Transcript of Wise Money Decisions Start With Clear Priorities New

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird, so we're here to help you transform your life. From the Ramsey Network in the Fairwinds Credit Union studio, this is The Ramsey Show. Rachel Cruz, Ramsey personality, number one bestselling author, co-host of the Smart Money Happy Hour, my daughter, And Joe Burr is my co-host today. Open phones at 888-825-5225. Phillip is in Los Angeles. Hi, Phillip, how are you?

Hello, I'm okay. How are you?

Better than I deserve. What's up?

Well, I'm having difficulty staying away from new debt, and I'm on Baby Step 2, and I'm having difficulty with budgeting.

Okay, Phillip.

Those would go together. That makes sense.

Yeah. Is it any— Any type of like business debt or all consumer debt in your household that you're trying to stay away from?

Consumer.

Okay. Any specific type that you find yourself in a lot?

Um, credit cards and medical.

Medical and credit cards. What's going on with the medical?

Oh, my, uh, well, just having difficulty with the copays and doctors and dentists and things like that.

Okay, more just routine type medical things, or is there an ongoing sickness or concern?

Routine.

Routine, okay, okay.

How old are you? 49. 49. How many kids you got?

Zero.

Okay, are you single?

I'm married.

Okay, and what's your household income?

I would guess $40,000, $45,000 a year.

What do y'all do for a living?

My wife is in clerical and I work as a— in a grocery store as a courtesy clerk. Okay.

Um, it doesn't sound like you guys are peaking out on your careers, correct? Yeah, I'm not.

My wife is okay with hers, you mean? Yes.

Okay. But $45,000 in Southern California for 2 people working 40 hours, that's not—

you're not working for—

yeah, I'm not working 40 hours a week. That's right. I'm a part-timer.

Why?

Um, just the way that the company does it.

No, why are you working— not working 40 hours doing something?

I'm looking for a 40-hour-a-week job. And it's hard right now for me.

Have you ever had one, a different type of career?

I've done other things with cashiering and with driving.

Okay.

Yeah.

Okay.

Is there something that's— that you are facing or that you're trying to work your way through that we're not understanding here that's keeping a 49-year-old man from getting a job and holding it down?

Yeah, a lot of emotional stuff, a lot of baggage, a lot of, um, yeah, I have a long history.

Okay, and so that's also playing into the medical bills, right?

Right.

Okay, all right, now that makes more sense. Okay, a little more mercy then. All right, and so here's the thing, there's a connecting line here between these things. Let me kind of walk through it. So the emotional healing produces a version of Philip that allows him to work more and earn more, which allows him to have more money to budget. And so the actual cause of some of the things you called about goes all the way back to you completing your healing journey. Does that— is that logical to you?

Yes.

Yeah. And so in other words, the stronger version of Philip we have that's got the scars of the past healed enough to function at full capacity. And then that version of Phillip works 60 hours, 2 jobs, 3 jobs. And that version of Phillip brings home a lot more money than $45,000 in Los Angeles.

Yeah.

And that then, that changes the whole budget transaction.

It does. But I also have Dr. John Delony in my head, Phillip, where he leans into, you have to have action as well. I'm all about you, healing from, you know, what it is. But there's been a pattern, it sounds like, most of your adult life where you haven't gone beyond what you're doing now. And I think I would— it's a both/ands. Yes, I do think.

Agreed, agreed.

But you have to—

Action in the healing step.

And the action of getting up at 6:00 AM, going to a job, getting dressed, getting out the door, being somewhere with an accountability of being on time, working hard and exhausting yourself till 5 PM, 6 PM for dinner and you leave and go home. There's a confidence and a rhythm.

That'll double your income.

That is good for you, Phillip, paired with being able to, you know, unpack what you need to unpack and understand yourself and not have high levels of anxiety, all of that. But I think it's a both/ands. And so, I think it's part of your healing journey to go and be productive, 'cause I think that's gonna give you some confidence. And when you get paychecks in that are double what it is now, and you can sustain a fam— and sustain you and your wife, and you're not behind, and you're not so stressed and bogged down and feeling like, "Oh my gosh, I don't know how we're gonna make the next paycheck." Some of that confidence of, "Hey, look, we're literally bringing in tangible money, double what we were." And that, not that money brings you confidence, but you know what I'm saying? Like, it will give you a sense of pride and dignity. That I think is really good for you, Phillip.

Yeah, that swagger to your walk.

Versus sleepy, I mean, versus, Being home till 11, working a half day, or, you know what I mean? Like, I think there's a level of that busyness and productivity that's gonna be really good for you, Phillip. And you have to, to stay current on your bills. There's a point that, yeah, there's not gonna be much of a choice, or you guys are gonna get behind and live off credit cards for the rest of your life. And that's gonna cause more stress and anxiety.

So, get freedom.

So, what I would do that'll help push you into that is to go back all the way to the beginning of the call and answer your actual question was, okay, I'm struggling with budgeting and I'm struggling with debt, is debt, staying away from debt. And so the way you fix both of those things is the same way we're talking about this other issue, with great intentionality and action. So the intentionality is, I'm going to ask you to pretend that someone is paying you $100,000 a year to manage this couple's budget in Los Angeles. And this couple's budget has a husband named Philip. And if you were paid to do that, you could do it. And you could sit down, I've talked to you, you're an intelligent guy, you can sit down and do a budget. And we'll hook you up with EveryDollar, the budgeting app, and you and your wife sit down and you say, "All right, we're going to tell every dollar before it gets here what to do, and then we're going to stick to that." That's intentionality. Then when you're doing that, and, you know, there's a problem, then you've got to say, well, the reason we're doing all of this is to get out of debt and stay out of debt, so we're not going to use debt to fix our problems anymore, or our impulses, or our whatever.

But the reason debt is popping up is you don't have a good, solid, detailed plan. Because if you got a good, solid, detailed plan, it's going to point out that you need more income, and you're going to go get the income.

Well, and I would assume your rent and Los Angeles has gotta be most of your paycheck. I mean, if you're bringing home 4 grand a month.

Not even.

I mean, yeah, I mean, 2 grand a month. I mean, I don't know. I just, I think that there's, when you start to look at the math and see, you guys will probably be, I mean, you're probably already cutting back, but I would cut up the credit cards, not make it an option. And that will force the math to show you that the income really is the major problem here.

Exactly, exactly. So there's two sides to the equation, folks. The income side and the outgo side. You want to win, you got to beat both of them. You gotta be increasing your income, constantly thinking about long-term and short-term. What can I do to get the income up? And what can I do long-term and short-term to get the outgo down? Sell the stupid car. Sell the boat. I don't know, what is it? What's in your way? What's keeping you from winning? When I'm done talking to you, you're still gonna be okay and I'm still gonna be okay, but what's keeping you from winning?

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So just like we told the last guy, 100% of people who win at anything do it with intentionality. They do it on purpose. No one accidentally is married for 45 years. Sharon and I are getting ready to hit 44. It's not accidental. No one accidentally raises great kids. It's a lot of work and a lot of intentionality. No one accidentally stays in shape. Donuts accidentally happen. Not staying in shape.

Okay?

And so, you know, you gotta do everything intentionally, and when you're doing it intentionally with money, it means you're working some kind of a system, some kind of a plan to build wealth. Ours has been proven because we get you out of debt so that you don't have any payments, and now you got money to build wealth with and be generous with and have fun with. And the best way to do that is with the budgeting app. Where you lay it all out. And our budgeting app, EveryDollar, leads you with personalized coaching and customized plans right through the Ramsey Plan. So if you want to do this stuff, download this app for free. EveryDollar in the App Store or Google Play. Jack's in Tampa. Hi, Jack, how are you? I'm all right, how are you? Better than I deserve. What's up?

Um, so I've got a couple questions. I am Fresh out of school. I just graduated from the University of Tennessee last year.

Go Vols!

Well done.

Go Vols.

Now, what'd you get your degree in?

I got a degree in supply chain management.

Whoa, good for you. Killer. You landed the first big job?

I did. Well, it's actually a construction job, so not exactly what I studied, but yeah.

So what are you making?

I got a pretty, pretty solid job. I'm making $80 grand a year.

Straight out of school. That's sweet. Good for you.

Yes, sir. Uh, thank you. Um, so I guess the main, main question I have is my girlfriend is still in school and she is, she does not have an income right now. Um, she's in school to get her DPT, so Doctorate of Physical Therapy. Um, and then at which point she will be in debt at around 70, she'll be around 70 grand in debt after getting out of school. I currently am saving for a ring. I don't have any debts at the moment. Good. I just don't have a ton in my savings, and I'm worried that once that $70,000 hits— I mean, assuming things go well with my girlfriend, which I fully do plan on, I plan on getting engaged and all that stuff. But I'm just kind of looking at that, and it's a little nerve-wracking to have that kind of—

Good.

Over my head.

You're a supply chain guy. You're looking down the field, down the line, and seeing what's coming. Way to go, man.

Yes, sir.

Like, actually, like you were trained to do. Congratulations.

So are you worried that you won't be able to make the payment or clear it up?

I'm just not— I'm worried that I won't be able to clear it up.

When does she graduate?

I think she'll graduate in about a year, but she won't start having a job until I think she said October. Why? Um, not of next, or I, I think it just takes a little bit of time. They've gotta pass a couple certifications outside of school.

Oh, through the summer she'll do that.

Okay.

Yeah.

So she's gotta pass her boards.

Okay.

And then when she makes, when she gets a job in October of next year, what will she be making? What's starting salary for her?

$60,000 to $80,000.

Uh, it's look, yeah, it's looking like around $80,000 to $90,000.

Okay.

Yeah.

Well, why don't you just live off your, assuming you guys get married in that time period. Why don't you guys, yeah, live off your income, which will probably be up a little bit more, of Aidy, and then throw her income at her debt, and you guys are out in a year.

Okay. Um, but I'm looking— I'm just looking at my savings. I've currently got around $3,000 in a high-yield savings account, like $202,000 in a—

uh, but you've been working a whole month.

Okay.

And she's gonna have—

she's gonna have—

she's gonna have an income, Jack. She'll have an income.

Right.

So, you know, you— if you save like a crazy man between now and the time you get married, when would you think you'd get married? Before October of next year?

No, definitely not. Okay, probably the next 2 to 3 years.

Why? He's like, whoa, whoa, I'm saving for a ring.

Marriages, rings, that's a lot coming down the pike. And I'm sort of— she doesn't live with me, but, um, we do hang out a lot. I live with my brother, but we kind of I pay for most, pretty much everything, which I'm comfortable doing.

And you don't need to be paying for anything of hers until you're married. And you need to be piling up cash. Buy a ring in cash, have an emergency fund in cash, and then pile up cash if you're engaged to where I think by the time you get married— and you probably need to get married sooner than you're thinking— but by the time you get married, you'll probably have enough to pay it off or almost pay it off. And then the two of you will be making $200,000 between the two of you by then. My gosh, man, you'll be able to knock it out in no time.

Okay, well, that's a little bit better.

But, and listen too, this is not your responsibility to pay on her debt until you are married.

Exactly. Do not pay a dime of it.

Yeah. So if you did your way and you guys got married in 3 years though, then you shouldn't be stressed about it because she— yeah, that's her problem, not yours at that point.

Yeah.

But if you're getting married, you know, she passes her boards, she gets a job in October, you get married in October, you might not have $70,000 by then stored up, but you might. You really might. That's 18 months from now. You're making $80,000, $90,000, and you don't have any expenses.

So what the flip are you gonna do with all that money? Well, it's $70,000. I know, but you got 18 months. Yeah, so I mean, he's gonna probably save for the wedding, save for a ring. Yeah, there's some stuff, but all that to say, you guys together, once you are married, Yes, you'll be fine. I appreciate the caution and a little bit of that unease, 'cause if I am Jack and I'm like, "Okay, I'm debt-free. I'm now going above my net worth and saving, and then I'm gonna have this massive debt entering my life once I get married," that can feel weighty for sure, but that's just so emotional. It's not logical. When you look at both of the numbers of what you guys are making, you'll be fine.

And, you know, I'm bragging on you, Jack, about getting your degree in supply chain. Your decision-making paradigm that you're taught, your method of thinking that you're taught in order to get that degree can work against you as you're planning this marriage. And you can— you'll get paralysis of the analysis and go, "We'll get married in 8 years." No, you need to just— old man to young man, get married.

If she's the one, yes.

Yeah, if you're gonna get engaged, we don't need 73-month engagements. Good Lord. All because you overanalyze stuff. So don't analyze it. Get done. Get it done, man. And you know, you're gonna be okay. Both of you got great careers. Neither one of you did stupid degrees in left-handed puppetry or something. You both got the ability to step out of school into 80 grand. Nope, I mean, not many degrees do that. So, pretty strong. Pretty strong. You guys are gonna be fine. And don't use your training and overanalyze getting married. Just do it. Jeff is in Raleigh. Hey Jeff, what's up?

Hey guys, thanks so much for taking my call. Longtime listener.

Thanks.

First time caller. Mm-hmm. So I have essentially completed Baby Steps 1, 2, and 3.

Good.

I got rid of the stupid truck, $60,000 truck, $1,200 a month payment. That's gone and out the window. How painful was that? Married. Oh, it still hurts. It still hurts.

What kind of truck was it?

But, uh, uh, a 3500 Silverado. I pulled a trailer all over the country, so it was, uh—

that was hard to sell. That's a great truck. Good for you. You manned up, did the right thing. You're acting like a grownup. Way to go.

If I could have built one, I'd have built that one. So it sucked, but it was the right thing to do.

Yep.

According to you, and, and it seems to be.

It is the right thing to do. But I hate— I'm, I'm with you.

I hate it.

How can we help, Jeff?

So I'm 29. Um, I'm married. I have 2 kids. Um, we have essentially eliminated our debt to this point outside of our home. Um, and a HELOC that we took out on the home to help eliminate that debt. Um, we had almost $80,000 in credit card debt, uh, that the HELOC paid off, um, which took, you know, the interest down to 6% with the HELOC over 20 years versus $3,000 a month in credit card bills that we were paying.

Well, you're not in Baby Step 3 then. You didn't eliminate the debt, you moved it.

So yeah, so that was kind of my question is, should my next step be—

Pay off the HELOC.

Pay off the HELOC?

Yes.

Okay.

Yes, you didn't get out of debt yet. You just moved your debt. And you can't hide from it. It's still there. So you need to draw back and punch that thing in the nose and finish it up.

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Today's question comes from Lewis in Connecticut. How should I "Should interest from high-yield savings accounts be handled? I've so far ignored the accumulating interest because of Baby Steps 6 and 7. Still feel very surreal. Should I be entering the interest as income on the EveryDollar app to include it into paying more on the house, giving, and investing, or should I leave it in savings and let it continue to grow?" I probably, it's funny, we actually have our interest as income on the EveryDollar app on our high-yield savings, be like, "Hey, we're making this." You don't have a mortgage. It's available. Do it. No, but I'm just saying, in general, if you have a lot of money in savings, that high yield, it's wild what it can produce year after year. So, it is a real thing that people look at.

If you're on Baby Step 6, you should not have a lot of money in savings.

It should be gone.

You should have your emergency fund.

I know, but I just thought that—

And the amount of high-yield savings that that is producing should be minimal. And so what that tells me is you got a whole big chunk of money sitting in high-yield savings you should have thrown at the mortgage. That's what I think's going on, Lewis. It could be that, but I think you should save it for something else. Yeah, I mean, 3% on $30,000 is $900 a year. That's not enough, that's not enough to ask this question over, okay? You would throw that, you would throw that, you just pick that up and throw it at the mortgage. It's a no-brainer. But you got a bunch of money in there. You've been saving money over there and You've not applied your— you got all this high-yield savings instead of putting on your mortgage. You need to take your dadgum mortgage and get rid of it.

Unless they are saving for something specific that they're gonna use that money for.

Again, it shouldn't be $200,000 worth of something. I mean, it should be the amount you should have. I mean, you're saving for Christmas or saving for replacing a car or something like that, a vacation.

Okay, fair. Okay, yes, fair enough.

Shouldn't be that much money.

I know, but when he said that, I was like, oh my gosh.

That's what you do. But you have a lot in high-yield savings because because you all are doing other things with that.

Yes.

And you don't have a mortgage.

Yeah.

Yeah, so do I. But yeah, but in that case, you would just take that interest and do exactly what you said and add it to income.

Sure.

Andrew's in Little Rock. Hi, Andrew, how are you?

I'm doing well, how are you?

Better than I deserve. What's up?

Yes, thank you so much for taking my call. I'm a longtime listener and we are Fine. We are very sick and tired of being sick and tired, and we are trying to figure out, um, how to best go about, you know, getting out of debt. We currently have two, uh, junk cars that we are driving.

Good.

Have a lot of issues, however, and we're trying to figure out if we should fix them or if we should buy another one, or in what would be a fair a safe amount to put towards them.

How much are the repairs costing you guys?

Well, right now they are asking me about $3,000 to fix the suspension and AC, uh, problems we're having, and, and batteries.

What is the car— what's the car worth?

It's worth $3,000.

Oh no, you don't spend $3,000 on a $3,000 car. That's a net zero. So you don't fix the suspension, and the suspension is the big number there. All you want to do is fix the AC, and you got to put a battery in it, right?

Yeah, yeah.

Don't fix the suspension on a $3,000 car. It's gone.

Okay.

I mean, if the suspension has completely gone out to where the car is sitting on this— sitting on its belly on the road, which didn't happen— this is just a mechanic that looked and said, oh, your suspension's loose. Yeah, well, so what? But guess what? It's a trashy car. Of course the suspension's loose. It's worn out. That— as long as the car will drive— will it drive?

It does drive good.

It's just loosey-goosey, right?

Yeah, yeah. I mean, it runs, it runs fine for the most part. It does make a lot of squeaky sounds. Yeah, here's what we just concerned about— safety.

Yeah, I was driving a car that was probably worth $400 after I went broke. The main color of it was Bondo, okay? And it had 418,000 actual miles on it. It was an absolute piece of crap. And I drove that car for what felt like 10 years, one 3-month period. And during that 3 months, all I thought about was how bad I hate this car. And I spent all my waking hours working to put money together to move up a little bit in car and pay cash. And then move up a little bit of car and pay cash. And that's why today when someone gripes about Dave Ramsey bought a nice car, well, kiss my butt. I know what it feels like to have been there, and I'm not gonna drive that anymore. I don't have to. I worked my way out of that hole. So what I want you to do is get really, really mad about being here, and don't call me back in 4 years and say, I listen to you all the time, I'm driving junk cars. You need to go get out of that junk car by getting this mess cleaned up in your finances and work your your butt off, get mad about driving something that—

and realistically, Andrew, it may only last you guys another 4 to 5 months. Yeah, and then save on the side.

Yes, throw it away and buy another $3,000 car, but don't spend $3,000 on a $3,000 car.

Yep.

Yeah, those are throwaway cars. And let me tell you guys, if you're at that level, okay, this car that I'm talking about was loaned to me. It wasn't even my car, which is even worse., and like the cops are following me around because they're like, what are you doing driving this car in this end of town? You know? And it's like, are you here to rob something? You know? And so I'm looking at what I was being profiled based on my car. Bondo. You don't know what Bondo is?

I don't think so.

Bondo is the filler you put in when you have a car wreck. Used to. They don't do it anymore.

Oh, or it's okay. It's showing on hardwoods.

Well, yeah, it's, it's a filler. Okay. Like if you had a dent, you would fill the dent up.

I got the joke now.

Yeah. Okay. So the predominant color was Bondo.

Was Bondo.

Was dent filler. Okay.

That makes sense. I always pictured like a red door and a— oh, thank you, Google Image.

Yeah, there we go.

Well done. All right.

Yeah.

You sand that stuff in.

Oh, I see.

Yeah. You fill it in and then you paint over it. Okay.

Yeah.

Yeah.

Okay. So lesson learned. All right. So here's the thing, though. Guys, tell me if you know what it was. In fact, if you are in that market for a short period of time, it should be for a short period of time because you're so pissed off that you're willing to do anything to never drive like that again. I'm going to drive like no one else so that I never have to drive like no one else again. I'm going to pay a price to get out of this mess, and part of it is I'm going to drive a car that we have to give it a name because it's pitiful. Old Blue, Big Bessie, whatever it is, right? And you have to have a little yacht horn going. So go So if you want to buy one of those, here's where you get them: garage sales. This is a $1,000, $2,000 car.

Facebook Marketplace.

And this— Facebook Marketplace too. This is a dog ugly car. No car dealer would even put this on their lot. It's ancient, but it has not many miles and has a lot of life left in it, but you couldn't tell it cosmetically. That's what you're looking for when you're buying a $2,000 or $3,000, $4,000 car. It's zero sex appeal, and you will get no dates if you're single based on your car. This is what you're looking for for a short period of time, and you go bananas on that because a car is the thing that kills your finances. And I love cars, I've got nice cars now, but they kill your finances and And if this is going on year after year after year after year, I'm not saying drive that kind of car for 3 years. I'm saying do it for 3 months, 5 months, 8 months, whatever. And we're just going absolutely crazy. Be sure you take pictures of it and you can put them, you know, you can later on you can show them to your grandchildren when you have, or your great-grandchildren and say, "Back in 'Ought '26, we drove this car and that's why you ain't poor no more, kid." You can do the grandpa thing, right?

You know, we changed our family tree back in '26, you know, and because that, that's the stuff you're doing right now, Andrew. I'm proud of you now. Now, but you're going to have to suck it up and knock it in the face. You got to get after it. You got to get pissed off. I'm not living like this. I've never been poor. I've only been broke. Poor is a state of mind. Broke is I'm passing through.

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Hi Dave, how are you guys?

Better than we deserve. How can we help?

Okay, I think this is like a really good question for you and your daughter. Um, how should you set up pay in a family business? That is my basic question.

Um, like market value you pay?

No, like I can I can like go into it. So I make $120,000 a year working for my dad and I'm asked, asked for a raise and he just acts like, acts like I'm capped out and there's like no other way to advance in a family business. And I'm wondering if you should be working towards shares or—

Wait, you feel that way or that was told to you?

Uh, I feel that way. Like I haven't had a raise in 10 years and my dad says I'm capped out. Like that's as much as we can pay you for your job.

Okay, so the answer to your question overall is what Rachel said, and that is that what you should be paid in a family business is what the job pays. And so if the job you're in is capped out, that's fine. But is that— if you weren't there and your dad had to hire someone else to do that job, what would he have to pay in the market?

Probably now about $120,000.

And what do you make?

About $120,000.

Okay, then why would you make more than he would have to pay to replace you?

Well, that's kind of my question. That, like, it's a generational family business, and that's not how my grandpa did it. He paid his kids way more so they could save and buy, buy more locations. It's a very large business.

Yeah.

So I'm just wondering, like—

so what I would do in that case is not to pay you more for your job, but I would give you some percentage of profit profits as a family member and treat you like an owner, okay? Whether you got percentage of actual ownership or whether you got paid as an owner. So what you should do in this situation or in this thing is to say, all right, let me ask you this. If you went and got a job doing what you do somewhere else, what could you get paid?

For the industry that's got a little bigger, about after a couple years, probably about what I'm at right now, about $120,000. But I've been working for my dad 20 years.

Doesn't matter how long you've been working there. What matters is what the job is worth. And I think we clearly have assumed, established in this conversation, this job's worth what you're being paid. You're not being underpaid, correct?

Okay.

And you're not being overpaid. Now, so then we separate the being paid for the job with being an owner. So you've got employee and you've got owner, and you can wear both hats. But just not— you just don't confuse them and convolute them. And so if your dad wanted to be like your granddad and move some dollars your way out as an ownership position, even if it wasn't an actual stock, but instead, I'm gonna give you some percentage like Grandpa used to do—

What is the profit of the company each year? Net profit?

Net profit about $8 to $10 million. Okay.

Do you have other siblings in the business?

Uh, I do not, but I have cousins in the business. So that's where my dad has 5 business partners.

And are the cousins paid just for their jobs as well, or are they getting paid just for their jobs, but they're paid just as much as me?

Like, it doesn't make any sense how they set up the pay structure. Okay. Okay. That's kind of, so I guess my, Dave's right. Like, I can separate the job. I know I'm not overpaid or underpaid. I know I'm getting what I get for my job. But my question more is like, my dad had told me at one point, you know, give me $100,000 and I'll sell you my shares of this. And I had the money to do it. Then he reneged on that and then he took that money and put it in a Roth IRA.

That's a different discussion.

Wait till I'm dead or— I just don't know how most families do it.

Most families do it, but they don't renege.

Yeah. But just should a dad be willing to sell the shares? Should it be something gifted? I mean, for that ownership?

Either one's okay. There's not an ethical construct on that. Lots of the small business owners we work with sell their shares to the next generation Um, that's not unusual at all. Uh, some of them allow them to participate in profits to buy out the percentages over time quickly. Uh, some of them gift them and just gift them. And so, um, it's, it's not a thing. So, uh, you know, but there's not a, you know, your dad's not— now the only thing he's done that I've heard so far in this whole conversation that's wrong is reneging.

Yeah.

And so when was that?

Oh, that was maybe about 2 years ago. And his reasoning was he wouldn't be able to be the president of the corporation because he had less shares than some of his brothers and some attorney advice. I don't know.

So, so would you be some of his shares or all of his shares when that was the deal?

No, just a small port, like $100,000, like maybe like a 1% stake of his shares just for me, you know, like, just to give your kid to have some— like, he just doesn't want to give me something, which I understand, you know.

He wants— so, uh, how many brothers are in the deal?

Uh, he has 3 brothers and 2 cousins in the deal, so— okay, 6 people. It's a lot.

And you've got cousins in the deal also?

Yeah, and we're all kind of trying to figure out how to get away. It's like my grandpa, uh, set it up more simply because he was one person and, you know, put a cap on all the stores to get a rent check and then gave like a 10% profit sharing. So my dad was making way more than the job entailed, but it. And then my great-grandpa actually just sold the business to his sons and allowed them to pay him with the profits over the years from the business. So there's a bunch of different ways, and I don't—

well, here's what I think should happen for the good of the business and all the people that we're talking about, brothers and cousins and everything else. You guys do not— your dad and his generation does not have a plan.

Correct.

And that is— that's more of a family issue. It's going to run off all the family members that are talented because they're going to go do something else with their life. And it's also, you know, they're holding on so tightly. Oh, God, I won't be the president. And there's no succession planning. There's no generational agreement on what we're going to do. There may not even be good partnership agreements between him and his brothers. I don't know.

Right.

But that— if they want to save this business generationally, They need to sit down starting next week and put together, A, a partnership agreement that they all agree to, and then B, it needs to include a succession plan of what to do with you and your generation and how to make the transition in ownership and how to make the transitions in profits. So an example would be, with what you've told me about this, that would be healthy from a mental health and a relational health standpoint. I don't know if your bunch can pull it off, but a good thing would be that you guys sit down and the brothers come up with an operating agreement that says your dad is the president until such time, regardless of his ownership position. And that allows him then to begin to transfer some of the ownership position without losing the presidency.

Because eventually he won't have it.

Yeah, yeah. And because he can't— if he can't do good succession planning because he has to hold on to the moment, mm-hmm, because they're at such conflict, then you guys are gonna die. The business is not gonna make it. You guys are gonna fight with each other, and the enemy is within. The enemy is in the building. It's no longer competition. It's no longer trying to serve the marketplace. You guys are all just scrambling for all the crumbs inside the building. That is not healthy. It's gonna blow up relationships and it's gonna end the business. We see it all the time. We coach family businesses that do stupid butt stuff like this all the time. And so you guys have got to— your dad has to sit down if he wants to save it. And if he wants to save the relationship with his kids and his brothers, they need to sit down and develop an operating agreement for today that includes him continuing to be president, in my opinion, based on what you told me, for X period of time and begin to transfer shares into the other generation, and that generation also has an operating agreement as to how this thing's run after succession.

It could be that you split the business up and each of you take your store and go on your way like your grandpa used to do. And that might be the healthiest thing of all. But you guys not having a plan and, you know, and then reneging on stuff to stay president is a good way to screw up the whole thing.

And staying so consistent for 10 years of your income and not moving one inch is deflating, right? So he either was overpaid 10 years ago.

Yeah.

And it is what it is, but there's no movement in that. There's no, I don't know, there's not, and not that you have to move up outside of market value, I'm not saying that, but to not have a raise for 10 years.

Well, that, something was wrong then.

Yeah.

They either started too high or something's weird about this position or something.

Yep.

But again, that can be solved For sure. By just saying we're gonna leave that income there because it's market value, but we're gonna add some percentages of ownership over here and let you share in the profits, and all of a sudden he gets a raise.

Yep.

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So get real legal help at guardianlit.com/ramsey. That's guardianlit.com/ramsey. Attorney advertising, results may vary, and no specific outcome is guaranteed. Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. Rachel Cruz is my co-host today. We're gonna take an hour and do something that we haven't done in a long time. We're gonna do a theme hour, and we're gonna talk about real estate. And to do that, I brought in one of my good friends for many, many years, one of the top real estate minds and real estate coaches in America, Brian Buffini, flew in from his home in California to hang out with us. We've been hanging out for a couple days, having all kinds of discussions. We get to do all kinds of fun stuff together, but we thought, hey, we better get him here on the air while he's here, and we better mine this mind. He knows more about this real estate stuff than anybody moving around out there, and have a really good discussion. Welcome, my friend.

It is always a pleasure, and we've had a great week, and I'm looking forward to today.

Yeah, if you've been listening to the show for a while, you've heard Brian on here a couple of different times. We were promoting his book, The Immigrant Advantage, which was a bestseller years ago when that came out, 3 years ago?

Maybe 5, we're getting old.

Maybe 5, yeah, time gets away fast, okay.

And it's not gonna be Southern accents this hour either, so. We love—

I love listening to Southern Ireland.

It's just like the Irish accent.

You know, we are big into real estate in Ireland, you know what I mean? The potato famine and all that good stuff.

All right, let's get to this. The real estate market is a problem. We've talked about it a lot here on the air that the shortage of inventory and the weird blip on the radar called COVID drove prices up unbelievably. And they've slowed down considerably, but still we've seen a phenomenon that we've never seen before in that we're currently at the oldest median age for a first-time homebuyer, right?

Yep, yep. 40 years of age. So median, half above and half below. You know, how old were you when you bought your first house?

22.

Yeah, we drove by one of your original houses last night.

That was a flipper I was doing. Last night we're going to dinner, we drove by one of those rehabs.

Yeah, that's good, that's good.

I was 23.

Yeah.

So Brian, this is the pain point I feel like we hear so much. I mean, housing and buying a home is a financial goal for majority of people, as it should be. But it's just, they're feeling this tension at this point and it starts to feel hopeless, right? And we were talking about social media.

It feels out of reach.

Yeah, we were talking about social media earlier, but I get in that algorithm and you just see people and it's some complaining, which I'm like, listen, I get it, that it is hard. But then also it starts to feel as people start throwing facts and figures, which is why I love that you're on, because you can maybe combat some of that or affirm some of it. But it just feels like today more than ever than any time in the home buying process, it's harder with just the price of homes, income and all of that. What would you say to someone that just—

Well, yes, the answer is correct. But if you talk to, you know, people from the '60s and they bought a house for $8,000, they thought their arms and legs were going to fall off and they ate spaghetti for 3 years. You know, everybody feels that way.

Yeah.

Everybody also does, oh, you see that property over there? I could have bought that in 1979 for $8 and a packet of peanuts. And now it's worth 20 minutes, 20 million, but I didn't buy it. So, you know, that, that's never gonna change in real estate. What, what we have is what I call an anaconda's meal.

Okay.

You know the anaconda? Yeah. It eats like a sheep.

Only from the Jennifer Lopez movie.

And it takes 8 months to digest it. And that's kind of where we are with real estate right now. That COVID, free money, you know, 2% loans, everything jumped up. COVID, people were living in small houses. Remember, I remember there was the tiny house movement. Remember that, Dave? Well, when we were all living together for 10 months locked up, nobody wanted a tiny house. It's like, I don't want to see you. I want an office. I want a school. I want a gym. So now people got bigger houses, lower interest rates, and you had this massive jump in the market. When the Fed adjusted the rates, because they overcooked it, it was the fastest rise in rates in 120 years since the Federal Reserve existed. They intentionally stalled the market, like stalling an airplane. So they intentionally put the brakes on. And the brakes have kind of been on ever since.

Yeah. So to backtrack a little bit, 10 years ago, the median age of a first-time homebuyer was what?

30 years old.

And so in 10 years, it went from 30 to 40.

Yeah.

Yeah.

And this is the highest median age since we've kept records.

Since we kept records, go back to 1908. The most in a decade was 2 years of change. That was the Great Depression. And then the next great change was during the war. And then we had the baby boomers and, you know, America exploded in the housing after that.

Yes.

And so this is— it's— so that's why it is a shock. It is a shock to the system. And what I do here—

so people don't feel crazy. If people are feeling this, they're not crazy.

No.

There's a reality to it.

But they're losing hope, and that's the dangerous thing. You can't lose hope.

That's right.

That's right.

You gotta dig in.

We're not gonna get in the loss of hope business or the sanctioning of a victim, but there's also the reality of the numbers. And so, based on that reality, then you've got a solution. We have to come up with a solution. We'll work on that throughout this time we've got together. I wanna do that. And so, rates are just pretty much just stayed the same.

Yeah.

For what, 3 years?

Yeah. I mean, look, we were heading on a nice path, and, um, I was— I thought we'd be at between 5.8% to 6.2% this year. And then we got Iran, you got oil, you got all that stuff, which is another blip in the screen. But I think what's going to happen is it's— it's— we might even have a slight rate hike before the end of the year. Eventually rates are going to settle around 6%. 6% is a healthy Interest rate, not a bad thing. You know, we remember when our business, it was high, right?

I was gonna say, well then that's perspective too, right? 'Cause you have, you know, my age group that we don't remember the Carter years, right? Or the, you know what I mean? Like when they all were selling houses.

1989, I was in a real estate office and we had a 10% party. We were stirring the porridge, we were dancing it up. Pizza was in, the music was playing 'cause the rates had come down to 10%.

Yep.

So yeah, historically the rates were ridiculously low. So, I mean, 2% and 3% mortgages are artificially governmentally created. So for a government to loan a bank money at 0% is not sustainable, especially when the government's paying 5% to the people who loaned it the money.

Yes.

So it's artificial.

And I saw this on one of these slides that you gave us, which I thought was fascinating, is that, yeah, the median age for the first-time home buyer is 40, but 25% of single women make up that demographic of first-time homebuyers and only 10% of single men. So women are outpacing men. Men.

Yeah. 2.5 to 1.

In buying homes.

All the single ladies. All the single ladies, right?

Yeah.

Yes.

So men are feeling the need to hit the home run is what I could see.

Okay.

And so they're like, I don't feel like—

So this is a 25 to 35-year-old man.

Yep. 25, 30. Well, we know that exact demographic. Because online gambling has gone from $5 billion a year to $150 billion a year in 3 years.

Thank you, DraftKings.

Thank you, DraftKings.

And you want to know why men aren't buying houses? DraftKings.

Yeah. And remember, you couldn't have a sports team in Vegas and you couldn't have an advertiser. And now because they all own a piece of the action, young men are buying the Lakers and the Celtics and the Sooners because they don't think, you know, saving $300 a month's not going to do me anything. Let me put it all on the Lakers. And so they're hoping for the big win. And with the big win, they're hoping— the number one question of the online gambling bros is, what would you do with the monies if you had a huge thing? They said, I'd buy a house. So it's that lack of hope.

And you look, what happens is when you have a lack of hope, as soon as I get desperate, I get stupid. Yeah. And you're not, you're not swinging. You're not swinging to hit singles and doubles. You're swinging for the fence. And every time you swing for the fence, you strike out. And that's what brought the crypto bros up too. Yep, they're looking for dadgum easy money.

And well, the ladies, I never— they're making wise decisions.

Well, women are just there, they're just going, we're just going to put some money away.

Yeah, yeah, the house is a bigger deal.

Wow. Well, I can't wait to keep talking about this because there is a plan and a great way for people to be homeowners. And so yeah, and you're part of that.

I wouldn't be here without us.

Brian Buffini is with us. We're talking real estate this hour, what you guys all want to talk about, and we're gonna help you with it. We're also gonna talk about the realities of what you're doing out there. Hey guys, George Campbell here. Two things you should know about me: I love a good movie, and I hate overpaying for things. An angry Angel just checked both boxes. They've got a new movie called Young Washington, the story of George Washington's early life as a soldier before he became a founding father. And whether you're a history buff or not, this was a gripping, entertaining thrill ride of a prequel to the guy on the dollar bill.

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Because instead of looking for a solution, they're just laying on the floor foaming at the mouth and having a fit. Because there's a lot of different problems. Let's go back to one thing, and then I want to take this down a couple of ways. One thing you were talking about was the number of houses sold this year.

Yeah, 4 million it'll be this year. It was like 4.1 last year, right? And the last time we got about a million houses on the market— on the market, yeah.

Yeah.

And that's been that way for about 4 years.

Yeah, almost 4. And the last time we had that few homes sold was in 1995 when there were 80 million less people living in the country. So you have big population increase, all economic supply and demand. So you have 80 million more people, which is why prices are continuing to go up and will continue to go up. If you are watching YouTube, if you're watching the doom scrollers, market crash, this has fallen into the thing. It is not true. It is clickbait. It's unfortunate that some people make a living—

The prices are going up because there's an inventory shortage, supply and demand.

Supply and demand.

You've got 100 million more people chasing the same number of sales. Yep. And so we've got a supply problem. We continue to have a supply problem, and that is due to several things. So there's a bill sitting on the president's desk for him to sign. He just pushed it aside a few minutes ago as we as we're recording this, or broadcasting this, so I don't know when you folks are gonna be listening to this, but something else may have happened by then. But for right now, he pushed it to the side, so he's not signing it till he gets some other political favors on some other stuff he's working on. But that bill is called the ROAD Act, and it had good intention. You and I agree it's full of a bunch of pork and crap, but Congress can screw up Christmas. But the idea was that they're gonna limit corporate hedge fund buyers and Chinese foreign nationals and so forth from buying thousands of single-family homes and starving that supply we're talking about. Yeah, allegedly they're going to limit— the idea of limiting it is a good idea. It was your idea.

It was.

I proposed it to this, and then I said it on the air, and I said, President Trump, if you're listening— yeah, and apparently he was, or somebody was, because they put the bill out like 60 days later, right, in January. They got the bill passed But by the time they got it through Congress, they screwed it up putting all this crap in it.

Yeah, and they, you know, what was initially proposed was a great bill.

Limit it to 350 homes, single-family homes, that a corporation can own because they're stealing them from first-time homebuyers.

100%. So first-time buyers, and by the way, they get tax advantages. So a giant, you know, multi-billion-dollar company gets all of these tax advantages that a single family that's, you know, eating spaghetti, saving their money, can't. And so that was the intent. Now it's gotten politicized and all of a sudden it's like, well, we're concerned about access to capital and things like that.

Except BlackRock.

Yeah, yes, because I also got a giant contribution to my campaign, right? BlackRock. Right, so they gave $10 million and Mary can give $10. So look, it is the deal. It's brutal.

One thing we could do is if you really did do it, and this bill really doesn't, if you really did do limit limit the number of, uh, the Chinese buying 5,000 houses in Memphis, Tennessee. Yep. Or BlackRock doing the same thing and taking them off the market. That's thing one. Thing two, you've suggested, and I like this even more, um, is to get the market moving, just do away with capital gains tax completely on single-family personal residences.

Yeah.

Or on personal residence, period.

Sure. And they can do this in a periodic way. They can business in a structured way. Right now it's $500 grand.

But that would— that's, that's a 25-year-old law, isn't it?

It's— yeah, and it's, it's $500 grand, and $500 grand was different 25 years ago than it is today. It was different 5 years ago. So if you move that to a million, so if you went from $500 grand to a million, so that first million, you would stimulate sales like crazy. Here's what would happen. The baby boomers who are sitting on $89 trillion worth of assets the baby boomers are willing to go, okay, you know what I might do? You'd actually have a temporary dip in prices because they go, guess what, I'm gonna make a mil on this, maybe I'll take 50 grand off the house to sell it quick because I want to do it while the capital gains law has changed. They might take 50, they might take 70 off the price, they might take 100 off the price. You might have, oh, this guy took 50, now they have—

so prices might take a little softening, put some supply in the market, a lot of supply in market because your median seller right now is in their 60s, right?

Median seller is 64 years of age.

I, I like capital gains. Is there, or is it rate to buy the next home that's stopping people, or both? I just wonder what the motivation is.

Baby boomers are sitting on—

their houses are paid for.

They're paid for. They got a bunch there. Yeah, you know, some, you know, some people say the greatest generation, they're, they're, they're borderline. I'm going to create some tension here for you, but they're borderline being called the greediest generation.

Well, we were with the '80s.

Yeah, go-go baby, get it, greed is good. Gordon Gekko, grease the hair back.

Exactly.

The baby boom generation was the first historical generation to buy real estate not just for a primary residence. Baby boomers bought rental properties, baby boomers bought vacation properties, baby boomers bought and built 8-unit apartment buildings. So brilliant. They made— they sacrificed, they made their money, and they've done well. They've been slow to hand it over.

So the two things we could do from a macro perspective, and usually you and I don't reach for Washington to do anything because they screw it up, and they have in this case too, but would be to limit corporate buying and to just do away with or raise the capital gains to a million. Capital— you know, you sell your home for up— your personal residence for up to a million dollars profit with no taxes at If you just did away with it, you could increase your inventory substantially, which would increase the flow of houses, and we get back up above a 4 million transaction rate, and you'd get the inventory going. And the third thing is we've got to have some federal help, probably pouncing on people like these idiots in California that have still not issued building permits 2.5 years later on Palisades.

My people, my people. I'm from the People's Republic of California. Look, it's— more homes were built in Dallas-Fort Worth last year than in the state of California.

The entire state.

Than the entire state, which is 40 million people.

Because of regulations and building permit costs and all the fees, fees, fees and more. They got more fees than a French poodle. Fee, fee, fee, fee, fee.

Very good. $167,000, the average fees for housing, just to break ground. So the fact of the matter is there are governmental things that can happen. There are some things they're trying to do. They're trying to— they're actually— the one thing this current legislation does, does a lot of reducing requirements and restrictions and regulations on housing. They're reducing the federal regulations on housing. So that will help some things. They're going to expand, you know, the developed property. So like, you know, the delivered mobile home, right? So it's like you can build it to suit, which is a little more—

Manufactured housing.

Manufactured, and they're a little more structured than they used to To be.

it.

So there are some things that they're doing that will help some things.

Okay, so let's switch gears then. Yeah, that's stuff that we can't control if we're 35. Yeah, but we can control if we're giving all of our money to crypto or DraftKings. Yeah, we can control if we go into debt to Ford Motor Company for a $90,000 pickup and so we don't have any money to save for a house. We can control if we don't let Citibank— what's in your wallet— screw me over with Samuel L. Jackson telling me to do it. We can control if we get deeply in debt with student loans. These are controllables that the individual can do to put themselves in a position where they have disposable income to start moving towards buying.

Dave Ramsey has a lot of answers for the real estate business. You know, if I wanna, somebody said, if I really hated a real estate agent and I wanted to just really screw 'em up, I'd refer 'em a couple of kids who wanted to buy a house and tell 'em to buy a truck first. If I really hated that realtor, okay, here they go. And what happens is psychologically, typically their first major purchase is a car, and then they got a loan, and now they feel they can buy a house. It's, it's insanity. And you've just, you just added—

screwed up the whole thing.

You screwed up the deal.

Uh, student loans, by the way, get married.

Yeah, there's a good one.

Cohabitating doesn't get you towards buying a house.

All the budgeting stuff you talk about is one-on-one. That's why I was a Dave Ramsey fan my whole real estate career, because I'd have my clients listen to your stuff so I could help them get a down payment to buy a Opens up margin when you don't have debt.

And then patience also.

I got one more to add to this when we come back, and then we're gonna take some calls.

Great.

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We have a shortage of inventory. We talked about there's 3 things that the government can do. One is to lower regulations and get home building going again. Two is do away with capital gains. And three is limit corporate buying thousands of single-family homes and starving that inventory. As an individual, what can you do? Well, quit being desperate and swinging for the fence. And so stay off of DraftKings and crypto. Quit buying crap you can't afford and letting these companies screw you like Lexus, and you've got a car you can't afford for $1,250, and then you whine because you can't buy a house. It's your fault. You did that. Okay, so you've got to stay out of the stupid— you gotta get the stupid student loan paid off like it's some kind of pet in your house. You got to get that credit cards cut up and get Samuel L. Jackson out of your life. What's in your wallet? All of your money, apparently, but Yeah, so we gotta fix all of that. And then the one last thing I wanted to bring up, and I want your input on this, 'cause you and I are about the same age, and I've been hammered negatively on this subject because— and I was on Fox yesterday talking about it, as a matter of fact, and the anchor, John, on there is about our age, and he said, "What'd you pay for your first house, Dave?" And I went, "$67,500." "What'd you pay for yours?" "$88,000." "What'd you do that on?" "$18,000 a year." Okay, well, wages have not kept up with house prices because house prices shot up in the last 10 years due to inventory shortage and COVID garbage, right?

And so wages have not kept up. That is real. However, the other thing we've never adjusted for in our psyche out there in the, in the land of TikTok, where you're 27 years old living in your mother's basement bitching about this, is you've never adjusted your entitled viewpoint. Because let me tell you what was in that $67,000 house: no stove, no refrigerator— had to go buy them used— no washer and dryer, no dishwasher, no microwave, no disposal, roll-out vinyl floor on the kitchen—

come on—

and a Formica top, a chipped-up sink that had little chips in the ceramic. Yeah, the carpet, you had to mow it because it was 7 inches tall. It was— remember shag in the 1970s?

Shagadelic.

Yeah, shagadelic.

One bathroom.

And it had 1.5 baths, and it was 1,200 square feet with a one-car garage. So you can't compare that house to your little McMansion that you're bitching about that you can't afford. So you don't compare that. I grew up in a 1,000-square-foot house with an unfinished basement. We had no living room furniture until I was 13, and the living room wasn't as big as this desk. And so, you know, you adjust all of that before you say, "Well, you're a boomer. You had it good. It was easy for you." No, we didn't. I mean, I had 1.5 cars. You guys got 3.

Sure.

And so you really got to adjust for that in your expectations. And then lastly, you need to think about where you're buying. And in most markets, and you know this better than anybody, probably the urban, basic urban growth is if you go out of town a ways, as we say in Tennessee, out in the country, it gets cheaper the further from downtown you move. Yep.

Yeah. And look, I mean, the average home used to be 1,210 square feet. And now the average home is 2,900 square feet. And so it's much bigger.

And the difference in those is not necessity, it's luxury.

It's, you know, that's what people were buying and the prices in the market and the way it went and all that kind of stuff. Here's the bottom line. You know, the first house I bought, it looked like it had been in a drive-by shooting, okay? And I was a house painter's son, you know, and I fixed it up. And there's a thing called sweat equity. And everybody watches the Home and Garden shows The truth of the matter is, you know, I was out here in Tennessee the other day just looking at stuff, and I was looking at the model homes, and they have them all tricked out, and they're lined up out the door, and everybody's buying the model homes. The money is not in the model home and the new construction. The money's in the old beater down the street without the, you know, with the, looks like it needs a coat of paint.

'Cause it does.

'Cause it does. You know, you make money in real estate when you solve somebody's problem.

That's how you buy though, people. Yeah. You stay out of the traps. And you set yourself up and you adjust your expectations and act like a first-time homebuyer. Quit acting like you've been saving money for 25 or 30 years. You haven't. You're 27 years old.

Look, you— how bad do you want it?

Yeah.

And, you know, I hear a lot of the younger folks, you know, the math isn't mathing, and I'm a lifestyle person. Also, the average homeowner has 44 times the net worth of the average renter. And if you want to get on the right side of the net worth equation, the number one way people make make money in America and all over the world is housing. And so I've trained in 47 countries, and housing is the same all over the world— food, shelter, clothing, the three necessities. And so you, you gotta fight and grind to do it. And again, I know—

I think you're right, foot in the door.

People have losing hope, but people are also listening to all this garbage out there.

100%.

You can do it. You can bite, fight, scratch. Look, I'm an immigrant, came to America, got run over by a car. I have $250 grand in medical in 1986. I don't know what $250 grand is worth today. It'd be a fortune. And I bought my first house and I fought like the dickens for it. And I literally didn't eat a meal that I didn't prepare for 3 years. But that house I bought for $107 grand, I sold it for $164. The next one I bought was $220 and I fixed it up and I sold it for $394. And then I bought the next one and I bought it for $900. $800,000. And then I bought the next one, it was $1.8 million. And I bought the next one, and that $1.8 million now turned into $4 million. And the next one, $4 million turned into $7.5 million. And so here's a house painter's son with not a dime goes from, in 22 years, from $0 to $7.5 million. That doesn't happen by renting, and that doesn't happen with crypto, and it doesn't happen with DraftKings.

Yep.

Yeah, very good. Chuck is in Milwaukee. Let me get that line going. Chuck, how are you?

Good, how you doing?

Great, man. Enter, enter the conversation. How can we help?

Hey, uh, so I'm a long-time listener. I'm a Baby Step worker. And, um, so my question is, um, so my wife and I have worked through most of the Baby Steps except for the latter ones.

Um, and we are at the point now where we want—

we're thinking about selling our house in order to be mortgage-free. And I'm just wondering, is that possible?

That makes you move down then, right?

What's that?

So you would move down in house?

We'd downsize, yep.

Okay, other than to be mortgage-free, why would you do that?

That's the only reason I would.

What's your, what's your house worth?

Uh, $447,000.

And what do you owe on it?

$192,000.

What do you guys make a year?

You're gonna buy $150,000 house from a $500,000 house?

Yeah, I— doesn't make sense.

Are you married?

Yeah.

Don't do this.

He just saved you $250 grand in marriage counseling right there, buddy. Chuck, do you want the real estate?

Do you want to do this? What is your wife saying? I am curious.

I, I Our goal is to, yeah, our goal was to work that baby step and be mortgage-free. But personally, personally, no, I like where we live. I'd rather just, you know, buckle down, pay it off. You know, we got 8 or 9 years till we could pay it off.

That's what you should do. Yeah.

Yeah.

How much do you guys make a year, Chuck?

Um, so I can tell you, um, I'm self, I've been self-employed for 25 years. I'm a hardwood flooring contractor. And I work alone. And do you want like the business gross income?

I'm asking what your household income that you pay taxes on is.

Okay, $151,000, she made $64,000.

Great.

Good.

So 2.25, and you gotta pay off, you need to pay off $192,000, and you're gonna do that in 4 or 5 years. And then if you want to save up and move up, I would. But I don't know, I would not sell this and move down to be debt-free.

Right.

I think you're going to be debt-free soon enough. You've got a good plan. Um, would you, Brian?

Well, I'm a house painter's son, Chuck, so here's what we would do.

We'd do—

call it Saturday money. So we'd take what was called a side job, uh, do a little, do a little work on the side, and every dollar I made on the Saturday job you used to pay down the debt. And so you do that, here's what you can be— you could be debt-free in 5 years, not 8, and you get to live in the same house. And you know what? Your wife thinks you're even cuter than you are right now.

With no mortgage, it's amazing how people's looks change suddenly. It's a beautiful thing.

My wife thinks I'm gorgeous.

Oh my goodness. Brian Buffini is with us, real estate coach and expert. We're going to come back in the last segment this hour and take your calls.

And I'll throw out too, you know, there was some hope interjected there at the beginning about, hey, get in. Like, this is like— your housing is amazing. And so if you want to check out and find a great agent, go to Ramsey ramseysolutions.com/agent. We'll put a link in the show notes.

Yeah, we'll hook you up with a Ramsey trusted agent that knows what they're doing and they can help you really do this. It's possible, folks. ramseysolutions.com/agent. If you've worked hard to keep your car running, the last thing you want is stress when you're running the kids all over to summer activities or loading up the family for a well-earned vacation.

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Our guest is real estate expert and world-renowned coach Brian Buffini. Coaches more real estate agents than anyone else in America today, especially the high-performing ones. We're talking real estate. We're talking about it is possible. It is definitely harder. It's definitely different than it was 10 years ago. And it's definitely way different than it was 30 years ago, no question. That is not in question. But the question is, you can control only the things you can control, and that's what you should control. If you control the controllables, you can put yourself in a position to buy. Carter is with us in Columbus, Ohio. Hey Carter, your question for Brian and the panel here.

Hey guys, how's it going?

Great, how can we help?

I just wanted to call in and just say my wife and I are expecting with our first child, and we're currently thinking that home buying is our next thing that God wants us to do.

Cool.

We are both in full-time ministry, so with that, obviously it's not like an extravagant paycheck that we get, but we're not in it for the money. I'm just wanting to know like how we can go from the jump— we're renting right now, and How we go from the jump of we have everything budgeted with our rent to our mortgage payment, everything with bills and like that.

Congratulations on the baby. How old are you guys?

Thank you. Uh, 22 and 23.

Hmm.

Okay.

And, and how old is, uh, I mean, I'm sorry, what is your household income today?

Um, yearly we both combined to $60,000. Okay.

You have a bunch of debt?

Nope. We, my wife has no debt whatsoever. The only debt I have is, uh, student loans, but I'm working through a public student loan forgiveness with— because I work for a church.

So 10 years is not a plan to get out of debt, honey.

Yeah.

Okay, Brian, what do you think?

Yeah, how much is on the student loan, by the way?

$21,000.

Okay, and after your bills come in and your money comes in, how much left over? You have anything left at the end of the month?

So with all bills aside and, uh, tithes offering aside and everything like that, we have about, um, $1,600 left to spend, not including food or anything like that.

Okay. You got any money saved?

Uh, we have $13,000 including a $1,000 emergency fund.

Great. Fantastic.

Wow. You're way ahead of what I thought.

Yeah. 22 and 23. We got a winner here. It's Hope for America. Okay. Okay, what's the average sales price in Columbus, Ohio?

Uh, we're looking— we got pre-approved for $228,000, but I was doing the math and just looking what our mortgage would be. I just don't know how that would, uh, be possible to— we just kind of be making pre-approved.

Pre-approved only means that the mortgage company has brain damage, okay? Because there's no possible way you should do that. Yeah, you know that. When you looked at the payment, you about choked, didn't you? Yeah, yeah, good for you.

It's about 220 though, $220,000.

Okay, all right, just curious, what would 220 get you in Columbus, Ohio?

Uh, like bedrooms and stuff like that? Yeah, about 3 beds, 2 baths.

Nice.

Wow, nice. I know, we're not living in San Diego, baby.

So like 2,000 square feet, huh?

Uh, like 1,500. Yeah, yeah.

Wow, okay.

Well, Carter, I would take that $13,000 that you have, throw it at the student loans. You guys, you may wanna work a part-time job for just a season. Well, when's your wife due? When's the baby coming?

End of September, early October.

Okay, between now and then, Carter, if I were you, I would be stacking cash and I would go work extra weekends and nights. And you guys, yeah, pile up some cash, get the student loan knocked out, save some more back to that emergency fund. And then make it a big goal, yeah, of— and knowing that you're on a $60,000 income, okay, so it's gonna take you guys a couple of years to save for that down payment, but it is totally possible.

So, let me tell you this. I have completely affirmed God's call on your life to be in ministry. And I want you to keep doing that. And here's the reality that goes with that. You're not gonna only get to do that that for the first decade. Go talk to some 65-year-old pastors and ask them how many of them, when they were 22, worked a side hustle. When we're— we work with 50,000 churches in America, and what we found is, is that 88% of pastors are bivocational. They have a side gig. 88%. And they call that full-time minister. My pastor that led me to the Lord and baptized me is with the Lord today, And back in the day, he delivered bread, had a bread truck, and he was a full-time pastor. And, and he tells that— told that story from the pulpit 1,000 times to where we all could visualize the bread truck. We heard it so much, but it was perfect. So, you know, you're 22 and 23, you're just beginning. You've got time. You don't need to buy a house today to be rich. You don't need to buy a house today. And money's not your motivator anyway.

But you do need to buy a home. It's going to be good for your family, but it may be 5 years. So what? You clear the student loans, you pile up some cash, you work some side hustles, and, you know, your ministry continues to grow, and maybe you move into a senior pastor role at some point where you actually can just do that and make enough money to afford a home. So if you buy a house at 27 or 28 years old, and you put down a good solid down payment, and you stay out of debt, and you're a good dad and a good pastor, I would call you a phenomenal success in America. Yes, sir.

Yes, sir. And by the way, being a pastor can also be your side hustle. I had a buddy of mine and he was in the same spot. And again, sometimes you can be so heavenly minded, you're no earthly good. I'm here to be a minister and I'm trying to help. And so his side hustle was marry, bury, and baptize. And so he said, "I'll marry, bury, and baptize." And he put a little service out there and he made enough money to go buy himself a house. So your ministry could be your side hustle too.

I love it. Danielle is in Des Moines. Hi, Danielle. Your question for the panel.

How's it going? Good.

How can we help?

So my husband and I, we're in our mid-20s and thinking about starting a family soon. Um, so we're looking at buying a house maybe in the next year or two, and we're just wondering what we should be prioritizing in our first house for our family. Like, should it be location, size, the cheapest thing possible, and we're trying to put down 20%.

Wow, that's great. That's unusual for a first-time homebuyer. That's good though, if you could do it. So what do you think the leading indicator of a home— you want to get in, yeah, but you're not gonna live there forever.

So how many kids you have again, Danielle?

Well, we don't have any right now.

We're hoping within the next year.

Well, so you plan for that. Here's the big tip I give people all the time: you'd live in the floor plan, not the square footage. People get caught up in square footage. So sometimes older houses have smaller square footage and better floor plans. You'll see this, like, you can see a townhome or a condo has lots of square footage, but it's all cut up and chased up, or it's a two-story. So you live in the floor plan, not the square footage. So start thinking about, okay, Lord willing, if we had a couple of kids, what would that look like? So to me, you want to make sure that you got the best floor plan that's open as possible. And then, you know, I have 6 kids, me and my bride, which seemed like a great idea at the time. And we prioritize having a yard over everything else. You know, we were going to have those crumb snatchers out there catching balls and running around. And we live where it was a little bit sunny. So to me, again, it's your priorities. So floor plan is key over square footage. And typically the older houses have the better floor plans.

And then a little bit of yard if you're going to have kids, those would be the first 2 for me.

Yeah, very good, very cool. All right, well done, sir. So Brian Buffini has been our guest this hour. Brian, if people want to learn about Buffini and Company, the leading real estate coaching company in the world, how do they do that?

Well, like I say, we have buffiniandcompany.com. Just check us out.

We're—

if they're interested in— if they're in real estate, that's our specialty. We do real well. We have thousands of clients. We really teach people to take care of their customers. That's what we're all about. And so we, uh, we help real estate agents do well, and a lot of our A lot of our agents that we coach are in your program helping folks out themselves.

A lot of our Ramsey Trusted Agents are coached by Buffini and Company. So that's absolutely perfect. Well, folks, we want to give you hope and we don't want— there's a whole industry that makes a living telling you that there's a bubble and there's a crash coming and the world is coming to an end and Chicken Little, we sell helmets.

And you could never be a homeowner.

You'll never make it. America is dead. There's people make a living off of that and that's a lie. Is it different? Yes. Is it hard? Yes. Has it always been some form of hard? Yes. Yes. But can you do it? You control the controllables. You know, stay out of crypto and DraftKings and get out, get yourself out of debt and then adjust your expectations on your first home and you can get yourself into the market and we'll help you do it. We love you. We want you to win.

That's right, Brian. Thanks for being here.

Thank you.

It's really nice.

Love you guys. Love your family. Love helping people today. It was a treasure.

Thank you.

Please check out our agents at ramseysolutions.com/agent if you want a Ramsey Trusted Agent to help you do it the way we teach you. Welcome back to The Ramsey Show in the Fairwinds Credit Union studio. Rachel Cruz, Ramsey personality My daughter is my co-host today. Mary's in Dallas. Hey, Mary, how can we help?

Hi, Dave, how are you?

Better than I deserve. How can we help?

Well, Dave, my husband and I have been married 19 years. We're approaching retirement, and we've always managed our finances separately. We're a blended family. We don't have a will, and we're struggling to move from talking about major financial decisions to actually making them. We cannot get on the same page. I just don't know how to get there.

What's the biggest difference, Mary, if you could explain? Like, what, what is kind of his mindset with things? What's yours? Where does that conflict come in?

So he has a lack of trust about— he kind of holds most of the liquid assets. I have retirement assets, but he has more liquid assets. Um, we kind of have always split bills, and I tend to carry debt and then pay it off, carry it. I've kind of borrowed money against savings and paid him back. And, um, so his concern is that if we combine finances, then he's not going to be able to protect our future from you— from me. Yes.

Okay, that's valid. You keep borrowing money and paying it off with his money money and then paying him back, and that scares him. Well, of course it does. It should.

Well, we both work and I have a good income.

I don't care. He's observing a pattern that scares him that is a valid thing. So you have to remove that, you know, that pattern in order for him to be comfortable combining finances because he's conservative.

Could he, if you guys agreed on the value system of if we combine finances, debt is no longer part of our family, we are not going to use debt, would you be okay with that?

Absolutely. You absolutely— I've suggested that we sit down, um, we sit down and go over our debts, go over our assets, look at everything together, pay off what needs to be paid off, create a household account, and help hold me accountable, hold him accountable.

That, that, that's healthy. I'm with you on that. But, you know, if it's so— but there's a— if someone observes a behavior pattern and that behavior pattern breaks trust, that's valid. So we've got to solve for that emotionally. He's got to have a reason to believe that you're not going to do this again. And you're saying, I'm— as a friend of mine said the other day, he said, I had to submit myself to the system.

Yep.

I have to say, the system says we don't borrow money. The system says we have a budget that we both agree on, and I had to submit myself to that. In other words, my little wants or little impulses were subject to my agreement with my spouse. And if he believes that, and okay, I will never spend another dime again that we have not both agreed on. Oh, and by the way, neither will you. If he really believes that that's gonna happen, then there's no possible way you could go in debt, right?

Correct. And I think that— I think that where we haven't gotten on the same page that way is that I think he's too frugal. He thinks I'm too liberal. And so—

Well, you do need each other in that regard in general. If one of you is not over the top— but I— here's what I would suggest y'all do. Let's try combining the budget the monthly income budget and work out of one first. And if we do that, then that addresses— now, and then both of you need to hear this part, okay? The saver needs a spender in his life so he has a life, okay? Because the people that are like him will live in a cave, collect lint, and only come out on Triple Coupon Thursday, right? And that's not, you know— and the saver him, the spender, you, needs a saver in his life, in your life, so you don't have to retire and eat dog food.

Correct.

Because you spend everything. So you can't, you know, so we've got to balance that out. And so there has to be a portion of Mary in the budget where there's some fun, and in our case that'd be Rachel. And there's a portion of the Your husband, which is Rachel's husband, Winston, is more like your husband, is conservative and very— but he allows for fun, and she allows for savings, because we agree that both of those things are necessary to have a quality life.

Yeah, absolutely. Mary, I want to follow back. When you mentioned the trust aspect at the beginning of the call, because you said he has a lot of liquid assets, does he— did you mean trust with like the market or you?

Um, I think with me.

Okay, so it's a relational trust. Okay.

Yeah, yeah, he has two big things. So one thing, we, we have a franchise and we invested a lot of money into that, and we're not going to come out whole on the other end of that. So he feels very protective of the liquid assets and retirement that he has, which is fine. Um, and then I, at one point, because I handled separate finances, made a decision to do some cosmetic cosmetic dentistry for one of our children that was substantial, and he felt that was a major financial decision. I didn't discuss with him, which it was, but we handled our finances separately. I have substantial retirement assets, but I really don't have very much liquid at all.

So, so what is your retirement asset base?

Um, a little over $1 million.

Okay. And what's the— is the franchise as a business one of you are running?

It's— it is a business. And I mean, we both own it, but I'm running it and there's 2 years left on the franchise.

What do you mean?

It's going to— you're just going to close it?

I believe so.

Yeah. And so you've been responsible for that. Let me say this carefully. It does— he said this in his mind. Does he feel like you're responsible for that failure?

I don't think so. I don't think so. What we've talked about, he said we own that together. Okay. And we made the decision together.

And it failed and we did that together.

Yes, sir.

Yeah. So, I would probably sit down, Mary, and you guys need to have a discussion for, to your point, to Dave's point earlier, that maybe some valid, maybe some valid concerns that he may have. And what does he need to see within you to get any level of that trust back on your side? Because you guys, as a couple, are going to function better when you see yourselves as a unit. You guys have been married 19 years and you've never combined this part of your life. "And so, that is a desire of yours." And so, that question, I would want to know from him, "Hey, what are the things that you need to see? And I am willing to make some changes when it comes to the way I handle money or communicate about money, but I do desire that we are seen as one in all of this, right? And what are those steps to get there?" 'Cause I would be curious what he'd want I don't want to see from you. And if it's ridiculous, and it's crazy, and it's controlling, and it is super, you know, all of this, "If I don't want you to ever spend money on avocados," or something just crazy, then there's gonna be some of his issues that are in this as well, not just you.

And so—

But if you have a reasonable acceptance of his need to save, he has a reasonable acceptance of yours to enjoy money, that's a good, healthy balance inside your budget. And that should be there. That's accurate. Rebuilding trust, Henry Cloud's book Trust, it gives you a great way to do that, and I think a good entry point here is just first start budgeting together. If you budget together for 90 days, the amount of discussions you're gonna have to get on the same page is gonna be amazing. You work your butt off for your money, but your money's never going to return the favor if all you do is hope for the best. If you're ready to learn how to make your money work for you, check out the SmartVestor program. SmartVestor can help you find advisors who specialize in retirement planning, charitable giving, advanced investing strategies, and more. Whatever your goals, your pro will take the time to explain your options so you never have to invest in anything you don't understand. Head to ramsaysolutions.com/smartvester to get connected. Ramsey Solutions is a paid, non-client promoter of participating pros.

Learn more at ramsaysolutions.com/smartvester.

Alex— Alexis, I'm sorry, is in Fort Wayne, Indiana. Hi Alexis, how are you?

Doing great, how are you?

Better than I deserve. How can we help?

All right, so me and my husband, we just— we've owned our home for a little over a year now, and we renovated our entire home, and now we have, we suspect, like $70,000 or more in equity. And then we're expecting our first baby here in July, so we've been working really, really hard to make like smart financial decisions. Our question for you is, would it be wise to refinance finance our home and use the equity to put it towards an investment property? Um, most likely it would be farmland, uh, that we could later build on. Or should we wait at least one more year and then sell the house after, like, we don't have to pay capital gains?

You should wait and sell the house and not buy something unless you're going to move into it.

Okay.

Because you, you don't— you can't afford investment property. You don't have any money. Okay, if you go into debt to buy a piece of land that's just sitting there and you're paying payments on it, that destabilizes your home where your new baby is. No, we don't do that.

Okay, um, yeah, I think the goal would be to continue to farm that land.

Um, yeah, well, so what?

Make some money off of that.

You don't— you're not farming it now.

What do you guys do for a living, Alexis?

My husband is, he works at a steel mill and then I am a stay-at-home mom.

Okay, how much do you guys make a year?

We make anywhere from $5,500 to $7,000 a month.

Okay, so the land is how much land?

It would be 8 acres.

8 acres.

What would you farm on it?

Corn, beans, slightly.

Yeah.

Okay.

You can't make the payments on that amount of money with farming beans on 8 acres.

Okay.

It won't, the numbers don't work. And so you're just, it's like he's got a dream of owning some dirt.

Yeah, I was gonna ask, is that like a passion kind of thing for you guys or what causes you to do that?

Yeah, I think the goal would be, right now we have a small house that we own and so the goal would be to eventually build on that property and we would like to own some property.

There we go. Okay, so now here's what I would do. That makes more sense than, "I'm gonna farm this and call it an investment on 8 acres." Okay, that just doesn't— that's not enough to spit on. So, no. What I would do is have your baby, you guys live your life, stack some cash, and say, "All right, the goal," to use your phrase, "the dream is to buy a piece of property and build a home on it and sell ours." and move into the new home on the piece of property. And that piece of property and home after construction are still a reasonable part of our budget, no more than 25% of your take-home pay on a 15-year fixed. And then if he wants to have a gentleman farm on it and have a little bit of a side hustle, that doesn't kill me, okay? And that's kind of fun for him apparently, uh, and so on, right? Right, but that's truly gentleman farming.

Yeah, and your life is about to be so different now being parents. And so, and I think you did say you're a stay-at-home mom, so I know you guys have other kids, but I would take this slow. I would not be in a rush to make these big decisions. I mean, honestly, I think a few years of saving is gonna be just fine. And then you guys may sell that house, go rent somewhere to be able to put down a good down payment, construction loan, all of that. You know, there may be a process.

The reason you are framing this poorly as an investment idea is because you're in a hurry.

And you have to borrow on your primary residence.

Exactly. If you slow down and make this deal your primary residence, later, after the baby's here and you've got some money saved and you make a good solid purchase and you think about building a home on there and selling this home and putting all of the equity into the new purchase. And again, then it becomes a wise thing, but all of that slows down your excitement level that caused you to move too fast and move into a bad idea. Julian is in Baltimore. Hi Julian, how are you?

Good, how are you?

Better than I deserve. How can I help?

Yeah, so I'm in Baby Step 2, and I'm working on paying off my student loans, and I have a little bit of credit card debt left.

How much debt?

I, there's $3,800 on it, um, which I—

On the credit card. How much on the student loan?

Oh yeah. Um, $70,000 on the student loans.

And what do you make?

The big one. Um, right now I, I, uh, I just graduated college in May, so I'm doing 35 hours a week at $17 an hour. Um, so my take home is right around $500.

Why'd you go to college? What do you make? I mean, what do you do? That's awful.

Yeah, well, that was just my job while I was in college. I'm currently looking for a career, but I—

Yeah, what's your degree in?

—environmental science and policy degree. Well, he just graduated a month ago.

I know. What's your degree in?

Environmental science and policy.

Okay, so how's the new— how's the big boy job hunt going?

Well, I have my resume, started tailoring my resume. I have also applied for, yeah, again, warden with the Department of Natural Resources, which is my, my second choice. And that would be doing $80,000 a year for that.

Okay, and your degree does somewhat prepare you for that? Okay. Yes, that makes sense. All right, so yeah, so all right, now I'm caught up. Okay, so, but you, you need to be in the big boy job quick. Yes. Okay. All right. The way you presented this is like 17 hours.

It's been 3 weeks.

I know, but the $17 an hour was like success or something. It's not success. It's no, we're not doing that. Okay. Anyway, how can I help? How can we help?

What's your question? Yeah. So, um, once I get that big boy job, um, and like I said, I'm on Baby Step 2. Um, but once I get that big boy job, I want to pay off my loans, but I also want to save up to buy a ring to propose to my girlfriend. Friend. Yay, I love it! Thank you. Um, we've been dating for 3 years and, uh, I really want to take the next step with her. And, um, I've, I've, I've talked to her family and, um, and I just was, was curious, um, what— how you would do that, you know, because I have such a big payment, um, in my student loans. Um, should I, you know, hold off on that for maybe—

no, no, I, I think you, I think you get rid of the credit card debt and then you save up some money for a ring ring, and then you get back on the student loans. Okay. So have you got a budget in mind on the ring?

Yeah, somewhere around $2,000, $2,000 to $3,000. That fits.

Good.

Great. Good. Yeah, and you may just be working 3 jobs to get there faster too, you know? Yeah, until you get the $80,000.

If you get the $80,000, that's it. So a good rule of thumb for those listening, not for you because I like your $2,000, okay? Okay, but a good rule of thumb is a maximum of 1 month's pay for your ring. Jewelry store in the mall will tell you 3 months, but they sell rings. It's like asking a dog if it's hungry, okay? So of course they're gonna do that. But the— so 1 month, and so in your situation, that $2,000 is very reasonable given that you're gonna have to stop paying on your debt to do this. And the debt, yes. And I think you're very wise, and yes, I would do all of that as soon as you possibly can.

Okay. Yeah, the credit card should be paid off by the end of July. I also am a lacrosse coach, so I run multiple camps and do individual lessons. So I'm kind of already doing a side hustle on top of that, and that will stay. Good. Once I get that career path. Good. But yeah, so I was— that was—

yeah, you'll be able to attack the $70,000. But, uh, and is she out of school too?

Yes. And what's her career? She's a nurse.

And she got the— passed her bars and got the job?

She's finishing up nursing school, so this semester will be her last semester.

Good.

She'll graduate in December. Will she have debt?

A little bit as well, yes.

Yeah, so when you combine incomes and combine those two student loan debts and you guys have a wonderful life starting off and you attack those student loans and get rid of them and then you go be millionaires, we're gonna be so proud of you.

All right, thank you. Well done. Well done.

Very well done. It's great stuff. Good stuff. That's cool. Well, fresh off the grad stage.

Dave's like, what?

What are you doing? Well, I'm working 35 hours. I heard 35 hours a week at $17. What'd you hear?

I heard that too.

And that's the definition of sucks right there.

But he also was a lacrosse coach.

He's killing it. No, he didn't. That buried that lead.

Hey, what's up guys? It's Jade Warshaw.

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Free today. In the lobby of Ramsey Solutions on the Debt Free Stage, Austin and Mackenzie are with us. Hi guys, how are you? Doing pretty good. How are you? Welcome. Welcome. Where do y'all live? Mount Pleasant, Michigan. Ah, okay. Where's that near?

Like in the middle. Okay, right in the middle.

I love Michigan. People always put up the—

always put the hand up. Talk to the hand. Yeah, good. Very cool. Well, welcome to Nashville, and you're here to do a debt-free scream. How much debt have you paid off? Uh, we paid off $117,417. Love it.

And how long did that take?

19 months. Good for you. And your range of income during that 2 2 years? Uh, we started at $100,000 and then we ended at $203,000. Well, that's a little jump. Nice. What do y'all do for a living? Uh, I am a health insurance agent. I'm a broker and I'm a stay-at-home mom. Okay, so how'd you double your income in 18 months, dude? Well, we actually, once we had our first child, uh, I realized we weren't sure if she was going to stay home or continue to work. Um, and when I was holding her, I realized we have to keep her home with her mom. And that just really set a fire to pick things up for me.

Yeah, so he just worked really hard to up the sales. Wow. Golly, baby will motivate you. Oh yeah, absolutely.

How many of you are like that?

She says, "Yes, yes." Yeah, you're holding that child, you're like, "This just got real." Yes. Oh my gosh, so wild. Wow, very cool. So, what was the $117,000 in debt?

What kind of debt? Credit cards, 2 cars, student loans, personal loan, medical, and our house.

Wow, you paid off your house! We sure did. So, what's the house worth? It is worth $135,000. Very cool. Good for you guys in Mount Pleasant, Michigan. What does that buy? How many square feet is that? How many bedrooms?

It's about, it's about a little over 1,000 square feet, and it's a 3-bed, 1-bath.

Bath. Wow, very cool. And how old are you two? 27. And you have a paid-for house in Michigan? Yeah. That's pretty amazing, y'all. It feels good. Feels great. I bet. Pretty incredible.

What year did you guys buy the house?

Uh, 2 years ago. Yeah, 2 years ago. So almost 2 years ago. Yeah, yep.

Amazing. So we were just talking last hour about people getting in the market and doing all of this and getting out of debt and all of it, and you guys did all of all of it in 18 months, 2 years basically.

Got in, not only did they buy a home in their 20s, yes, they paid it off in their 20s. Well done. Guess what, they bought a 1,000— what'd you say, how many square feet? 1,000, about 1,000, about 1,000 square feet.

Yeah, well done, you guys. That's amazing.

This is not, this is not going to be on the, uh, you know, the land of the rich and famous, but it is a great starter house because you guys are going to start— you're going to be millionaires. Yeah, I mean Hey, it's a roof over our head, right? I love it. Yeah, I love it. I'm so proud of you. Way to go. So did you sell anything, like the cars or anything? No, actually, we just kept the cars that we currently have. And during the process, I actually called into the show to ask if I should buy a 1976 Corvette. And yeah, it was interesting. You had told me, not necessarily something that you would have done at that time, but to keep it based off the income and where I was at during the Baby Steps. So probably would have maybe been a little bit sooner if I hadn't done that.

But you kept the car.

Yeah, we kept everything.

Because we told you to. We told you you could.

Yes. Yes. Rachel, you gave me a little more trouble than Dave did, surprisingly. So fun. Surprisingly. We were all together.

Look at that. Yes. I probably was like, sell it. Oh, I think I do remember that. So I was like, I don't get it.

Cars are such a big deal. It wasn't, but how much money was it? How much was it? It was $7,700. Yeah.

OK, OK, OK, OK. Oh, so what happened 19 months ago that you said, OK, we're going to start this journey to pay off all— I mean, that's a long list of debt. Yeah, I mean— And then the house.

Yeah, I don't think it was anything, one big thing in particular.

I think it was just a bunch of little small things. But I think definitely our first daughter being born, we were like, yeah, we got to— leading up to that, we were like, we got to get serious about this.

What do you tell people the key to doing this is? I would say, at least for me and the people that I talk to, the ones that don't really make it or get anywhere are the ones that say that it's impossible to do or they just can't do it. And like, for us, we asked, how can we do this? What do we need to do? Exactly. So that's, that was my advice. If you're in that situation where it feels impossible I definitely ask yourself how and start from there.

Also, just like being honest with yourself and like putting the numbers in your face, because it took him— I won't say nagging, but persistently being like, hey, let's add up what you spent what on this month, you know, and all this stuff. And it took me sitting down and looking at the number that I was spending on fast food to be like, actually, you know what, I can afford to put more money towards my debts. Like, there's no reason that I should only be making minimum payments on everything. Wow, so the, I mean, the budget and the revealing of, hey, this is what's going on and here's what we have to change from a lifestyle perspective even. Absolutely, just be honest with yourself. Yes, so good. Yeah, people live in a little bit of that denial, I think, at times, right? Where you're like, it's not a big deal, it's not a big deal. And then, yeah, you add it up, you're like, oh man, it could be going towards something great. Yeah, absolutely. Well done, you guys.

So you guys are, are content today with an inexpensive home and some inexpensive cars so that you're 100% debt-free. And I've often taught, and Rachel has too, that contentment is not on the same spectrum with ambition, because you're very ambitious at the same time, in that you leaned into this, you've worked your tail off, like Rachel said. Bills. You cleaned up the mess. You paid it all off in 18 months, house and everything. Oh my gosh. Um, where does that contentment come from? Uh, I would say we, we just have a lot of peace knowing that, you know, if something were to happen to me tomorrow, that the girls will be okay, that they're not going to drown in debt. Um, we put a lot of things in place that you guys have recommended to give us that peace. Um, and I'll say, I, I know people that have much nicer cars and much nicer homes, um, but have a lot more stress on their shoulders. And that's just not something that I wish for myself or my family. Yeah. Yeah.

And I think, I, I mean, I'm content with food in the fridge, a roof over our head, and happy daughters, you know. And, you know, just giving it up to God, and he's provided what we need, and we don't need anything else. That's, I guess, that's where the contentment comes from, like We complicate our lives so much, right? And we do it to ourselves. Yeah, chasing after the next big thing. That's right, absolutely. And that keeps you in a broke cycle for so many people. And they don't even realize it, right? And you guys are just a beautiful example of what that looks like. 'Cause you're exactly right. I think trading the peace over the stress any day. And people crave it. They don't know what to do. Absolutely, yeah.

We'll be saving up. We're currently saving up for our next house. Buying in cash? Yeah, absolutely. So, it'll take some time, But that's the next goal for us.

Yeah, you guys are awesome.

Yeah, you're gonna be able to do, I mean, if you're making a couple of hundred, you're gonna be able to do whatever you wanna do in very short order. Yes. Because you got the stuff in the right order. You didn't go, you know, acting like you were richer than you are. And so, and that's gonna set you up to build incredible wealth and generosity. In the meantime, you've got the peace of going, hey, this house, we got no payments. And I'll tell you something else. How long has the house been, how long has the debt been paid off? How many months ago was that? February is when we paid it off. Have you noticed yet a difference in your sales? Well, I noticed there's definitely a difference in everything that I do, knowing that it's paid off. I mean, we've cash flowed 3 vacations since then as a little celebration. Yeah. Including this one. This will be our last one for a while, but there's definitely a different, there's a calm in the air that we've never felt before. Yeah, I've always coached small business owners and sales teams as well, that when you don't have a single debt in the world, you don't have to make a sale, and people can smell it.

Yeah. And you end up increasing your income. Yeah. Because they don't think you— you don't smell needy. Yeah. You know, a needy salesperson, you know, you can smell it. The commission breath. Exactly. Exactly. Exactly. And how old are the kids?

I— we have a— she just turned 19 months old, and she just they just turned 5 months old.

Okay, did you bring them or are they at home? Yeah, they're here. You want to put them in the debt-free scream? Yeah, absolutely. All right, let's bring them up then. That's perfect. And what are their names?

Uh, this one's Harlan. So great, little Harlan.

Oh cute. And the little baby is Maggie.

Oh my gosh, so sweet.

All right, those kids— Mom and Dad changed their family tree. All right, count it down. Oh no, $117,000 paid off in 19 months. Debt-free house and everything at 26. Let's hear a debt-free scream.

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

Well, Amaya, you got to do the debt-free scream early. He's so good. That's awesome. So good. You should not feel uncertain about investing, and you don't have to. That's why we created Investing Essentials, a two-night virtual event where George Campbell and I walk you through my playbook for investing Investing and Wealth Planning. We'll simplify everything from 401s and mutual funds to passing on wealth so you can invest with confidence. Tickets start at $199. Get yours today at ramsaysolutions.com/events or click the link in the show notes. Okay. Our Scripture of the Day, Hebrews 11:6, "It is impossible to please God without faith. Anyone who wants to come to him must believe that God exists and that he rewards those who sincerely seek him." Saint Francis of Assisi said, "Start by doing what's necessary, then do what's possible, possible, and suddenly you are doing the impossible. People always want to know how I handle my investments, and a couple of years ago we decided to open Dave's Investing Playbook on real estate and on other things, and that includes what I don't invest in and why. And we called it Investing Essentials, and George Campbell and I did a virtual event for 2 nights.

We've only done that 2 We're gonna do it again, one more time. And we're gonna change up a little bit of the content and get a little bit into building a lasting legacy and dealing with the issues of wealth inside your family and looking at wills and estate planning just a little bit as well. So we're gonna get into all of that. It's two nights. It's a virtual event, September 1st and 2nd, me and George Campbell. Tickets start at $199. You can get them at RamseySolutions.com/ jazmine@clayfin.com/events. Jasmine is with us in Baltimore. Hi Jasmine, how are you?

Hey, I'm really curious how this is gonna go. Thanks for taking my call. Sure, what's up? So, um, I went into some debt. At the time I wasn't super familiar with your Baby Steps, but I'm in phase Baby Step number 2 now, building a homeschool app, and I'm thinking about taking some certificates paying to take some AI product management certificates to put me in a different tax bracket. Entry level is like $100K, can be like anywhere between $100K and $200K starting pay. And I'm wondering, is it like— it's such a competitive field, is it worth me paying in to take those certificates and putting that time in to come out the other side hoping to put that money back into my business?

Are you already in the technological field?

Well, I'm the product manager for the app that I built. Like, I built this app from scratch for homeschoolers.

That means you did it by yourself at your kitchen table?

No, no, I, I hired a web development company, but like, I chose like how everything's supposed to function, like where the buttons are supposed to be, what needs to connect to what. Like, I designed it completely from that. And that's what a product manager does.

I know what a product manager does. I have a bunch of them work for me. Okay, uh, I'm sorry, that's okay. Um, the, uh, so I, I, um, but I just didn't visualize how you're doing. So, but you've got no software engineering experience at all? No. Okay. All right. And what were the courses?

Is it the— what you're going to get and learn in those for the app, or you said it's gonna put you in a different tax bracket. Like what? She just means she's gonna make more money. How though?

Make more money so I can move the business faster.

With, with the day job, make more money in what you're currently doing or with the app?

Um, make more money with getting the project management, AI project management certificates to get a different job.

Okay. So right now I'm a caregiver and I make about $60,000. I gotcha. I gotcha. Gotcha. And the field at which you're looking to get in is AI project management. Yes, I know. Thank you. I, I, yes. Uh, but I'm asking, is that, is the type of online course that you're taking, do they see that as, because it's kind of, it's all pretty new, do they need that as a standard or are they looking for something else? I just want to make sure you don't get in this and get something that people are like, I don't even know what this is. And then it does— it really doesn't do much for you.

Um, no, the Coursera certificates that you can get are specialized for project management training, and then there's some for AI project management training. And if you pay like $300, you get access to like 10,000 different courses. I only need maybe 4 different certificates, and I'm really burnt out at my job that I'm at, and it's, it's not moving the needle fast enough for me. Okay, okay.

So here, yes, I would spend $300 on continuing education. Yes, I would pursue, uh, your dream. Uh, where I've got a disconnect is that someone told you this guarantees and opens these doors, and I'm not sure it does, right?

That's why I'm like, should I? Okay, so yes, do it, but I don't know that I'll get a job doing it, but I know that I, I have it in me to do that job if I were to get that job.

Yes. Have you talked to people though that are— that the job is out there and you could apply for it and they're saying, hey, you do need these courses and then you could be in the running?

Have you already got any certs in project management, not counting AI?

Uh, no, I don't. I just have proof that I can, like, that I can do the job because of the— what I've already the app that you did.

It's proof. Yeah. Okay. Yeah.

Okay. So I'll be here. Here's what's running through my mind. All right. We have 400 people of our 1,000 people that are in the technology side of things. Obviously, we're leaning heavily into AI, and obviously we have several project managers and lots of product squads working on things that are being led by different people. And I'm trying to think through if this would cause us to consider hiring you. The fact that you built an app for your homeschool thing, I don't know if that qualifies you to be a project manager, even though you actually did manage a project. I'm not arguing that. I'm not sure we would hire you, and I'm not sure we would hire you because you had a certificate that says you're an AI project manager that cost you $300 to go through Coursera. There. I think we would talk to you.

That's why I'm asking, the companies that you're wanting to work for, Jasmine, what are they saying?

It's not a golden key that opens the door.

Yeah, but it's not Ramsey she's asking.

No, but it is. She's wanting to get a job making $100,000 a year.

I know, but in technology companies, trust me, I got some friends working in those, plenty of money there. It's crazy. So, I was wondering, like, has she talked, like, when she's looking at these jobs, are they saying this is a hole that has to be filled? And this is a way to fill that hole, or is it work experience? Like, I'm trying to figure out what it is for that next step, and is it courses or is it not?

Yeah, there is plenty of money in technology companies, and we pay a lot of money to the technology team here. That's true. All of those are true. The only question I've got is, is whether this actually is the golden key that opens the door, and I'm not sure it is.

And so, um, what would be the next step for her to get on that path?

I think I would talk to someone who's actually doing the job that she wants to do.

Talk to company she's applying for. I agree.

Find someone that is doing AI project management and say, okay, what would qualify? What would make me get an interview and possibly get hired? Would this certificate help, or is it a slam dunk if I've got the certificate, or nobody gives a crap if I've got the certificate? And talk to somebody who's actually doing that, right? And I think you're gonna find that they're gonna want some If you want to be a project manager and you want to be in AI, both are cutting-edge situations. You probably are going to have to have something more than, than what I'm hearing here, but I might be wrong. So I do want you to discover all of that. I don't want you to spend $300 and then be vastly disappointed that you didn't walk into the first place and they went, oh, we have to have you. You went, you got a Coursera certificate, which I'm pretty sure is not going to happen. Okay, so, and you suddenly go make $100,000 a year. I just, no, I don't believe that's gonna happen. But I do believe that you're on the right track, and I want you to continue pursuing it.

Yeah, I would use Ken Coleman's principle, the proximity principle. Go talk to people in that field, Jasmine, and again, to those companies that you're looking at to apply for, and go out to coffee with some of 'em. Be like, "Hey, what are the first 4 things I need to be doing to get myself in the running for this?" 'Cause this is a passion of yours. You're obviously, somewhat educated in it, 'cause you built an app and you're like, you're actually in that world doing it. You're pressing the buttons, you're talking to the people develop, like you are in this world. And so what's the next formality to actually make you in the running for it? And it may be this certificate, it may not, we don't know. But I would go talk to people in that field.

Folks, the danger I want everybody out there to look for is this, don't, when someone tells you in a trade school or a certificate program or a 4-year your education that this is going to be the magic pill that makes your life all good. It's not. You're the secret sauce, not the education piece. You're the secret sauce that gets the job, keeps the job. And so when someone says, oh, we'll put you in a higher tax bracket, that sounds like a sales pitch from a trade school to me. And, um, so I don't want you to fall for that. I want you to have good solid information make these decisions. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.