counsel? Have you suggested, hey, this is really bad, we need to get in counseling? What did he say?

Yes, I said that, and he said no because you're— that person is not going to tell me that I have to allow you to see my money.

See, here's the thing, and I'm just going to go ahead and say this, this is based off of just what you've told me, so take it with a grain of salt. This—

it—

based on what you're saying, there's something going on he doesn't want you to see, and maybe it does have to do with his, uh, stature or how people view him. He doesn't want you to have any parts of what he's doing with his money. Maybe that's a blessing. He's the one that's filed for divorce. Maybe this is you dodging a bullet. I don't know. I don't know. But this sounds like somebody who doesn't— it sounds like somebody who's got extremely high pride that they cannot be told nor learn anything about a better way to exist in a relationship. That's what you've told me.

Yeah.

The, um, and the weird thing is, is that all of his finances are now going to get exposed in the divorce, right?

Because it's ironic, the judge not gonna go along with his plan.

It's very ironic.

100% of his finances have to be exposed, or he's going to have to lie to the court, which will get him put in jail. So you don't lie to the court, not even divorce court. So, you know, he has to come, he has to show all the stuff to the lawyers, and it has to all come before the judge, and he's gonna find out that half of it's yours. That's gonna be very weird for him.

Yeah, well, we only been married 2 years.

Yeah, that doesn't matter.

Oh, I thought it was 8. So you've been in the house for 6 years?

Married to—

okay.

Yeah.

Uh, what are you concerned about? Are you concerned that there's debt that your name might be on that you don't know about?

Actually, so before we separated, um, I had to find out the hard way that he had a garnishment on my, on my account. And so I had to ask him several times to get it taken care of. Um, he got them to remove it and put it on his bank account, but he was not happy about it. And, you know, so I was just like, for you to be so angry with me and telling me no, you won't allow me to see you financially, but you got a garnishment on my, on my account, how is that fair?

There's probably some shame going on that you don't know about. There's probably a lot here going on that you don't know about. And it's— now granted, I don't know what parts you've contributed to whatever mess is here. I'm sure there's— it's two, you know, two sides to everything. But, um, but my guess is there's some things going on that might be causing him some shame. Or, you know, it might, might be just the way he views, uh, those gender roles that you guys never aligned on. That money is the man's thing and it's not— who knows? But there— it's never going to come out because he won't go to counseling with you.

It's gonna come out in the divorce. You're gonna find out everything about his money in the divorce, which is the irony of him filing for divorce because you wanted to find out what was going on with the money. So it's kind of ironic, and he just—

he's just—

he's just dumb enough he doesn't know that. So this is gonna be a real surprise to him. It's gonna be this awesome wake-up call for him because the judge doesn't really care about— the judge doesn't really care about his theories. He's just gonna tell him what to do, and if you don't do it, you're in contempt of court, and it's really nasty. You don't want to screw around with the judge. So, um, this is, this is where he's going. The question you asked, I have a sad, horrible answer for. What can I say to him to do to make him want to do this? And the answer is nothing. There's not anything you can say to him. I wish there was one phrase, one way of doing it, but this is a very entrenched position that he has taken to the point he's willing to give up his marriage over this. And so there's not a single phrase. If he was coming to the table and saying, hey, I want to work on this, let's go to counseling, I could give you some things to say to do all that. But, but in this situation, you know, you're just going to be, uh, you know, just throwing water against the wall.

There's nothing happening here. So, um, I'm sorry. I'm sorry that you chose poorly. In a husband. This guy, this guy's bad news.

Too bad.

Yeah, you wouldn't— no one listening that has a daughter would want their daughter to marry this guy. Not a person out there, regardless of how much Nicole contributed or whatever else was going on in the house, all that kind of thing. But this is a guy that is not in a good place, and he's not helpful, and he's not a good husband.

And that's sad.

You're, you know, there's not a single phrase that's gonna make him not be a jerk. I don't have that 'not be a jerk' phrase. I don't have one of those. And I'm sorry, I wish it was. I wish there was something we could just do. But unless he just decides that he wants to be together, unified, work together in full visibility, and in order to save his marriage and start with a marriage counselor, then you're not gonna make it, kiddo. I'm sorry. I wish you were.

Hey, good folks, Dr. John Delony here. Don't you think life is too short to hate Mondays? Listen, you're worth loving the work you do and where you do it. So guess what? Ramsey Solutions is hiring. If you're ready to join an amazing team that's all about changing lives and spreading hope, we want to see your application right now. We're hiring for technology, sales, marketing, writing, copy editing, and creative roles. Check out all our job postings at ramseysolutions.com/careers. That's ramseysolutions.com/careers.

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All right, today's question comes from Steve in West Virginia. He says, I'm 66 years old and have been retired for 5 years. I have $500,000 in retirement funds, but I have 2 debts $40,000 in credit card debt and $150,000 on my mortgage. I have Social Security and pension income of $6,000 per month. Should I pay off my debt to reduce my withdrawal each month from my 401(k)? Um, I wish I had a little bit more information, but off the top I would say yes, because to have your mortgage paid for, that's money that you're not going to have to take a draw on. And my guess— I don't know what your expenses are every month, but my guess is you probably are living okay on the $6,000 per month if you don't have a single debt in the world.

Yeah, make sure you cut up the stupid credit cards and get on a budget so you don't spend more than you make again.

Yeah, that's really what you need to do.

I don't know, credit card debt is not the problem, it's the symptom of you overspending.

Yeah, and if it's, it's, if it's old debt and you're like, I am, I'm not on that lifestyle anymore, I just still have it laying around, absolutely paid off. But if it's current debt, then Dave is absolutely right about that.

Mike's in Virginia Beach.

Hey Mike, how are you? Good, how you guys doing? Better than we deserve. What's up?

Um, my wife and her siblings inherited some money from their dad when he passed away several years back, and one of the siblings is the executor, and they said they're not going to tell one of the other siblings about it because they don't feel that they're financially responsible and they're just going to hold their money back from them. Oh, I say that's not, uh, that ain't their call.

You're exactly right.

Okay, well, I'm smarter than I look sometimes.

The executor, the literal man, the reason they're called an executor is they're to execute, right? They execute the what the will said. It didn't, it didn't say you're a trust officer and you get to decide what's best. It said you execute what the will says. That's your only option. Even if you don't like it, even if you don't agree with it, you have one option when you're the executor, and that's to execute what the will says.

Otherwise, the people on the other side of it are gonna sue your butt, and they're gonna win because you violated your fiduciary responsibility.

What's your wife think?

Uh, she agrees with me.

Okay.

You know, you guys got your part, right?

Yeah, yeah.

Okay, well, I would tell the executor that they're being stupid and they're gonna get sued.

Well, I kind of did that.

Yeah, well, then that's— you've done your job and leave it alone. It's not your problem anymore.

How much is it?

Yeah, uh, you know, I think it was like $8,000 or $10,000 each.

Oh, it's not enough to mess with. But here's the thing, the person finds out that they were not given the money they're supposed to be given, the person that is the executor is in deep Kimchi legally.

Well, that's, that's what I've kind of figured.

Yep, for sure, for sure. But there's nothing you can do about it. I mean, it's just these are people doing whatever they want to do, and that's what people do all the time. That's the problem. When you pick the executor of your will, folks, you need to pick someone who's going to have the integrity to execute your will. Yeah, what is it you will to happen? That's right, that's what that means.

They need to be Switzerland.

Yeah.

Did you say deep kimchi?

I just did.

Okay, just checking.

Just make sure. Things come up in the Rolodex.

Nora is in Fort Wayne, Indiana. Hi, Nora, what's up?

Hi, Dave and Jade, excited to talk to you today. I have an exciting question for you.

I want to know, should we buy a new car with cash or pay off our house?

Ooh, my favorite type of question. Tell us more.

Okay, so we are in Baby Steps 4, 5, and 6. We've been on the Ramsey Plan for a solid, like, 7 years. We have $60,000 saved for the vehicle in a high-yield savings account. But then when we are doing our annual budget meeting, we were also looking at our brokerage account, which is sitting at $35,000.

Okay.

Our mortgage is approximately $83,000 left.

Okay.

So if we liquidate that brokerage account, we could pay off the home and be done.

And still have an emergency fund?

Yeah, we do have $10,000 set aside for an emergency fund.

That's a little small. That's a bit small.

Is, yeah, is that what it would be if the house were gone?

Yeah, well, we use like the brokerage account as like a backup emergency.

Yeah, you don't have that anymore in this scenario.

We have, we have $10,000 in our bank account now as a—

I know, but if you use the brokerage account and you use the $60,000 from the car and you pay off the house, you're down to $10,000, which isn't much.

Well, we want to spend approximately $50,000 on a car.

No, he's saying if you pay the house off, you got nothing but 10 grand left, right?

We also have a $10,000 savings account that is just a side emergency fund.

So you have $20,000. So we would have, yeah, we would have $20,000 if the house is paid off. Okay, that's what I didn't understand. Is your net worth over a million dollars?

$60,000.

It is, sir.

And this is a brand new car?

Um, new to us.

Oh, it's not a brand new car.

It might be a year old.

Okay, that's not a brand new car. It either is or it isn't. Okay, all right. Now, um, so, wow.

I mean, how long would it take you? You could do either. I don't think there's a wrong answer here. How long would it take you if you were to pay off the house? How quickly could you save back up $60,000 and buy the car you want?

We think by probably August.

Oh, crap, man. I, I got to be honest, I— there's not a wrong answer. I'd probably pay the house off.

Yeah, there's a wrong answer. Don't buy the car. Pay the house off and then go buy the car.

You would?

I would never buy that car.

I mean, I wouldn't buy— I wouldn't buy the car. I would pay the house off. But I'm just saying, do you think she'd be dead wrong?

Yeah, because in 8 months you can go get the car anyway.

That's what I said.

So get the house paid off. What are your priorities here? Your priorities are get the house paid off, not buy a stupid car. Stupid cars you can get. I got a stupid car today. I don't mind getting a stupid car. Listen, fine, but they go down in value.

Yeah, but do you think that lightning would strike her down? No, had she done the other way?

Lightning doesn't strike you down on anything on this show, hardly. But no, I'm definitely paying the house off 100% today. I pay it off today, and then I'd save like crazy and go buy the car that you want. And you might even get a nicer car parking it in the driveway of a paid-for house. Hello, no question that that's the order things got to go down. Definitely, definitely, definitely, definitely. So here's the thing, and I'm a car guy, I, you know, I, I've got— own a bunch of different vehicles here and there, and, um, they all go down in value.

Yeah.

And so you're, you know, you can't put appreciating assets in the same sentence with the largest depreciating asset that we buy, even if you've got a high net worth.

But what sent you over the edge was the fact that they owed so little on the mortgage.

Yeah, it's simple. Yeah, I mean, if she owed $500,000 on the mortgage, then we could have a different discussion.

Or even $100,000. Well, see, my tipping point probably would have been like $250,000.

Yeah, I mean, I just, I The point is that this is very doable very quickly. And so it doesn't matter. So do it the right way.

Yes, I'm with you.

And let your actions reflect that you've got an understanding of how these assets work.

Right.

Because 5 years from today, that $50,000 car is worth $15,000.

Yes, and that's going to be painful. Hopefully you keep it for a very long time.

5 years from today, that house will have doubled twice. Yes, you know, so I mean, there's no question where I'm going with this, and it doesn't mean you never buy a car.

I bought one today, literally.

You bought a car today?

Yeah.

What'd you get?

I got the new Bronco Raptor.

Look at you.

So I just wanted one, but I'm not— I'm not mad about cars. That's not the point. That's not the point. The point is they go down in value, and they need to be a minor part of your overall life.

Dave Ramsey here. Most people stay stuck with their money because they're not paying attention to it. Most people are living paycheck to paycheck, stressed out and broke. Don't be most people. You work way too hard to be broke and feel broke, and you deserve to have something to show for it. That's why we built the EveryDollar budget app. It gives you a personalized plan for your money that shows you how to free up extra money every month and use it to beat debt and build lasting wealth. Plus, you get real coaches guiding you through your plan step by step. Look, most people hearing this will just keep hoping something changes, but not you. You're ready to make change happen starting now. Go download EveryDollar in the App Store or Google Play and start for free today.

In the lobby of Ramsey Solutions on the debt-free stage, Nathan and Megan are with us.

Hey guys, how are you?

Hi Dave, doing well. Great to be here.

Good to have you.

Where do y'all live?

We live in Woodstock, Georgia.

Oh yeah, just down the road. Welcome to Nashville.

Thank Thank you. Good to have you guys.

And how much debt have you paid off?

We paid off $155,000 in just under 5 years.

Good for you.

There you go.

And your range of income during that time?

Starting income was $100,000 and ending income was $145,000.

Very cool. What do y'all do for a living?

So I work in technology. I manage a whole tech team in the convenience industry.

Oh yeah? Fun.

Yep.

And I worked part-time in a credit department at a staffing company during that time.

Okay, good.

What kind of debt was it?

It was our mortgage.

Wow!

Looking at weird people.

I know.

That's right.

Very cool. How much is this house worth?

About $450,000 now.

Good for you guys.

That's awesome.

And you've been putting money in your retirement all along?

That's right.

So how much is in that?

About $300,000.

All right, very good.

Almost millionaires now.

That's right.

Look at you guys.

Wow.

And how old are you two?

How old are you?

I'm 28.

And I'm 29.

So you guys started this in your early 20s.

Yes.

Our goal was to get it paid off before Nathan turned 30 in March.

And you did it!

Wow!

Paid it off on Christmas Day, 2025.

What?

Wow!

That's awesome!

So, tell us the story.

How do you guys be smart enough to do this at 22 years old?

Well, honestly, he listened to you since he was—

12 years old.

Yep, 12 years old.

And we didn't have TV, so as a teenager, I couldn't go to bed early, so I'd I would turn on my clock radio to Dave Ramsey, and I didn't quite get everything at the time of what you were saying, but I started picking it up. And then, I mean, it really just comes from my parents instilling, hey, if you're gonna accomplish anything, you gotta work for it. So then following your steps along the way, we did Financial Peace University right after we were married and just, I mean, worked as a team together.

Wow.

Very cool.

Yep.

So your mom and dad were doing this stuff and then you're hearing the stuff on talk radio back in the day.

Yes.

Yeah.

And they were, it was really just instilling, if you want anything in life, you have to work for it. So that was what my parents gave me. And you gave me the tools to, you know, us the tools to work together and accomplish this.

Yeah, we also bought a fixer-upper that needed a lot of equity, or a lot of sweat equity.

Oh my gosh, I see the picture.

So that's what it used to look like, and we worked really hard on it, and it's in Woodstock, which is where we wanted to grow up, wanted the kids to grow up. And it doesn't even look like the same house. So that's where we live.

Yeah, that was the dream, uh, just putting, putting our hard work into it and not just expecting things to come to us and working for what we wanted.

Looks like it started with a chainsaw.

Yeah, that's right.

It did.

And lots of poison ivy.

So the moment you bought it, you knew you were gonna pay it off fast. Like you already—

Yes, that was the whole idea.

Yes, definitely. We wanted to attack it, you know.

So Megan, I mean, when you're dating a guy that at 12 years old is listening to a financial show on talk radio before he goes to bed, you might be dating a nerd.

I know. I I learned this a lot from him, and then he got me onto you two. And I truly— he is a little bit of a nerd.

So, it sounds like he was an attractive nerd.

He was. Tall, dark, and handsome. I was very, you know— Didn't take much convincing.

Financial, yes.

So, and I truly, I mean, once I learned it too, once we did Financial Peace, I was all in as well. We were just trying to do it together. And I think that's one of the keys too, is just doing it together.

You guys throw those pictures up again on YouTube in case someone is 23 years old and thinks it's impossible to buy a house. You could buy that house. Looks like a jungle. Put it back up there. It looks like a dadgum jungle. Yeah. I mean, that's the— Yeah.

And you said it's worth $400,000 now?

$450,000 now in the neighborhood.

Woodstock's sweet. Oh, we love it.

It's a great area.

Dave always says it's important to dream together. So it was actually— took us 2 years to convince this lady. It was vacant to sell us the home, and we would drive by and she would get annoyed at me. I'd go, "That's our home. See our home?" And we didn't even have it under contract yet, but we dreamed and we studied.

I'd get angry too when we would drive by it.

And you know, following the principles of going, "Hey, we wanted a 15-year mortgage, not more than 20% of our take-home pay." How did you get her to sell it? Well, honestly, I was her friend for 2 years. She didn't know anyone else. And I honestly didn't think we were going to get it most of the time. But I said, I just told her, if whenever she wants to sell, she'll think of us first. And one day after 2 years, she said, said, all right, I'm ready to sell.

Yeah, we wrote her letters, drove to her house at a different residence.

She wasn't—

it was vacant.

Yeah, it was vacant. It looked like it in a different place. And we drove there, smart, and got her phone number. And they talked on the phone every month until she decided to say—

until she relented.

We're ready. Yeah.

Wow, I love this guy. This is incredible.

And of course you cash flowed all the, all the upgrades. You did the inside and the outside.

We did. We went down of the studs. And it was, you know, I had some family help, but it was all us just working through it. We did gas, electrical, plumbing, we did the septic system, and we did everything.

So you pay— I just need America to hear this.

You cash flowed all of that and paid off the $175,000.

Wow.

So you 26-year-olds that are whining, I can't buy a house right now, Trump's ruined the world. Oh, kiss my butt. These guys right here, hold their beer. Look at this. It's unbelievable.

Yeah, tell them what they need to know because there's a lot of naysayers out there. Tell them what they need to know.

Absolutely, Dave, you preach it. I actually saw the bumper sticker over there and I love it. And it was pray like everything depends on God and work like everything depends on you. And that was us going into this. I tell everyone that'll listen, I'm annoying, I'll get passionate about it, but I'm— but you're the problem, you're the solution. Work hard. There is— I can't stand anyone that says anything different, but there's more opportunity in America than there has ever been in any country for all of history. So work for it. It's easy to look at all the obstacles and say, hey, I can't do this, but roll up your sleeves and get to work. Work is underestimated, and working together as a team, this has just helped us in our marriage. And, you know, now we have a home for our kids, and we're just going to continue building the dream.

Mic drop.

You can pull that headset off and slam it on the floor.

No, don't, don't, don't do that.

It looks expensive.

Yes. I say too, like, just, um, you know, eat at home and practical things like being content with what you have, not comparing yourself to the people around you, and also just work in side hustles. We both worked during this whole process. I was stay-at-home mom, but also trying to help provide some income during that time. And Nathan worked really hard at his job just to wake— work his way up, but also worked side hustles. So do the things that are required to get to that point, but also just enjoy your life and be content with what you have. Um, Already.

Well, I mean, you're not even 30 years old, you have a paid-for half-million-dollar house, you've got— you're well on your way to being millionaires within the next probably 36 months or so, the way the markets are moving and everything's happening. You guys are in really, really good shape. Congratulations. I'm very proud of you. I know your parents are proud of you. Your children, you're heroes. You have changed your family tree. So your secret is work at it and stick together.

Yeah, and just don't take no for an answer. You know, if someone tells you no, just figure another way to do it.

Yeah, there's always another way, another way to get it done.

Wow, that's amazing. I have one more question. When you went to buy this house, uh, how did you set your expectations? Because a lot of people would have seen that before you renovated and said, that's not— that's a shack, I'm not going to spend my money on that. How, how did you know to do that?

Well, great question. I mean, my whole life it's been What do people— we're so wealthy as a country, people throw away great things that we can work hard and make beautiful. So going into it, it was horrible looking on the inside, but we were just looking and we had talked about it. What are the bones? What can't we change? Let's make sure that's good. We can work hard on everything else and change that.

Change some paint colors, change the flooring. Yeah, that's right. Just kind of see past that stuff on the outside and just look at the beauty on the inside. And we— there were no mold issues, no like, foundation issues. Like, we were very blessed. God blessed us with this home too. Like, we were put in all the right situations where we were like, this is not just coincidental.

That's so awesome. So, so good, guys.

Well done. All right, bring the kiddos up. Let's get their names and ages.

Oh boy, are they cute.

They are cute, cute.

Oh, there's more of them than I thought.

Yes, they just keep coming.

Yes, we paid it off when he was 10 days old.

Oh, what a guy.

Yes. Yes, baby James.

So what's his name?

This is James.

James.

He's 2 months now.

And the girls?

This is Emmy, she's 5, and then Lily is 2.

All right.

Yes.

You guys are—

your parents are heroes. You don't even know it yet. You're too young. But someday you'll know they're the ones that changed the family tree. Way to go. All right, Nathan and Megan, count it down.

Let's hear a debt-free scream. $155,000 paid off in 5 years, making $140,000 almost, basically, Baby Steps Millionaires already at 30 years old.

Let's hear it.

3, 2, 1.

We're debt free!

Yeah! Wow!

I love it, I love it.

Wow.

Those kids are cute.

They are. I love it. That's amazing, Dave.

Wow.

Amazing.

Oh, it can be done. We're all gonna die.

Not, no, not if you're Nathan and Megan. They got it figured out, baby.

Hey guys, Dave Ramsey here. There is a lot of noise out there when it comes to money advice, and most of it just leaves people confused. That is why we built Ask Ramsey. It's a free tool on our website where you can ask your money question and get a clear answer based on the same proven Ramsey principles we teach on the show every day. No mixed messages, no bad advice, just clarity you can trust. Go to RamseySolutions.com and try Ask Ramsey today. That's RamseySolutions.com.

Our scripture of the day is 1 Corinthians 15:58. Therefore, my dear brothers and sisters, stand firm. Let nothing move you. Always give yourselves fully to the work of the Lord, because you know that your labor in the Lord is not in vain. Thomas Sowell said, there are people who go through the motions and people who get the job done. It's amazing how much work you can accomplish just by hiring the latter and firing the former. Amen.

Charlie is with us in Cleveland, Ohio. Hey Charlie, how are you?

Better than I deserve.

How are you, Dave?

Just the same. What's up?

Yeah, so, uh, my wife and I, uh, we have two young kids, and this month we, uh, just Got that free. So we pay off the mortgage.

Good for you.

There you go.

Thank you. Thank you. So the question is, uh, so I have a pretty good job. Uh, my wife, she stays home. My dad, uh, he is in his, uh, 70s. He's still working, uh, probably because maybe a series of, uh, poor financial decisions. So he cannot retire because he, he has to continue to financially support, uh, other family members, adult family members in the family, right, overseas. Um, and, uh, so I'm a bit torn, uh, because I, I, I don't have any debt I can help, uh, but I also don't want to continue to encourage bad behaviors. Um, so I'm kind of torn apart and seeking some advice here.

So what do you make?

$600,000.

Wow.

Good for you.

And what is it you're being torn about?

What is it you're being asked to do or that you're doing?

Um, I want my dad to be able to enjoy, uh, retirement life.

Yeah, but he chose to give all his money to somebody overseas.

Uh, well, he lives overseas, so he doesn't live here in the States. Yeah, we are immigrants.

Okay. From which country?

Korea.

Okay. All right. And so he lives overseas and he's 70 years old and he doesn't— he has the money to support himself, but he doesn't because he gives it to other family members.

Correct.

Okay. All right.

What's the situation with the other family members? Are they ill? Are they unable to work? Can he stop doing that today or is the damage completely done?

Well, I say it's multifold, right? So, you know, some of the family members, he supports them. Uh, just to help them with their lifestyle choices. And some of the family members, they chose not to work, uh, because, uh, you know, some of the, the, the poor choices they made in the past. So that makes them, it makes it very difficult for them to find jobs. So basically my dad has been paying for everything, you know, for as long as—

what happened if he couldn't?

That's the big question.

So, uh, we don't know.

Uh, so do you give your dad money?

Huh?

Are you being asked to give your father money so that he can work and give them money?

He makes good money, but I'm worried he probably doesn't have enough saved for his—

what's the equivalent? Give us an equivalent in US dollars of what he makes over there.

Oh, he makes $250,000 and he's 70 years old.

Okay. So let me stop. What's the problem? The problem is he gives all of his money away and he's going to retire with nothing and ask you to get to help him. Is that the problem?

The problem is, you know, I don't know if that's going to make the problem worse because I'm worried that if I give him the money, the money just go to other family members.

No, I wouldn't give him anything. I'm just asking you, today you're not giving him anything, so there's not a problem other than you're observing that in the future there's getting ready to be something happening, right?

Correct. I'm anticipating.

Yeah, that, that's what I'm trying to figure out. Okay. All right. So what you're anticipating is, is that he's going to run out of the ability to work and not have any money because he's given all of his away.

Yes.

Yeah. At that point, you can decide how much you want to help him. I mean, and you, you'll have the money to— you make $600,000, but we're not going to help him to the tune that he has enough to help everybody else, only to the tune that he has enough to help himself. I'm guessing, because I, I'm a redneck hillbilly and I don't know these things, but I'm guessing that part of this might be cultural.

It is very cultural.

Yeah, because I mean, in You know, in the Latino world, for instance, it's very normal to have a more of a family obligation to support parents than we would have in a typical gringo culture, right? My hillbilly culture, you know, you're not required to do that. Puritan ethics, so to speak, you're not required to do that, right? But in an Asian culture where you're talking about, or the Latino culture, it's more normalized to be asked to, expected to, and you've grown up with it your whole life. It's integrated into your DNA that, that this is how things are done. Is that correct?

Yeah, that's 100% correct.

Yeah, and I'm thinking that may lend itself to why he's giving all of his money away as well, even though someone in my seat would look at that and go, why are you doing that? But, but, and the answer is it's a cultural difference, um, to do that. It doesn't make it smart, doesn't make it dumb, it's just an explanation, right? So mathematically we can all agree it's dumb, but there's a reason that he's doing it. It's not just straight up irresponsibility, although it is intertwined into this cultural icon. So, um, yeah, I, I, you know, I think I'd talk to him about it if he'll listen, but I bet he doesn't. And just say, Dad, you know, you need to be aware that when you are broke, I will be helping you only with food and shelter, not with enough to, uh, for you to further on your giving of these other people. So these other people, when you run out of gas and aren't able to work, are going to be on their own. And they should know that now, because I'm not going to be held, uh, to this standard. I think it's okay to go ahead and communicate that, but I don't think it's going to change what's going to occur.

What's going to occur is what you expect. I think that's exactly what's going to happen. Do you, Jade?

I do. I think he's 70 years old, and he's been making this decision for a long time, and it would be a miracle if he stopped today.

Yeah, and he's old school within that culture.

Yes.

And he's duty-bound.

Yep, yep.

And going to follow through on his duty. To take care of them, no matter how irresponsible or, you know, uh, bad decisions they've been making. He's going to do it anyway, I think. Aren't you, Charlie? You agree with that?

I agree. I agree 100%. I tried to have a conversation 10 years ago, didn't really go anywhere. So you're right, decided to focus on my own and then try to get that free and protect the family.

You know, the hard part for you, Charlie, is holding— going to be to hold that boundary when the time comes. Because you're likely going to feel guilty and all these other things, but it wasn't your— you didn't make the choice, right? He did. And that's the thing that you'll have to remind yourself of many, many times.

And you'll be able to help him to a reasonable degree.

Absolutely.

But not an unreasonable degree. And it's not gonna be—

it's not gonna make everybody happy.

No one in the end of the story is gonna be thrilled with the outcome. But the great news is you make a huge income, and you're gonna be in a wonderful position financially, and And if you want to reach over and do a, you know, help somebody a little bit every month, you can do that and you won't even notice mathematically. And so that's the thing. So yeah, not accounting for cultural differences, and you have to account for that, so it's not fair to say that, but you just, folks, you need to plan to not be a burden on your children.

Yeah, you do. And you said it exactly right, you know, it might be a reason for a behavior, but it doesn't make it right or good.

That's true.

And the same way that Charlie was able to look at that and go, that doesn't make sense.

Yeah, yeah. And he comes, he comes from, right, comes right straight out of that. So, so yeah, you just gotta go, um, no.

Yeah, you can't.

Don't park. We're not going to participate in that. It doesn't make sense. And, uh, I've learned a better way.

Yes.

And that can happen. You could learn that. I could learn that from his culture. You learn that from my culture. It doesn't matter. You can learn a better way.

That's right. But the hard part is he's going to have to do that at the expense of, um, hurt feelings. Hurt feelings and family meals and all that stuff is going to be very different when you, when you draw boundaries like that. People don't like it and they push up against them and all that stuff.

So count on it.

Good luck to you.

That puts this 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.