Transcript of How to Escape Living Paycheck to Paycheck

Live from the headquarters of Ramsey Solutions. It's the Ramsey Show. We help people build wealth, do work that they love, and create actual amazing

relationships.

I'm Dave Ramsey, your host George Campbell, number 1 best selling author, host of the George Campbell show on YouTube is Ramsey Personality is my cohost today. The phone number here is 888-825-5225. Tony is in Chicago. Hi, Tony. Welcome to The Ramsey Show.

Hey, guys. Thanks for taking my call.

Sure. What's up?

Hey. So I manage a special needs trust for my mother who's 67. And currently, the money in that account is about 170,000 and it's all sitting in cash. And I got a call from the bank today asking if I you know, they're trying to encourage me to invest it in different ways. And I recently saw a video of you talking about the risks of bonds, and I wanted to call and ask your opinion on how I should best go about this.

Yeah. I would not do any bonds for sure. Your mom is in a special needs trust? What's her what's her issue?

She has multiple sclerosis, has had it for 30 years, and is in a nursing home.

Oh, wow. Okay. And the 170 is all the money she has in the world?

Plus about 10,000 in, checking account, but yes.

Okay. That's it. Alright. And how much are you using? Is there a burn rate on it?

Are you using it for her care?

I have not touched a cent

of it in the few years it's been active, well, since I established it.

How is she being cared for?

Medicare and Medicaid.

Okay. Alright. Cool. Alright. So to the extent we can leave it alone, we can invest it in something that has a longer time horizon to be safe.

So just like a good gross stock mutual fund, if you leave that alone 5 years, you're pretty safe. Okay? So I certainly wouldn't put all of it there. I'd be looking for a mix between high yield savings for a big chunk of this. And then the other chunk, I might do something as simple as an S and P 500 or sit down with a SmartVester Pro and just pick out some very, very calm growth and income type funds.

But all of those funds would be in the last year, they would have paid 20%, but the last year, the market was up 30, which is crazy. That's not normal. But in a in an average, they would probably pay out 10, where the market's paying out 12, where a high yield savings is paying out 4. So Correct. You know, I'm gonna invest some of it, not all

of it.

I'm gonna invest some of it, not all of it to the extent I'm comfortable I can leave my hands off of it.

Okay.

What does the next 1 to 2 years look like as far as short term costs?

I really don't know how to answer that question. I don't foresee any major costs. But, you know, like, for example, she just had a bunch of dental work done that wasn't covered, but we're able to pay that without having to dip into this special needs trust. So things like that maybe, but otherwise, I'm not sure.

Okay. Yeah. I mean, if it was me, I'm probably putting like a 100 in some mutual funds with a SmartVester Pro that have a very low volatility, very calm funds. Okay? And, then I'm gonna put the other, like, 70 into just high yield savings.

But that will at least change your income. Instead of making, $4,000 on that 100, you you might make $12,000 on that 100.

Mhmm.

That kind of thing.

I understand. Okay. Outstanding.

But but you wanna be able to, you know, you wanna be able to access it when she needs it because that's the primary thing it's for. So, yeah, click on at Ramsey Solutions, just click on SmartVista Pro and find 1 near you that you like and sit down with them, and they can teach you some things you can do. Bryce is in Dallas. Hey, Bryce. What's up?

Hey, guys. Thank you so much for answering my call.

Sure. How can we help?

Well, I ran into a recent situation. Let me get let me just get into it. But, basically, I've driven a 2018 Ford F150 for about 7 years. We ran into an engine issue to where the second the second cylinder within the engine busted. After taking it to 2 mechanics, I got the same verdict that it's gonna cost about $15,000.

It's gonna require a whole brand new engine replacement. And so just considering my options, these 2, top things have been entering my mind. Either, 1, I pay the $15,000 to go ahead and get the engine replaced. This

is an f 150 that

has about a 127,000 miles on it, or I can go toward getting a new vehicle. And the 1 that I'm currently let me maybe I have a lot of numbers that I've just been working through, but let me just give some details. But it's the exact same vehicle, exact same model. The only difference is it's a brand new year. Considering the down payment that I would make and the vehicle trade in value that I got from a dealership, comes out to about $25,000 going in.

The

vehicle price on as it as

it is quoted at is about $40,000, and the current APR rate is 1.9% over 60 months. So ballpark, that's $15,000.

Wanna go buy a brand new truck. Is that what you're saying?

Yeah. I'm considering either buying a brand new truck versus getting getting into broke.

You don't go buy a brand new truck when you're broke. No.

Okay.

Okay. This this this 2018, if it was running, is worth what?

2018, I mean, it's sure

it's worth running. I mean, it's if it

was running, it's 10,000, 11,000 ballpark.

Yeah. So So that's what you get.

You got a $20,000 or $10,000 truck. You got notes on this truck. Right?

Fully paid off.

Okay. And and so you wanna use this as an excuse to do something stupid and go in debt and buy a truck you can't afford?

No. How much money do you have saved up?

About 20,000 saved up.

And what's your income?

95,000 a year.

Okay. And does that 20,000 you have saved, does that include your emergency fund, or is this just your car savings fund is 20 grand?

That's emergency fund 20,000.

K. Buying a new car is not an emergency, honey, by definition. It's a Bryce wants a new truck is what this is.

That is true.

There's no emergency here. Alright. So let's let's backtrack a little bit. If you if you get a different car, you need to get about a $10,000 car that you can pay cash for. Okay?

Okay.

That that that's the wise thing to do in your situation. Because car payments are a mathematical ball and chain that will 100% cause you to not build wealth and stay middle class the rest of your life. If you invest into a good mutual fund, what you were getting ready to put in put into that truck, you'll be wealthy.

Okay.

That that's what I want you to do. And I I I'm not against truck. I got a nice truck. I drove a nice truck to work today. Alright?

Yeah.

Yeah. I know. I know. Yeah.

Yeah. That that's not the point. Now let's backtrack on 1 other thing too. $15,000 for a new engine in that truck is Asa 9. Somebody's running you up a flag.

So you need to look at a couple of other things. Number 1, I want you to hit 2 more, good mechanics, and I want you to consider 2 possibilities to fix the truck before you make the decision to get rid of it. Number 1 possibility is buy a salvage engine from a junkyard on a truck that was totaled, but the engine's perfect. And the engine has 10,000, 15,000 miles on it, and you can buy that for pennies of what you're talking about. Or do something like a factory rebuilt motor, not a brand new motor like a Jasper brand.

As an example, they rebuild them, and it's half of what you're talking about. So you do not need a brand new engine in a 2018. That's asinine fixed. That's a bad repair. So you need a used engine or a rebuilt engine in a 2018, then you decide if you're gonna keep it or not.

No new trucks, Bryce, if you wanna be rich.

This is the Ramsey Show.

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That's xander.com or 800356 4282. George Campbell Ramsay personality is my co host today. Bill is with us in San Diego. Hi, Bill. How are you?

Bill? Hello, Bill.

I'm here.

Hey. How are you? How can we help?

I am good. How are you?

Good. How can we help today, sir?

Alright. So, my wife and I combined, we make about $5 to $600,000 a year. But, we still somehow are unable to save as much as I believe we should save. So harm you know? So that's my problem.

I mean, our monthly expenses are about $30,000 a month and, you know, then add taxes to that. So we pretty much even out of the year. And I believe when we make 5 to $600,000 a year, we should be able to save 1.

Oh, yeah. I think the $30,000 a month expense is your clue.

How much of that is debt payments?

Well, it's on 2 properties. 1 is primary residence and 1 is an investment property. And the debt payments, on the mortgage are, added to about, $12,000 a month.

Yeah. Why do you need $18,000 a month to run your household?

Well, about $8,000 to $9,000 go to charity, for a good cause. And then the rest, like, I would say about $10,000 is, for groceries, utilities, for the car payment, and, a little bit for, you know, towards the Why

do you have car payments when you make $600,000 a year?

Say that again?

Why would you have a car payment when you make $600,000 a year?

Well, we, 1 of the car is paid off, or the other 1, it's a lease. So we make about $750 a month for that 1. Then we have a bigger family, 5 people. So, you know, it's a relatively bigger SUV.

Well, which you could have written a check and purchased. And should have instead of leasing and renting your car for $700 a month. Okay. So, yeah. You're giving away a $100,000 a year in that $30,000 a month budget.

You said 8 to $10,000. So there's a where a $100,000 of it goes. Right?

Yeah. Is it? Yeah. It could be more than that. A 100 to 120.

Yeah.

Mhmm. Okay. And, you know, and you've got a car payment.

Yes.

Which we would not have. And what do you guys do for a living?

I, own a business, and my wife, works with, a, with a company. She makes about 100,000 and the rest of my income, and I I own a service business, service based business.

Okay. Alright. The way you're discussing this, the language you're using is very general. It's not precise about the numbers, which tells me you're kinda just throwing this over there and just shocked that it disappeared. So, if I woke up in your shoes, you've got a level of disgust.

So this is not okay is what you're saying. We make this kind of money. We shouldn't have no money. We shouldn't have a car payment. When we make $600, we should've just bought the car.

Then what I would do is simply do a detailed budget with your spouse and come into agreement of what we want to give, what we want to save, and what we want to spend, and what we want to spend it on. And every month before the month begins, every dollar has an assignment exactly. But it kind of feels like, Bill, I went through a period of time in my life where I thought I could out earn my stupidity, my lack of organization, my lack of detail, and you can't. If you had a person working in your business that was managing a section of your business as poorly as you are managing your finances, you would fire them for incompetence. And so you gotta kind of treat it that way from an emotional standpoint and do a detailed budget.

And it's funny, Dave. As people make more, especially people who are good at making money, like Bill's good at making money. You're good at making money. You think you can just solve the problem by, well, I'll just make more money. As long as we don't overdraft, we're doing okay.

But when

you do that budget, you realize, if this was a business, you go, we are wasting a lot of money in this business. We could be doing a lot better if we cut the spending, get out of this debt. We might need to sell this investment property. It's not a blessing right now. Might need to downshift some of our giving a little bit until we get back on track.

So that's the kinds of things you'd the levers you'd be pulling if this was a business. You need to treat your household the same way.

Yeah. Every you know, you need to detail it out and then stick to it. And both of you, you and your wife, have an agreement. You're both looking at it. You're not bringing it in slapping it down on the table and declaring, I have done a budget.

You people will live on it. That won't work. Now you get your wife involved in the disgust. It's not okay that we make this much money and we have no money. It's not okay that we make this much money and we don't invest.

So generosity is awesome. Investing is amazing. Enjoying money? Yes, you should. All 3 things.

But very very very very very very intentional. And right now you're not intentional. You're kind of throwing a bail of dollars over the fence, and then coming back to see what's left later.

Mhmm.

And after the family devours it. And so, it may be you downshift your giving. Your giving is pretty heavy. I'm not against generosity in any form. I tell folks to do it all the time.

But if you're doing 0 investing and you're giving 20%, you may need to adjust that, at least temporarily. But I think you got some lifestyle issues, and I think you guys just kinda walk around do whatever you want because you're making enough money. And I think if you'll just actually pay attention and say no. We're not doing that. No.

That's crazy. That that's a that's a we we're spending what on that? Yeah. Yeah. And you start actually telling the money what to do.

You'll very naturally, tighten this up a little bit. Dane is in Houston, Texas. Hi, Dane. How are you?

Hey. I'm doing good, mister Ramsey. How about yourself?

Better than I deserve. What's up?

Alright. So me and my wife, I'm the only 1 that works out of the family. We got 2 kids. Only debt we have is our house. We owe about a $141,000 on it.

And we were gonna continue paying towards the house and paying it off sooner, but we were wondering, should we sell the house and move farther inland away from Galveston Bay so our insurance ain't so expensive? My flood insurance is about 3,000 a year. Homeowners with fire is about 2,000, and then my windstorm is around 1500. Should we sell the house with that we have a 2.7% interest on and move farther in for a more expensive house with a higher interest rate or stay?

Well, in a sense, you have a high interest rate now because you have a hurricane tax.

That's true.

In a sense, because of the location of the property.

Yes, sir.

You know, I I, it's causing you pain. I can you it's caused which because you asked the question. Well, I mean, the only thing wrong with moving is that you're gonna not gonna get the same rate next time. Well, whoopie doopie. When rates come down, you can refinance.

We bought we marry the house. We date the rate. So rates are temporary.

Yes, sir.

And if you're gonna pay pay this thing off the next few years, if it's at 1.40 and you go, we're gonna aggressively get this thing down to 0 in the next 5 years, the interest rate's not gonna matter that much.

Right. Yeah. We planned on paying the house off that we're in now within the next 5 to 10 years.

Yeah. And if you bought 1 the similar price range, you could do the same thing, but you didn't have all the insurance cost.

Right.

So I wouldn't go just upgrade in house and get a way more expensive house and get a way bigger mortgage just to get out of this tax and insurance situation.

Not necessary. Yeah. Buy a similar price range. If your payment goes up a little, so what? But I buy similar price range and make the move.

Here's the way the best way to handle this sometimes is look out 10 years, 20 years

Mhmm.

And say, where do I want to be? Okay. If you if you have this house paid for 20 years from now, what is that insurance cost going to do? It's gonna go up every year.

Yes, sir.

Or it's even going to be worse. It's going to be like Florida, it's going to be hard to get at all. Right. Right? And the house is going to go on up in value, there's no question about that.

But you live in this constant, you're in a storm zone, is what it amounts to. So 10 years from now, if you move inland and you pay it off, you're gonna have more normal taxes, more normal insurance, and you're gonna see an appreciation just as well. So where do you want to live 10 years from today with a paid for house? That'll answer your question. This is the Ramsey Show.

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That's byrna.com/dave. George Campbell Ramsey personality is my cohost. Abby is in Des Moines, Iowa. Hi, Abby. Welcome to the Ramsey Show.

Hi. Happy to be here.

Good to have you. How can we help?

Well, I need help with this credit card situation that's a part of a bigger problem. But my husband and I separated about 3 months ago. 2 months ago, we stopped paying credit cards, and I just found out that before they go into collections that we might wanna start paying them. Again, we just owe so much. We just have been overwhelmed and have not had good advice.

So that's why I called you.

You're currently still separated?

Yes.

Why?

Well,

we were, working together in his construction business, and let's just say, like, everything came crashing down. His anger and my, not feeling safe from, like, past trauma all happened at once. I moved out to my cousin's house, and when I came back home, he had moved back to his home state. And we're talking. We're having weekly finance meetings, and I believe God will restore our marriage, but we've got a lot to work through.

A big part of it

is fine.

He shut his construction business down and moved away?

While we were at the end of a really long project from not having,

he shut his Yeah.

He won't.

Construction business down and moved away.

Yeah.

And how are are you working?

I am now. Yes.

What do you make?

Well, I'm working 3 part time jobs now. Just got offered a full time job. So right now, I'm making, like, maybe 2,000 a month, and I'll be making, like, 5 5 or 6 here in January.

Good. Good for you. Okay.

Thank you.

And and so you're gonna get your own place. You're currently living with your cousin, but you're gonna or is that right?

I'm kinda couch surfing.

Yeah. But, I mean, if you're making $5 a month, you're not anymore. Right?

Well, the thing is is our my credit just went from, like, 7.50 to the 500, so I don't even think I can get a plate

Oh, I think you can.

Like a rental. You think so?

Sure.

Okay.

You're making $5 a month. Yeah. And you need to you need to. You don't need to be homeless and divorcing and broke. The you know, we need to get some you know, get a stabilized situation where you're safe and you have a home of some sort, a little 1 bedroom studio apartment.

It doesn't have to be anything fancy, but get some stability. And then you've got $5 rent minus electricity minus food to work with towards your debt. And now we've got a now we've got a thing we can project into the future. Does that make sense?

Mhmm.

Couch surfing doesn't project into the future. No. That's what I'm saying.

So how much credit card debt do you have?

Let me look at my spreadsheet.

And is your name on all the cards along with him? Yep. 42,000. 42,000. And what's the plan for you guys to pay this off since you're separated right now?

Have you talked about that? Is it equal split payments or what?

Yeah. We're talking about it, and the talks has been, like, 5050. But the other major debt is owing subcontractors, and so that's where we've struggled.

Like, who do we pay first,

or how do we even, like, make a plan?

But

So when he closed his in his, construction company, he was not profitable.

Well

If he didn't pay his subcontractors, honey, he wasn't making a profit. Okay. Unless he has a pile of cash somewhere. No. Okay.

If he has no money and he still has bills outstanding, that means he lost money on the deal. Right?

Right.

Yeah. Did he just blow the money and never paid his the crew?

How much do you how much does he owe subs?

He owes subs 30,000.

Mhmm. Alright. So here here's what you need to do. Do you do you have a car payment also?

I do, but my car just I owe 5. It's worth 5. The repair is 7. And where I'm considering moving, I can get everywhere around on a bike because it's warm enough all year. So I'm like, I might sell it.

Wait a minute. You're where would you move this warm if you have a $5,000 a month job starting next month?

So that's where I would be moving to, the job.

Why would you consider? You are doing it. You don't have to consider moving. You're going.

Oh, okay. Thank you.

No. I mean, you take the $5,000 job. Where is it?

North Carolina.

Okay.

Coastal.

Why would you not do this?

I am. I just it hap this weekend, I visited. I just got the offer talking more details this week. I've just been

Yeah. Okay. Yeah. It's not really considering. I mean, you're couch surfing, working 3 part time jobs.

You have another option to move to North Carolina and have a $5,000 a month job. Yeah. You're going. You're broke. So you gotta get your life back.

You gotta get control. You have you have control of no variables right now. So this is gotta be you the anxiety, the stress must be horrendous for you, honey.

Yeah.

Okay. So here's what we're gonna do. We're not gonna worry about the subs, and we're not gonna worry about the credit cards right now. You need to get moved, and you need to get, into an apartment, a little 1 bedroom studio of some kind, something basic, and you need to figure out your transportation. When you've got food, shelter, clothing, transportation, and utilities covered, then we can talk about how to settle these credit cards.

But you don't need to start making payments on them. You're broke and homeless and divorcing. We've got to fix some of those things before we worry about a stupid credit card. Okay?

K.

So just put those on the back shelf right now. They're not going anywhere. They'll they'll definitely take money when you call them back 6 months from now or 4 months from now. Then you decide what's going you and your husband start talking and decide what's gonna happen with the marriage. If there is a divorce, you'll have to split these bills up some way or another.

I don't know what. And the divorce decree, the divorce judge will, approve your all's plan, or tell you what the real plan is if he doesn't like yours. And then you can go in and start working your way through this debt, and you can probably settle it for pennies on the dollar. At that point, you're gonna be 6 months behind. But you don't need to be paying these bills while he sits at his cousin's house doing nothing, and while you're couch surfing.

No. No. I wouldn't pay any of these bills until it's in an agreement of us getting back together or in an agreement of the divorce. How the divorce is gonna go down.

Yeah. We're kind of in a storm mode, and there's a lot of unknowns. Until you have an agreement,

1 way or the other on this, you don't pay it because you're gonna be the only 1 paying it. He's not.

Yeah. You're not gonna make much progress trying to do this on your own in the midst of this storm.

Exactly.

So just pause until you got the next step.

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Today's question comes from Carl in Wisconsin. My wife and I are looking for guidance on how to best allocate our investment funds. I'm 50 and self employed. She's 35, currently a stay at home mom, and has an IRA that was rolled over from her previous employer. We're wondering if it makes sense to max out both of our IRAs or if we should just focus on my IRA and invest the rest in a non retirement account.

Could you give us some advice on the best strategy to balance our retirement planning in other investment goals? Lot more details I'd love to know here, but let's I guess, we can assume they're in baby step 4. They don't have debt, they have an emergency fund. Fair assumption here?

Fair assumption.

Okay. So he's they both have access to the IRA. I would love for them to be investing on the Roth side, and 15% of your gross household income is what you wanna be investing. So if it's a $100 household, we would be investing $15,000 total. So she's got an IRA, you've got an IRA.

He's saying, well, should we just focus on mine and do the rest of the nonretirement? I would rather you take advantage of those retirement accounts, which means maxing out both IRAs if you can, before moving to a non retirement taxable account.

And then focus on getting your house paid off. So that by the time you hit retirement and she hasn't, you know, you're 50, so you got 9a half years. 59a half. Right? Start withdrawals, without any penalties.

By the time you get there, 9a half years from now, you have a paid for house. And somewhere along the line, you might look up and do some non retirement. But right now, you need to be putting 15% in Roths. That's simple. And good growth stock mutual funds.

I agree, George.

So people say, Dave, you know, well, Dave, is it 15% of my income and 15% of her income? How do you go about splitting what goes where?

Absolutely.

Is it just, you know, we both do 15%? Yeah. And that becomes 15 percent of

the household. Percent of the whole household. Yeah. So you add everybody's income up times 15%, and somewhere that number has to go. So in your case, it's like she in her in this case, she's a stay at home mom.

So it's 1 household, 1 income.

And she can do a spousal Roth IRA. Yeah.

So

you can do a spousal Roth IRA. Yeah. So you can only fund 2 individual Roths. But if you're working and you got a Roth 401 k too, whatever you gotta do to get to 15%. If you can't get to 15% and you've maxed out everything, then you would do some non retirement because it's your only other option.

But do we not take advantage of a Roth and do some non retirement option because of this age differentiation? No. No. Absolutely not. Wouldn't do that.

Jamal is with us in Washington DC. Hey, Jamal. What's up?

Hey. Hi, Dave. How are you doing?

Better than I deserve, man.

How can I help?

I'm new to the country. I'm 25, married. Well, my wife, she's 22, very young. I came 2 years and a half ago from Italy. And between things that happened throughout, like, our engagement business and that and, like, my lawyer payment for the green card, we racked up around $10,000 in debt.

She has our student loan that will not kick in until, like, 2026, which is like around 30,000. I'm very hardworking and I hate debt. I just picked up your book. I'm already on page 40. So I just wanted to know how to get out of the situation to start like bumping more cash flow into our pockets and, make sure that everything goes well from now on.

Is she also from Italy?

No. She's an American citizen. She's born here in DC.

Okay. I think I would just begin a marriage conversation about what our dream is. What's our dream?

We had that. We had that, and, she has she came from money, and her idea is, like, people have debt. She never got, like, very educated on money, so it was always given to her. So, like, people have debt. It's normal.

That will be fine. And I just hate that idea. I don't wanna owe anybody anything. I didn't owe anything my grandson owes her enough.

Stop. Stop. Stop. Stop. Stop.

That's not a dream. People always have debt, and I'll always have debt. That's not a dream. That's a that's a hopeless person. That's not a dreaming person.

Exactly. I hate debt, and I've tried all

That's not the point. Why is it you hate debt? You hate debt because you don't want to steal your life because you wanna be able to build wealth so you can be outrageously generous and have a wonderful life.

Yes.

That's the dream. Not we're always gonna have a car payment. That's not a dream. That's a surrender. To

my dream, honestly, is to give my kids what I didn't have chance

to have. Led the conversation with your young wife, your young self, by saying I hate debt. That was your dream. That's not a dream either. I hate debt because it steals my dream.

Now what is your dream? I wanna be a multimillionaire, and I wanna be outrageously generous. And I wanna be able to change our family tree. I came to this country, the country of opportunity for that reason. I wanna go big.

That's my dream, not I hate debt. You see the difference?

Yeah.

She says debt's always gonna be here. You say I hate debt, and this is what you're discussed when you're trying to have a dream. That's not a dream. Neither 1 of those are a dream.

And you're not gonna get very far with just saying I hate debt. And so Yeah. It's not worth

the point is it's not it's not persuasive.

You need to cast a vision, and that's what Dave is saying you need to do for your own marriage. Sit down with her, maybe a dream date, and go, here's where we wanna be. We wanna be debt free, millionaires. I'm an immigrant. I want a different future for our kids.

Is that what you want?

Well, you know, we're 20. When I'm 35, I wanna be worth $2,000,000, have no debt, and be able to give money away, and change our family tree, and send our kids to school with 0 debt. Because you're sitting here with looking at $30,000 worth of debt because your family didn't have a big dream. They had a crummy vision. I don't wanna live like that.

I wanna live big and get her on board with that. Then you say, okay. How do we get to be

What's the best value?

5 and a multimillionaire. Oh, we get out of debt. Oh, we increase our income. Oh, we watch our spending. Oh, we're generous in our current world.

All of that. That's how it works. Jordan is in Salem, Oregon. Hi, Jordan. How are you?

Hi. I'm well. Thank you. Thank you for taking my call.

Sure.

How can we help?

I was wondering if compound interest still works the same across multiple accounts as it does in 1 account.

Exactly the same.

If they're invested the same, then yes.

Okay.

If you're earning and here, you can do the math. If you're earning 10% and you have $100,000, 10% would be $10,000. Does that sound right?

Yes.

If you had a single account that was only $10,000 and you had 10 of those, 10% on $10,000 would be $1,000. Does that sound right?

Yes.

If there

were 10 of those, that'd be $10,000. Right?

Yes.

It's exactly the same as if it was 1 lump.

Okay.

You see how I did that?

I do. I like I like to hear that.

Okay. Some people call him a genius. I call him my boss.

Well, I

saw the video where if you have a $100,000, it starts to grow exponentially. So then I was like, oh, we're really close to that, but it's all spread out. So does that still apply to us?

Yeah. Absolutely.

Now George George's point earlier makes a lot of difference. That's assuming they're all invested at exactly the same rate. So if it's spread out on a bunch of different mutual funds and some of them are underperforming, then that's that's a problem. But that's not a compound interest equation problem. That's an investing problem.

An allocation issue. Yeah. So if I've got 10 different mutual funds and they all earn they all grow at a 10% rate, that's the same as having 1 mutual fund that grows at a 10% rate, to George's point earlier.

But if you add it all up in 1 nest egg and everything's invested equally, it's gonna grow at the same rate.

Exactly. Exact same rate.

So, yes, if you got a 100,000 total across a bunch of accounts, you got a 100,000 growing for you. That's awesome.

Yeah. Very good for you. Good question. You're gonna be great. And, by the way, rule of 72 tells us if you divide an interest rate into the number 72, it tells you how many years it takes for it to double for a lump sum.

So $100,000 at 10%, 10% into 72, would be 7.2 years to double. So if you got a $100,000 and you're invested at 10%, in 7 years, you'll have $200,000. In 14 years, you'll have $400,000. In, 21 years, you'll have $800,000. In 28 year let me yeah.

28 years. I'm doing this quickly. It'll you you'll have, what? 1.6. 1.6.

Yeah.

I told you. He's a genius.

30 years from now. So that that that's how you can start to run the numbers out in your head pretty quick and go, yes, this is all worth doing boys and girls.

And very little of that money was the money you put in. Compound growth due to heavy lifting.

90% of what's in your account at retirement if you start now boys and girls, will be growth, not money you put in.

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Live from the headquarters of Ramsey Solutions. It's the Ramsey Show. We help people build wealth, do work that they love, and create actual amazing relationships. George Campbell, Ramsey personality number 1 best selling author of Breaking Free From Broke, host of the George Campbell Show on YouTube on the Ramsey Networks, and of course, Ramsey personality. He's my co host today.

Christopher is in Richmond, Virginia. Hi, Christopher. How are you?

Hello, mister Ramsey. Thanks for taking my call.

Sure.

What's up?

I I I've heard you yell at

quite a few people about, whole life policies. I have a universal life policy. And when I started hearing out terrible, the whole life's where I looked into it, and I don't think it has all the same bad things to it that whole life does. Like, the cash value doesn't go away when I die. It was just dealt with the policy.

Yes. It does.

I I called I called the company and asked them. They said, no. It does not.

Yes. It does.

Well, they sometimes will claim they can set it up in such a way in a in very

few ways.

Do you have a universal b or a? I think so. What?

I I I don't know if it's a or b.

Okay. But a

b you're sure

Universal b works like this. You pay let let's say you bought a $100,000 policy and you build up a $20,000 cash value. Okay? Universal B charges you for $120,000 the face value plus the cash value, worth of insurance. So you're purchasing extra insurance that makes it look like you get the cash value upon death, but you don't.

You're just buying more insurance in b. That's all that you're doing. The equivalent of the cash value amount. The cash value amount in 100% of universal policies disappears at death 100% of the time.

Okay. The other thing was that whole is

It's howler's truck. It's howler's truck. What?

The other thing you said was that whole is 20 times as expensive, and I just did some comp shopping. And my universal policy is about the same exact amount it would cost me to get term right now. I've had it for a while. But

Well, there's 1 of 2 possibilities there right there. 1 is you did your comp shopping with the same stupid company that sold you the universal, and they generally have very expensive term. If you go to Zander Insurance and comp shop, you'll probably find it to be a lot less, because they're shopping among a bunch of different companies that specialize in term, and it's much, much cheaper. The other possibility is universal life works like this. The premium go that the portion of your premium that you're paying monthly that buys your life insurance goes up every year.

Your premium stays the same. But let's say that let's just make up a number. Let's say your premium is a $100, and the first time the 1st year you bought it, you were 26, and your, and of the $100, $10 went to insurance cost and $90 went to the investment. Later on, as you get older, the amount going towards insurance goes up. Okay?

Because every year you're older, you're more likely to die. And so what can happen with a universal policy that can't that's worse than whole life even is the lines can cross, and actually, the insurance cost becomes more than the premium, and they'll start using part of your cash value to cover the insurance cost, because you're upside down in the policy. And then that thing will actually disappear, it will actually deteriorate, kill itself. It turns in on itself mathematically. So what's happening is that you were doing more investing in the old days, and now almost all of your premium is simply buying insurance.

Now in the term insurance world, Christopher, there's a thing there's term life insurance, which means the length of the term. So you can buy a 1 year term, a 5 year term, a 10 year term, a 15, a 20, a 30 year term, And if it's level term, the premium stays level throughout that period of time, which is an average of all the years before. Pure insurance, technically speaking, would be annually renewable. Once a year, the cost the insurance premium goes up because you get older, and every year you're older, you're more likely to die percentage wise. Does that make sense?

So an ART is what that's called, an annual renewable term, and the cost of insurance goes up every single year, it's not level, when you buy an ART, and that's what's built into the universal policy, is an ART. And so the universal the cost of insurance, more of your premium is going to insurance every single year, thereby less is going to the investment. And that may, if you've had it for many years, now you're just buying insurance, You're not putting anything into investment. Or worse, you're not even covering the cost of the insurance, and they're using up some of your investment to cover the difference because you've crossed the lines on it. And if that's the case, then that would also explain why you find term insurance to be about the same cost, because really, all you've got now, honey, is term insurance.

Because the ART is rate raised in price every year and caught up with the actual premium that you've been paying. I'm dizzy.

It's exhausting. It's and here's the thing. Most I've never heard of someone who isn't selling insurance say that Whole Life or Universal is good. It's only coming from the salespeople. And so the people that get swindled by this, it's usually from a friend who explained to them the wealthy do this.

They invest through their insurance policy, and you can borrow against your own money tax free. And they explain all these crazy loophole quote, quote, quote, unquote advantages.

So in the financial planning realm, fee based financial planners, investment advisers like our SmartVestor Pros, anywhere you go to for financial planning help, the only people that tell you to buy cash value insurance are people that sell it. No 1 else tells you to do it. No 1 in the entire the rest of the financial world looks at it and goes, buy inexpensive term insurance, 10, 15, 20 year level term, and do your investing anywhere else. Don't put it in this crap. Because of what ends up happening see, let's go back and revisit the barrel of fish hooks I

just unpacked a minute, because it's

frustrating as crud. When you were 26 and you bought that $100 premium I was talking about a minute ago, and I made that number up, okay? You bought that because you wanted some insurance and because you wanted some investments. And the irony is that the rising cost of insurance through the years eats up all of your premium, so that the very reason you bought it instead of buying term was to have an investment, and it doesn't occur.

The longer you hang on to it, the higher chance it will implode on itself.

Yeah. It eats it eats itself out. And so the very reason that you did it is systematically annually disappearing. That's the irony of how bad this is. It just sucks.

And with universal, there's flexible premiums. But here's the thing, if it's not enough to cover the insurance, they take it from your cash value. Yeah. So you're not winning. They always win.

And again, the insurance is gonna go up every single year because it's the equivalent of an ART built in. Now the truth is on a 15 year fixed level payment, right? You're paying more in the early days than you would for an ART. Because all the 15 year is, is the average of the ART, but less because ARTs have low persistence. Very few people keep them.

And, they drop them because they go up every year and they get, Oh God, I gotta get out of this thing. But they keep the 15, so it's cheaper for the insurance company to run the 15, so they give you a break. So it's less than the average of 15 ARTs.

And it's simpler to manage. There's no investments and cash value to deal with.

But you're still paying it. You're still paying for the coverage. This is the Ramsey Show. You want to leave happy memories for your loved ones when you pass away? Not a mess.

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Well, Christmas is right around the corner. And if you're shopping for yourself or you're looking for the perfect gift to help someone get their money in order, now is the time to shop and get up to 30% off on our best selling products. The Total Money Makeover is 30% off, Building a Non Anxious Life is 30% off, And Georgia's number 1 bestseller, breaking free from broke, is even on sale. So check it out, including the classic questions for humans card decks from doctor John Deloney for couples, friends, and parents, $12, all atramsysolutions.com/store, or click the link in the description on YouTube or podcast. Nicole is with us in Denver.

Hi, Nicole. Welcome to the Ramsey Show.

Hi. Good afternoon. I wanted to ask you about prenups. I'm very recently engaged, and I'm walking into this marriage with about a $400,000 Schwab investment account.

Okay. How old are you?

30.

How long y'all been dating?

3 years.

Okay.

My fiance and I are in very different financial situations. He doesn't have much of a savings account. The reason I have this investment account, my father passed away, left me quite a bit of money, and my mother has helped grow this account to a significant amount. So

By adding to it?

Something by adding to it and investing and and things like that. Well, my money that she has invested. Very smart lady. But I don't know what I should do with that account or if I should bring it to the marriage or not.

Okay. When I first started doing this show 35 years ago, I told someone that if you need a prenup, you don't need to get married. If you can't trust them with $400,000, you don't need to trust them with your life.

Right. And I don't wanna come into this marriage feeling as though I'm harboring under resentment or being perceived as noncommittal or anything like that. The reason I asked you 2 reasons. I I feel like this account is not mine. I think it would be set up for me in case of an emergency.

I have a significant health condition that may run

not yours? Yeah. You told me it was yours.

It is, but not because my mother has grown it. So significantly Are

you going to stay married to your mother, or are you gonna marry him?

No. I'm marrying him.

Okay.

Then maybe it's time to be married to him and not your mother. And you and him manage your health condition and your future and your money for the good of you and him and the next 40 years of your life, 50 years of your life. We're managing that together. It's very sweet that mom has been helpful, but her days of controlling your life at 30 years old, you're a grown woman are over.

Sure.

So now that changes it. So I I I would want to share every bit of my life. It's if you're gonna get married, you gotta go all in.

Okay.

Okay? And and that's what you asked. That's my opinion, and that's my opinion. I would tell you to do that. The only time I tell someone to get a prenup is if there is an extreme amount of wealth on 1 side, and 400 k is not extreme.

But if you had if you had $15,000,000 and he had not a nickel, then I tell you to get a prenup then because, not because of him, but because of his crazy relatives. The crazy relatives come out of the woodwork when you marry a rich woman, you know. And it's like, and so you you control them with the prenup. You go, I can't do anything about it. I mean, it's not I don't have any access to it, the prenups.

And it it just shuts down the crazy relatives and sends them back to the cave they came out of. And so that that's the only reason I do that is is it gives you some relationship management stuff, and I'm trying to keep someone from getting just conned completely. But I don't think you're being conned. You've got 3 years in this in this relationship. You're 30 years old.

You're not a baby child, and you're not been you know, we go you know, I met

him in Las Vegas 2 weeks ago, and,

well, that's a whole different story. Right? That's not you. You're very precise. You're very wise.

You're very even. You're very careful.

Does he know about this account?

He does. He doesn't know the exact amount that's in it. I was also thinking maybe we would reserve this account for our children in the event that

we did get a divorce.

Well, let's talk about it.

Sure.

Let's talk about it. Let's say, hey. If we if something ever happened, I'm going to claim that I brought this money into the marriage if you divorce me, and I'm gonna try to keep it. I'm gonna make sure you don't get it. But you don't need a prenup to do that in most states.

In most states, it was assets you owned when you came in. But I I think there's something to be said here for it makes you think about, okay, are there parts of the way he handles money that you don't respect? Well, see, that's a that's a that's a red flag. That's something to be handled in a pre marriage.

I see your point. Not at all. Just we have different finances, so I don't know how to combine or or not combine things. I wanna be smart. But Well,

when you say different, you don't mean he's irresponsible and you're responsible.

No. He has quite a bit of student loans left. He just entered the workforce after, being in the military and getting his doctor degree. So he hasn't been working.

Cool. A doctorate in what?

He's a chiropractor.

Okay. So he's getting ready to start making some money, and he's got $200,000 in stinking student loans.

Yes.

Yeah. Yeah. Well, I would not wanna use the 400 to pay those in the next 30 seconds, But 4 or 5 years from now, I might use some of it to knock the rest of that out, if you haven't knocked it out. But I think you guys need to roll up your sleeves and knock it out, and then leave the 400 alone. That'd be a plan.

That's a good plan.

Yeah. But I I I hopefully, you can do that. Now but if he's saying, oh, I'm gonna be in debt for the next 30 years just because that's the way it is if you're a chiropractor, that's a different discussion. That's not a prenup discussion. That's a I don't get married discussion.

Yeah. If your financial responsibility gets him to be lazy or entitled, that's a whole different discussion. He doesn't

sound like lazy and entitled. He goes for me. He went and got his dadgum doctorate.

He's been working his tail off. So Yeah. I hope I'd go into this with with arms wide open right now unless you have reason not to be.

Yep. Yep. Eyes eyes wide open and arms wide open. Yeah. Just like Creed said.

All in. All in. All in. All in. Leave it all on the field.

Alright. Danielle's in Columbus, Ohio. Hi, Danielle. How are you?

Hello, Dave. So I, am just stepping into the Ramsey way. I'm about to start my budgeting, and I now have a stable income of 42,000, which includes my housing and my food for at least half the year. I have side hustles, which I haven't calculated. It's gonna be at least 15,000.

I have 16,000 in credit card debt, 7 in my car, and 35,000 in school loans. My question is, now that I have this new job, I've previous this, I was on Medicaid insurance, and they're offering me health insurance, but I really don't wanna do it. It just seems too expensive. I'm 31 years old. I'm healthy.

I just

You'll qualify for Medicaid, honey, if you're working. Medicaid is welfare.

Yeah. I know. So that's what I was before, but now But

you can't you can't get it now.

Exactly. So

I have to health insurance.

I have to.

Yeah. You'll go bankrupt.

Okay.

You have your appendix out, and, you know, you're gonna get a $62,000 bill.

It'll bankrupt you. So you're I mean, it's just like car insurance. Just because you haven't had a wreck, doesn't mean someone else is gonna hit you.

Alright. Okay.

You can

be a great driver, and so you need health insurance now and always. And do you know how much it's gonna be? Is it $600 a month?

Yeah. Something like that. It's I we have they're offering us UnitedHealthcare.

I mean, you can shop around with our friends at HealthTrust Financial and see what the marketplace insurance would be versus the employers and see what's the better deal for you. But it's a nonnegotiable, and it just has to go in your budget. And if other things have to be sacrificed because of that, then that's what you'll have to do for now.

If they have, 4 or 5 different plans under United, and they probably do, just take the cheap 1, and the higher deductible, and all that kind of stuff. That's all fine. But it because I'm not worried about a $5,000 or a $4,000 deductible. I'm worried about a $62,000 problem. The number 1 cause of bankruptcy in America is medical bills.

Okay.

So you have to guard against it.

So look for that HDHP. That's a high deductible health plan that'll come with an HSA, which is a great way to save for those health expenses. And that'll be your best bet. Keep the premium low, but it'll transfer a little bit more risk to you with the deductible. Yep.

This is the Ramsey Show.

Hey, guys. Dave Ramsey here. I'm coming to a city near you with doctor John Deloney on the money and relationships tour. This is a brand new event where you, the audience, will get to vote live from your seats and choose the things you want me and John to talk about. You'll be picking from over 20 topics that impact your life, like saving for the future, leaving a legacy, money stress in marriage, and so much more.

We're getting real and digging in deep on the things that are important to you, and you never know what might happen when me and John get candid. It's an event unlike anything we've ever done before, and it's gonna be a whole lot of fun. We'll be kicking it off in Louisville on April 21, 2025, and then stopping in Durham, Atlanta, Kansas City, Fort Worth, and Phoenix in April May. Prices are the lowest they'll ever be right now, so don't wait. Grab your tickets at ramsey solutions.com/tour.

That'sramsysolutions.com/tour. Coming up December 18th, 1 of your favorite shows, our annual giving show. We take calls from folks who are proud of some giving that they did and wanna tell us the story, or they are, proud of some receiving that they did. Tell us they're gonna tell stories that make our eyes leak. December 18th, our annual giving show.

Don't miss it. Also, coming up at the end of this segment, we will jump the show over to the Ramsey Network app for the remaining portion of today's show. And the Ramsey Network app is a free download. You can do that there anytime you want, and you'll get the entire show there, plus audio video of everything. And you can search the show.

You can, send us emails in there. You can search the show by subject, so you don't have to listen to 26 hours to find out what we say about whole life life insurance or whatever it is that we're harping on that day. So check it out, and if you're on radio, of course, stay tuned. Wherever we are on radio, we're still there on radio. And Thomas is in New York City.

Hi, Thomas. How are you?

Hello, gentlemen. I'm great.

Thank you so much for taking the call. Sure.

I just

have a quick question. I don't know if I have to get into a lot of detail. I'll answer your questions. My mother's financial adviser has been trying persuade her to buy something called structured note investment and I've looked into it, but I wanted to get your opinion on how that if that's a good investment product versus buying a 5 or 10 year structured note or just taking that same amount of money and putting it into you know, a a mutual fund that tracks the S and P 500 or something along those lines? Is that something you're familiar with, and do you have an opinion on it, though?

Thank you.

Yeah. Don't do it.

Don't do it. Okay.

And I'm I'm real how old is your mother?

My mother is 81.

Okay. Alright. Here's the thing. Structured note is a bond propped up with a derivative. Okay?

And the here's the way bonds work. If you buy a bond and the interest rate on the face of the bond, you buy a $10,000 bond and it pays 3%. Okay? When interest rates go up above 3% to 6%, the $10,000 bond becomes worth less. Does that make sense?

I see.

Yes. It it does.

And when their interest rates go down, the $10,000 bond becomes worth more than $10,000. So in an inter in a rising or high interest rate environment, you have a good chance of losing money on bonds. They are not safer. The financial world has, I'll be kind, has mistakenly said that bonds are safer than equities. And in general, they're not, particularly in an interest rate environment that's as volatile as the 1 we're in right now.

We don't know what interest rates are going to do in the next 12 months. With a change in administration, with a change in move in the economy, I hope they come down, which would make her bonds, in this case, worth more. But the derivative portion of this is a high risk play. And why in the world he's putting her in a volatile instrument at 81 years old with a high risk play, it just sounds weird to me. I I think that's I think that's irresponsible.

Well, my best guess, it's high cost and fees that go to the financial adviser. Yeah. That's why I would choose that product if I was this guy. I go, well, I'm gonna make more money off this 1 than putting her in a triple mutual fund. That

yeah. I I think

That's my understanding that there is a high fee involved with that with that particular product. Okay.

Probably. I mean, we're not positive. We don't know that we don't know which product he's got in front of her, but, how long has he been taking care of her in quotes?

God. A long time. 30 20 some odd years.

Yeah. And what is she invested in now? Do we know?

Well, she has a a 401 k that she and I don't know exact what that is exactly. And she's just mutual funds, and I don't know exactly what the mutual funds are. She's got mutual funds that she purchased through UBS.

Mhmm.

And she's got mutual funds that she has in her 401 k. She's got a combined net worth in in about $400,000.

Yeah. I think I would just stay right where she is.

Just stay where she is. Just stay with the mutual funds? Yeah.

I might not stay with the financial adviser, but I'd stay right where she is.

Yeah. Yeah. I know. I know. I I I yeah.

I know. I was thinking about that myself. So okay. Thank you.

Thank you, Thomas. We appreciate you calling. Open phones at 888-825-5225. Jill's in Dallas. Hi, Jill.

How are you?

Hi. I'm good. How are you guys?

Better than I deserve. What's up?

Okay. I just have a question because I'm new to managing money.

I was married for 15 years and

recently finalized the divorce. I'd love your opinion. I don't know how much house I can afford or what would be wise to spend on a home.

Are you out of debt?

Yes, sir.

Good. Okay. How old are you?

I'm 40.

How long were you married?

15 years.

I'm sorry. It's a hard time of the year with a broken heart.

Well, it's it's all good. I just it was a long time coming. But

Yeah. Yeah. You're surviving, but it's not all good. But yeah. Okay.

I'm sorry you've been through this.

Thank you.

Alright. The I mean, we teach folks to get their home paid off as fast as possible. And in that vein, we have a standardized guideline that we use, which is super conservative for house payment. Okay?

Well, I have cash is what I'm wondering Oh,

cash do you have?

Spend of it.

So I have, 1,200,000 in mutual funds.

I buried the lead there,

Jill. Wow.

Okay. You have 1,200,000 in mutual funds. And what else?

750 in a 401 k.

Okay.

And my monthly income for the next well, my monthly income for the next 7 years will be 18,500.

Was there a whole a a family property that's sold?

When we got divorced, I got, money instead of property.

Okay. Good. Yeah. You did.

And you'll be making over $200 a year.

Yes. And you'll pay cash

to this house.

Assuming he pays the bill. This is alimony and child support.

Alimony is, yes, is the 185, but I do have the 1.2 and the 750.

Yeah. And and is he in good shape financially? Can we count on this 185?

Yes.

Alright. Are you going to develop a career, or what's your plan?

Well, 17 of that is, alimony. I make a tiny bit just a part time job. I have 2 kids.

How old are your kids?

They are 14 and 11.

Okay. So what are you going to do with the next 10 years of your life?

I really don't know. I'm a teacher by trade in an Oklahoma

that doesn't make any money. So

Okay. Well, it doesn't mean you don't get the alimony if you went into this classroom. Right?

Right. No.

Okay. Alright. Just as a part of your healing, I want you to have the dignity of, making some money somewhere down the line. You don't need it, but it's it's gonna be good for you to feel that that you are sustaining yourself in addition to all this money. Okay?

K.

Now how much of the 1.2 are you thinking about spending on a house?

Well, I don't know. I don't know what's wise.

I No. I ask you. You you've been thinking about it. This isn't your first review.

I

mean, some days, I think, like, 300,000 would be really modest, and it'd be enough space for us. But then there's I get kinda starry eyed, and there's pretty homes for 800,000.

Mhmm. Mhmm.

So I don't really know.

Yeah. Okay.

I just my thing is I don't want to put myself in a predicament down the road that I think, oh my gosh. I bought too much house. I shouldn't have done that.

Well, too much house would be a payment you can't afford, and that's not a problem.

Okay.

The The house is gonna go up in value, and if you ever wanna sell it, usually, you can sell a house if it's a decent house. Right?

Mhmm.

You're not stuck in it.

So if

you pay cash for a $700,000 house, and you wake up a few years later with regret, you could sell it.

K.

And then you still have 500,000 left over, plus 700,000 in a 401 k, plus $18,000 a month. Right?

Mhmm. I

it feels to me that's very safe to be in the 700 range. Okay. That's very safe.

Okay. Thank you. I value your opinion a lot.

Well, I mean, you need to work that math out and feel very safe about it, not just just because Dave said so.

And work with a good agent. Jump on ramseysolutions.com/agent and start shopping around and see what you can get for that amount and if you're happy with it.

Yeah. Get a get a, real estate 1 of our Ramsey trusted real estate agents there. They'll they'll help you. They'll do a good job helping you work through the decision making on this as well. This is the Ramsey

Show.

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We need your help. It helps spread the word, by the way, when you do all of those things, and you guys are spreading the word, and we really, really appreciate you telling people about us, especially when you tell people nice things about us. Thank you. Elliot is in Denver. Hi, Elliot.

Welcome to the Ramsey Show.

Hello. So I'm in a bit of a predicament with my kinda housing after the end of the year. I've been going to school, going to college on and off, for the last, like, 18 months or so, for meteorology. But in between there, I worked as a, aircraft ramp agent, so, like, a a a baggage handler, at the airport here in Denver for 6 months at a airline that had high turnover, so I actually worked my way up all the way to where I was a supervisor. But I liked the work, but I liked the work environment or not the things that I would do with the job working with the with the planes and stuff, but I didn't like the, kinda business corporate environment of it.

And so I decided to go back to school, and, that didn't quite work out, as well as it, as I thought it would. And so, now I am no longer get getting any financial support for school, from my parents, which was previously the, they were paying for my school. And, now I'm being kinda told that I am expected to move out of their house at the at or around the end of the year, and I don't really know what to do right right now. I have, like Wait

a minute. Things didn't work out at school. What does that mean?

I wasn't able to pass a math class that I was taking.

Why?

And because I I wasn't good at the kinda managing time with the, mainly, like, the homework assignments. And, I honestly don't

Do you have a learning disability?

No. I have, like, ADHD, but I don't I'm not sure if that's a learning disability or not.

But

That wouldn't keep you from passing a math class.

Yeah.

Why did you not do your lessons?

It's kinda getting distracted by things, that I should realize when looking back now I shouldn't have and,

You're so vague.

Stuff like

I have no idea what the crap you're talking about. Are you telling me you've been drinking and smoking dope and partying and you're flunked out of school so your parents are throwing you out?

I've never I've never been I've never been that kid. It's just, you know, finding it hard hard motivationally, sometimes to just, like, do work that, but I just I have decided that, like, I'm not going back to school. And

Okay. And you're moving in. So how can we help you?

So was there was there an agreement with your parents where they said, here's the deal. We're gonna pay for school, and you're gonna go to class and pass. And that will allow you to live here, and we will pay for school. If not, here's what happens.

If not Yeah. And and now we're

at the if not. Sounds like you agreed to this, man.

Now you're moving. How can we help you?

So I just I'm not sure, like, in terms of, like, with, work, like, getting a job here is I'm able to do that, but it none none of the jobs that I see that I can get would really pay for the because the cost of living in Denver is so high that

Sounds like you can't afford to live in Denver.

What were you making on the ramp job?

I

was making 22.50 an hour.

You can get

a roommate in an apartment in Denver out on the out on the edges of Denver, towards the airport, which is not anywhere near Denver. But, Yeah. Yeah. Move out of town, get an apartment with a roommate, and

Making 3 or 4 grand

a month. Right? And then crank your and then crank your hours up and work your butt off. You can make it.

Okay.

But you need to you need can you get back on over there?

I I think I could try or or another similar operation like that. Yeah.

Jump in, man.

For sure.

Because it that's a that's a known quantity. I'm not saying you need to be doing that when you're 35. But for right now, that'll get some money coming in and let you get stabilized and get yourself established as an adult working on their own, paying their own bills, which is what your parents are demanding. And then you can reset and say, okay. While I'm doing this, what do I wanna study, and how can I study it?

And start taking some night classes to go be something else. But I would get my feet on the ground over there at the ramp, start throwing some bags, making some money, and I'd be working, like, 60, 80 hours a week because I'd be scared I'd be hungry.

And you're gonna have to deal with this underlying problem of time management and responsibility.

Being hungry is a motivator. You don't have to worry about being motivated. Being homeless is a motivator. You you wanna pay rent. You wanna pay having the lights cut off and it gets cold in that apartment because you didn't go to work, that's a motivator.

You will suddenly be motivated.

You don't

need to look for motivation at that point.

It'll be finding you. It's called survival, dude. It's called sustainability. And, you know, you don't have the option of not being motivated when you need to eat and keep the lights on and not be homeless. And so that's that's what you're set up for, and that's gonna be good for you.

You're gonna you're gonna learn some good things about Elliott, that Elliott can work, and Elliott can stay on the job, and Elliott can keep focused, and Elliott can push through what because Elliott freaking has to now. And, I I think it's gonna be wonderful for you. It's gonna be the best thing that ever happened to you maybe. I kind of like your parents. I think I think they're pushing you out of the nest and saying, fly, little eagle.

Otherwise, like Dave says, you become a turkey.

Yeah. If you stay in the nest too long, eagles become turkeys.

But the, that's science.

I'm not

I can't explain.

It is science. It's definitely it's evolution. You know? And so Is it de evolution? It's de evolution.

De escalation. Yeah. Fly little turkey. Fly I mean, fly little eagle. Fly.

You're gonna be fine, but you're gonna have to get your butt in gear like yesterday. And, if you can't get more than 40 hours at the airport, next door, there's a place called UPS, and they'll let you throw boxes. It's Christmastime. They desperately need your help over there. The Amazon warehouse that's out there in the middle of nowhere, this looming beacon of light for Americans purchasing things, will hire you in a heartbeat to work in their warehouse right now.

They are stepping and fetching. It's Christmas time. And so you don't you you're you're not gonna have time to worry about motivation because you're gonna be at work all the time.

That helps. I've I've found that when I'm distracted by work, I'm rarely bored. And I'm rarely broke. That's a good combination. My grandmother used

to say there's a great place to go when you're broke, toe work. So It's wisdom. You know, here here's the thing. This could be the best thing that ever happened to you in your whole life if you decide it is. And, you know, no excuses.

No excuses. Go get it. Go get it. Open phones at 888-825-5225. Diane is in Phoenix.

Hi, Diane. Welcome to the Ramsey Show. I'm short on time. Go straight to your question.

I hear you. I hear you today. Thank you. I hope you guys are having a blessed day. I have an annuity question.

My mother recently passed away. I'm the executor of the estate annuity. The beneficiary was my sister. Not a problem there. However, my question is, my mother, when the contract the, annuity came mature last fall, and my 91 year old mother had no idea what to do or what they were talking about or what they were asking her for, had to make a choice of taking a lump sum or monthly payments for the next 10 years.

Doesn't matter. Doesn't matter. She died. When she dies, the beneficiary gets a lump sum.

Well, that's not what they're telling me, and that's why

I'm calling you to get a lump sum. Oh, no. No. They they don't have a choice. They're trying to just con you.

Absolutely. They do not have a choice. They're trying to get you can elect you can elect to take payments, but you are not forced to stick with her contract. She died. The beneficiary gets a lump sum.

Okay. What is my next step? Because they're they're just telling me there's nothing I can do.

So I'm actually Tell them there is something I can do. I'm going to the insurance commission and file a complaint on you crooks.

There you go. That's what I needed to know, Dave. And I'm I'm walking into my lawyer's office right now as well to talk about this same subject. So

Yeah.

Thank you. I really

appreciate it. Bogus, dad gum insurance people. So they they love to get you on payments rather than giving out the money. They don't want the money to leave them, their control. And so they're like presenting 2 options and acting like you only have 1.

Nope. Now they will offer you payment option, a contract, again, as a beneficiary. But never you're not forced to take it and never take it. Time to get out of Dodge. For your sister anyway.

Take that lump sum and invest it.

Yeah. And do do something good with it that's not leaving it with them. This is the Ramsey Show.

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

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

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

What does crippling anxiety mean? Paint me a picture of that. Alright. So you ready to jump in?

I'm ready to jump in.

Then we're

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

I cannot even function because I am just crying. My mom left us when I was 4. I truly felt like for a while I had no family.

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

He triggered me a lot. Scared of losing Paul, scared of doing the wrong thing, scared of not being enough.

It just feels like it would be exhausting to be Kelsey.

It

is. Whenever somebody's playing whack a mole with their anxiety, when it just keeps moving, that tells me the underlying system's not okay.

How do I get my inner child out of this relationship? Because I feel like she's running the show.

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

How is this how is this burden?

A new burden. That's right. To the 1 person who should carry it. All of it. Did you ever tell that little girl that it wasn't her fault?

I don't know what to do.

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