Transcript of If You Want To Be a Millionaire, Do What Millionaires Do

Live from the headquarters of Ramsey Solutions, this is the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, Ramsey, your host, number 1 best selling author, and Ramsey personality, Ken Coleman, is my cohost today as we answer your questions about your life and your money. The phone number is 888-825-5225. Merry Christmas, America. We're so glad you're with us.

Britney is gonna start this segment in Charlotte, North Carolina. Hi, Britney. How are you?

Hi. I'm wonderful. How are you today?

Better than I deserve. What's up?

I've got a question for you. So my husband and I have started doing the baby steps. We have started our budget, and we are just trying to figure out where do we put this leftover money that we have at the end of the month. I have quite a few student loans, as well as our car payments.

Mhmm.

We have a credit card. Mhmm. And we have a $10,000 personal loan that my husband just had to take out because he had issues with his truck. So I'm just trying to figure out what what's the best bang for our buck as far as this leftover money that we have at the end of the month?

K. $10,000 worth of issues on a truck?

Yeah. What in the world? What? So, apparently, the engine had some kind of issue, and it's a no manufacturer problem. Recall hasn't happened yet.

But, yeah, it's gonna be it's gonna be, give or take, about 7 to 10000 to fix it.

Okay. Yeah. And you you already took out the loan?

Yes. He did.

But the work hasn't been done? First.

They are starting it and doing it now.

Okay. Alright. Alright. Okay. So the first step to getting out of debt is quit borrowing more.

That's why I was asking. So the, baby steps are your order of attack. That's what they're for.

Mhmm.

So we start with number 1. Do you know what number 1 is?

I have to have a $1,000 emergency fund.

Starter beginner emergency fund. Do you have a $1,000?

Yes, sir.

Do you have more than $1,000?

We have about $1600 in our savings account right now.

Good. Okay. So we're gonna take 600 of that and any other money we can squeeze out of the budget, and we're gonna apply to baby step 2, which is the debt snowball. Does that sound familiar?

Yes, sir.

It does.

Okay. And the debt snowball is where you list all of your debts, smallest to largest except your home, pay minimum payments on everything but the little 1, and attack the little 1 with a vengeance?

Yes.

What's your smallest debt?

It's about and that's I guess that's my biggest question is within my student loan, it's a bunch of smaller little ones.

Okay. What is your smallest debt? They're that's they're little debts. They're small some small student loans. It's not a good by category.

It's by debt.

1,000. What?

It's it's a $2,000 student loan.

Okay. Good. So we're gonna throw $600 out of savings at that and any other money we can throw at it and try to get that paid off in about a month here. Right?

Yes. K.

What's your household income?

We make about 215,000 a year. Okay. You and I both combined.

And what's your next smallest debt?

It's another $3,000 student loan.

Good. I want both of those gone by the end of January.

K.

Including the 600 we're pulling out of savings. You see how we're doing this? Boom. Just like that.

Yeah.

And every dollar we can squeeze out of this wonderful income that you have, we're going to attack, attack, attack, attack, attack. Now if you do not need but $7,000, then take 3 of that borrowed money and put it back on that loan.

K.

And you have a $7,000 loan for your debt snowball instead of a 10.

Right.

Okay. And, it sounds like everything the truck's already down there, and this deal's already done. I might have challenged even how to fix the truck, but sounds like we're already, cows out of the barn on that 1. So

Yeah.

But, good news is you have a fabulous income. What is the total of your debt?

Well, not counting our home, it is a 125,000.

Oh, excellent. If you live on beans and rice, you'll be out of debt in a year.

That's the plan.

Okay. I love it. And no eating out, and no vacations, and no more borrowing money. And we're gonna attack this to the tune of about $10,000 a month, and we're gonna be out of debt in 1 year. And that still leaves you a 100 and something $1,000 to live on.

Oh, darn.

Mhmm.

Wow. That's a pretty cool plan. That's how you do it. That's your order of attack. And then once that's gone, we go back to the $1,000 account.

Baby step 3 is we raise it up to 3 to 6 months of expenses, a fully funded proper emergency fund, because $1,000 is not enough. We all know that. And, then once that's done, then you do baby steps 4, 5, and 6 simultaneously. 4 is you start putting 15% of your income away in retirement. 5 is you start funding your kids' college.

6 is we throw everything else we can get our hands on at the house and get the house paid off. It usually takes about 5 or 6 years to knock it out. And then once you finish that up, you're at baby step 7, which there's nothing left to do then but become very wealthy and outrageously generous. And it just works, Ken.

Yeah. Because it's momentum. And I think it's so great to hear new callers, new people coming in, listening to what Dave just laid out. The secret to the baby steps that Dave figured out a long time ago was the sheer momentum, the emotional momentum of knocking out those debts and seeing that there is a path out of this. Because for a lot of people, $120,000 of debt, just the sound of that is bone crushing.

And so to understand that we can do this 1 step at a time, it's really, really huge. And I got to say, back to that truck issue, something like that happens. I think people automatically, Dave, they default to, I've

got

to go into debt because this is my car. And they don't sit there and go, what are all of my options right now that don't require taking out debt? Yeah. They just immediately default to, well, it's my car, and that's a bit of a trap.

It is. And and, well, here's the thing. Most Americans, that's a good point, solve their problems with a debt payment. They get a new debt to solve a problem. That's right.

I wanna go to college. I don't have any money. So now I'm a student loan. I don't have a car. I like that car.

Now I have a car payment. Right. And I wanna go on vacation, and I don't have any money. So now I have a vacation loan. Oh, wait a minute.

Christmas this year is in December. It caught me off guard. Oh, that's gonna be some credit card debt. Anything that's a surprise, and everything seems to be a surprise, we solve our problems with a new debt payment. And you're you're gonna be in debt the rest of your life, and that's what the banks have taught you to do.

And that's it's a mindset that, Ken, you're exactly right, has to be broken where you say, I don't borrow money anymore, so now what am I gonna do?

Yeah. Yeah. Remember the old place?

Off the table. It's not it's not even on the table.

Grammarly used to say where there's a will, there's a way.

Yeah.

And I believe if you will yourself to not use debt as an option, you can get pretty innovative. In fact, that's where innovation comes from, a lack of resources. That's the very nature of innovation. They figure out a way to solve a problem.

People that have, a lack of resources get more creative. Always. Yep. Always. I have gotten very creative many times, over the years once I drew a line on the sand and said, I don't borrow money.

So that's part of her story going forward now. That's the plan. This is the Ramsey Show.

Hey, you guys. When you go against what society thinks is, quote, normal, like avoiding debt, for example, it might seem weird at first, and that is totally okay. We want you to be weird if that means you're doing things intentionally, including how you spend your health care dollars. And 1 way to be intentional is with Christian Healthcare Ministries. CHM isn't health insurance.

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Ken Coleman, Ramsey personality, number 1 best selling author of the book Paycheck to Purpose. He's my cohost today. The phone number here is triple 8-825-5225. Ray in Houston, Texas. What's up, Ray?

Hey, Dave. How are you?

Better than I deserve. How can I help?

Okay. So I am 27 years old, and I just finished filing well, I mean, just completed chapter 7 bankruptcy, and I have no idea what to do next financially at all.

I'm sorry. Wow. Are you working are you working?

Yeah. So right now, I'm just bartending. I'm still trying to find a job in my career field in the meantime.

Which is what? What field is that?

I have a degree in chemistry, so I was working as a lab assistant. But it was a contract base, and my contract wasn't renewed.

So What's the path though? What's the ideal path that led you to a chemistry degree? Where do you wanna be?

I I thought I just wanted to be a chemist. Not sure if that's still what I wanna do at the moment.

Well, I'm not I'm

not worried about the moment, but I am trying to think about this long term play because now you're you're you're rebuilding your life. So is chemistry off the table, a career in chemistry off the table, or is it still on the table?

It's still on the table. Still on the table.

What's that income look like? What would be a top top income in your field?

Usually, like, around 70, 80,000.

Okay. So, Ray, what happened? Why'd you file bankruptcy?

I was married, and we divorced. And I was I also lost my contract job. So I just had a lot of debt, and I just stopped paying for everything. And I felt like there wasn't any other options to do except file chapter 7.

Okay. What was the debt?

I had a car loan for about $35,000. It was about $15,000 in credit card debt and my student loans, which is about 60.

They're not bankruptable.

Well, I actually was able to get them discharged, actually.

Oh, they're private. They're private student. They're private student loans. Yeah. Okay.

Yes.

Okay.

Yeah.

Alright. Good. Alright. So when I was 28, many years ago, I filed bankruptcy, chapter 7. I lost everything, and I went through it.

It was very painful and, a lot of shame that I had failed because I had. And it took some of my confidence away. And so, the what what I the way I chose to react to that was to do an autopsy on my stupidity. And say what put me here? What are the things I believed that were obvious lies that put me here?

You follow me? In other words, if you're gonna go through that kind of crap, at least learn the lessons. Right? At least pass the test. If this is a test, at least pass the test.

So you never go back for those reasons. So, you you you bought an education you couldn't afford, you bought a car you couldn't afford, and you had no savings. So when you went through a job loss and a divorce, everything came tumbling down because you had a lot of debt and no money. Does that sound right?

Correct.

Yeah. That's the CSI on your deal. So how do we recover from that? Well, we do the opposite of that. We pile up cash, and we have no debt.

And that's what I've been doing now for 35 years. It worked too, by the way. Good news. So next time you need a car, you pay cash for it or you don't buy it. The next time you need to take a class, you pay cash for it, or you don't buy it.

The next time you need to fill in the blank stupid American thing we do, and don't do it unless you pay cash for it. And part of my written monthly budget for the rest of my life from age 30 to age 64 today has been the first line in my budget is giving. I'm a Christian and I tithe to my local church. That's the first line first thing that happens to money when it comes to us. The second thing that happens is savings.

And then we eat. We're always gonna give, and we're always gonna save, and we're always gonna eat. But we don't purchase crap while we've not been generous, and while we've not saved money. These are basic principles, and they're kind of common sense if you think about it. But no 1 does them, Ray, and that's why most people are broke.

This is how you recover, kiddo. And you do what Ken's talking about, and you start let's get your let's get your career in business. K? You're you're not, you're not tending bar because it's what what was your goal when you were 16 years old. You're tending bar because that's where you're hiding while you're recovering from these wounds of a lost job, a bankruptcy, and a divorce.

You've had 3 major blows emotionally. So I want you to come out of the cave and go be who Ray is supposed to be, which is a chemist making a $100 a year, or whatever it is you want to do. I don't care. But God made you to go do something. So let's get let's get that figured out because that's gonna bring you in more money than you're making now, more satisfaction than you're making now, and then you can start saving and giving and avoiding debt going forward with a plan.

Is that all that makes sense?

It makes sense.

Yeah. Ray, I just wanna add that, Dave, I I'm curious to know what you would say to this having walked through this yourself. But, Ray, I've got a friend of mine. He's a big fitness expert, and he says, exhaust the body, tame the mind. And I think there's a bit of a truth there for you in this situation in the form of not necessarily working out, but I think you need to be working as much as you can.

I'd like to see you make the transition into your field because that's your greatest potential for income. But whether you're working at a bar or you're working 3 or 4 jobs right now, I think you need a mental win. And I think you do it 2 ways. You're working so hard that you have nothing else going on and you're piling up cash, as Dave says. Because I think you need the emotional win, and I think you need the mental win and not beat yourself up anymore.

I think you need to see yourself establish that bank account and get it growing and watch yourself get some momentum of putting cash in the bank so that you convince yourself, I can actually do this. I'm not a moron. I'm not the only person that's ever gone bankrupt. Dave Ramsey has, and he's done well since. So I I just think that would be my encouragement to you.

Stay busy right now. Be as busy as you can, not to, detach, but to grow from this and to exhaust your work body and your work mind so that you can say, hey, I'm actually winning and I can build myself back up. I can come out of these ashes. That would be my recommendation. I think that's the best thing coming off of a big loss.

Amen. Because I think it's traumatic.

Well and what happens is you start getting some wins and it rebuilds your confidence. That's that's part of answering the question

Yeah.

How do I recover

That's it.

Is you rebuild your confidence. I had to, and it worked. Amy is in Dallas. Hi, Amy. How are you?

Good.

How are you guys doing?

Better than we deserve. What's up?

Hi. I was just curious. Is it is it up

to the, employer's discretion to allow or not allow a conversion from traditional 401k to Roth 401k? I've asked multiple times, and my answer has been they don't do it.

If the 4 0 the the employer sets the rules of the 401k in place, some do not have a Roth option.

Mine does. Mine does have both. So I I've I've since done contributing to Roth, but I was hoping to I

mean, your company offers a Roth 401 k and a regular 401 k.

Yes, sir.

Then it is not up to the employer's discretion. They're telling you they won't let you do it?

Correct. Like,

That's weird.

Okay. I

It's not their money, and they have rules that they have the place to put the rules in place, but, and if they chose not to have a Roth option, they can do that for everyone. But they can't select to look at you and say, no. You can't do this. Is this a small employer?

No. Corporate America.

Huge. You need to get you need to get above this idiot's head. Somebody in HR is making a huge mistake. No. They do not have the right to deny you.

If they're offering the plan to everyone, they're offering the plan to everyone. It's you can't say some employees can do this and some can't. That's not not the way 401 k rules work. So I think you gotta dig into this and learn a little bit more. There's something weird here.

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The budgeting app I'm talking about, 50,000,000 people have. That's a lot. Wish all of them are using it. But wow. Pretty cool.

But download it for free in the App Store or at Google Play. Alex is in Atlanta. Hi, Alex. Welcome to the Ramsey Show.

Hey, Dave. Thanks for having me.

Sure, man. What's up?

Hey. So I had

a quick question. It might be a little complex, but my dad's been disabled my whole life, and he's had multiple heart attacks. My mom's been fighting with stage 3 cervical cancer. You know, I wanna know if it's honorable to go a $1,000 into debt to be able to take my wife and kids down to go visit them and take them to Disneyland and what my parents used to do with us when we were kids so they can no. I don't know when the next time we're all gonna

Take your kids to Disneyland? Your parents.

All of us.

Oh, your parents' health will allow a Disneyland trip?

In a wheelchair. Yeah.

Disneyland or Disney World in Orlando?

Disney World in Orlando.

Where where's mom and dad?

We just got cleared to fly from California to Florida to visit my grandmother Mhmm. And my sister. She's had a baby too.

Mhmm. Okay.

I'm just trying to

Yeah. So what's your household income, sir?

I bring in anywhere from 80 to a 120.

Why can you not find a $1,000?

Dug myself a little hole, before I had kids and bought more expensive cars than I should have, and I'm paying the price now.

So you don't have a $1,000? You make a $120,000 a year. You don't have a $1,000.

I have 2,000 in savings and 2,000

dollars and go to Florida.

Okay.

Why did you call me and ask me to borrow money when you have $2,000 in your savings account?

Oh, I wasn't calling to borrow. I was calling just for some insight.

No. You were saying, is it honorable to borrow money because my parents are sick and dying so I can spend some time with them before they leave this Earth, and I have to borrow money to do it. But you don't have to borrow money to do it.

Yeah. I'm just trying to figure out if I should keep the $1,000 or 2,000 for

So let let me rephrase frame this for you. Okay? If you borrow $1,000, you're not borrowing it for your sick parents. You're borrowing it to put it in savings.

Mhmm.

Because same thing.

Yeah.

If you take $1,000 out of savings and you borrow $1,000 for this trip and put it back in savings, it's the same thing.

Mhmm.

So you're really not borrowing for the parent's trip. You've worked this whole drama thing up in your head. You're really borrowing so you don't have to deplete your little savings account. See the difference?

Yeah.

Now what this is, if I'm you, is my wake up call. It's time to do some different stuff, Alex. Agreed? You make too much money to be this freaking broke. You work too hard to be this freaking broke, dude.

Yeah. What's what's the depression from? You sound like you're walking around a mud hole.

Just trying to figure out the way. I mean, I've, you know, I've read the books. I've read your books. And

You have the energy of a hound dog in the sun. What's the deal, man? I mean, are you depressed?

No. I think it's just hard watching your family suffer your whole life, and then you try. And you're trying to prevent that from happening in your house and with your kids and trying to make everybody happy and trying

to, you know,

be happy yourself too and make all the right choices.

Sounds like you're exhausted.

Yeah.

I think you're emotionally exhausted.

So here's the thing. You make a $120,000 a year. The plan you've been working is not working. Can we agree with that?

Oh, yeah.

You work too hard. You make too much money to be as broke as you are. So take a $1,000 out of the account is the answer to your question and go visit your mom and dad. Take them everybody to Disneyland. That's fine.

But when you get home, man, it's time to sell some cars. It's time to cut up the credit cards. It's time to put everybody on a budget. And I don't care if the 14 year old's happy. By definition, 14 year olds are not happy anyway.

And so I don't really care. That's true. That's the deal. So I don't know if you got a 14 year old. I just made that up.

But I would take you said you're taking kids to Disney. Maybe it's an 8 year old that's not happy. Definition of happy when you're 8 is you have shelter and food and dry clothing that fits. That's it. After that, everything else is a spoiled freaking American.

So, you know, it's okay to have some nice things. It's not okay to have some nice things when you can't afford them and you can't afford them. You guys have got to change your ways, man. This is your wake up call. When you make $120,000 a year and you have to call some guy on the radio that you've never even met to ask permission in your mind or to ask insight in your mind to use $1,000 of your $2,000 savings account, that's signaling.

That's flares going off. Time for a change. Time to do something different, dude.

Now he's gonna have to get comfortable disappointing some people. Or really, to be honest with you, he's got to be okay with what he perceives as disappointment when in all reality, it's just not there. That's what I hear. I hear a guy that's just overextended, and he's just lost all reason because he's trying to emotionally feel good about himself, make sure everybody else feels good about him. And he gets to this point where he calls and says, is it okay to take $1,000 out on a credit card just to pay for this trip?

Because I feel like I got to make my mom and dad happy because they made me happy. I heard that throughout the entire description, and I feel bad for him.

I really do. But it's not even it's not even on the it's not even an issue. It really isn't. So that's not the issue.

It's all

in his head. So, guys, 1 of the things you have to do in this regard, and is, all of us, Dave included, me included, rationalize our purchase. And 1 of the rationalization methodologies that we use is that we are doing this for someone else. And when you unpack it, most of the time that's just not true. Yep.

Example. Okay? Little family has a brand new little baby. We spend $26,000 redoing the nursery. Promise you, little baby has no freaking idea.

You did not do this for the baby. It does not change the baby's environment. It does not change their developmental skills. It does not increase their intelligence. All absolute hogwash.

You did this for yourself. You did this so your friends could walk in and go,

oh, it's so cute.

And they're not talking about the baby. They're talking about the nursery. And so babies don't give a crap. All they want is a dry diaper and some food. That's all they and and a good hug.

That's what a baby needs. That's it, man. It's simple. They don't need $26,000 worth of nursery equipment. Now, if you have $26,000 extra laying around and you want to spruce up your home and do something nice, do it.

I can promise you Sharon Ramsey is doing that right now for Christmas, for no apparent reason, but that she has the money. And that's okay. But that's different than I'm broke, and I I did this for my child. No. You didn't.

Your child is 3 months old. They don't have a freaking clue. Hello, Christmas present purchasers. Who are you really buying for? Think about it.

I don't mind your be I'm not the Grinch, but quit using the little children as my rationalization. This is the Ramsey Show.

This show is sponsored by BetterHelp. Alright. Hey. It's that time of year when it's getting a little colder, it's getting dark earlier, and sometimes we just wanna stay inside and get cozy. For me, the perfect night at home, when I'm trying to be cozy, is me and my whole family under a bunch of big blankets watching the TV show or reading a book.

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Ken Coleman, Ramsey personality is my co host today. If you don't know, we have the Ramsey network app that is free 100%. There is no subscription anywhere around it. All you gotta do is download it and start using it, and it carries the 3rd segment of the show every day on video and audio that is not available on podcast or YouTube. And you can search by call subject, say, I wanna talk about high yield savings accounts.

And you pull up 4 or 5 times what we've talked about on the air without having to listen to 26 hours of of podcasting to get there. So if you're looking for a specific thing, you can do that, and you can communicate with us by email, which is exactly what Adam did.

Today's Ramsey Network app question is, of course, from Adam. He says, could you please explain how to know if I can be self insured? I'm 47, married with 2 daughters, in their teens, and I have $250,000 in investments. I believe my current life insurance policy, which I bought from a relative, is overpriced, but I'm afraid to change brokers. At what point can I pull the plug on having insurance?

K. Well, we're talking about life insurance. And so the way you answer the question back into it is, if you die, can your wife survive if you die this year? Okay? Can your wife survive on the investments in the situation that she's in?

Generally speaking, we would tell folks to be self insured. You would need to be 100% debt free house and everything, and the kids are grown and gone, and there's a substantial investment, and you could she could live off of the income that the investments create. So if she made 10% on $250,000 that'd be $25,000 a year, and she's got 2 teenage daughters. No. I don't think you're self insured.

Yeah. I agree. You gotta replace your income. Now if you make $60,000 a year and you have $1,000,000, well, the million will create, you know, 80 to a 100000 a year in income for your wife without touching the million, and your kids are grown and gone, and your house is paid for, well, your wife actually gets a raise if you die.

Yeah. Right.

Then you're self insured. Right? And so if your investments will replace your income and or the fact that you're debt free and or the kids are grown and gone, that puts you there. But, dude, you're not. I I would not tell you to do this.

Now if you're getting ripped off on insurance, it's time to have some courage and talk to Zander Insurance, and get some the proper amount of term insurance in place. It's not that expensive, even at 47. If you're if you're not overweight, you don't smoke. Term life insurance is just cheap, and Zander Insurance can shop among a bunch of different companies, get you the right deal, get that in place, and I wouldn't even contact the relative. I would just contact the insurance company and cancel it.

Yeah. Your relative may not even be in the business anymore. If they are, they might not even notice the cancelation come through. Yeah. And if they do, when they call up, just go, you know, I just want another different I want a different direction.

You're not required to get into a long explanation with someone that sold you something that you believe is overpriced except goodbye.

Yeah. I agree. You know, this isn't scary. I I know it seems scary, but, this is again the kind of the law of the unknown. The thing we don't know anything about, we wanna leave it alone because it seems scary or time consuming.

And Colin Zander, you're gonna find out how seamless this process is to get properly insured. There's nothing to be scared about for switching.

Yeah. Well, he just he he said I'm afraid to change brokers. He's afraid of the conflict with the relative. That's what it amounts to.

Oh, okay.

I didn't read that. I'm reading that anyway. Yeah. Yeah. I gotcha.

That's what I get.

So Well, you know what? Same deal there. What are you afraid of? Yeah. I mean, if you wanna pay extra money just because you don't wanna deal with disappointing a family member, that's just not the way I wanna live.

Oh, I'd rather save money.

Yeah. Well and there's you know, why would someone that loves me overcharge me? There's the other side of it. Just like, you know, who is it I'm disappointing here? The person who's supposed to be having my best interest at heart and yet overcharged me.

So, yeah. I don't I'm gosh. Sorry. I'm disappointing you. Right.

Who cares? Right. Yeah. You know? So, yeah, get your get your term insurance in place the proper amount.

You're not self insured yet, I don't think. I don't think your wife wants to live on $25,000 a year. I could be wrong, but I don't think she does. Derek is in Saint Louis. Hi, Derek.

How are you?

Hi, Dave. Been a big fan for a long time.

Thanks.

I'm great. Thank you. The reason I'm calling today is, my wife would like to quit her job and stay home with the kids. About 10 years ago, we built a house on the family farm, which I now run. We've got a little over $2,000 a month mortgage.

And I'm just afraid if she quits, we're barely gonna be able to pay all the bills. We also have we have 3 children. The 2 older ones are both in Catholic school Mhmm. Because we didn't want them in the public schools here locally.

Mhmm. Okay. So what is your income? What do you make a year on running the farm?

I'm well, I also work full time off the farm. Oh, good.

What are you what's your income if she quits?

So my take home pay from the job is a little north of a 100,000. It's about $5,200 a month take home.

That's her. Woah. Woah. Woah. Woah.

A 100,000 is 83100. You don't have 3,000 in withholding.

Oh, well, there's also 401 k and, health insurance

and Okay. How much is going into 401 k?

15% right now.

And are you in baby step 4? You're out of debt except the house?

All but my car, which is a $5,000 loan, I drive it for work. That's the only thing.

And how much how much thing do you have in savings other than your 401 k?

I'd have to check. I didn't look today. So we have 3 or $4,000 in savings. The farm accounts, we make some money on it. There if we have trouble,

we Pay your car off today, Derek.

I could.

Yes. No. You could. You need to now. Okay.

Well,

would you have to Now you're out of debt on the car. You're and the answer to your question is, $2,000 a month on 83100, and you've got farm income. What is the net profit on the farm that you pay taxes on annually?

Well, it varies year to year.

I know. It's a farm.

Yeah. Yeah. The commodity prices went to half price this year from last. I haven't got all the I haven't got everything back from the crops, but

Honey, how long have you been doing this?

All my life.

Okay. So what do you make a year on a stinking farm? It's not rocket science. You're making 30,000, 300,000.

This year, it's probably gonna be closer to 10 to 15.

Okay. In some years, you make 20. So you're not making much money on the farm. Okay. I got it.

Well, 40 to 50.

Well, except 20. Okay. Alright. So somewhere at least by okay. Now alright.

So you got a $150,000, $140,000 household income. So the question is run a budget in detail.

We keep we keep a spreadsheet.

Then run your budget as if she's not working and bank her check.

Say that again?

You mean Run a budget

few months.

Run a budget for the next 3 months as if she's not working and put her entire check-in savings.

Okay.

If you can do that, she can come home. If you can't do that, what have we got to change so that she can come home? Is it Catholic school? Is it we move? What have we got to change?

What's less important than her coming home? Both of those other things, the farm and the Catholic school sounds very important to you, but maybe I mean, you you 1 of these things may need to give, I don't know, for her to be able to come home. So but if you simply the math is, if you'll just practice living on your income, then, gosh, it's a no brainer. She can come home. You don't have anything to be vaguely afraid about.

You actually have done an analysis and have proven what we call proof texting the concept. But if you if you can't bank her check and make it, then you start asking yourself, what do we got to change for us to be able to bank our check and make it? And we gotta work that through.

It's just powerful the the deduction that you just gave folks. I mean, you gotta take the emotion out of this stuff. I'm afraid. What are you afraid of? Is there something to be afraid of?

Or is it just a fake monster under the bed? You gotta look under the bed, and that's the idea here. And I think there's so much power in what you know and what you don't know.

And then you put the things on the scale and go, that's not as important as her being home, or that is more important than her being home, so she's not coming home. If that's how that works. I mean, it's just math. This is the Ramsey Show. Hey, guys.

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Field of greens.com/ramsay. Live from the headquarters of Ramsey Solutions. It's the Ramsey show where we help people build wealth, do work that they love, and create actual amazing relationships. Ken Coleman, Ramsey Personality, number 1 best selling author of the book, Paycheck to Purpose. He's my co host today.

Open phones here at triple 8, 8255225225. Tyler's in Charlotte, North Carolina. Hi, Tyler. How are you?

I'm good. How are you?

Better than I deserve. What's up?

So I run a realtor business with 5 agents and property management as well, and my attorney approached me about potentially partnering 5050 on it. And I've been against that since I've got started for many reasons, but, just kinda wanted to run it by y'all and see what y'all thought.

Give us your top couple of reasons why you didn't wanna do it.

Just risky. You never truly know who you're working with. They could change their mind, you know, down the road or get greedy, get sick. I mean, many different options that could cause hassles in the future.

Yeah. Our rule is the only ship on sale is a partnership. Yeah. So, I find with the exception of medical practices and law practices, we coach tens of thousands of small businesses through EntreLeadership, and we find almost no partnerships of this type survive 10 years. They don't make it 10 years.

And because of a lot of different things that you just described, sometimes it's not negative things even. Sometimes it's a positive thing. But, why would your attorney want to buy 50% of your business?

Well, he's he's been doing law for 10 years now, and he's just kinda looking to grow in another realm, I guess, kinda same way. I am just kinda wanting to pick things up and do something a little different than we've been doing.

I'm sorry. Same thing. You're you're wanting to do something different?

Well, I've just yeah. Every every couple years, I kinda get bored is the best way I can say it, and I look to start something else. And I've done that last couple years and has been a great decision. So I thought this time I would just kinda try to grow my main business instead of trying to branch out into other things.

Yeah. Staying in your lane is a good thing. Yeah. Okay.

Yeah. But how

would it how would it change? Is he how would it change? Have you guys talked about the details of what it would look like if he came in?

Yeah. I've been I've been working with him for about 4 years. He he's got a lot of, you know, obviously contacts, other other lawyers and stuff like that in the area that he's merged his business with. And my main business is investors, and he knows a lot of them. He closes business bills and everything as well as regular real estate.

So we would we'd be looking to separate ourselves from the overhead brokerage, kinda make the firm, it's, you know, a standalone thing, get an office going because I don't have a brick and mortar office yet, and he has 1 kinda available. And then just kind of merge into that. He would help with the law

side of the brick and mortar for this other thing. You have 1 for your real estate office.

No. I don't have 1 because I I'm But

you said you had 9 agents or 5 agents.

I have 5. Yeah. We I opened an office 1 time, and it never really benefited us. And because I kinda started during COVID is when I got started. And we've just never ran out of a out of an office.

We've all Until I see the principal

broker has to have a location.

Well, it's a brokered by business, so I I have my firm. I'm brokered by an overhead brokerage.

Oh, you're not the principal broker?

I'm a I'm broker in charge of this firm for property management. Yeah.

Yeah.

Yeah. Principal broker in most states has to have a physical location. Okay. Hey. Hey.

Hey. Okay. All that doesn't to to me is simple. I no. I would not go in partnership.

I don't do partnerships. I don't mind doing a deal with someone, a singular deal, a 1 off that has a a set into it. That's more of a joint venture. And I don't do hardly any of those, but I would do that. But something that is an ongoing thing that does not have a set calendar to its expiration, a term to it, I would not do that.

No. If he's got some investors and y'all wanna work out some deals, you know, where, you know, he gets a certain amount of legal work, if he keeps spoon feeding you investors and that kind of thing, a legal way to do the transfer on that, that's fine. But no, I don't you don't need a wife. I mean, that's an attorney. No.

No. No. I wouldn't do it. No. I think you're you guys are just bored.

You need to you need to back up and say, gosh. How what can I do to make this thing exciting and go push something out there that's different and that gives you some energy again? But, no. I it's a compliment that he came to you and said, it'd be fun to do business with you. I think I like the way you do stuff, but that compliment does not substitute for good sense.

You just nailed it. I cannot tell you how many times I've taken calls on the Ken Coleman Show like this where someone feels like they are less than if they don't take some opportunity that in their heart they don't wanna take. But because it's an opportunity, what happens is the brain feels great. There's an endorphin release from being wanted. Right?

Or or or from being approached on this. And so you feel like, Oh, common sense is I'd be an idiot to walk away from this. And in all reality, you gotta trust your gut. You gotta trust your principles and your values. And you led, Tyler, with principles and values.

I think you got to listen to those things. Those are bedrock things that keep us, grounded and keep us from making big, big mistakes. And I think, Dave, you nailed it. I think there's something weird, right, about the psyche when when somebody wants you to be a part of them or they come to you with an attractive offer.

I want I want you in this deal. Yeah. And, 1 of the things that has happened to me over the years running Ramsey is people come in with ideas. Sure. Hey, I want to share this idea with you and see if you want to work on this idea.

And, you know, I don't. I just don't. You know, 1 guy was, you know, he's like, well this is the best idea since sliced bread. You need to sign an NDA so I can tell you about it. You need to sign a non disclosure agreement so I can expose this wonderful idea to you.

And I said, please don't tell me anymore. Because dude, I get ideas in here like shovel fulls every day. Ideas are a dime a dozen. People who can actually get crap done, those are hard to find. Ideas, not hard to find.

They're everywhere. People that execute and follow through with excellence, and energy, and enthusiasm, and that those are those are a rare gem. You bring me 1 of those, I'll sign an NDA. But, but I don't need please don't tell me your idea because we might have already had the idea, and then you'll think I stole it from you. Because they're that easy.

The ideas are just everywhere. When you're entrepreneurial, I mean, I'm somewhat ADD, I guess. It's undiagnosed. When I was a child, they called it hyperactive. But, yeah.

Dave talks too much on all my report cards. Now I make a living doing it, but there you go. Mhmm. So my much to my grade school teacher's chagrin. But the, but yeah.

So ideas are everywhere. I mean, squirrel. There's another idea. You know, you just boom. They're everywhere.

So but people that can do them or not. And that's the same it's the same category here of the affirmation of, oh, I brought you an idea. Oh, thank you. I'm worthy of your idea. Thank you.

But then I quickly figured out. No. No. I don't need to. I know.

No. No. That's a nightmare.

So true. You know, it's because of the law. You not tell people

to eat beans and rice, rice, and beans? Yeah. Would you believe that to date we've had over 1,000 over 1,000 people propose that I coauthor a book with them Of course. Of beans and rice rice and beans recipes.

Yeah. It's a great idea.

Because they didn't understand it was a metaphor. Yeah. I it doesn't literally mean everyone should actually eat. I thought you were

gonna tell me people pitched you on having your own rice bran or beans.

Oh, that too. I'm sure that's out. That too. Yeah. Uncle Ben's got the market.

He's got the market. This is the Ramsey Show. Hey. I'm excited to talk about a new sponsor, Burna. You all probably know I'm a gun guy, but I'm big on safety, so I'm also a Burna guy.

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I also love talking about business, a small business as well, like we were just our last caller there. If you didn't know, I host a podcast called the EntreLeadership podcast. It's been on the air for many years since podcast first started. I took it over. We had other folks at Ramsey doing it, but I took it over about 2 years ago and started taking calls from small business people with questions about business and leadership and so on every day or not every day, but 1 day a week.

And, if you have a small business or leadership question, reach out to us. Leave us a voice mail at 844-944 10:70. We'll set you up to be a caller. 844-944-1070, or you can go to entreleadership.com/ask. Sterling in Austin, Texas.

How are you, Sterling?

I'm doing good. How about you?

Better than I deserve. What's up?

So we are on ma'am, my wife and I are on baby step 2. And I was wondering according to the baby steps, when should we purchase a house?

We call it 3 b. After baby step 3 is in place, you're debt free, and you have an emergency fund of 3 to 6 months of expenses, then start saving for your down payment in 3b. In other words, between 34, if you wanna not start retirement savings for a short period of time and use that time to build up your down payment, that's when we would tell you to do it.

Okay. That makes sense. We are sadly about to have to go back into step 1, because of car repairs. And but then after that, we're gonna be back to step 2. And so we're thinking about the future Yeah.

And trying to, you know, look at the market and see when, you know, we can save up for a down payment.

Yeah. We wanna get you in that. That's perfect. So how much debt you got left, Sterling?

It's still a lot. Right now, I wanna say it totals to a $109,000 with all the student loans, all my student loans, and then we both have, 2 car loans, and then we have 1 personal loan.

Yeah. What's your household income?

Together, we make about $120,000 a year after taxes.

Cool. What's the most expensive car loan?

That would be my truck at $26,000.

Okay. Alright. Cool. Sounds like you got a good plan. If you wanna speed up the house, you jet the truck.

I've I've been considering it. I've really I've really been considering it. Right now, it's been giving me, a lot of problems. I have a friend who says the 1 thing that's worse, than either parts or payments is having parts and payments when it comes to a vehicle.

Say it.

And, yes. You can thank Robert Looney for that 1. He's he's told me parts and payments are unfortunate. It's 1 of the worst things you can have. And right now, my truck has been giving me both problems, and I've been really debating about, getting rid of it.

Now if you could get 26, and you probably can, you probably get close to that for it depending on what it is. It gets you out of a 4th of your debt and speeds the purchase of the home, which goes up in value and the truck goes down in value. I'm not against having a nice truck. I'm just always trying to figure out a way to get to my goal faster.

Yes, sir. I'm I I was doing, some the kinda estimation with on every dollar, and it looks like, after all the bills and other things that, my wife and I are about to cut out, because we're deciding we really don't need. We have about $35100 left over. Yeah. It's about a 3 year plan.

Yeah. So so we're

gonna start really cutting things out and try to get that close to $5,000 left over every month.

That'd be great.

At least $4,000 and then really start paying things to make it a 2 and a half to 3 year plan.

Yeah. And that'd be and the truck payment is how much?

The truck payment is $712.7

Yeah.

At it's like a 3.9% interest rate.

Put put yourself in a hoopty and run the numbers with that extra 700 on there, and that's what you'll see what I'm talking about then. That's cool. Hey, man. You're doing great. I'm proud of you.

Can't wait to hear you do your debt free scream. Good job. Rick's in Columbia, South Carolina. Hi, Rick. Welcome to the Ramsey Show.

Thank you, Dave.

What's up?

Well, I'm 47, and I'd like to retire at 55, and I'm not sure where to go yet. I thought I was pretty fiscally responsible, and then, I started to listening to you in 2022 and realized I wasn't as smart as

I thought I was. So

I'm gonna ask for help.

Oh my goodness. Okay. Cool. So, how much debt have you got today?

The only debt I have is I've got a company truck where I got a 3 year loan, and it's 1500 a month, but I get reimbursed 1100 to 1700 depending on how many miles I drive from my company.

You get that whether you have a car payment or not?

Correct. So, yeah, I need to get that truck paid off, and then they still give me the same amount. But the truck has

to be it can't be more

than 3 years old, so I have

to drive to systematically keep money moving that direction so you can upgrade the truck periodically?

Yeah. Correct.

But no more payments?

Yes.

The program is independent of debt. It does not require debt. Yeah. You just used it to justify debt. So, it okay.

So we're gonna clear that. Now what how what's your nest egg looking like in your 401 k?

Well, I've only I came out of a a different position where I was in a pension program.

Mhmm.

And then April of 22, I started in with this 4 0 1 k program. And, I've got this is a big question is, last year, I started doing a Roth 401 k.

Good.

And my talk tax adviser said that I should be doing a traditional 401 k.

You should fire your tax adviser.

As you said. Yeah.

So I'm

serious. It was a heart attack. They're trading a tax deduction for tax free growth. This guy can't do math.

That's what I thought too. So I kept doing the Roth 401 k this year.

And change tax advisers, because I don't know what else he's doing this dumb.

Yeah.

Alright. Anyway, so so you don't have a lot there. So you're a long way from retiring in 7 years.

Yeah. So I got 19,000 in the 401 Roth 401 k, 67,000 in the traditional 401 k, 18,000 in the HSA,

and

that's all since April 22.

Good. Okay. Well, you're tracking. I mean, you're dumping a bunch of money in. What do you make?

My base pays 111,000, and then my bonus was 56,000 this year.

Okay. You're married?

Yes. 3 kids, but my wife stays home with the kids, so it's just my income.

Okay. Well, I mean, the beautiful thing about what you're doing is is you're making all the right moves. I think the thing that'll help you is to, you know, just do some calculations. You can use some of the calculations on our calculators on our website. They'll help you, or in the EveryDollar app, either 1.

And start saying, okay, what will I have when I'm 55? What will I have when I'm 60 based on my current trend line, with the lump sum I have now, plus the payments I'm putting in now? And that'll start to tell you, you know, give you some comfort level as to where you're going to be. I don't think you're going to be mathematically able to live, like, anywhere near like you're living now at 55 years old with no work. So I think you're working a while.

That's not a bad thing though. You need to be doing something. I'm 64. I work. So it's not it's not the end of the world.

Yeah. I would agree with that. I think the 55 is a little too aggressive. So now, you know, double down, do your numbers, crunch, and go, what is it really gonna look like? And again, I the data, Dave, just to back up what you said, the data is overwhelming for people who want to research it on what happens when you truly stop working.

Now financial retirement, in my mind, is different than just straight professional. I'm not doing anything any longer. I think that, it's not good for the body, and it's definitely not good for the soul.

Not good for the mind. It's a terrible thing to waste. Yeah. Doing something. Yeah.

I just having enough money to not have to work is different than just not working. That's what you're saying.

A 100%. Yeah.

Yeah. But either way, if either way, you can start to run your numbers out, and it'll give you some insights on to where you are. So that you're doing you're doing pretty good, Rick. Sounds like it. I'm gonna get out of the truck debt, and I'm gonna jack up on some of these other things, the investment side, and get this thing moving.

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Today's question comes from Nikki in Kansas. My husband has been at his current job for over 5 years. He has received yearly inflationary raises. A new manager position was recently created, and my husband considered applying for it. But before he could, it was given to another employee that has no previous experience in the role.

This new manager now repeatedly asked my husband for advice and wants him to work extra hours and to cover his lack of confidence. I think it's time for him to find a new job, but he wants to make it work here. His annual review is coming up. Should he mention the situation and bring up needing increased compensation or a path to growth? Well, Nikki, you know, when somebody has done me wrong, I found, Dave, that my wife, Stacy, has always taken it worse.

I don't know if Sharon's that way or not, but it feels like this situation where your husband's griped a little bit about this, Nikki, and you've gotten really upset about it. And, I would listen to your husband here. He wants to make it work. And based on the facts you've given us, he never raised his hand for the job. And because he didn't raise his hand, whoever hired this other employee is not on the line for that because they can't read mine.

So in this situation, I always tell people to never ask directly for a raise. I teach to, talk about a growth plan, after you talk about a desire to grow. In other words, I think in his annual review, you just sit down and say, hey, listen. You know, I was thinking about raising my hand for this other position. I didn't.

And that's on me. But what it did show me is that I want more. I want to lead. I wanna step up. I wanna climb here at company x y z.

So to that end, in my review, whether you got it for me today, but in the future, in the near future, I'd like to meet with you and discuss a growth plan. What tools can I add to my tool belt? In other words, skills and experience. And then what are some shortcomings? What are some areas that may be blind spots for me that I need to be aware of so that I do better and make myself a better employee?

And then, can we lay that plan out? And how do we measure it? So that you and I are operating off the same sheet of paper, shape same sheet of music. And and and and if we measure that, will that lead to opportunity for more responsibility, which should come with more compensation? That's the spirit, the posture that you should have so that you do not put your leader on the defensive.

Because many times, they are not the sole decision maker in you getting a promotion and a raise. And so the reason I prescribe it that way, Dave, is it allows them to have some ownership in it. They don't feel put on the spot. They don't feel backed into a corner. And, then we have an adult, mature, professional conversation about a path forward.

The other thing I want you to ask yourself, is who is ambitious here? You or your husband? Because a, he didn't raise his hand for this position. B, his wife wrote us an email. Mhmm.

Not him. 2 indicators he ain't real fired up. And so or not as fired up as you are.

That's correct. That's very obvious. So,

I I don't want you to want something for him more than he wants it for himself because that's gonna come through when he sits down in his review. He needs to be confident, competent. How can I add value to this organization? What do I need to do to make myself more valuable so that I can grow here? Grow meaning grow in responsibility and in value that I'm adding, and hopefully in compensation someday.

And that requires a a body language, a, a little swagger.

Yeah. You gotta show some hunger. I think what what they wanna see here is I want to get better. I wanna do more, be more, and that's attractive.

Yeah. And and, you know, I think that's a discussion. Maybe your husband doesn't want any of that.

Maybe you want it. It's very possible.

So, you need to talk that through before you send him into the lion's cage. Open phones at 888 255-225. Matthew is in Houston, Texas. Hi, Matthew. How are you?

Hey, guys. Thanks for taking my call. Sure.

What's up?

Hey. So I have a budgeting question. I'm trying to figure out what I should do for, an extra 20,000, in income. I'm gonna receive 3 to 4 times this year, from overtime work.

Send it to Dave's Bahama Fund, PO Box. No. I'm kidding. Okay. Alright.

So you're gonna make it you're gonna make an extra 80 grand?

Yeah. Sweet.

Very nice.

Pretty nice.

I'm Where where are you on the baby steps, bro?

I'm not sure what baby step exactly it does.

Okay. So this whole this whole thing is new to you. So that's cool. That's fine. Okay.

We teach a process to use all extra money to achieve wealth as fast as possible, and we apply it in an order, a forced ranking, of importance. Okay? And that system is called the baby steps. 1 baby step at a time, and you'll become wealthy. So I'll walk you through them right quick.

You ready?

Okay.

First thing you need to do, save $1,000. I bet you've already done that.

Yes.

How much money do you have in savings?

Just savings. I have about 50 k.

Okay. Good for you. And how much debt do you have not counting your home?

None.

Good. Okay. Baby step 1 is save $1,000. Baby step 2 is to become debt free everything but the house. Ding ding.

Check those 2 boxes. 3 is to have an emergency fund of 3 to 6 months of expenses. If we call that 50,000 that emergency fund, you're there. 3. Baby step 4 is start putting 15% of your income towards retirement, not more, not less, in 401ks and Roth IRAs.

Are you doing that?

Yeah. I'm matching them out. It's more like 25% at the moment.

Okay. Baby step 5 is kids college. Do you have kids?

No. I'm single.

Well, that's easy. We skip that 1. Baby step 6 is pay off your house early. How much do you owe on your home?

Yeah. I owe, 200 on my home, and right now I'm putting an extra $400 a month towards the principal.

K. And what do you make? What's your total income, sir?

Well, depending what this OT, should be close to about 200 this year.

Okay. And you're single and you have no debt payments. If I woke up in your shoes, what would I do following those steps I just gave you that I've taught 10,000,000 people? I would tell you to reduce your 401 ks to 15%, not maxed out. And I want you to take everything you can squeeze out of your monthly budget, including this bonuses that are coming in, and throw it at the mortgage.

Let's pay this house off in 2 years.

Okay. Yeah. That's, kind of what I've been leaning towards too. I don't like having it hang over my head, but, I was also wondering if I should consider a side brokerage account

or,

after the house was paid off.

Okay. So after the house. Yeah.

Here's here's why. Here's why. Yeah. Okay? This is I did not I don't want it hanging over my head.

There's actual data. Okay? We did the largest study of millionaires in North America ever done. 10,167 of them. 2 primary things caused them to have the first 1 to $10,000,000 of net worth.

Investing steadily into their 401 k and paying their home off. They and paying the home off is a big part of it, by the way. So a paid for house.

How old

are you?

I'm 26.

And the house is worth what?

Probably about 2.60.

Okay. So when the house gets paid off, by the time it's paid off, somewhere around 34 years old, 33 years old, you're gonna have a net worth of over $1,000,000 at the track you're on right now. So way to go, dude. You're killing it. Proud of you.

Hang on, I'm gonna send you a copy of the book, Baby Steps Millionaires. It's my latest number 1 best seller. And, it'll show you exactly the stuff I'm talking about, why, when, and where, and it'll help you dial this in. You are a stud. Keep it up, man.

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 ramseysolutions.com/tour. That's ramseysolutions.com/tour. Thanks for joining us, America. We're glad you're here. Open phones at 888-825-5225.

Well, it snuck up on you again. Christmas is here. Are you ready? Hey. Whether 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 our best selling products, including Ken's book, Paycheck to Purpose, my book.

The 1 that just mentioned, Baby Step Millionaires, or Total Money Makeover, Non Anxious Life by our own doctor John Deloney, Breaking Free From Broke, On Sale by George Campbell, human Questions for Humans decks of cards, $12.ramsysolutions.com/store. By the way, the reminder, this is the last segment of the show on podcast and YouTube. You can pick up the final segment of the show, the final episode or the final portion of the episode, rather, at the Ramsey Network app. It's completely free. You can download it right now at Apple or at Google Play, and you can always hear everything we're doing at Ramsey Network on there, video and audio.

So be sure and jump over to the Ramsey Network app and pick up everything you need to know. Tammy is in Nashville. Hi, Tammy. Welcome to the Ramsey Show. What's up?

Hey. Thank you so much. Thanks for accepting my call and sharing your knowledge. I just have a quick question. My husband and I are actually wanting to buy a home, and he wants to do this shared mortgage.

And he's trying to convince me that it's a great thing and that it's so wonderful, and it sounds very stupid to me. And so I would just like to know what you I I it it

Don't go back, Tammy. Tell us how you really feel.

Well, I wanted to know what is this and the the negatives and the positives, if there is any positives. That's my question. Shared mortgage, negatives and positives, and is it a good thing?

It is not a good thing. Your instinct is correct. You win the argument. Now let's talk about why.

Praise the Lord.

Yeah. Let's talk about why. You have a good news for you have a good news for stupid. And, sir. So, you're like my wife in that regard.

But, so a shared appreciation mortgage is what we're talking about. And what this is is the mortgage company in return for a lower interest rate and in return usually for lesser down payment, you give up a portion of the increase in value. And so, you buy a $300,000 house and it goes up to 500,000, the sum of that $200,000 increase goes back to the mortgage company when you refinance or when you sell. So you do not get all of the growth in value. The downside is 2 things.

1 is it can trap you and make it very difficult to refinance if you were able to and get rid of them, okay, Get rid of that loss of growth. And it can also make it difficult to sell. And of course, the third thing is you gave up some of your growth, and the trade off's not worth it is what it amounts to. I don't know why he's being pulled into that. That's very strange, because it's the the thing is very, very few mortgages very, very, very few people do this.

I thought the program was actually dead until a few months ago I heard somebody bring it up. I think somebody's out there promoting it or something because I hadn't even heard of it in a long time. First time I heard of it was back in the nineties. And, but, and high interest rate environment, you know. And so, you know, interest rates were really high, and people were trying to get the rate down by giving up some of their future appreciation.

So Tammy, kind of think of it this way. Have you heard these things with student, some of the student loan things, where, you can go to a certain college, and, you don't pay as much to go to the college, but you give up some of your income to that college?

No. I've never heard

of that.

Same deal. Same kind of a thing here. You're you're selling off your future for a little bit better deal in the present, and that's never a good trend.

Saying that I'm sorry. So you're saying that once, if you ever decide to sell or if you ever decide to whatever, you have to give them a portion of the value?

Yeah. Of the of the increase in value. Yes. So if you bought a $300,000 house and it went up in value to $500,000 and you had a 20% share depreciation, as an example, then you would give up 20% of that $200,000 growth, or about $40,000 when you refinance to get rid of that mortgage. And by the way, if you wanted to just pay it off, if you start making a lot of money in your work, in the Ramsey plan, you want to pay it off, you gotta pay off that appreciation that you owe them too, not just the loan balance.

Oh.

So

Well, here's the here's the idiotic thing to me is we have $400,000 or whatever in cash, liquid. We could just buy the home, but he doesn't wanna do that. He wants to go through the bank because in his mind, he's keeping his money and making some money from the bank. And I'm like, this doesn't why would the bank do that? That makes no sense to me.

Well, the bank does because it's good for the bank. But it's not your husband's wrong. You you you're right. Pay cash for your house. You have the money.

You are exactly right he is.

That's what I told him.

And he's to listen to his wife.

And he

my and his money's amen. In his mind, he's thinking he's keeping this money for somehow in in his possession or something. And I'm like, but I don't understand why we need to go through the bank and loan the bank our money to get a mortgage through the bank.

Here here let's try that. Let's try a couple of things. Okay? Number 1, you could you could say this. Let's pay cash for the house.

If 2 years from now, after we pay cash for it, you wanna talk about getting a mortgage, we'll talk about it. You know how hard it is for somebody emotionally to put a mortgage on a paid for house? He'll never do it.

Okay.

So try honey, try my way, pay cash for it for 2 years, and then we'll talk about it. So that's thing number 1. Okay. Thing number 2. Alright.

We did the largest study of millionaires ever done in North America. I say this all the time because we did. We studied 10,000 +1000000000. The number of millionaires that's out of 10,000 of them that said, we became a millionaire by borrowing money on our home so that we could invest what your husband's talking about. The number of millionaires that said they did that out of 10,000 was 0.

Okay.

So the data says, the facts are that your husband's theory is wrong. K? Okay. 1 last thing, and I'm gonna keep I'm gonna keep throwing stuff at him and at you too. But here's the thing.

So Good. Good.

When I went when I went broke, I did whatever I wanted to do because I'm really smart with math, and I did some stupid butt stuff like he's trying to do. And I found I found in the Bible, Proverbs 31 says, who can find a virtuous wife? For her worth is far above rubies. The heart of her husband safely trusts her, and he will have no lack of gain. Now that doesn't mean he can't argue with you about this, he should, And challenge your theory.

He should. I do with Sharon, with my wife. But I trust my wife to have common sense and input. Ken trusts Stacy to have common sense and input. Hang on.

I'm gonna give you a copy of the book, Baby Steps Millionaires, for you and your husband to look at. I think it'll help your husband with this. He's trying to do a good thing a bad way. It's a bad move. You smelled it out.

Congratulations.

I, I'm I'm gonna say what I think a lot of Americans are thinking right now that Tammy would be a great cohost 1 time with you. Were you not thinking that, James? I mean, was she let off with stupid with the same passion that Dave says? And I thought I thought Tammy America would love Tammy. I love Tammy.

She's she's a treasure. I I just wanted to say that. I think that was 1 of my favorite calls that I've ever heard because she's on it. She makes no, no mistakes about what she thinks, and I love her. I think she's great.

I I don't think, communication is a problem in their

home. You and Tammy you and Tammy, co coaching someone would melt the Internet. It would melt YouTube. Picture Dave fired up and Tammy a little fired up.

It would be great radio.

You're awesome, Tammy.

Very fun. You're amazing, lady. Well done. This is the Ramsey Show.

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

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

So I've lived with crippling anxiety for as long as

I can remember. How do I stop it from constantly coming up in different areas of my life?

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

I'm ready to jump in.

So we're gonna check-in with Kelsey 30 days, 60 days, 90 days.

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

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

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

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

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

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

off. How is this how is this burden?

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