Transcript of The Key to Financial Success: Slow and Steady

From the Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by number one best-selling author, Mr. Ken Coleman. We're taking your calls at 888-825-518. Com. We'll help you with your money, making more of it, keeping more of it, spending less, all of the issues. And Ken is the man when it comes to, How do I make more income? Because that is my greatest wealth building tool. Maybe that's switching jobs. Mo We have money, George. New career path. There we go. Some short term side hustles, whatever it is. We want to help you make the most of your money. Happy Friday, sir. You as well.

Do you have a brand new bomber jacket?

I always try to impress Ken with my wardrobe.

I feel like this is the one I haven't seen before.

He looks impressed.

I love it. It's a good look.

It's a dark chocolate. If I'm going to be really honest, Ken, I just came down from our event center where we have our money and marriage event, and I'm looking out at some lovely couples who came to join us.

We have actually a really good looking. I was looking at him before the show. It's a pretty good looking group of people. You say it like it's rare, Ken. Well, it is rare. I'll be honest. But today, I kid, we've got a great looking group out there, full studio lobby. We're going to have fun today. That's what George and I do. We're going to coach you, but we're going to have some fun. This stuff doesn't have to be dour.

As As I say, if we don't laugh, we cry.

By the way, I got to say one other thing on the bomber jacket. It matches your beard perfectly.

Ken, I need to just carry you in my pocket just to compliment me. Thank you so much.

Your pocket's too small for me to fit in. I'm a small man.

True story. Skinny jeans will do that. That's right. All right, Mary's up first in Miami. What's going on, Mary? How can we help? I am. Uh-oh. There we are.

Hello.

Yes.

You sounded like a monster for a second, but now we got you back. Okay.

Okay, great. We actually were sold a home illegally, and we are wondering if we should claim bankruptcy.

Tell us a little bit more. Someone sold you a house that they were not legally allowed to sell you? What happened?

We bought the home in April of 2023, and we wanted to get some things done, like fencing and encapsulate the crawl space underneath. We learned that when we went to go get the property surveyed for the fencing, that the property didn't exist. There were no permits. There's no CEO on the house.

What do you mean the property didn't exist?

They told us the property didn't exist in the county. There was no house that was on that property.

I'm confused. You bought a house site unseen No.

We bought the house, we saw the house. The county had no idea the house was built.

Oh, so the house was illegally built on that land in the first place with no permits, and then that person sold it to you. How did you even go through the closing process? Was it just done through the seller?

No, it was done through all of the bells and whistles that you're supposed to do with inspectors and real estate agents and lenders and everything, and they still sold it to us.

I mean, aren't there titles It has to be cleared? I mean, I'm just so confused how nobody caught this. Yeah.

So the lenders were in the bylaws of our contract. They were supposed to get the CEO and obtain it five days after closing, and they never did. Then we didn't find out about all of that. This is our first home. We were first-time home buyers, so we learned a lot in this process.

What did you pay for it?

$2. 59.

You got a loan on that?

Yes, it's a USDA loan.

Okay. How much was the loan for?

It was for $2. 59.

You put nothing down with the USDA loan?

No, we did put down $12,000.

Okay. Why are you having to file bankruptcy? I get what we just heard. I'm now understanding that, but it feels like a lot of people dropped the ball, and it was before you. This has got to shake out somehow. What have you done so far? What do you know? What not know?

Basically, we have a lawyer on it now. We tried to get help without a lawyer and tried to talk to the builder and gave him all the documents and tried to actually get him to agree to buy back the house. He obviously did not agree to that. In the process of all of this, the house is actually… It was creating more mold. The floors are sinking, the walls are leaning. We're starting to see things.

Did Did you get an inspection?

We did, yes. We did everything.

And they caught none of this?

They caught none of it.

This is a scam.

Yeah, it was terrible.

Was the inspector friends with the builder?

We're not sure, but it seems like it.

This wasn't a resale, somebody else living in it. This was a builder built this essentially as a spec house on that property.

As a brand new home. He said it was a brand new build, and he actually built on a 1950s foundation.

Oh, of course. Do you have a good lawyer?

We're not sure. At this point, nothing has happened, and he's dragging it out. No, no, no.

Hold on a second. Okay. Now your lawyer is dragging this out?

Well, the lawyer is not dragging it out, but there's not really a lot of motion happening, and we just keep paying him.

Okay, Mary. Mary, Mary. It is time for you to get real, seriously mad and get going with it Fire the lawyer now. You are getting jerkt around like, I can't remember the last time I heard a story like this, and I feel bad for you, but you are going to have to stand up and fight. The builder screwed you, the inspector screwed you. Sounds like your lawyer is screwing you over, and you are the common denominator in this. I hate that this is happening. But I got to tell you, George, if I were in this situation, I promise you I'd have the builder begging for mercy because he is liable. The inspector is liable, and your lawyer is a scumbag. I could go take care of this in court, and I could get a law degree out of a fruit loops box and take care of this situation. Am I right, George?

Am I missing anything? No, this is the Ken Coleman Esquire energy you need, Mary.

I'm more pissed off than you are, Mary.

This is America. I'd be taking that builder to the cleaners with a scary attorney right now. Holy cow.

I'd go to the local news They love this crap.

This is like- We tried the local news. They told us it was a legal issue.

Oh, my gosh. Okay. Mary, all you do is make excuses for why you're getting abused.

Okay, so what's the What are the ramifications here of you living in a home that has no record? Are they going to evict you?

I assume you can't even live in it.

No, we can't live in it, so we actually don't live in it.

Are you renting with staying with family? We're renting. Okay. You're renting right now, but you still make payments. Have you talked to the lender that they basically have bad collateral here?

Yes, they said they didn't care.

They don't care. You still owe us the payment every single month? Yes. You can't sell it. I think your only way out of this, and again, I'm not an attorney. This is for your attorney to deal with, you got to sue this builder to get your money back. Get an attorney.

Which is what we're trying to do.

Get rid of your current attorney.

But do not file bankruptcy. That's not the solution here. No. The solution is to take this builder to court, sue them, potentially get the inspector involved because they clearly can't do their job well, and then collect on whatever the settlement is. I wish I had better news. I mean, we have no power in this, but I'm going to tell you, don't do anything drastic like bankruptcy at this point. You're just going to have to float the payment until this gets solved, which would light a fire under me.

I wouldn't even float the payment. I'd be sitting in the banker's office, the lender, going, I'm not paying you a cent because all of you are going down. But after I got a lawyer who had a brain and who wasn't going to take advantage of you guys.

Yeah, I think A1, find a new attorney.

New attorney with a backbone, somebody who wants to destroy somebody. Because this is wrong.

What a weird situation.

Oh, my gosh. I got a headache.

Thanks for sharing, Mary. I hope it works out for you guys. This is The Ramsey Show.

Statistics show that half of Americans don't have enough life insurance, or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're not going to die or something?

Well, I used to be one of those guys. I didn't even think about it. One of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids. I immediately went and got term life insurance.

That's a gut punch.

For decades Dave, I've sat across people who've lost a spouse. They've lost somebody important to them, and they don't know what to do next.

Terrifying. You're going to have a crisis here. You got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this or she's concerned how she's going to eat tomorrow. That's exactly right. These are the two options. It's saying I love you to your family. Term life insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to zander. Com or call 800-356-4282.

Welcome back to The Ramsey Show. I'm George Campbell, joined by Ken Coleman. Open phones at 888-825-522. If you guys want to take control of your money this year, there's no better way to do that than by making a budget. It sounds simple. It might sound overwhelming. I don't know. But here's the deal. We created an app to make it easier than ever. It's called Every Dollar. You can go download it in the App Store for free or go to everydollar. Com to get started. And it will give you such peace of mind to look in that financial mirror and just know the reality of your situation and how to move forward. And that's exactly what this app is going to do for you. Be sure to check it out. Landon is up next in Memphis What's going on, Landon? Hey, I appreciate you all taking my call. Sure. How can Ken and I help? This is probably a really stupid question, but I'm a tight wad, so I got to ask it anyways.

Okay.

I'm in Baby Step 7, my wife and I, and we're 27. Really, the problem with my question is I feel like I just have too much of my networth wrapped up in my house. But I just recently bought a Mercedes S class, maybe a day or two ago. Just emotionally, to me, it feels like I spent way too much money on something that goes down in value, and it just eats me up thinking about what I could put that money in that would go up in value. My question is, just should I take this stupid car back? Well, let's talk about what you spent on it. After taxes and fees and all that junk, it was about 35 grand. All right. What's your household income?

The last two years, I've averaged about 250.

Well, there's some ratios for you. That puts it in perspective. How much do you have tied up in everything with wheels and motors in your house right now?

Probably got 45 grand, counting the Mercedes.

Yeah. Okay. You're driving an older car for the other car, right?

Dave would have said, You should have bought a nicer car. You're not doing anything- Both of my cars outside of the Mercedes are probably worth 10 grand total.

I understand, ratio-wise, it sounds okay, but emotionally, it just doesn't feel right to write a check for something that goes down in value, when I could put that in something like some mutual funds, retirement, whatever.

All right, let me ask you a quick question, Landon. You seem like a very even keel level headed person, so this may be difficult for you to answer. But have you ever acted out of emotion before and realized that your emotion was wrong?

Sure.

All right. So your emotion is wrong on this Mercedes. Well- Your emotion is wrong.

I mean, intellectually, I get that. I do get that.

But- Wait a second. Wait, wait, wait, wait, wait, Basically, all in all in, we're worth about 750, and about 550 of that is in my house.

It just feels like cash-wise, I feel like 35 grand is rich out of the cash that I have available is what I mean.

It's not.

Landon, there are people who have a negative networth who bought more expensive cars than you today. Just know that in the grand scheme of life, it's going to be okay. Here's the deal. When you're young, naturally, more of your house is going to make up your networth. It might be 50, 60, 70, 80% when you're young, but over time, compound growth with your investments will catch up. By the time you retire, your house will probably be a third of your networth. You're right. That car will be in an impound somewhere 30 years from now, and that's okay. That stuff is stuff. You wouldn't say, go buy $10,000 on Toyota Camry or something. You're in your live like no one else era. You said you have a paid-for house, right? You're in Baby Step 7? Yeah. Then what's the point of money?

You're scared to death over nothing.

There's three things you can do with money, Landon. You can give it, save it, spend it. If you just save it, you're going to drive yourself crazy. If you just spend it, you're going to end up broke. If you just give it, you'll be a great philanthropist but unable to retire. It's wise to do all three. What you're experiencing is something I experience as well, which is needing to flex this muscle of spending after you've been so aggressive toward a financial goal of paying off the house or investing. This is something I struggled with. When I broke a check for my wife's last car we bought her, it hurt my soul. I've never spent that much money on anything outside of a house. I remember that. Ken remembers. I was talking to him about it. I remember. But over time, you'll look back 10 years from now and go, remember when I was stressed out about buying a $35,000 car? I'm sure Dave Ramsey had the same experience. Now Now, Dave's cars are worth more than my house. It's okay to have nice stuff as long as you understand that it's a toy that goes down in value.

It doesn't make or break you. Money just magnifies who you are, and it sounds like you are right on track, my friend.

What year is that Mercedes, and how many miles?

2018, it's about 85,000.

Yeah, it's totally fine. I drive a used Mercedes as well. If you take good care of it, it'll last forever. It's a little bit more expensive to keep up. Yes, but you've got it. I Listen, you've been shooting all over yourself, and you need to stop.

Keyword should, just for those listening who weren't sure what Ken just said.

I know exactly what I said. We all tend to should. I don't notice that either. Should. But I'm using it very purposefully. My therapist tells me this.

It's called double entendra.

Stop shooting on yourself. I should have done this, and I should have done that. That's the idea. You could sit there and play that game and talk yourself into another 5,000 $5,000 car. Sounds like you got two $5,000 cars or somewhere in that range. You do whatever you want to do. You can take the car back, and if that allows you to sleep better. But I think you're not addressing what's really going on. What's going on, George, this is more your lane than mine, although I understand it. I just think there's a deep rooted shame in this.

I'm not allowed to have something this nice. I don't deserve it.

I don't think it's fear. I think it's shame. I think he's got shame over this, and I think you got to confront that.

Did you grow up with money, Landon? Yeah, my parents had some money, for sure. We say behavior is a language. How did the way they handled money influence you? Well, I'll tell you honestly, what I think it is, is honestly that I've just been so aggressive since I was 18, because just doing this since I was 18 and doing this without marriage, that it almost feels like I need to stay aggressive. You know what I mean? We just fought and clawed so hard to pay our house off in the whole deal. What does your spouse think about this? She legitimately... We went up to the dealership and she said, buy whatever you want. I'm tired and went home.

Good for her.

That's a good woman right there.

That's a good woman. By the way, let me just ask you, how long you've been familiar with Dave and his teachings and what we do here?

Since I was probably 12.

All right, I want you to finish a sentence for me, okay? You ready?

Sure.

Live like no one else so that later you can…

Live like no All right, then. Now, swap that with drive. Drive like no one else. Drive the crappy car. So later, you can drive like no one else.

You worked really hard. You worked really hard to get to a point where you can buy a $35,000 Benz. And by the The way your wife has worked really hard, too, and she deserves to go on date night with you in a car that you don't have to pedal like Fred Flintstone. Hey, there he is. Did you hear that laugh? That's the first time on this entire call, I felt like we got the real you who wasn't so up tight.

What's so funny about that is that's not far off from what I'm driving outside of the vans.

I know. I know I don't look like this- Can you get rid of that car? This guy. Can you get rid of that car? Do I come across really dumb? Because when you tell me you got two cars worth $10,000, those are Fred Flintstone cars. I didn't have to do a lot of deduction, my man. She deserves better. She deserves better. If you want to drive a turd on wheels, then that's up to you. But she doesn't deserve that. Can we agree it's Valentine's Day, for heaven's sakes?

I agree.

I agree with you. All right, then. Relax. You worked really hard. It is impossible for me, George, to conceive of a scenario where and does something dumb with money.

Yeah. You are spot on our parameters. Here it is. If all the things with wheels, motors, and your life adds up to more than half of your annual income, you're off track. That's simply too much. You are not even close to that. Again, like ratios, Dave buying a nice car is like me buying a biscuit. You have to understand the ratios look different. When you have a very high income, your networth is going to continually grow. You're 27. You got another 30, 40 years of working for you and investing to build wealth. In the meantime, you have to do something called enjoying life. I'm scared because you're like me. I'm wired to go, but if we didn't eat this month, we could invest that in a good gross stock mutual fund. It can make 12% over. You can't live your life like that. You got to let go.

Speaking of letting go and living life, George, how do you eat a biscuit? What do you put on your biscuit?

One bite at a time. Oh, really?

Yeah. No butter? No jam?

I'll do a little butter.

No jam? No honey?

It's like a chicken biscuit. What are we talking?

I'm asking you. It's your biscuit.

Yeah. I'll do half butter, half jelly. Best of both worlds.

How about you? Oh, I like the jam. A lot of jam.

Jam's your jam. I respect that. Well, glad we could at least help Landon get over his emotions. This is The Ramsey Show.

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Welcome back to The Ramsey Show. I'm George Campbell here with Ken Coleman, taking your calls at 888-825-5225. We've got a phone number to call, of course, and we get a lot of voicemails on that. And so occasionally, we like to do a little segment called Sorry We missed your call where we listen to the voicemail and respond without them, without having to talk to them. Yeah. Let's see what we have today. Do we have a voicemail? What do you got for us, Kelly?

I actually am trying to get some financial advice on if I have $30,000, which I do, and another $1,000 to $1,500 a month, what would be the best move or strategy to turn that $30,000 into $300,000 in one year. The last month or two, I've been learning stocks, bonds, ETFs, options, day trading. Still got a lot further to go on acquiring knowledge whenever it comes to that, but just wanted to get some info from someone that actually knows what they're doing and talking about. Thank you very much.

All right. Good question. My first thought, Ken, was you don't need knowledge, you need patience. This guy's about to lose his butt.

But he wants to 10X That 30, jeez.

30 grand to 300 grand in one year? In one year. Go to Vegas, my man. I was going to say. Hit the craps table.

Good luck. Highly, highly prospective investment. It's a quick turnaround. Yeesh. All those things are scary.

My question is always with these, why? Why the urgency and the desperation to turn 30 into 300? What is this get-rich-quick mentality? Where is it coming from? Social media. Likely friends, social media. I saw a guy who posted that he does day trading, and if I buy his course, he'll show me how to 10X my money, need.

It's the microwave mentality.

You got to be a crockpot in a world full of microwaves. This is not just my opinion. One of my favorite proverbs from the Bible, Ken, Wealth gained hastily will dwindle, but whoever gathers little by little will increase it. It's ancient wisdom. You gain wealth fast, you're going to lose it even faster. You're going to fall in your face trying to do this. I want you to build wealth. I popped it into my investment calculator just to get a lay of the land. Instead of one year, if you had 30 grand I don't know. If you're in your mid-30s, let's say, 30 grand, you're adding 1,500 a month, 10% rate of return on average. It'll take you probably eight or nine years to get to 300 grand. I'd much rather you gain it slow and keep it than try to risk it all by day trading or doing options trading and lose it all. That's my take. That's the Ramsey plan is, let's get rich slow, let's build wealth the right way, and not be in a hurry to do it. If you want to make more money, go increase your income. You can increase your savings rate, but trying to gamble this away is not the move.

I like it. I think we need a new segment called George Quotes the Bible.

I would love that, actually. I think that would be great.

I thought you did a good job there. The guy calls, leaves a voicemail, and You dropped some proverbs.

This is my encouragement to him. His name is Travis. I love it. Go read a proverb a Day. There it is. You can read it in a whole month if you just do that, and it will give you the best financial wisdom money can buy. No course necessary. You can read it online for free. Download the Bible app. There you go. But I'm telling you, there's just some wisdom in being the Tortoise instead of the hair. We know how that story plays out. Tortoise wins every time. Every time. Thanks for the question, though. Casey is up next in Lexington, Kentucky. What's going on, Casey?

Hello. Thanks for having me on. I understand now why people say that. I have… Oh, my goodness, I forgot my question. No, okay. When we finish Baby Step 3, which I believe is a fully funded 3-6 months, right? Yes. Correct. Okay. After we finish that, which should be… It's going to be a little while until we finish that, but that's our next step. We have been discussing buying a house or putting money into our business. We're business owners now. It's complicated, but I just wasn't sure what would be the best thing, to buy a house or to invest in our business.

What's your business? Tell us a little bit about it.

It's my husband's business. I'll preface it with that. He owns a restaurant, and he wants another location, but more of his own type of deal because right now, he's got a few partners, and it's complicated. But eventually stepping out and doing something so low down the line.

That's all I needed to hear. I just wanted to know what we were looking at and what the investment would do, and I would not put the business investment in front of saving for the house.

Okay. Especially in the hospitality industry. There is an immense risk in starting a restaurant.

Yeah. Let's see how this deal works out. Tell him to be patient. It feels like the call that George... Excuse me, the voicemail we just answered. I think this is a patient's deal on the professional side of things. He's got multiple partners. Those at times, that can be tricky. He's already got some real money, and I'm guessing some sweat equity involved there. Let's learn. Let's see if that proves to be successful before he chases another rabbit. There's an old phrase, If you chase two rabbits, you lose them both. I think that would be the advice I would give your hubs there Let's move forward on a stable plan to get a good house. George, tell them what we want them to do on that house.

You're saving up for a down payment. That would be your next goal after Baby Step 3. We call that Baby Step 3B, where before you start investing, which is Baby Step 4, you just go real hard at getting that down payment set in under two years. Is that realistic for you guys?

It might be a little longer than that. That's okay. The business is up down, it's not super steady the income.

One more reason to not go start another one. We don't have this one squared away. But yeah, in that case, what you could do once you hit Baby Step, once you finish Baby Step 3, just go ahead and begin investing 15% of your household income into retirement plans. If he's self-employed, there's still a lot of options out there. There's always a Roth IRA, which you can do outside of employment. There's solo 401(k)s. I imagine his situation, it might be different, but there's a lot of opportunity to invest. Then on top of that, save up for that down payment. And once you guys have a little more stability in your life and you've got that foundation, now we can figure out what it's going to take to start this business. I hope you do it with cash and just move slow.

Yeah, that's why I'm calling you guys because I'm like, We are terrified of debt. We did something stupid twice. We paid off eight credit cards and loans and then close them, and then we reoped, eight more cards. But we're about paid off and we're done with debt. I've listened to you guys so much. It's such an embarrassing thing, but we're done with that and we're just looking to the future and doing everything debt-free. I know a mortgage will be taking that on, but that's when we should do a business and increase income. But I really want I'd figure out what is a reasonable goal for this business once we're in the house.

Okay, what's it going to take to start this business? And then figure out what that number is and how do we start slow if it's an overwhelming number. We can't afford a million dollar- Are you working?

I'm not. No, I have two kids, and I stay home with them. I do homeschool.

Well, you're working. You're working your tail off. But you're not working in the business with them. You're not in the business. What has his range of income been since getting involved with this partnership in this restaurant? Do you have a couple of years of numbers for me, like what he's been making?

Probably before taxes, probably around 35 to 40.

Oh my gosh.

It varies because there's also quarterly, but it does vary a lot.

What's the high mark, Ben? What's the highest he's made?

Probably 40.

Okay, listen to me. Now I'm going to go older brother, and I may be old enough to be your dad for crying out loud. I would not be in any hurry to get in a house at all. I would be saving. The advice doesn't change on the baby steps, but I would just be renting until you guys figure out what the future looks like on this. He's not making much money at all.

He should go be a line cook in the kitchen and make more.

My goodness, he could make more working at Walmart. I really don't want you thinking about a house until we see his income get a good bit. I'd like to see him close to double that income and get some stability there, George. Because I just don't want you... Here's what happens. You get into a house that you think, Okay, this is going to be right, and then something goes wrong, and you guys are out of income for six months, and he starts from scratch. That is scary business.

Making 35 grand gross, it's going to be hard to afford any mortgage with that, let alone rent.

You guys can't. It's going to be a long haul on savings. Go ahead and settle into the long haul. You all need to figure out a better income situation. If this thing doesn't start to turn, we got to delay the business dream and get the income as a crisis at this point.

He either needs to opt out of this restaurant business and go get a different job, but now is not the time to start a business or buy a house. So there's option C. We got to figure out the income first. Thanks for the call, Casey. More of your calls coming up, 888-825-5225. This is The Ramsey Show.

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Welcome back to The Ramsey Show. I'm George Kamel, joined by Ken Coleman. Open phones at 888-825-5225. It's time for our Ramsey Show Question of the Day brought to you by YreFi. Yrefi refinances defaulted private student loans and builds a custom loan based on your ability to pay. Now, private student loans are different than federal student loans like Sally May. If you want to learn more about this custom refinancing option and the lump sum payoff option you could qualify for after 24 months, go to yrefi. Com/ramsey. That's Y-R-E-F-Y. Com/ramsey. May not be available in all states.

All right, George, today's question comes from Ava in Montana. She writes, I'm 25 He's 12 years old and my husband is 40. Because of the age gap, I'm concerned about my financial state. If my husband passes before I do, we both work in church ministry and earn $80,000 combined. We have very little retirement or savings. I have a $350,000 whole life Life Policy on him, and the premium is $200 a month. My fear is that if he gets a term life policy, his health will decline later in life and prevent him from getting it renewed. I want a guarantee of long-term income, but at an affordable rate. Is there anything available that could work in my situation. Well, George, you're Mr. Insurance.

That's what they call me, Ken.

I mean, that's what we call you around the office. I see him across the way and I go, There he is, folks. Is that my personal brand? Mr. Insurance.

I do have a weird affinity for him.

This is your thing. I'll just say the whole life needs to be dealt with immediately. Get rid of that and get a good term life policy. That's going to put him well into his 60s. At that point, you guys should be fine if you do what we teach as it relates to investment. George, tell her what she needs to know.

Let me go through this systematically. Number one, the $350,000 policy is not enough. You need a 10-12 times your income. If you're making 80K combined, maybe that means he's making 40 or 50. I don't know, but that would be closer to half a million, $600,000. On top of that, your whole life policy sucks. This is just making the salesperson a lot of money, and it's not helping you out. By paying $200 a month, very little of that going to the actual policy, most of that into their pocket, some of it into a cash value portion, growing at an abysmal rate. And so I would surrender this policy after you get term life in place. The next question, my fear is if he gets term life, his health will decline later in life. That's how it generally works. As you get older, you get closer to something called death. Getting term life won't change that. Here's the deal. Term life is for a specific term, 15 years, 20 years, 25 years. But if you follow the Ramsey baby steps, by the time that policy lapses and it's over, you will be self insured because you've been following the plan for 20 years, investing for 20 years, you paid off your house 20 years later.

There's no fear that it's going to end and now you're out of the money. The goal is to get self-insured at that point.

I'll give you a real-life example. I'll use me as example. Now, I know that anybody that looks at me on the show, you know I'm a picture of health. I mean, I get that. I look a lot younger than my 50 years. I also understand that as well.

Especially if you see him on the pickleball court.

That's exactly right. I'm very spry. Very spry for a 50-year-old.

He is supple and nimble.

Supple and nimble. Thank Thank you very much. But I've got three kids, and they're all teenagers, and a wife and two doodles. A lot of responsibility on me. You know what I'm saying? Just to really give you a real life thing here. I renewed mind, got a better deal because I was in tip top shape when I got it, probably, I don't know, eight years ago. That's going to carry me through to where, again, Stacy would be fine if something happens. In fact, she'll be so fine, I'd be looking over my shoulder. You know what I might have to sleep in another room, Dick Van Dyke style. Keep one eye open. You know what I mean? However, and then the kids would be fine, too. That's all you need for his situation is to get that retirement going and really see that compound interest. You need to call our friends at Xander Insurance because I've done this now, and Xander, it's one-stop shop. You call them, I want to get good term. They're going to take care of you.

They'll compare pricing with their top companies.

They'll compare pricing, get you the best deals, and they guide you as to what you need We've worked with Xander forever, and so make that happen right now. Absolutely. Right now. It's so cheap. I don't think people realize how affordable- Yeah, it's not going to be $200 a month.

It's not going to be $200 a month. The whole life is a rip-off. Generally, term life is a fraction of the price, and even at his age, it's going to be way more affordable. So jump on his internet. Com or give him a call 800-356-4282 and get term life in place today. If you're listening, whoever you are out there listening, if you don't have term life in place today, do it. If anyone relies on your income, a spouse, kids, family, whoever, you need to get this in place. It's not a matter of if, but when. You will eventually pass. I don't want to be the one to break it to you. Term life is not going to cause that to change. It's just going to give your family peace of mind.

Now, you can eat as many biscuits as you would like, George. I'm good. Because your wife and daughter are okay.

She is covered. Stay at home, spouses, you need a term life policy as well because it would take Mary Poppins to replace all the things you do. There you go. There's my pitch for the day, Ken. I had to say it.

I thought it was off the soapbox. I thought that was well played.

All right, on to Ashley in Austin, Texas. What's going on, Ashley?

Hi. Thank you so much for taking my call. Sure. Yeah. How can we help? It's right on it. My husband and I recently accumulated $3,000 in IRS debt starting this year. $3,000? $3,000. Okay. Which has added to the financial strain we already had which now being our total debt, 62,000 dollars, excluding the mortgage. We've been following the snowball effect method for about a year now, but it feels like we're not making much progress. We've considered changing our jobs, selling our house temporarily so we can rent and stay, or even relocating to our hometown for a more simpler, affordable lifestyle. My question is, what would you men as the best source of action for us.

What's keeping you guys from making progress? Just not enough income, and you've cut everything you can cut, and you just still don't have enough income to make progress?

I think that we probably could cut maybe groceries. That one, we haven't done the rice and beans like Dave Ramsey says. But we spend $200 on groceries. What's your income? Together, take home after deductions. Is that 4,400 together?

A year.

Together?

Sorry, a month. 4,400 a month.

Are you guys doing any investing right now?

We are not.

Okay. That's just deductions meaning taxes, maybe health insurance, something like that? Correct. Okay. 4,400 a month You're trying to tackle… We're talking about a take home pay of roughly 50 grand a year, and you're trying to tackle 62. You're going to need more income. You can slash expenses all you want. That will help. But income is the biggest factor here.

Would this To move. You gave George and I, I think, three scenarios, right?

Correct.

Which one of those three scenarios allows you to cut expenses but also provides an opportunity for greater income? Both at the same time? Which one of the three options, or however many you gave us?

Honestly, it may actually have to be- Combination? We were combination We work in a job that we have a set income, that's our set income, but we work a mortgage company. We both receive commission and bonuses on the side. We just don't take that into account. Anything we receive, we're putting it straight to debt. But I think our staff is just not enough.

What's your mortgage payment?

1,800.

Okay. That's 40% of your income. It's definitely high. That's hurting your ability to do this. I don't think we're at a fire moment where you have to go sell the house tomorrow. No. I would work on your income. If nothing changes a year from now with your income, you might want to downsize to get out of this mess instead of taking five years. Because normally 18 to 24 months, that's how long it takes people to get out of debt. Some longer if they got a big hole and not a big shovel, and some less. But for you guys, we need to see this income grow to about six figures to get this knocked out in two years or less.

Yeah. Rule of thumb for you, Ashley, and everybody listening or watching, I wouldn't make a major life change unless it has both short term and long term benefits. Because there's a lot that goes into a major change. And major change when it's good in the short term and sets me up for what I want my long term to look like. That's a no brainer. Outside of that, no, I'm going to stick and hustle and dig my way out. Not just pull the parachute. Does that make sense? Yeah.

We need to expand the gap here, the margin between our income and our expenses. And I think both levers are going to be necessary. That puts this hour of the Ramsey Show in the Books. Thank you to my co-host, Ken Coleman, everyone in the booth keeping the show afloat. And you, America, we'll be back before you know it.

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Com/dave. From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Ken Coleman, host of the new show, Front Row Seat with Ken Coleman. Be sure to check that out on the Ramsey Network and on YouTube and podcast. We're taking your calls at 888-825-5225. You jump in, we'll talk about your life and your money. Brett's going to kick us off this hour in Sacramento. How can we help, Brett?

Yeah, my question is simple. So insurance agent or insurance broker? I've noticed insurance has gone way up over the last year or so, and I was curious. Your thoughts on insurance broker versus insurance agent?

It's an easy choice for me. I'm going broker all the time because here's the deal. With a captive agent, let's say your buddy who works for, I don't know, Rimes with a StateParm, I don't know, something like that. If they work for one of these companies, they can only sell insurance from that company. Makes sense, right? Yes. Whereas a broker isn't actually selling They're selling you the policy. They're just connecting you and shopping the policies across the board from the top companies to get you the best deal. Does that make sense? I don't fall for the marketing of these commercials. I want to know who's giving me the coverage I need at the best price. That's all it is. Super. Thank you for the information. What insurance are you looking at?

Well, I have a car insurance. It's gone way up.

I have a daughter driving now. I also have an umbrella, a million-dollar policy, and a home insurance as well.

Love it. Well, you're doing all the right things. To me, it's all about price. You want to obviously go with a top-rated company, and we have all kinds of connections for you. If you jump on ramseysolutions. Com and click on Trusted Pros, we can connect you to the right insurance brokers in any area, from home, auto health, whatever it is, to help you sort that out. That's something I do. I actually reshop every year. I contact my insurance broker and I say, Hey, can you reshop to make sure I'm still getting the best deal? They'll either say, Yep, you're still the best deal. I just reshoped it, or actually, we could save you a little bit of money here if we switch this policy over here. Having someone do that work for me saves time, hassle, and money. Anything to add, Ken, or did I nail it?

I just like how you did the little wordplay so it was not to technically endorse somebody.

Now I want a chicken farm is the problem. Yeah. Shouldn't have said that.

I won't say which one, but I do have... Some of those commercials are really obnoxious and some are funny.

Oh, the marketing is great.

They've gotten to a real... It reminds me of the days when I was growing up, when it was like the beer commercials were really competing to be which ones were the funiest. I feel like we've got the big three insurance. They're all really pouring the money into celebs, a lot of funny stuff, trying to be funny.

Yeah, you got Jake, you got mayhem, you got Flow.

That's it. You just nailed all three.

I think that's my encore career, Ken. If this doesn't work out, I'm hoping someone will get me to be some character.

You would be a great insurance salesman. I appreciate I think I could see you as a spokesperson doing that, your little cute bomber jacket there. Thank you for saying that. Because you're very trustworthy. You're a small guy, but you got a very, very serious beard.

Well, I'm not intimidating. I think that's part of what makes me- You're definitely not intimidating.

Okay. Neither one of us are.

I dug too far for the compliment. I hit rock.

But no, neither one of us are intimidating. You run into us in an alley and you take a sigh of relief. Yes, absolutely. They're like, Oh, there's two little guys right there.

I'm the guy. A guy walked up to me in Costco, and he just said, Hey, where's the paper towels? And I was aggast. I was like, Does he think I work here? What were you wearing? Just normal. I mean, an outfit like this. I didn't look like I worked at Costco.

He apparently thought you did.

Well, of course, I knew where the paper towels were. Let me walk you over there, sir, right this way.

You were like, you instantly went to a spin, a point. You gave him an aisle number. Absolutely. I like that, George.

So I'm unbearably helpful. That's what my wife says, at least.

If you're ever looking for me in a Costco and you think it's me, first ask yourself, is he near a sample? Because if it looks like me and it's a sample line, it's me.

Stacey's doing the shopping, Ken's doing the sample.

That's exactly right.

That's what's up. That's how it goes. All right, let's head out to the phones. Brooklyn waits in Syracuse. What's going on, Brooklyn?

Hi, guys. Happy Valentine's Day.

You as well. Happy Valentine's Day, Brooklyn.

You're the first one to say that to us.

First one to say that to us. We were starting to get our feelings hurt a little bit, but thank you.

I am calling me. My husband are on baby step two, and I'm having a conflict with the principles that you guys teach, I think, where it's either the order or I'm trying to get rid of a stupid car. We have a It's the actual amount of money to us that's about to come, and I really want to make sure that I apply it to the situation the best way that I possibly can.

How much?

$5,300.

Okay. $5,300?

Yeah. Okay.

How much debt do you have?

We have about $18,000 total.

Then do you want me to break all of it down? Sure. Yeah, go from smallest to largest in the balances.

Okay. We have a credit We have a carer card that has $178 balance left, which I've been… That's my current project. Then we have a care credit account that has two payments of $111 left on it. We have a dental loan situation that's $1,948. We have a discover card at $730. Then our biggest loan is a debt consolidation loan, which the stupid car is the collateral on, which is It's $18,535.

What's the issue here? You get this $5,300. I don't know. Is it an inheritance settlement?

It's actually money that we had. It was invested sitting in an account for the past year and a half that we forgot existed.

You'll knock out your first four debts with that. The smallest credit card, the care credit, the dental, the other credit, the discovery card, all of those get knocked out instantly. Then we start chipping away at the remaining consolidated That's a foundation loan, right?

That seems obvious to me, but the thing that catches me is that that $15,535 loan, the car that's tied up into it is worth about $10,000. Then we also, we have one 19-month-old, and then next month, we are having our son, and we have two cars. We have the one that's tied up in this, which is stupid. It's a Mustang convertible. Then we have a smart car, and both of these cars are uniquely stupid to have two car seats in to the point where it's almost unsafe to drive.

Yeah, uniquely unsuitable for a child.

I love your emotion on the Mustang. Let me guess, the Mustang convertible is your hubby's car.

Actually, no. I got a really cool job, and so I thought I could get a really cool car. Good for you. I financed it.

You wanted to let your hair flow, huh? Come on, on the way home. You're a little Tom Petty free-falling.

Yeah, and the job wasn't that great.

Okay. I misdiagnosed that one, George.

Yeah, you're underwater on the car, so you need the difference in cash or a loan from your credit union to make up the difference, to get out of this. Is that what you're saying?

This money seems to be the exact the right amount. I've been praying about it like, What do I do?

Oh, I see. Because I feel like we need a new car for these two babies. You could use this money to get out of this car situation with the consolidation loan.

Right. If I take that money and if I can sell the car, then I can get out of that. That payment is more than our house payment. It's like $556 a month, then we only pay $500 a month on our house.

What's your income every month?

We also eliminate our biggest expenses. Last year, we made $32,000, but my husband just had a job loss last year, which is why that was so low, and he just started a new career. So I'm not entirely sure what to expect.

Yeah, you guys get a lot more money coming in, Brooklyn. And so I would hang on until Baby's here and you and Baby are home safe before I let go of this of grand because this might be the safety net you need for any medical bills that come up. But once that's done, I would absolutely use this money to get out of this car situation, then hit the debt snowball on the remaining debts. Thanks for the call. This is The Ramsey Show. Okay, here's the hard truth. Your investment dollars could be winding up in the pockets of companies that hold positions you don't agree with.

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I'm George Campbell, joined by Ken Coleman. Open phones at 888-825-5-225. Hey, you do not want to miss our two-night virtual event. It's called Investing Essentials, hosted by Dave Ramsey and me, George Campbell. Investing can be overwhelming, it can be confusing, and it's not something you can get from a 60-second social media post. So at this virtual event, we're going to walk you through how to maximize your retirement plans, how to choose mutual funds, how to get the most out of your money, how to invest with confidence. Plus, it's the only place where you're going to hear Dave Ramsey unpack his personal playbook on real estate investing. What to look for, the calculations. I mean, we are going to nerdville and back, and you're going to love it. And Dave, I mean, famously is a real estate mogul. He has hundreds of millions in property investments, all in cash, and he wants to teach you how to build wealth the right way. So you're going to get clarity you need. Join us, Investing Essentials. It's happening March fourth and fifth. It's virtual. You can join from anywhere. Tickets It's a great start at 199 bucks, and it's worth every penny to get four or five hours of Dave coaching you.

That's pretty incredible. Get yours today, ramseysolutions. Com/events, or click the link in the show notes if you're tuning in on podcast or YouTube. Sarah is up next in Rochester, New York? How can we help, Sarah?

Hi. How's it going? Thank you for taking my call. Absolutely. Basically, my issue is I am trying to figure out how we can budget our finances because my husband is a blue collar worker on a commission-based pay scale, and we don't have consistent income per year. But last year, he made 161,000. The year before that, he made 140,000. And the year before that, he made 180,000. So I would say an average of 160,000 over the last three years. We're looking into doing the baby steps and snowballing all of this fun stuff. But right now, currently, with our mortgage at $4,120, we also have a consolidation loan. Health insurance is $900 a month because through his work, it's $1,300. The credit card debt totals $127,000.

Goodness gracious. What'd you guys spend on these cards?

Well, it's been a combination In addition of... Don't hurt me, but I put my husband's motorcycle on my card because we were trying to get the points. I know that's the worst answer you could possibly want to hear. That's $18,000. We have just multiple bills. He has $72,000 in credit card debt, and I have not including that motorcycle, it's like $34,000. I put groceries on it. I've put property taxes on it because our personal property tax- Where is your actual income going if you're using the card to fund your life?

You guys make great money.

That's I know. That's the problem is it just disappears. We have the total debt that's going out per month for all of our payments is $9,600.

$9,600? Yeah. Does that include the mortgage?

Yes.

Goodness gracious. Yes. What is your... So your average take home pay? I mean, is it 10 grand a month, 8 grand a month?

Well, I'm guessing it's closer to 13. Well, that's the average, though. That's the problem. Some months we'll have fantastic months, and some months we don't. For instance, if he has a bad couple of weeks or if he took vacation, then he gets his hourly pay.

Let me make this clear. There are no vacations in your near future. Why is that motorcycle not sold?

We went nowhere.

You You don't need to be going to work. You don't need to be staying home at all.

Well, right. Yeah.

Where's this motorcycle?

Where is it? It's in the garage.

Why is it not sold yesterday?

That's the source of- See, It's the deal, Sarah. I'm listening to this, and George will keep coaching you, but I'm jumping in.

I'm getting fired up on your behalf.

I like how fired up you're getting, George. It's hard to tell between when you're calm and when you're fired up, so it's really got to be discerning.

Well, I'm often irritable.

You are. But what's What's going on here is not the irregular income. You presented this call as, My husband's got an irregular income. By the way, George and I do as well. You're actually talking to two people that this is how we are paid as well. Your issue is not that. Your issue is you're overspending. You're not living within the means, whether it's regular or irregular. That's the problem. What happens is because you put all this stuff that you couldn't afford on credit and you got yourself in so much debt, the irregular income makes it even more stressful than it would be if you had it coming in every month. I just want to make sure that you are acknowledging this or Hubs needs to acknowledge this, because if he's holding up the sale of the Harley, then you guys got to have a real sit down here and go, This has got to stop. But the irregular income is not your issue.

It's the behavior.

To George's point, you better go make some more right now. Sorry, George.

No, but on a bad month, let's say it's 10 grand. We know that on a great month, it might be 15 grand, right? Right. It's not zero. We can't go, Well, we can't do a budget because it's irregular. What you guys need to do is cut up the cards yesterday, freeze your credit completely, close all the accounts, start doing the debt snowball, and sell everything you can in sight while also working twice as much as you are.

There it is.

Right. Well, I run out of children to sell, but I definitely would like to do the snowball. But is there a way to negotiate with the creditors to help with the interest rate?

I don't want to run away from this debt. You can call every creditor and say, Hey, listen, we're trying to pay you back. This interest is killing us. Would you be willing to lower it?

But even that's a secondary action. You didn't even hear anything George said.

I did. We need to cut up all of our cards. I know. But I'm looking forward from here. If we do all of these things, I just want to see. Sure. Call them. We could be paying for 120 years.

What's the motorcycle payment every month?

360.

Boom. So tomorrow, you could free up 360 bucks if you get rid of that thing. Are you underwater on it?

I don't know. I have not checked the resale value of it at this point.

Is Hubs willing to sell this or is he fighting?

He said it was a sore spot, like it was not going to go away.

Well, this could be a totally different issue, too. He works really hard, and he doesn't- I think he works too hard to be this broke.

He works hard to finish Receive that sentence. I want to hear this. He works really hard. Keep going.

I know. I don't want to take something that he loves so much. He absolutely loves it.

But- He's not going to love anything. I don't care how great your toys are. When you're miserable underwater with debt, you don't love anything.

Right. True.

Don't you think the stress of having to work this hard and pay off all this debt is not worth the joy of the motorcycle that we can go buy once we're debt-free?

Right. Agreed.

I mean, this is like a child who's unwilling to let go of their toy. I know. It's not grand pappies from World War II. This isn't sentimental.

Right. It's true.

I just feel like we need to make some sacrifices here, and you're looking for solutions that are shortcuts that don't involve us having to change our lifestyle. It's been out of control for so long that you guys don't know another life. Right. That's why cutting off all the... You can't go into credit card debt if you don't have a credit card. That's what I found. That's the best way to address the issue. So cutting up these cards, getting over the motorcycle, you need some instant relief right now, and it's not going to come from a debt repayment company or another consolidation loan or adding more debt. You've got to start cutting. You got to have it come to Jesus moment with your husband tonight and say, This is not okay. Why are we living like this? We make $180,000. How are we in crippling debt?

Right.

Very true. Is your husband on board for this? It sounds like you're wanting to make a change, and you're Hey, it's a hard sell because he's a hard worker. I don't want to make him sacrifice anymore.

He is on board. I am the type of person. I'm a people pleaser, and I want him to be happy. I'm equating his happiness with his motorcycle.

Let me ask a quick question. Five-second answer or less. How happy would he be if all that debt went away tonight?

Oh, world's happier.

Then why don't we aim on that people pleaser? Right.

Happiness is not in stuff. You can find happiness financial peace because of a lack of stress, but it's not going to come from riding that motorcycle while you're in crippling debt, stressed out, affecting your marriage and your financial future. I'm going to send you guys Financial Peace University because I want to see you in. I think you need some fire under your butt, and I think Dave and crew can help if you watch all nine lessons. So hang on the lines here. We're going to send you guys Financial Peace University as a Valentine's gift on us. This is the Ramsey Show.

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Welcome back to The Ramsey Show. I'm George Campbell, joined by Ken Coleman, and we're also joined by a lovely couple on the debt-free stage. It's Brian and Taylor. How are you guys doing? Good, you? Amazing. I mean, you guys are better than you deserve today on the debt-free stage. Where are you from?

Greenly, Colorado.

Wonderful. How much do you guys pay off? We started out in 2021 with $102,361.

45 in debt.

Wow. Since then, we just started Ramsey in October of 2023. We paid off in the last 15 months, we paid off the remaining 38,727. 90. Whoa. Okay, so how long did this full journey take to pay off the $100, too? Go ahead.

Since May of 2021, Wow, that's incredible.

How many months is that? Do the math with me here. Almost four years? Yes. Okay, just shy of four years.

But in 15 months was the- Was the big one.

You really went gun-hoe. Yes. Okay. What's the range of income during that We started out at 140,000, and then we ended up at about 158,000. Wow.

What do you all do?

I'm a truck driver. I do international documentation for JBS.

Cool. All right. Very nice. Tell us about this 102,000. What debt was this?

It was everything. We had credit card debt, student loan debt, and I'm blanking. Cars. I am serviced.

You're doing great, by the way. You're okay. Look at us. We don't scare anybody. So just deep breath, you're going to be fine.

Watch it or I will come take your job. Now I'm scared.

Now I'm nervous.

Reverse intimidation factor.

She just flipped it on me.

We had it all. When we started this journey, it was hard because in 2021, we had barely just been married. We've only been together for six years. Between us, we have seven kids. A combo marriage, and we both brought debt to the table. Then we fought a lot. It There was many, many arguments, many tears, many slam to doors in the house. Then it was in the summer of 2021, I started listening to Ramsey. After about two months, I went home. When I was excited and I told Brian, I said, Hey, we need to do this. You need to start listening to these shows. He looked at me, he goes, I'm not going to do MLM. I said, It's not multi. That's hilarious. That's good. I said, No, this is you buckling down and paying off your debt. I wasn't sure how to approach this because money It was a huge argument for us. We were both embarrassed, we were both frustrated, and so we didn't know how to communicate. I reached out to Andy Thiel, who was from our financial advisor, and I asked him to come to the house one day. He came over and he sat down and we were talking numbers.

Brian said, No, I'm not going to sit here and talk. I sat there with Andy and I slid a piece of paper across the table and I said, Well, here's our debt, here's our income, here's our age, where will we be at retirement? He looked at me dumbfounded when he looked at the number and he didn't say anything. He got up and laughed. About a week and a half later, he called back and he says, I have some charts and graphs and I have some numbers. I said, Can I get you and your husband to sit down? He came back to the house and again, I said, Brian, would you come sit down? Brian's like,. But he did. He came over. He stood next to me. He wouldn't sit. Then when Andy brought out the charts and graphs, he goes, When I left your house, it was very dismal. He goes, I was nervous for you guys because of where you're at with your age and what your debt was. He didn't see how we were going to get out of this. He goes, I don't know what your plan is. He goes, But what you have shown me, and he slid the grass over.

He goes, You guys will be self-made millionaires at retirement. Right now, Brian is 57, and I am 50. No, he's 57 and I'm 50. Fifty-five sounds better. I'm 54. I'm nervous. I'm flubbing up here. You're doing great.

Wow. Where are you guys at now?

Well, we are completely debt free. We're on Baby Steps 3, but the week- Except the house. Except the house, that's true.

And on track to become Baby Steps Millionaires by retirement, even after all of that. What encouragement to anyone listening who's gone, Wait, it's too late for Well, we have Brian and Taylor here telling you that even if you get a, quote, late start in your 50s, you can still turn this around and retire with dignity. What a beautiful picture. Brian, you were the reluctant spouse. You heard Ramsey way, and all you heard was Mary Kay, and not the same, right? What got you to actually make that turn and go, All right, fine, I'll do this. Just looking back at what I hadn't done and what I did do was what was wrong and what I should be doing for my family and my wife. Was Was it really that you didn't want to look in your own mirror and go, Oh, I'm part of this problem? Was that why you were shutting down? Right. Yeah, I was embarrassed.

I should have done better.

Taylor was a numbers person, and she's the as teacher.

I learned from her. You had to let go of your own baggage and shame and go, All right, I'm part of this, but I got to do something about it. If I'm for the problem, I'm the solution. Yeah.

All right, so here's what I want to know. After the charts and graphs, kitchen moment, we'll call it, what did it look like going forward? How committed were you? What was the most extreme thing you did? Give us some people out there that are listening and watching. Give them something to hold on to. What'd you do?

Well, I made up a graph, and it's one of those little thermometers, and I put it on the wall right outside of our bedroom door. We were forced to walk past it every day to see what our actual debt value was, and then we filled it in, colored it in as we went and paid off the debt. But that first month, when I sat down, because it's a hard thing to do with that every dollar app. It took me the three months to really get it figured out. It's a stumbling project. But that first month, I looked at him and I said, We spend way too much eating out. We did a 30-day challenge, and that was a hard one because- No eating out for 30 days?

No eating out.

Was there any rice or beans? A lot of home cooking and food beans, yes. But when we got done, he He was like, Well, I want to be able to have some enjoyment. I said, Well, let's just do two. Two dates a month where we have one with the family and then just one with us. We were going to put that in the budget, which I did, but we didn't use it because we realized how much money it was costing to eat out. We just quit everything all together. This is our first trip since we started this. This is the first. That's sweet. We're all out on this. Did you stay at a decent hotel? We did. When do you guys recommend it, actually? Good.

I didn't know we were in the hotel recommendation business.

No one consulted me. I'd like to see what has been published.

Concierge Pullman.

Because I got an opinion on hotels. I'm what they call bougey, I'm told. I love that about you. I don't know what it means, but I'm told that's what I am.

Can I give a shout out to all of our kids? Please.

Please do. All seven of them. Here we go. All seven.

They range from 33 down to 15. We have Brianna, Ian, Tyler, Brandon, Erin, Claire, and Tyler. Yes, we have two Tylers, one from each of us. But our kids are our motivator, too, because we realize Because looking back, both of us have lived paycheck to paycheck, and it's been a hard struggle, and we don't want our kids to follow in that path. The two living at home are the two youngest ones, Claire and Tyler, and they've watched our struggles, and they've felt the heartaches that we've been going through as well. That's amazing.

Change that family tree.

Absolutely. What's next for you guys? You're on Baby Step 3, and now we're going to be investing for the future as your financial advisor been cheering you on? Any other cheerleaders in your life?

My mom was probably my biggest one. Then we were cheerleaders for each other. But my mom, she checked in quite often and she would send text messages, and I'd send her pictures of the graph. She was the one that was probably the biggest one for me. That's awesome.

What's the 30-second encouragement you would give to someone who might be where you guys were in your 50s going, Gosh, we're $100,000 in consumer debt. We're so far behind a retirement. We're never going to be able to do this.

Be smart. Sit down with the financial... The thing that woke me up was looking at what money we didn't have and realizing how in debt we were. We made a big mistake. We pulled out $70,000 out of our retirement as a down payment on our house before Ramsey and realized that was probably one of the biggest mistakes we ever made because that's a $430,000 mistake. But We just weren't set up for retirement at the time, and now we're on track.

That's incredible. Well, hey, we've got a little parting gift for you for coming by. We've got two one-year subscriptions to every dollar. That was the tool that helped you after three months of struggling through it, figuring it out. It's what helped you guys debt-free, so feel free to use that or pass it on to someone to get their journey started. We are so pumped for you guys. All right, you ready to do this? Yes. We've got Brian and Taylor from the Denver, Colorado area. $102,000 paid off credit cards, student loans, car loans. It's all gone They did it in under 40 years with the last chunk getting knocked out fast in 15 months, making 140 to 158. Count it down. Let's hear a debt-free scream.

Three, two, one.

We are debt-free.

We are That's special.

From the kitchen fights to a debt-free life.

On Valentine's Day, no less.

The romance is in the air. Is there anything more romantic than fiscal responsibility? I don't know.

I got to believe Coupet was debt-free. You got to be. I almost said Coupet.

There can't be much money in that matchmaking.

But hey, how does he pay for those arrows?

We love to see it. This is The Ramsey Show. I still remember 10 years ago, 23 years old, I was frustrated, anxious, and flat broke. I had followed all the ways the toxic money culture had led me down from well-meaning parents and misguided guidance counselors, and it left me with a a while of debt. But I'm telling you, it doesn't have to stay that way. Over a decade, I went from broke to millionaire, and I break it all down in my new book, Breaking Free from Broke. I'm going to show you just how toxic this money system is and how you can break free from credit scores and credit cards and student loans and auto loans and investing traps, and finally live a life that you're not exhausted by, a life with more margin, more options, and more peace. If you want to check out the book, go to ramsey solutions. Com/store to get your a breaking free from broke. That's ramsey solutions. Com/store. Welcome back to The Ramsey Show. I'm George Campbell, joined by Ken Coleman. Hey, this is the last segment of this hour. If you want to check the rest of the out, you got to get the Ramsey Network app.

It's the only place to get full episodes of The Ramsey Show. You can download the Ramsey Network app for free. Just use the link in the show notes or just search Ramsey Network in your app store. For everyone listening on radio, stay tuned. The show will continue as programmed, but everyone else, don't miss out. It's happening in the app. Michael in New York is up next. What's going on, Michael? Hey, how are you? Thank you for taking my call. Absolutely. How can Ken and I help?

Sure. It's really just general investment advice and guidance. I got married a few months ago.

Congrats.

Thank God, we got... Thank you. We got a lot of money in wedding gifts. We currently don't have any debt, but we have $45,000 sitting in our checking account, which is obviously ridiculous.

That's amazing.

Yes, thank you. I just wanted to advise on where you would put it and also just some passive investing with my income.

Okay, so what is your household income?

It's about 120,000.

Awesome. And you said you guys are debt free. Do you have an emergency fund and savings outside of the $45, or is that everything?

No, that's everything.

Okay, so that's all the money to your name. That's liquid. And what would a month of expenses look like for you guys right now as a married couple? Have you figured out finances yet?

Not so much. Our rent is about 2,400. Utilities, another 300. I own my car. It's probably around 3,500 altogether a month.

Does that include food, insurance, everything?

Yeah, maybe a little more. 3,800.

Okay. So let's call it four grand is one month of expenses. We recommend 3-6 months of expenses in a fully-funded emergency fund. For you guys, we can call that 15 or 20 grand. Okay. Let's say you kept 20 grand aside as your emergency fund. Label it emergency fund, do not touch it unless there's a true emergency. Then the other 25, now we're talking. Now we can use this money towards something. I'm not sure if it should go toward investments yet. Let's dig in a little more. Are you guys renting right now?

Yes, we are.

Okay. You rent a 2,400 a month. At this stage of the game, once you set that money aside today, you'll be in baby step four, five, and six. I would be working on investing 15% of your household income. For you guys, that would look a lot like, what's that per month, Ken? Do the math for me here. 120.

What are you doing? Hit me again. I'm sorry.

I was thinking about- Eighteen grand a year. Basically, 1,500 bucks a month from your future income should be going toward investing. That 20K might become a starter down payment fund for you guys.

That's what I personally would do.

Would you recommend keeping that in cash? If this is a shorter term goal, let's say in the next few years, I would just keep it in a high yield savings account. I would not keep it in cash. You got to at least keep up with inflation and let this money grow for A high yield savings account is the place I would store any short term savings goals, any emergency fund.

Okay. Do you have any recommendations for high yield savings?

Absolutely. Yeah, you can check out... Laurel Road is one that has been a great partner for my YouTube channel, couturelroad. Com/george. Then we've got Fairwinds as well. That's been a great partner on The Ramsey show. They have a great checking and savings bundle. There's a lot of options out there. Here's what I wouldn't do. I wouldn't go rate climbing. People will try to go, Well, I can get 3. 8 8% over here, but now it's three. The rates are changing all the time, and they've been going down. So don't worry as much about that. Just don't leave it in a boring old checking account or a regular traditional savings account. That's the key. Then beyond that, start investing in your retirement plans you have through your employer. You got a 401k or something equivalent?

No. Unfortunately, my employer doesn't give me that.

Okay. You're not self-employed, though. Your employer doesn't have any retirement options? Yeah. Okay. So your next best bet would something called an IRA. That's something you can open without having an employer. As long as you have earned income, you can open up an IRA. There's a Roth version. All that means is you're paying the taxes now. You're not going to get a deduction come tax time, but that money will then grow tax-free, and you can withdraw it tax-free come retirement. Wow. You could fund that. It's about $7,000 a year is the max contribution for this year. You and your wife could both do one of those, and that would get you real close to that 15% goal.

All right. Amazing.

Absolutely. I'm going to send you as a newlywed gift a copy of my book, Breaking Free from Broke, that walks you through all of this. Even on the wealth side, there's an investment traps chapter, a wealth as patience chapter that will really help you guys navigate all of this. I think that'll be a great start. 21 to be making six figures debt free?

Yeah, it's great. I was only going to add one thing, Michael, is that not that I'm thinking you're going to, but I think this is the human condition. I agree 100% that I would put the 20,000, the additional after he's done everything else, the emergency fund. Don't let that burn a hole in your pocket. That's an old phrase. When I was a kid, your grandfather would give you 50 cents or something, and then don't let it burn a hole in your pocket. What does that mean? It means, hang on to it. Don't spend it right away. I think for a young couple, certainly this young, you get 20 grand there. There's a lot of people that will talk them into using the 20 grand right now to get in a house, as opposed to be patient, let that 20 grand be an awesome start and really build a really big down payment.

Oh, absolutely. They're in the New York City area. Exactly. Which means 20 grand is not a suitable down payment.

But you know what I'm talking about. There will be no shortage of people that will go, Oh, take the 20 grand and only put this in small. No, sit tight on that 20. Build on that 20, would be my advice.

Absolutely. I love it. Great call, Michael. Thank you. Paige is in Oklahoma City What's up next. How can we help Paige?

Hi. How are you guys today? Doing great.

What's going on?

I'll just get right to my question. I inherited a home free and clear about three years ago. I was wondering if we should sell it and put that towards our mortgage or keep it as an investment property.

Oh, this is a fun one.

I like this. Tell us more. Tell us how much rent, how much profit it is spitting off in rental, or have you not started renting it It's been rented with a tenant for about a year and a half.

She's great on time every single month, but she just gave us notice that she would probably be moving out in June.

Okay.

And it's paid for, correct?

Yes.

What were you making in a year for renting that?

Roughly 10,000.

Ten to 12,000.

After taxes.

Okay. What's it worth?

It probably would go for about 180.

Okay. What's left on your mortgage?

300.

You could throw the proceeds of the home sale if you did sell it toward the mortgage, knocking it basically in half?

Yes.

That's I mean, the fact that you're even calling about this makes me think you don't really want to be in the landlord business.

I mean, it hasn't been an issue. We're just laying option. We're almost done with Baby Step 2, and we'll have Baby Step 3 by May, so we're just looking ahead. Just trying to see if that was probably a better investment or just keeping it as a rental.

I'll tell you what I would do if I were you. Because the house is not worth an enormous amount, How much more is it going to keep going up over 10 years, George?

You know what I mean? What's your household income, Paige?

We make about 110.

Okay. Losing 10,000 in rental income is not going to make or break your budget. It was a small part of your income anyway.

They're not keeping 10 because you guys got expenses on that house. For those reasons, George, for those reasons, Paige, if I were you, would sell the house and knock that mortgage of your actual home in half, I think that's going to put you further ahead financially than actually keeping the house. I just don't see that that house is worth that much long term versus your current home. Your current homes were double. You're going to be able to roll that in time like George has done. George Whitney has done that recently. That's what I would do if I were you. I'd sell the rental and put it all towards your current home. Okay. All right.

Good luck. This is an exciting time.

I assume you agree with that. I got out in front of the money guy.

Dave loves real estate. He'd probably just hang on to it because he loves real estate, and he's got lots of tenants and lots of properties. Sure. It's not everyone needs to own property and everyone needs to have an investment property. You could take that 180 grand, put in an investment account, and you can make the same amount you're making from your her just without the hassle. There's no one way to do this. I like her plan of getting rid of the primary mortgage, freeing up the mortgage payment, investing that, and then later on, they can always save up and pay for an investment property with cash. Yeah. But great question. All right, that puts this hour of The Ramsey Show in the books. If you want to catch more of it, we're still sticking around. You got to go to the Ramsey Network app to get it. We'll see you over there. This is The Ramsey Show.

The right questions are the key to unlock personal and professional potential. That means if you're not where you want to be, you are not asking the right questions. I'm Ken Coleman, and this is what my new show, Front Row Seat, is all about. Over my career, I've had the distinct privilege to interview successful people from all walks of life and to coach over 10,000 professionals who wanted more. What sets successful people apart is a never-ending desire to learn and grow. Each week, I'll be joined by industry leaders and world-class experts to have a conversation about how to get better, move up, and lead in work and life. But the best part of this show is you get to be a part of the conversation. Live in Studio, we'll have a group of professionals just like you who have the power to ask questions and steer the discussion in real-time. It's an opportunity to get real answers to real questions like how to make the right decisions, have hard conversations, live a balanced life, and discover your next steps to grow. Join us every Tuesday for conversations that are guaranteed to surprise, challenge, and inspire you.

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