Transcript of You Don’t Escape Debt by Waiting—You Escape by Acting

Brought to you by the Every Dollar app. Start budgeting for free today. Normal is broken, common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. Ken Coleman, number one best-selling author, Ramsey personality, host of the big hit on the Ramsey Network, called Front Row Seat. He's my co-host today. The phone number here is 888-825-5225. Pat, San Boise, Idaho. Hey, Pat, how are you?

Hi, Dave. Thanks for talking to me. I'm the executor for my dad's estate. About six months after his death, I received a letter looking for the person who could act on his behalf. I looked up the company, and it's a debt collection agency, primarily focused on collecting debts related to deceased individuals. Wow. They utilize, check out... Yeah, I I never heard this either. They utilize technology like Finder on demand to identify and contact the personal representatives of the state to recover unpaid debt. My dad absolutely did not have any debt. He was Dave Ramsey while Dave was running around in diapers. You get to borrow money. I do know that there is... Just from looking at unclaimed property, I do know that there's a gentleman who lived in the same metro area as my dad for many years who had his exact name, first name, middle initial, and last name. So I'm thinking, I don't know, maybe they're looking for that guy. Here's the deal. I don't even want to talk to them. I don't want to spend time on this. I don't know if you need to know the name of the company, but how worried do I need to be?

Well, I mean, is the estate settled?

The probate is finished, but it's not closed yet. I haven't closed it.

Okay. What is lacking for it to be closed?

Nothing. I was just doing some final insurance policies and transfer of his property to my mother. So that is done. I can close the estate at any time as far as I know, there was nothing that came up during the probate.

So your mom's still there and she's sitting with whatever assets that they had?

Yes.

Okay, good. Yes. Okay. Well, I don't know Idaho law, and I'm not an attorney anyway, even if I did. But the Most states have a period of time that a creditor can file a claim against an estate before, after, or during the probate being opened. I don't know what yours is. Oh, good.

If they didn't, I'm probably good.

Probably from a legal, practical standpoint or from a legal standpoint. From a practical standpoint, these folks, They have one little thread that they're hanging on, and they're going to pull that thread and pull that thread and pull that thread. They're eventually going to end up hustling your mom, probably. From a practical standpoint, I would put them down.

I'm her power of attorney, so they won't get much further than that.

I know, but if they start calling her, start mailing, filling up her mailbox with stuff, I don't think there's a legal issue. I don't think they've got a claim. You don't think they've got a claim. They're probably outside notice of meeting the creditor's period of time, all that stuff. But that doesn't keep them from driving everybody in the soup crazy. I probably would invest a few minutes and just shut them down. How do I shut them down? I would just call them and say, he did not have any debt with you. I'm the executor of the estate, and you can give me a social security number, send him a copy of the death certificate. None of that hurts you in any way. You I'll give you the last four digits of social security numbers, if it matches with what you think you're hunting. But I think you're hunting this other guy, and you need to stop. If you don't provide me written proof of debt and you don't stop, I'm going to sue you under the Federal Fair Debt Collection Practices Act because you're violating it now that I have told you that I am demanding proof of the debt.

Can I just said demand proof of the debt without Are you not providing them anything to start with?

I'll give them the last four digits social security number. What I'm trying to do is in case there's two brain cells on the guy you're talking to, if they happen to rub together, you want to give him a way to go away. It's not him. I got to go the other way. Okay, right? But in case if they think... But the problem is some of these companies, and what you need to be prepared for is, and I think you're already there, is they will try to collect from someone that they know is not legitimately the debt just by hasling them.

That's what I'm worried about.

Well, I'm not worried about it because you're going to shut them down. We're not going to talk to them anymore. We're going to block them. If they continue to pursue, I would have an attorney send them a letter under the Federal Fair Debt Collection Practices Act because they're in violation of federal law if they continue to pursue after you show them that it is not his debt, and you give them last four digits, social security number, and they don't provide proof of debt. The other thing that's going to come up is they They probably don't have proof of debt. They probably bought a line item on a spreadsheet. A lot of debt buyers don't get the actual documentation on the debt. They just get a line item, point of last contact, some details about a name, whatever the files got, and it's just a whole list of line items. It's not like they have a file on them. So point being, I don't think they can provide proof of debt. But I'm going to ask because I'm going to make one or two phone calls with these people and try to, in a civil way, make this go away.

But if you determine that, A, they're trying to collect from somebody, just anybody, and they just think they can hassle you, then just pound their face, or B, that they cannot provide proof of debt, and they won't go away. What I'm more than anything trying to do is get them to quit calling you and quit calling your mom. It's worth two phone calls to invest in that or to never call your mom. Okay.

Right. I like that.

Okay. But again, write that down. It's the Federal Fair Debt Collection Practices Act. It is federal law that they're violating. If you demand a proof of the debt, they don't provide it, and they continue to attempt collection. Hammer them.

I was looking for something to add. You covered it from every angle. Look, you got the facts. So don't be afraid to take this on and then shut it down. I think that's what this is. I don't think this is harassment. I just Dave's nailed it. They don't have a lot of info.

It's not harassment yet. No, yet. Probably is going to be there if it doesn't stop. That's right. The thing is, folks, you got to do... Debt buyers, when they buy debts, are typically paying anywhere from 2 to 8 cents on the dollar. They're paying 80 bucks for a $1,000 debt. They can't even find the people in most cases. In this case, they're chasing deceased people's debt. They're always trying to chase down the...

This is basically prospect Collecting.

Yeah, they're dialing for dollars all day long. It's a horrible job. You want to be worse than somebody trying to collect on an old debt? Collect on an old debt that you know the person is dead. Right. I mean, this is a bad job. Cleaning septic tanks is more fun. Honestly, seriously, oh my gosh, what a horrible position. They probably got high turnover. Got a boiler room, phone room going. Looks like something on Wolf of Wall Street or something. That's right. The average time on the job is 21 days, and they're just constantly hiring new people that are dialing for dollars. You're probably not going to talk to the same person twice.

And they're brainwashed, by the way. They come at you with a script. Oh, yeah. And so that they don't get knocked off. So you got to really be strong and show a lot of facts.

And the other thing is the neat thing about the technology is you can just hang the phone up. Just push in. That's always enjoyable. And then slide that little thing over that says block, and you're done. They're done.

Ken Coleman-Ramsey personality is my co-host today. Thank you for joining us, America. Open phones at 888-825-5225. Franky is in Greenville, North Carolina. Hi, Franky. How are you?

Hi, Dave. I'm good. How are you?

Better than I deserve. What's up?

I have a pretty straightforward question. I talked to my dad yesterday, and he wants me to pay for his life insurance policy. He said I should think of it like an investment, and he doesn't want to actually pay for it himself. So I just wanted some advice on maybe how I can talk to him about paying for his own life insurance, or should I pay for it myself? It's just a self.

That's so weird, isn't it? When you heard that, you had to go, Say what? I don't know if you said it out loud, but you said it in your head, didn't you, Frankie?

I did. He said it to my mom, and he said, Because he's not going to be receiving any of the benefits, I was like, Well, that's the point. He was saying, Since he's not going to be receiving it, I should pay for it since I can think of it like an-How old are you? I'm 24.

How old is he?

Sixty-five.

Is he ill?

Not necessarily. He has some health issues, but I mean, for his age- But his death is not imminent as far as we know. Right.

Yeah. You could be doing this for 30 years.

Yeah.

Yeah. I think that's a hard pass. That's a big no. No. Let's just call that. Let's check the box beside, Nope. Now, your question was, though, how do I talk to him about it? Just go, Dad, I'm 24. I'm going to be doing other kinds of investing rather than in your death. I don't think we're going to go this way, but thanks for the offer.

Yeah. Okay. I think that Pretty simple.

You don't need to be snarky about it, although it's really tempting. But it doesn't serve any purpose to be snarky about it other than to make you feel… It's just because it's just strange. He knows it's strange. I don't know. Your dad does stuff like this often, doesn't he?

Yes, he does. Yeah, he's got quirky.

Quirky dude. Okay. I would just smile and say, Dad, thanks for the offer. I've I thought about this, and I talked with my financial guys, and they said, I should just be doing regular investing rather than investing in your death. I'm just not comfortable doing that. But thanks for the offer. No. I really wouldn't go into a long, lengthy discussion about it. It's just two sentences and no.

But what I'm going to do is I'm going to play this back for him later. Okay, that's fine.

You could tell him. I said, Obviously, he's quirky because that's a really quirky thing to say to your 24-year-old daughter, dude. If you're going to play it for him. I mean, I wouldn't do that to my 24-year-old daughter. You've got other things you should be doing with your life rather than investing in your dad's death. And besides that, mathematically, it's a bad investment because insurance companies make money on insurance. The probability of his death and the payout is less than the premiums that they think they're going to receive. If they don't receive premiums equal to the payout before When he dies, they lose money on the insurance. If they do that often enough, they go out of business. So insurance companies make money on insurance, which by translation means it's not a good investment. It is a good purchase for those of you out there. We had a debt-free scream yesterday, I believe, or the day before yesterday, that the young lady's husband was killed in a car wreck. He was 30 something years old, two months before they were debt-free. Two months before that, he had gotten life insurance and he had a brand baby.

Now, that's a good time to buy life insurance. That's perfect. I mean, that family is taken care of because that young man was just a stellar dad and husband. But this is a completely different thing. It's not a good investment, mathematically. It is a protection for your family in the case of a horrible event happening. But if your dad doesn't... He's 65, he may not need life insurance. If he's got enough money, he could just not buy life insurance. I'm 63, I don't have any life insurance. I have a huge pile of money and no debt. If I die, Sharon's going to have a party. She doesn't need life insurance, okay? It'll be a big party. I guess not if I die, when I die. If I die before her is what I should say, right?

Well, we will celebrate.

We know that that's her plan, and I'm a little worried about it.

I mean, the data probably backs that up. I would just say this, that this is like common core math. It just doesn't make sense, and we already have good math. We don't need to invent something. This is just a wacky idea. The minute I heard it, it's just wacky. You can't, by the way, reason with wacky. You just got to move on quickly.

Yeah, I wouldn't. No, dad. No.

You didn't have to deal with Common Core math, and I'm glad because it would have made the top of your head explode.

It must have been what happened. Okay. Joel is in Chicago. Hi, Joel. What's up?

Hi, guys. Pleasure to talk to both of you, finally. I have a question about a to-debt question. I just started listening to you guys a couple of weeks ago. I've been finished watching your podcast or listening to your podcast for every day, nonstop. Me and my wife been talking about this, and we're getting ready to start the baby steps. We have the 1,000 already set. The issue that I'm having is I get you guys some quick numbers real fast. We're about $25 to $30 in credit card and personal loan debt. We have about $31,000 in two car loans, $122 in our mortgage, and we have a second home, which is our first purchase that still sits at about $40,000, and that's being rented currently.

What's your household income?

We make around 140 combined before taxes.

Okay. Your question is simply how to start the baby steps?

Yes.

Okay. We get on an every dollar budget. You and your wife are in agreement that We're going to get out of debt, and we're going to sacrifice to do that because if you didn't have any of these payments, you'd have a lot of money. Agreed? Exactly. That's the whole idea. Do you have any savings that's not in retirement?

No, just the 1K for the startup.

You got the baby step one. Okay, then we're going to list all these debts, smallest to largest. We're going to pay minimum payments on everything but the little one. We're not going to see the inside of a restaurant unless you're working there as an extra job and you're not going to go on vacation. You are broke people that make $140,000 a year, and you need to clean up this $70,000 worth of stupidity before you do anything else. It's stupid butt car loans and all this other mess you've got. You got to get disgusted about it and attack it and attack it and attack it to where your friends think you've joined a cult.

I agree. The one thing I did wanted to mention is the one car loan, we owe 2,000 on it, so that'll be gone in the next four months.

We'll be done with that. Good. No, it doesn't take four months to pay off 2,000 when you make 140.

You do that the first month. Yeah, I agree. I totally agree with that. The second thing is the second car is our second vehicle, which is an SUV. That one's the one that's sitting at about 29,000. I told my wife, we need to just get rid of the car, and that's where she's- No, I wouldn't.

Hiding me on it. I wouldn't. The best way to get your wife on board is not say, I want to sell your car.

That's actually just a weekend vehicle. I drive a personal... I mean, it vehicle Monday through Friday.

Is that your car?

She drives… It's both our cars, but we use it because we have three kids, so it's a larger vehicle for the family.

You have a work car? Yes. That you own?

It's a company vehicle, but I.

Okay. No, it's a company vehicle. Okay. And then she has a car.

Yes, which is the one that's about to be paid off, and that's her community vehicle to work every day.

And then the other one has 29,000-od on it.

Yes.

Well, her car that she owns Carrier family?

Yeah, we'll fit. My oldest is about to finish high school, and the other one, the smallest one is 10 years old. So we fit. Not much space, but I told her something we could do if we really wanted it.

The other thing you could do, what's What's your rental worth?

I think about 120, 130.

You could dump it and clean up the whole mess. But either one of those is fine or neither if you want to just bust all the way through You're going to trade sacrificed lifestyle, scorched earth lifestyle longer. You're going to stay in the mess longer if you don't move one or both of these other items. And that's the decision the two of you can make together. This is The Ramsey Show. One of the first things I discovered working the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of rip offs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level term life insurance, usually 10 to 12 times your income, which is the smartest the most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about.

They shop the term life companies to find you the best options, and they've been around for over 95 years, so you know they'll be there when you need them. Zander is the real deal, and that's why they've handled all my personal insurance for over 25 years. I trust them, and you can, too. Visit zander. Com. For instant online quotes or for a more personal touch, give them a call at 800-356-4282. Ken Coleman-Ramsey personality is my co-host today. Thank you for joining us, America. The best way to make the most of your money is a plan. Tell your money what to do instead of wondering where it went. Most people, the money comes in, the money goes out, only the names are changed to protect the innocent. We don't know where it went. That's most people. Then you scratch your head and wonder why you're broke. If you ran a company and your job was to manage money, and you manage money the way you manage money for you, you'd get fired for incompetence. Because if you work in a business, You're supposed to have a budget, and then you're supposed to stick to it and stuff.

Hello. That's basic, you all. I mean, it's really not hard, but it's hard because it's dealing with me, and I got to look at the teenager and go, No. I got to have a discussion with my spouse about spending, and we got to quit eating out every freaking night of our lives and then wondering why we have no retirement because we're eating it. That's why. Basic stuff like that comes up when you do a budget. Hello. That's why we came up with the idea that every dollar needs an assignment. Every dollar needs a name. Every dollar of your money before the month begins needs a mission beside it. You need to send it out there to do stuff for you. You work too hard to be broke. The only thing that fixes that is giving every dollar an assignment. That's why we named the world's best budgeting app, EveryDollar. That's why tens of millions, no exaggeration, tens of millions of people are using EveryDollar every month, the budgeting app, to run their budget with their spouse. Download EveryDollar for free in the App Store or Google Play, or go to everydollar. Com. Let's get started, boys and girls.

It's time to do this. Open phones at 888-825-5225. John's in New York. Hey, John, how are you?

Hi, Dave. How are you, sir?

Better than I deserve. What's up? Good.

I'm 23 years old, and I have around 57,000 liquid cash in the bank.

I got screwed over by the car industry twice now.

When I was 19, I bought a new Mustang.

Insight, very bad mistake.

And obviously, I was upside down. And then now I have a Cadillac.

Obviously, I got it pre-owned. And now that loan is around at 35,000. I just got it about eight, nine months ago. And then I have student loans of about 25,000. They're not crazy high because I went to community college. I've been listening to you guys for a while. I just wanted to get your approval.

What do you make? What's that?

What do you make?

Around 80,000.

What do you do? I'm a bartender at my family's restaurant. Okay, very cool. Thank you. Okay. And so your question's what?

Should I? Because I've watched a couple of your videos if I should just take the 57,000 and dump it into all the debt and just clear it, but then I have nothing left in my account, or do I do thousands at a time and knock it down as quick as I can?

Okay. Is your goal to be wealthy?

Yes.

Because you make a lot of money. You're doing really good. You must work really hard. I do, yeah. I work six days a weekend. And some serious hours, too. Good for you. Thank you. Good for you. You're in a pretty sweet spot for 23 years old, overall. I mean, you've done some stupid stuff. A couple of things that come out of the conversation is, one, you did not get screwed by the car industry. You got screwed by you because you walked on to the car lot and you bought a car you couldn't afford because you were acting like a child. Is that fair? Yeah, of course it is. You're not a victim, dude. You caused this. All right, both times. I don't know what a guy making $80,000 that's 23 years old, working his butt off needs with a $35,000 Cadillac I don't know why you have to have that. You might rather have the cash than that. So one option, sell a car and buy a $10,000 car for cash. And then you don't have to give up all your cash. You just give up the Cadillac. That's the main thing I want to avoid, is I don't want to just deplet all my savings that I worked for.

Then the Cadillac is on the block. So I mean, if you want to keep the Cadillac, you need to pay it off. Right. See, your money's already gone. Paying it off, you just admit it. Yeah. You've already spent the money. You just hadn't admitted it yet by paying off the debt. Of course, yeah. But you can choose, Okay, do I want... Because basically, if you sold the car for 35,000 bucks and you took $10,000 and you broke even, got out of it, cleared it, right? Will it bring 35?

No, I think it'll bring 24 because I was upside down from the other one.

Oh, you rolled negative into it? Okay. Yeah, I was around 9,000 negative. Then I put five- You're going to spend 10 of your money, even if you sell it, and you're going to spend another 10 of your money to buy a car, and you're going to spend some money to pay off the student loan debt?

Right.

You said 25 in student loans? Yes, sir. Okay, so you're 60 and you got 57, so you don't have enough to pay off everything.

Yeah.

Quite. But you're making money and you're used to stacking cash because you… All right, the premise is this. If we could get you where you had no payments, student loan and the car payment's gone through whatever mechanism, either paying it off or selling the car, either one, you choose, okay? If we can get you where you don't have any payments, but most of your money is gone, without If you don't have any payments, make an 80K, you could stack that cash up real quick again. It won't take long, just a few months. You probably save 5,000, 6,000 bucks a month, can't you? If you don't have any payments?

Yeah.

Are you living at home? I am, yeah. Me, my mom and dad live above the restaurant. You got almost no overhead. I thought that. Okay, so that's how the 57 got there.

I got some quick numbers here. I want to run with you here. I think you're still walking away with Dave's plan with 11,000 in cash. Because if you owe 11, so you're going to pull 11 out because you're upside down, you're going to spend 10 on another car. That's 21. 57, money, 21 is 36. We owe 25 in student loan. That leaves you with 11K and you're debt-free.

No payments in a paid $4,000 car.

You live at home with a pretty secure job.

And you're stacking cash like a boss, man. You could stack 6,000. I mean, in 10 months, you'd have 60,000 bucks on top of the 11. You'd have $71,000 10 months. I also have $10,000 in an IRA that I'm maxing out every month as well. I would stop that until we get this mess cleaned up. But if you're going to clean up the mess in one fell swoop, you don't have to stop it. But you can stack cash. You're going to follow me, especially if you don't have a car payment of 35 grand. I'm going to use up all my money for a hot second because a month later, you're going to have $10,000 more. And a A month later, you're going to have $8,000 more. And a month later, you're going to have you follow me?

Got you. Yeah.

So you're not going to be out of cash, but just for a few days.

Well, you still have 11,000 living at home.

I know you got 11, but I'm saying he's 57 down to 11, and that's causing emotional distress. Sure. Heartburn. A lot of heartburn. A lot of heartburn, yeah. Heartburn, yeah. Right? Yeah. But the point is, it's a temporary situation, and it's the best path for you to become wealthy. Because your most powerful wealth building tool is your income, and You don't give it all to car companies and student loan companies. You get to keep it. And that causes wealth building, and that's what I'm going to tell you to do. I would be debt-free either by selling the Cadillac or not immediately, even if it caused my heart to burn. Because, keep in mind, your heart's not going to burn for very long because with no payments and serious motivation called a little bit of fear, you're going to stack that cash real fast. You'll be right back where you are by Christmas, and you'll be a whole 23 years old. Wow. You got lots of time to be smart now. This is The Ramsey Show.

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Today's question comes from Kate in Maryland. My daughter is a junior in high school and has no idea of what she wants to do when she graduates. My husband and I love the idea of her owning our own business, but neither my husband nor I have experience in this. We both wish we had made different career decisions that would have given us more independence. Where can we research with her to get a better understanding and vision for this option? Or would you still recommend college versus real-world experience? Okay, I'm going to put myself into this particular situation and say, If this was my daughter, what would I do? Because she's a junior, we would begin to identify areas of interest not come up with a business idea. I think this could be very paralyzing for a youngster. It's paralyzing for a lot of people in their 30s and 40s because we know, Dave, from the data that 70% of Americans want to be self-employed, but only 6% are. I'm speaking from data here. What I would do with my daughter is we begin to identify areas of interest. In other words, people that she wants to help, solutions she gets excited about, problems she wants to solve, There's an industry.

If there's a business, there's an industry. We want to get broad so that she gets some real interest and begins to see some areas of interest. At that point, we're going to shadow. I'm going to allow her to go have coffee, lunch with people that in those industries, or maybe run businesses in those industries, shadow at work, if she can get shadow opportunities, all of this to begin to create a field of three or four of her most interesting options. At that point, then we start to have the discussion, is college, is a degree, the best decision, or is it getting right into the workforce and working in an industry? Give me an example to help clarify this some more. If this were a young man, and by the way, it's not limited to young men, but let's say she decides she wants to own a business in the trades. At that point, then I want her shadowing folks that are working in those trades and getting a real-world experience. Experience, the good, the bad, the ugly, the smelly, everything. At that point, we determine whether or not she's really interested. Then the path is going to be to go to work and hustle and learn on the job.

Eventually, you work your way into spinning off on your own and starting your own business. That's a hard question to answer in such a short amount of time without back and forth, but that would be the advice that I would give because that's what I would do. These young people need to see it, touch it, experience it, smell it. Yes. And then they can decide.

Completely agree. Because, Kate, you did not say she has this extreme passion and apparent natural talent and bent towards X, Because you did not say that, that would have led her towards a business. The people that we've talked to that are 18 or 19 or 21 years old that have had success, and they call this show, and they are really killing it, and we're all agaced at how far ahead of this curve they are running their own thing. They almost always had a natural gift towards something. Technology is not unusual for a 19-year-old today to be something that they would go They've been screwing around writing code, messing around building apps, and all of a sudden, they built an app and took off and around the business, okay? Or whatever. That's fine. I mean, that would be Michael Dell. That would be Bill Gates, both quit college. And Steve Jobs, all three. All three companies were formed by college dropouts. But they were super nerds with their eye exactly on what they wanted to do. There was no question. Instead, you're asking a very generic thing. My husband and I always wish we were in business, so we wish our daughter would go into business, but none of us have a clue.

No, don't go in business. Business is too hard. That's correct. Don't put an 18-year-old, 20-year-old out there with no education to go into business doing that. No. If she thinks, in talking with her, that she has got some entrepreneurial flair and wants to do a business someday, maybe in the future, a great Just get a business degree, get a degree in finance, a degree in marketing. You'll learn accounting, you'll learn statistics, you'll learn marketing, you'll learn strategic thought. You'll get some of these basic things in a good four-year degree. That's what I have. I use a lot of those classes I took 40 years ago every day running Ramsey. It's a $300 million company. It's a dadgum good thing. I had a couple of accounting classes. Hello. Rather than just trying to figure that out with a high school accounting class. It's a good thing that I understand marketing at an academic level before I actually get neck deep in it and then try to figure out how it works out here in the real world, too. I would do that if she thinks she's going to go that direction, combined with Ken's advice of really go in there and study, study.

Go visit these places. Quit talking about this stuff in the abstract.

Here's what we know about entrepreneurs.

Business is very hard. It is. People that have never started a small business and run one have this romantic view, but there's a lot of dirt under the fingernails, boys and girls. I mean, it's a long hour. It's the hardest boss you'll ever work for in your life. That guy's a dead gum slave driver.

Yeah. To that point, the entrepreneurs that win are driven by deep, deep desire to solve a problem, and they come up with a solution. That's the business. It's a solution, and they're deeply passionate about it. That's what keeps them going, because you almost need that magnetic pull, or else you're going to quit.

Because in air quotes, I always wanted to work for myself. You're not going to make it. No, no chance. It's too tough. You're going to get your butt run over in the middle of the street, man. You're just going to be roadkill. Because you put up with too much... You shovel so much manure. It's unbelievable. There's a pony in there somewhere, but you got to shovel the manure. I mean, it's real. I'm not complaining and I'm not whining, but I have a call for a certain thing. That's correct. I've had two in my life. I mean, one on real estate and went broke and then one doing this, and I could do the real estate tomorrow and still be okay. But obviously, God called us to this right here, and I'm happy with that. But yeah, I wouldn't put up with the BS that you... Nobody will. That's why we see business people quit all the time. It's why we see a chef who is good at cooking and nothing else has a failed restaurant. That's why restaurants have the highest failure rate of almost any stinking business category. Because somebody thinks because they can cook or like cooking for their friends, that that makes them a restaurant owner.

No, you got to hire and fire people all day long. Restaurant has a 325% turnover ratio in a year. It means you have to hire three people to fill that one position during that year. You're in the hiring business. You're in the firing business. You're in the food sourcing. Inventory. There's all this stuff that goes with running a business. It's not cooking. That's right. It blows a chef's mind, and they go, Oh, God, I wish I'd never. Yeah, we all wish you'd never.

That is a great actual example of, do I want to run a business that serves food, or do I just want to cook food? Two very different paths. By the way, both honorable. But there is a big distinction It's between the two, and that's the key.

When we're talking with Entree leaders, these small businesses, and they're getting ready to promote their best salesperson to be sales manager, it's two different skills. That's exactly right. You're managing salespeople. It's different than making sales. Sometimes one of the worst things you can do is take your best seller and turn them into sales manager because they don't have that skill set. They're good at selling. They're not good at managing sales people.

Don't forget, they may not enjoy it. They may enjoy the service. They may hate it. They enjoy the service of the customer. They don't enjoy the service of leading a team of people.

Again, you lead a bunch of sales people. It's like running a beauty parter. It's drama.

That's right. Two very different job descriptions.

You need to get in there what it is. It's a great question, Kate, and we'll have the team send out I love the student assessment.

It would be great for them. Okay, perfect. Because we've actually got that, and that's a young person can take that and get a pretty good idea of what a current snapshot of what a professional job description of purpose would look like for them.

That can be a business. That's right. It might very We're killing that. But make sure you understand that business is not romantic. This is the Ramsey Show. We all want peace, peace with our money, our homes, our schedules. But having peace online is important too. Most of the time when you sign up for a coupon, enter a giveaway, or click yes to another email list, your personal info, like your name, your phone number, your address, gets collected and sold by data brokers. And before you know it, your inbox is overflowing, your phone's full of spam calls, and your data's floating around who knows where. That is why I love what Delete Me does. Their team of privacy experts finds your personal info on those creepy data broker sites, gets it removed, and keeps it off. It is simple, it's safe, and it gives you more peace of mind. That means fewer spam calls, fewer scams, and way less digital chaos. You have worked so hard to find peace with your money. Now it's time to find peace with your digital life. Start protecting your privacy and your peace today. Go to joindelateme. Com/ramsey for 20% off an annual plan.

That's joindeleteme. Com/ramsey. Welcome Back to the Ramsey Show in the Fairwinds Credit Union Studio. I'm Dave Ramsey, your host, Ken Coleman. Ramsey, personality number one best-selling author, is my co-host today. Chris is in Wyoming. Hi, Chris. How are you? Good, yourself? Better than I deserve. What's up?

I just wanted to give you guys a call. Just going through some struggles with debt. I got fired for my job on Wednesday.

I That sucks. What happened?

They gave me an evaluation, and I guess I didn't score high enough. I think they fired me because of my hearing issues because I was born partially deaf. I think that's the reason why they fired me, because I couldn't understand things.

You're going to speak directly into your phone, sir. You got muffled on me there. But you had trouble understanding things? What was the job?

I was I was looking at a casino. I was doing surveillance, and I'm looking at cameras, I'm answering phones, and I think I just wasn't understanding a lot of stuff that I was being told. They didn't tell me they fired me because of my hearing issues, but I think that's what it was.

The reason I'm asking this follow-up is because this is going to inform maybe some advice we give you going forward. When they went through the evaluation, whether or not they told you that or not, did you agree that you weren't meeting their evaluation points?

Yeah, I do.

Listen, you're not speaking directly into your phone again, honey. You don't have to do that. It's muffled.

Yeah, I do agree that I was having a hard time understanding things that they were the tasks that they were giving me. Okay.

So your biggest crisis is you're unemployed?

Yeah. I'm unemployed and my wife can't work because she tore her femur back when she was in the military and she's using two canes, and she hasn't worked for so long. It's been hard to try to take care of her, myself, and our three kids.

Are you aware of what work that you can do where the hearing is not going to be that big of an issue?

For 15 to 20 plus years, I was doing physical work, warehouse type work, because it really had been involved a whole lot of… I mean, I still had to hear things, but it wasn't as bad as having to… I didn't have to answer phones or any type of thing like that. I've been trying to get back into that again. With the winter hours coming up, it's just been more harder to get into that again.

How did you lose your hearing?

I was I was born with it. It was genetic.

Okay. Do you have hearing aids?

Yeah, I do. I went through the Wyoming workforce.

But they're not working?

They're working. They've been a big help. But even after I got the hearing aids with the casino, I was still having a hard time. I tried to do everything the best I can, and I seem to still have a hard time hearing.

Well, the casino is a very noisy place, and even with hearing aids, that could be a problem. I'm worried about your location. It seems when you said winter hours, that you have limited opportunities due to where you are. Is that what I'm understanding?

Well, I'm in here in Cheyenne, and usually when winter starts coming up, that's when they, a lot of places, cut back hours because they're fully staffed and it's harder to get into places.

Sure. How much money do you need to make? What's the bottom line that would just take care of you guys? Just your basic expenses. What do you need?

My rent, I mean, it's my rent, my electric. I don't have to worry about gas or anything.

Give me a number. Do you got a monthly number that you need to live?

In all honesty, I mean, I honestly don't know. Can't really figure out a number. It's usually about, I think, like 3000 a month. That's usually where all my bills are at. Because I got two vehicles, and then my kids taking care of the expenses for them, too, and the food and all that stuff.

Do you have two car payments?

Yeah, I have two car payments. I have a My truck payment, which is $740, and then my car payment is $360.

I don't know. What in the world planet you're on that you think you can afford a $700 truck payment?

When I was working with Walmart, I got fired from them the same year in January.

Why did you get fired from Walmart?

Because of my attendance, because of the wife's medical issues with her leg, and then my mental health. I I was leaving a lot and I was calling off a lot because of my mental health, and I ended up, after I got fired, I ended up in the mental health.

What's the nature of your mental health problem?

Well, when my daughter was born, she No, your mental health problem.

What's the nature of your mental health problem?

I'm depressed.

Okay. All right. Is your wife on military disability?

No, she's I've been trying to fight with the VA for several years and not getting anywhere.

Are you on any disability?

No, I'm not. I tried to get on Social Security, and they denied me because I finally got the job at the casino, and they denied me because I was making too much.

That would be true. That would be obvious. Okay. What we got to do is we got to figure out a career where you can make some basic income and son, you got to sell your truck. A $780 truck in this picture that you have painted for the last few minutes is insanity. It's nuts. You got to get rid of the $780 payment You guys could go down to one car for that matter. Your wife doesn't work. She's on two canes. I don't think she needs to be driving a lot. Then you're going to have to pick up work doing a lot of other stuff until you can land something that's stable. Any good suggestions, Ken?

Well, the reason I went that direction of what have you done or what work is because you're going to have to get back into that space. What I heard was a lot of limitations. But right now, you can't accept limitations I understand depression is real. That's a real thing. I get it. But you're going to have to fight through that because you are the person that this entire household is relying on. So, yeah, manufacturing, warehouse work. I'm showing I'm going to go back to Walmart and I'm going to say, Hey, here's what happened to me. I'm going to power through it. I mean, anything and everything right now, two and three jobs, you have got to get enough money that may be seen, not maybe, I'd see a therapist. I'd scrape enough money together where you get some help because a professional can help you with some tools to power through the depression. This is desperation time.

Yeah. I'm sorry you're facing all this. So sorry. I'm 100% I'm 100% sure we got to get your income up, and I'm 100% sure you need to sell your truck. When you do those two things, you create a sustainable situation mathematically, and that gives you the opportunity to work through the emotional struggles that you got. Keep it up, dude. Keep pushing, keep fighting. You can do it. After the holidays, a lot of people start feeling budget pressure, and it's a wake-up call to get intentional. So listen, don't fall for buy now, pay later, cell phone plans that drag you back into debt. Boost Mobile keeps it simple with no contracts and no nonsense. Keep the phone you already own and pay just 25 bucks a month forever for unlimited data, talk, and text. That's real long-term value and real peace of mind. So budget like you mean it and go to boostmobile. Com/ramsey today to make the switch. That's boostmobile. Com/ramsey.

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Thank you for joining us, America. We're glad you are here. Ken Coleman, Ramsey personality, number one best-selling author of the book Paycheck to Purpose and his new work, Discovering Finding the Work You're Wired to Do, which comes with the get clear assessment to help you figure out what your strengths are and where you need to head with your whole career and money-making endeavors. It's a great thing. It's just hit a bunch of best-seller things this week, as a matter of fact. Very cool. Hey, the average interest rate for a 15-year mortgage dropped from 6 to 5. 6 this week. And the average this week, I'm sorry, fell to 5. 15, the lowest we've seen since February of '23. Almost 20 some odd months now since we've seen an interest rate that low. If you purchase a $423,000 house with a 20% down You're going to need a payment on a 15 year, the interest rate change is the difference now of about $3, $4,000 a year is what it would save you. If you're financially ready, if you're out of debt, you have your down payment ready and you have your emergency fund in place, we're huge on the real estate market, and this is the time to do it.

It's also a great time to sell because there's a shortage of inventory. It's a weird market in that way, but you need a good, strong real estate agent in your corner that knows what the flip they're doing. High protein, high octane. Go to ramseysolutions. Com/agent, and you can find the real estate agent that's Ramsey Trusted that we have vetted in your area. There we Open phones at 888-825-5225. Nicole is in Jacksonville. Hi, Nicole. How are you? Good. How are you? Better than I deserve. What's up?

Okay, Me and my husband are about to bring a baby into the world in January next year.

Congratulations.

Thank you. He's had this credit card with his mom that he's been having for the past basically a year and a half. But she basically has joint ownership of his account and stuff like that because he's in the military. When he first got in, he was like, Oh, well, you're going to oversee everything. Just make sure my bills are paid and stuff like that. But she opened up her credit card, and she's ran $14,000 since then. Every time I try to talk to him about it Hey, what's going on with this? Is she going to take care of it? Now that we're bringing a baby into the world, I'm concerned. Every time she'll ask him about it, she completely is angry or upset and cries because she has lupus and she has a lot of medical bills, too. We're not really sure how to- How long have you been married? We've been married for a year and a half. Okay.

What does she make? She's so pretty fresh. What does he make and what do you make?

He makes like 55,000 a year. And me, I'm a student, so I'm still in school and everything because I work part-time.

How old are you two?

I'm 22, and he's 23.

Here's the thing. Stop. You don't have a mother-in-law problem. You have a husband problem. Okay. Hubby has got to decide now that there's a new woman in his life that's not his mother. In the old days, people would say things like, When you get married, you leave your parents and cleave to your spouse. Leave and cleave, we called it. And there's a boundary drawn. There's a new household has been established a year and a half ago, and now it has a baby entering it. We're not going to We're not going to blame any of this on the baby. We're going to blame all of this on your husband. The day you all got married, it was his job as a man to separate all of his accounts from his mother. This is very boyish, not manly behavior that he's engaging in. If I'm in your shoes, I'm going to sit down very calmly, and I don't care if his Mom cries. I'm sorry. I don't care. I'm sorry she has lupus. But the reason she's crying is because she's ashamed and because it works on her little boy. We're going to have to help your husband run down to Walmart and pick up a backbone.

They're on aisle 3. Then he's going to walk in there very calmly and gently and say, Mom, now that I'm married and I have my own family, we're not going to have any more joint accounts. Everything being closed today, and you're going to reopen your own accounts, mom, and you need to pay this $14,000 you ran up on this credit card. If she doesn't, you'll have to. Because it's got your husband's name on it. This is a mistake that he has made. It may cost him and you $14,000 because I got a feeling this woman is not going to pay this, don't you?

Yeah.

You're not to be involved at all. You'll become the wicked daughter-in-law. It'll be all your fault because this woman is a travel agent for guilt trips.

Okay. Yeah, every time I try to talk to her about it- No, don't you ever say a word to her about this again.

But your husband, he needs to throw his shoulders back and become a man today. Today. This is weak and fearful behavior. He needs to become courageous, bold, gentle with his mom. There's no reason to be mean to her. He's the one entered into this arrangement. But it does need to be very thorough and complete immediately. It's absurd that a man that is married and has a baby on the way has joint accounts with his mommy That's ridiculous. You can play this back for him if you want. He needs to square- I will. Yeah, he needs to square his shoulders and walk in there. I don't want him to be unkind to his mom, but it was his duty the week before you got married to separate everything. When my kids were getting married, we sat down two weeks before. I transferred every single mutual fund that was theirs, every single checking account or piece of savings that was theirs, completely out of our name. If they went and did something stupid with it the next day, that's on them because they're now what's known as grown-up adults. It's not my job anymore to manage them.

They are now free agents. They're grown people. You don't even have to get married to do that, but that happened to be when we made sure that everything was final because I did not want to be interfering with my daughters-in-law, sons-in-law, just like Nicole situation. This is happening more and more.

The emotional umbilical cord needs to be cut. The reason why is because the lupus, she's my mom, she did this, she's done that. You cannot think rationally when you were thinking emotionally. You cannot have a rational thought at the same time that you have an emotional thought. This tie together, he's never going to act rational until the clear cut has happened. I really would recommend that he watch this so that he realizes you're not the bad person.

You don't be pissed if somebody be pissed at me. It's like a spiritual gift to have. I'm fine with that. Yeah, cut the cord, man. There's an entire Reddit page is devoted to doing that. So and comment sections of everything.

By the way, this is only going to get worse. I want the young man to hear every day this goes on.

Every day this goes on. We're not even going to blame this on the baby. Oh, no. Not the baby. This is something that should have been done before there was a baby.

Well, I'll tell you, it's the big baby. I'm blaming it on the big baby. Not the baby in the womb, the baby who has yet to mature. By the way, mom enabled this, so there's enough blame to go around.

She didn't enable it. She manipulated it. She wanted it. She likes this.

He was a mama's boy to go to the military and say, Mom, pay my bills. I'm not blaming that all on him. We got to let these kids fly, folks. Kick them out of the nest. That's what the birds do. This is a national problem to your point.

We're seeing- It's a real problem. It's a real problem. This is The Ramsey Show. We're I love entrepreneurs. Don't forget, guys, I started my company on a card table myself, so I know what it's like to have people counting on you, your team, your family, not to mention your customers. When you're the one signing the paycheck, you can't afford to fly blind. But I'll be honest, early on, one thing that nearly sunk us was wasting time with spreadsheets that didn't add up because business units didn't talk to each other. I finally told my team, Just fix it. And they did. We got NetSuite. That was years ago, and we've never looked back. See, NetSuite isn't just for tech giants. It's built for growing businesses like yours. Over 43,000 businesses already run on NetSuite, including a lot that started just like you. Now with built-in AI, NetSuite is helping them even more. It's one system connected to every part of your business for real-time insights, not guesswork. Network. Netsuite AI flags inventory issues, cash flow risks, even supplier delays before they become problems. So you can trust the data. Stop wasting time and make the right decisions faster.

Take a free product tour today at netsuite. Com/ramsey. That's netsuite. Com/ramsey. Ken Coleman, Ramsey personality, is my co-host today. Thank you for joining us, America. Danell is with us in Salt Lake City. Hi, Danell. How are you?

I'm good. Thank you. How are you?

Better than I deserve. What's up?

I have a little dilemma that we're trying to figure out what we need to do. I have a 2012 Hyundai Elantra, and it's got over 200,000 miles on it. Around the end of October, I was backing up out of a parking spot, and a guy behind me backed into my car. It didn't ruin my car, so I couldn't drive it, but his insurance totaled my car. Great. So now, yeah.

I mean, you're driving a hoopty and you're getting a check.

Yeah, I can get a check for it, for I can get 37, 45 and keep it, and I'll have to get a salvaged tile.

No.

Or they'll give me 45, 38. No.

You take the full pay, give them the car, go get your car. Okay. If the car was in good shape, if the car was in good shape and it was 200,000-mile, 2012 Alontro, what's it actually worth? Have you looked it up?

Yeah, it's probably under five.

Well, that's what they're giving you is under five.

Yeah.

I want you to make sure that what they're giving you is the actual value of the car.

Well, the 45 is what they would give me, and that's what I've looked at.

No, honey, they're going to give you the value of the car. That's the law. They may not have understood that yet. You may have to help them with that. But they're supposed to give you the value of the car. The guy tore your car up. So it didn't take much to total this car, but it's okay. Cool. I'm glad. So I want you guys... You said we. Are you married? . Okay. You guys jump on the computer before you accept the offer and find out from Kelly Blue Book what the retail value of that car is and enter it with 200,000 miles, no damage, and the attributes of that car, the accessories it has and so forth, and then look on stuff like trader. Com and find some that are for sale that look similar in mileage. If you find out that car is worth 5,200, you call this insurance company up and say, You need to pay me 5,200. Here's the appraisal from Kelly Blue Book, and here's three cars on trader. Com that look the same. All these things say 5,200, not 4,500. The guy will go, Okay.

All right.

Who's the insurance company?

Bear River Mutual.

What?

Say it again. They're the ones that- Say it again. Bear River.

That's the actual insurance company, not they wrote the policy. Bear River Mutual. Do what? Bear River Mutual. Okay, I just don't know that one. Okay. All right. Because sometimes I know their reputation. If it's State Farm, you can pretty much be assured they're trying to screw you. Okay? Yeah. It's like their modus operandi. Jake was State Farm? I've been hit by State Farm people twice, and it's been a problem both times. They're just a pain in the butt. See, it cost a lot because I just said that. But anyway, just verify that the actual cost value of the car. I'm not trying to rip them off. I want them to pay you what you're due. That's all. It's an honest transaction. It has a ding in it. I'm sorry?

I mean, with the ding in the car is that?

No, darling. There wasn't a ding in the car before he hit it. Before he hit it, what was the car worth?

Yeah, okay.

Because that's what they owe you. That's the market value of the car. Because you got to take the cash and go buy that exact car on trader. Com from somebody else. That's what you're going to have to pay for it.

Yeah.

That's what they should give you. They should replace your car. My other question. No, you don't keep your car.

Okay. My other question for you then is- This car was almost dead before this guy put a bullet in it.

Let it die.

Yeah, it's true. I have listened to you for years, and I just get sick to my stomach now thinking about even taking a loan out on a vehicle.

Well, don't.

Buy a $5,000 car. We have money put aside.

Pardon? Buy a $5,000 car.

Okay.

You have $5,000. You were driving a $5,000 car before this happened. True. So it was perfectly good with your life or good enough for now.

How much money do you have set aside? Is that earmarked for something else or was it for a car replacement?

It's to go towards the car replacement. How much you got? We have about 7,000.

7,000?

That's your car fund? Yeah. Okay, well, then you can buy a $12,000 car. Yeah.

Okay. All right. My husband wants me to have a car that he knows we can depend on, and he's like,.

Where was this husband before you got hit in the parking lot?

He was sitting next to me.

I know, but you see what I'm saying. He wasn't whining about you having something that would dependable when you were driving this $5,000 hoopdie, you were saving up to get out of the hoopty. Now you sold the hoopty. You just sold it to an insurance company.

Yeah, you're right. A lot of $12,000 cars that you can rely on.

Excellent vehicles for 12 grand. Excellent. A car that'll do double back flips. You can get great cars for 12 grand. Yes. The best value in the market is 10,000 to 15,000. It's the best buy in the car market. You get the most bang for your buck.

You can get a great vehicle for that. That'll last you for a long time. Yes, yes, yes, yes, yes, I'm sad that your car, the parking lot ding. I never heard anybody get totaled in the Kroger parking lot, but there you go. So you're totaled. I was going to say that was quite a incident. He must have been on his way to the game with the wings and the chips and salsa.

He was in a hurry? Something going on. Amber's in Spokane. Amber, welcome to The Ramsey Show.

Thank you. I just have a quick question, actually two-part question. I have an 18-year-old son. He's still in high school. He will be 19 next year, graduating. He is planning on opening his own business.

Doing what?

With his landscaping, with his own money. Good. He's very smart of money. He doesn't have any debt. He won't get a credit card. He only uses what he has. But I was trying to explain to him the other day that he can do it with a zero credit score. I am also confused a little bit, too, but I know it's possible. So he doesn't want to take out any loans.

He's been told- Then he doesn't need a credit score. Why do you need a credit score?

I think he's more worried about if something comes up where he has to- Borrow money. Borrow to, yeah, if he has to get a bigger machine or- Well, that already is going to come up.

A hundred % of the people that buy machines buy too many of them.

Well, he has a plan to buy used.

And cash. And if something comes up, he'll buy used and cash. He does not need a credit score. Do not use debt as your backstop in case of emergencies in business because you will live in debt the rest of your life. Because a hundred % of... There's three rules in business. It takes twice as long as you think, it costs twice as much as you think, and you're not the exception. Those are the three rules of business.

The nice thing is that he understands all three of those rules and he- Then he doesn't need a credit score. Okay. The other question I have is, I've been trying to get him to listen to your show or read your book. And he's 18. I'll give him that because he's still in that mentality stage where he's 18. And is there something... I don't want to push too hard so that he doesn't do it altogether, but is there... I know you have books and programs and stuff like that, but I've already bought those and he wasn't interested in Is it something that may come along later on when he's going through?

I guess. The only thing I can tell you is the only good I've ever been able to do with my kids once they turned 18 and beyond was I try my best to not use my dad voice because once I do, they quit listening. I have to use my persuasive uncle voice like I'm their uncle that loves them and has no power because I am that person that has no power once they're 18. You've been using your mom voice, You need to listen to Dave. That won't work. He turned that off immediately. Use your friend voice, and maybe, maybe he'll pick it up. Probably not, but maybe he will. This is The Ramsey Show. If collectors are blowing up your phone every day and you're living in constant fear of the next call, you're not living. You're surviving. You don't need more noise or more stress. You need help you can trust. That's why I recommend Guardian Litigation Group. Guardian isn't a call center reading from a script. They're real attorneys who can step into the courtroom and fight back when creditors try to sue you. Debt settlement isn't glamorous. It's not the preferred path.

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Hey, guys, we could use your help. It helps us a bunch, and we know you're doing it because we're seeing the numbers are incredible. If you subscribe to the show on the platform that you're or follow the show on the platform that you're listening or watching, whether it's YouTube or Spotify or Apple podcast, Google Play, whatever it is, just click, follow or subscribe. It makes a big difference. Also share the show. Some of these things have a share button where you can share it. Maybe you're just listening on talk radio. Tell people where you're listening. I'm in Phoenix. I listen on KTAR, and the Ramsey show's on there. It's changed my life. Tell people. Tell people when you read a good book. Tell people when you see a good movie. Tell people when you hear a good show, a good podcast, a good YouTube show, whatever it is. Spread the word. We know you're doing it because our numbers are up astronomically, and we appreciate it. But when you do all that, it also affects all of those platforms, algorithms, and the way people are behaving on their effects, whether they push the show out forward in front of people that don't even know they're searching for it.

It changes everything when you do that, guys. It's a big deal. Thank you very much. Even the five-star reviews, those help a bunch, too. Thank you. William is with us in Providence, Rhode Island. Hi, William. How are you?

Hey, guys. I'm great. Thanks for taking my call.

I appreciate it. Sure. How can we help?

I'm in the military, and I just got married two months ago.

Congratulations. I've got to talk to you all about four months ago.

Thanks, man. I appreciate it. I discovered you guys four months ago. Life has been excellent. We're in the process of moving. We're paying off my wife's student loan debt, about $28,000. We figured out we're going to be moving to Hawaii in March. Looking at housing prices over there, it's going to be pretty insane, at least to do first month's rent, security deposit, everything like that. I'm looking at your advice on how to approach that, taking a pause at Baby Step 2 and how to move forward there.

It's not really a pause on baby step two. It's just a pause on the whole thing because you've got something staring. You're staring at this thing in front of you and you've got to deal with it, right? And so what I would do is put a detailed number on the March move Stop everything and pile up that number because it's coming. It's not if, it's just- Oh, yeah. There's no question about the probability of it. Then when you've got that number, then push play, set that number to the side, push play, and then start working it Okay. Yeah, that's exactly how you do it. Which branch are you in? I'm in the Navy. Okay. Thank you for your service, sir. We appreciate you guys. Well, I appreciate you guys. How old are you two?

28. My wife is 26.

Perfect. Okay. Have you been through Financial Peace University yet?

No, sir. We've been just listening to the show and making a go at it.

We're going to give that to you as a belated wedding gift. Two months into my marriage, I wish somebody had shown me this stuff. My life would have been completely different in a good way. I got a pretty good life. Anyway, Hang on. Christian is going to pick up. We'll get you signed up for Financial Peace University because Hawaii is expensive. You need to...

That's the truth. Dave, I got to ask a quick question because I'm curious to know your take on this. If I was in this situation, and he's in the military, so he may not be able to do anything outside of his military service. But if his wife is not working outside of the home or even she is, I'm the guy that if I were in that position in the baby steps, certainly in baby step two, and I had an expense like that that was coming, and we knew it was going to be a chunk. So let's just say it was a I'll make this up for example purposes. I had to come up with $5,000 for something in March. I'm the guy that's going to go crazy trying to make extra money and fund that 5,000 above and beyond what I'm doing out my normal budget towards the baby steps. Does that bother you?

That's an okay thing. The thing is it works exactly the same way if you just push stop. That's true. And then go crazy, pile it up that much faster. But I'm the guy who hates losing the progress. But if you pile it up twice as fast because you're not staying in play mode, you push pause, then you're back at it. Mathetically, you'll end up in about the same But you're right, it does light a fire under you to get it done quick. Jack is in Los Angeles. Hey, Jack, how are you? I'm good. How are you doing? Better than I deserve. What's up?

My fiancé and I are both 25 years old. We're getting married two months from now. And we're, of course, looking to combine finances. Not sure the best way to go about it on a couple of fronts. One, should we be waiting until we're married. Two, we both do have credit cards. We both, as of last month, are debt-free, but we're wondering, should we be keeping them? Should we get rid of them? We're worried about canceling them, impacting our credit scores as we look to buy a house, so hoping to get your advice on all of that.

Okay. You don't combine finances until you're married.

Okay.

And after you're married, then, yes, you combine them because the preacher will say, And now you are one. That's what that means. Until then, you've got all kinds of issues when you combine things that can happen. If something terrible happened before the wedding, you get yourself into a mess. We just wait until then. As far as keeping your credit cards open, the best thing I know to do is cut them up and close everything and have zero balances. If you have no active accounts going, it takes about six months for your credit score to just disappear. What you don't want is a medium credit score. You either want a very high one or a no credit score when you're going for a mortgage. No credit score sets you up for manual underwriting with someone like Churchill Mortgage Hour, the team that we've endorsed for mortgages for almost 30 years now, and they can help you do a manual underwriting with zero credit score. But you don't want to be in no man's land in the middle. And that's what will happen if you keep a bunch of stuff open with zero balances, because the FICO algorithm is built to where it wants you to be in debt.

To drive an 800 credit score, you have to get in debt and stay in debt and pay it regularly. I pay my credit cards off every month or I don't use them at all, and they're open, will damage your credit score, so will closing them will damage your credit score. But closing them is path to get to zero. That's where I would recommend you go, is to zero. It's okay to not buy a house immediately, by the way. It's going to take about six months for this to happen. Six months from the time you're married, you both close all accounts. You have zero balances, zero activity of any kind on anything that's reporting to FICO, you will disappear, you'll fall off the grid, which is what you're trying to do here. That's the goal. We recommend, in general, young couples getting married that they wait a year to buy a house. It takes about a year of marriage to know how close to your mother-in-law to buy. You got to get to know each other. You've been married 20 minutes. You're going to buy a different house then than you will when you've been married 20 months.

It's a different property you're going to sign up for. Just take your time. You got the rest of your life. You're going to be okay. I don't want you to take 10 years, but you can take a few months. During that time, you have the opportunity for the credit score to go away.

I'm thinking back to when Stacy and I got married and this whole question, and we were walking through premarital counseling. Both of our dads were pastors, and so they were really driving home the point that you made, Keep everything separate, separate, of course. But it was us trying to clean everything up, and Stacy had some debt, and we worked really hard to help her, and she went after it, and to enter into marriage with, and we had a little debt. I had a little bit of student loans left, and she had a little bit left, and then we knocked them out in that first couple of years. But it was such a big deal for us to, in the first 12 months, just learn how each other handled money.

You know what I mean? How you handle life.

There's that, too. But it's like to make a big purchase decision like that and strap yourself into a mortgage like that without, as you said, experiencing marriage in the way we viewed money. That first 12 months for us was really eye-opening, and we had to learn how to get on the same page.

It was for my wife, Sharon. She realized she'd made a huge mistake.

Well, Stacey as well. Poor woman.

They have the patience of Joe. She thought she married Sir Galahad. Turns out it was Goover. Right.

I resemble that.

This is The Ramsey Show.

How many times have you started January saying, This is the year I'm finally going to get my money under control. But then months go by and you still feel broke. You work too hard to keep living like that. Look, there's only one way to move the needle on your finances this year. You've got to have a plan. Start by downloading every dollar. Every is way more than our world-class budgeting app. In 15 minutes, we'll build you a personalized plan to free up extra margin in your budget and use it to beat debt and build wealth. You'll find thousands of dollars on average, just the first day. And you'll get new steps and new lessons every day that help you stay on track and create unstoppable momentum. Don't waste one more day feeling broke and stressed. Get your plan in just 15 minutes by downloading every dollar for free today. Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio with Ken Coleman, number one best-selling author and host of The Front Row Seat. As my co-host, I'm Dave Ramsey. Ryan is in Nashville. Hey, Ryan, how are you? Good. Dave, how are you doing?

Better than I deserve. What's up?

Well, I had a question about retirement in 401(k)s. I am new into a Roth IRA. I'll be 50 next year, and I can only contribute so much to that. And on my wife's 401(k), we're maxing out what she can do a year on that. And then there's a rollover IRA from previous employment that we have. So we've got the three things working for us, but I can only contribute just that 7,000 a year. I would just like to know what you think other ways for me to try to make my money work for me down the road so I can have more retirement.

Yeah, you can bump it to 8,000 at 50, and you can also do a spousal Roth for your wife as well. Are you doing both of those?

We can do that. If she has a 401k plus she has a roll over IRA?

Yes. What's that called? I'm sorry. Just a Roth IRA. She can just do a Roth. You can do one, too. She can do a Roth. Yeah. Even if she's not working, she could do one, but she's working in this case. Make sure, is her 401k a Roth?

No, I don't believe. Well, yes, it is. Okay.

All right. Because if they match, the portion they match is not Roth, but make sure it's not traditional. Is the rollover IRA, has it been converted to Roth?

I don't think it's been converted.

It's just a rollover. If you convert it, it'll make the taxes on the amount come due. What's the amount in there?

The amount on the rollover currently is probably about 75.

Okay. You would have about 15 or $20,000 in taxes, probably 15. If you got an extra 15 to invest in retirement, I would roll that to a Roth and pay that 15 in taxes and call that investing. Here's why. Because from this point forward, it will grow completely tax-free. Okay. So paying those taxes now is like investing into a retirement. If you're looking for more money to throw at something, the first thing is you bump them to eight, you do a spousal, make sure her 401k is Roth, if it's not already, and then take that roll over and talk to your tax person, figure out what your taxes are going to be before you do it. Make sure you've Not that much in extra cash to pay your tax bill next year when the April rolls around because you're going to have an extra, whatever it is, 15 grand or so on that. Then roll that 75 because that 75 in seven years will be 150, and in seven more years, it'll be 300, and in seven more years, it'll be 600. All of that will be tax-free. If it's Roth, it won't be the way it is now.

It's going to grow and all of it be taxable at ordinary income. You do want to move at some point. But if you're looking for extra ways to put money towards retirement, that's the way you can do it. Matt's in Tennessee. Hey, Matt, how are you?

I'm doing great, guys. I'm so excited to be on the show.

Thanks for taking my call. My pleasure. How can we help?

Well, my wife and I have been weighing the decision of making her a stay-at-home mom, and I just want to make sure we're not letting emotion blind us from making making a bad decision financially.

Cool. Good for you. How many babies you got?

We have two.

They're both under three. Awesome. You got your hands full. Never a quiet moment at your house. Yes. Okay. Yeah, it's great. I just kept the grand babies last week that Sharon and I did that are that age. I know what I'm talking about for just a moment there. But I can hand them back when they're broke. You can't. This one's got There's nothing wrong with it. You don't need to work on this one. But anyway, what does she make?

She makes 95 gross.

What do you make?

I'll be on track to make over 150.

Okay, cool. If you want to be really, really sure, an easy way to do it would be just live on your check for three months and bank hers.

Yes, sir. We've been doing that.

Oh, you have? Okay. I mean, minus daycare. If you got daycare, you could take daycare out of hers because you won't have that. But if you just practice. You've already proven to yourself you can do this.

I guess so. But I mean, I guess We're just a little nervous to take that leap of faith.

It's not a leap of faith. You've proven it. It's a step. It's a step. It's not a leap. Yes, sir. How much more to you? A leap is I have no I've never even looked at the math. That's a leap. This is true. Yeah, so you're done great, man. What does she do for a living?

She's a nurse auditor for Humana.

Is she a nurse by trade?

Yes, sir. Okay.

I think Ken and I would both recommend that she do enough of something to keep her search alive while she's at home.

We've both talked about that as well. We want to keep her license up to date.

Absolutely. Absolutely. You'll be amazed at what she could pick up as just little side things here or there that make a lot of money. She's got the perfect career to do what you're talking about doing. I couldn't agree more. I mean, she could pick up. If you all got in a pinch or something, she could pick up weekends in the ER and make almost as much as she's making now. This is true. Be very uncomfortable, and I'm not recommending doing that. You don't have to because you've already proven we can live on your income. So, yeah, just do it, man. Do it. This is why you manage money to get to live the life you want to live. You guys want her to be home, and she's doing nothing wrong and everything right by doing that.

Yeah. My question is, as Dave was walking you through this, you still seemed unsure. Is that because you're worried about some big, giant expense coming out of nowhere from the giant in the sky, or you are too tight on just your income?

No, that's a good question. We're not too tight on my income. What makes me nervous, Ken, is I started this job in June, and it's a phenomenal job. It provides very well. It's given us a great financial bump. I guess it just makes me nervous to solely rely on my job having been being in it for such a short period of time.

What do you do?

I'm in medical sales.

Oh, dude. You land another... You can land backwards on your head and make 150 in that in the next job. If these people lose their minds, you can get another job doing this. Once you've done medical sales, you're so qualified. It's unbelievable. You both have selected excellent careers. You'll be making 250 in three years, dude.

Yes, sir. If everything goes well and I stay on plan, I I should track to make over 200.

Yeah, absolutely.

Well, the good thing coming out of a decision like this is you're going to be extra motivated. I appreciate you sharing the fear, and I didn't need to know. I wanted you to hear yourself say it. What you need to do now is go, Okay, if this makes me a little nervous, is there any evidence that it should make me nervous? In this case, the answer is no. Then to Dave's point, you can crush it, man, so go crush it. Here's the other thing. You guys can decide, Okay, we're going to stack up a little extra money Oh, just a little rest easy money. No, we're not saying you have to do that, but you can to ease yourself into this. You guys get to decide how and when you make this transition.

Everything goes sideways. She walks down there and picks up a nurse job. I mean, if you lost your job, she picks up a nursing job, you all can eat. It's okay. It's not like it's permanent. You keep those certs, though. Keep everything up to date.

Ken Coleman-Ramsey personality is my co-host today. He's the number one best-selling author and host of the Ken Coleman Show Ramsey Networks. One of his best-selling books is Find the Work You're Wired to Do. It's his latest best seller. It included in it is the GetClear Career Assessment that we've sold almost 100,000 of, and it goes with the book for free. So not only do you get the assessment, you get the book to teach you how to read the assessment and what to take away from it. So be sure and pick that up at ramseysolutions. Com. Jack is in New York. Hi, Jack. Welcome to The Ramsey Show. Well, thank you very much, Dave. How are you today? Better than I deserve. What's up?

Well, I'm at the age now, mid-fifty's, to where you want to get to be conservative with your investments, for retirement. However, I don't have a retirement because of life choices that I've had to make throughout the years. So now that I'm finally in a financial position to where I can start making investments. I'm afraid to make liberal investments, to make money, to actually have a retirement, because I'm at that age to be conservative, so I really don't know what to do. And I've met- Well, let me help What the fuck are you with this.

You're not at the age to be conservative. I don't know who told you that, but they were wrong.

Well, I don't have that many years left of this.

You have plenty of time. You're only 50. Okay, I get that. I'm not I'm conservatively investing, and I'm 63. So I'm investing in good growth stock mutual funds that are growing like a weed, and you need to be. You're broke.

Well, I'm not broke, but I had no retirement whatsoever.

Well, I mean, how much do you have? How much money do you have?

I got about 20K in savings.

Okay. Well, you're broke. I mean, for 50 years old, going into retirement, that would scare the crap out of me. You need like 250, right? Moving on. I'm not trying to scare you. I don't want you to panic, but you do need to get with it, as you said, and you recognize that. That's why you called. What I would do is this. The thing I have figured out is there's two things that we are afraid of, and fear is a positive thing in these situations. Number one thing we're afraid of is something we don't understand. So the first time you sat behind the wheel of a car, I distinctly remember I was 12, and dad said, Move the car around back. I left no gravel in the driveway. No one told me you weren't supposed to press down on the accelerator all the way to the floor. Because I didn't know what I was doing. So driving a car, I didn't know how to do it. I was afraid, and I was really afraid after I screwed it up. But now we all have been driving cars for decades, and we drive and don't think anything about it.

It's like muscle memory. So you learn how to do the thing, and you're no longer afraid of it. The second thing you're afraid of is something that will legitimately hurt you. Standing in the middle of the interstate, you should be afraid an 18-wheeler is going to turn you into a bug. A bear is standing in front of you. You should be afraid. That's a good thing. But the other is just you're afraid because you don't know how. That's the investing thing. That's wisdom, but it's something that can be overcome. I don't want to overcome my fear of bears. They will eat you. But I do want to overcome my fear of things I don't understand that can help me. The fear goes away with knowledge. So sit down with a good Smart Vesta Pro, click that at Ramsey Solutions, and let the guys that we recommend begin to teach you and gradually start to understand. As your confidence builds, then you'll easily increase the amount of money you start pouring into to retirement-type investments, and you won't have to worry about the whole idea of conservative versus whatever, bull crap, something you read on the internet, right?

I completely understand that. That's absolutely true.

Ken?

I was just going to echo that, that right now you have no idea what you don't know, and it just paralyzes you. I think the quicker you can get seated with smart Vesta pros, interview several, figure out the that you've got the best chemistry with. There's that teacher relationship going on. You can make up some ground pretty quick, but you've got to be aggressive. I would say, Dave, beyond just the mindset of aggressive, I'd be doing some things if I were him to make some extra money and try to catch up. Where can I make an additional 10 grand? An additional 15 to 25. So you can play catch up and start stacking some money. When you begin to see that momentum, by the way, that gets really exciting, and you start doing more of that. A lot of people think that they got to have a side hustle hustle just to pay off debt or just pay the bills. In this case, when someone is that age, to the extent that you can do some extra work and leverage your skill and experience to pour more money on top of the little fire, the bigger that fire gets.

That would be a direct challenge in this situation for him.

That's very good. That reminds me when they're walking around out there in the world, people say these sayings that are just stupid. Here's one of them. What you don't know won't hurt you. What you don't know will kill you. That's a dumb butt saying. Lack of knowledge knock you out, man. I mean, that's a ridiculous... Like, You can just stick your head in the sand. I'm not talking about Jack here. I'm just saying in general. But yeah, it's a big deal to know new things all the time. Angela is with us in Knoxville. Hi, Angela. How are you?

Hey, Dave. I'm doing all right. How are you?

Better than I deserve. What's up?

Awesome. So today is actually my birthday.

Happy birthday.

Thank you. How old are you? I have like in a tip in 42.

Oh, okay. Just a pup. Yeah.

So I actually met you in Orlando a couple of years ago, in fact, at one of your events. So I'm trying to get back on track, Dave. I never did the baby steps. I purchased FPU at that event, never did anything with it like a dummy. Basically, I'm in $30,000 in debt. About 18 of that is my car and another seven in credit card debt, and I owe five to a family member. So my question is, I'm trying to figure out the best way to go about once I get to Baby Step 2, because I'm going to be finishing Baby Step 1 next month. And then in August, I'm going to start tackling the debt. My car has about 250,000 miles, and I use my car right now to make a living. And so my concern is if I start tackling the smaller debts first, and then my car breaks down and the transmission goes out or something, and I can't fix it, and I don't know if I should be saving more in my step one for that. Or that's where I'm stuck, and I just wanted your input.

You owe $18,000 on it?

Yeah. I had a paid for 4runner, A few years ago, and then I started a new job.

You owe $18,000 on a car you have 250,000 miles on?

Yeah, because I was a courier. I ran the miles up on that thing. I was a courier for the last two, three years since I bought the car. I just racked it up. Okay.

What car is it?

It's a 19 Dodge Charger. A six-cylinders, the cheaper one. Yeah. Okay. All right.

Okay. No, we're worrying about something that hasn't happened yet. It's a reasonable thing to worry about because those things may occur, but I'm not going to change the game plan here. If you have a problem, you may have to stop your baby steps and address the problem. But until you do, you were already broke before you started this, and now you're just running broke, trying to actually do some good and climb out, right?

Yeah.

Cut up your credit cards and let's start attacking them with a vengeance and as many hours as you can. As Ken says, always get an extra job. Let's do six things and do that written budget in detail and live on nothing and work all the time. Let's begin to get this cleaned up because this is a scary place to be for you.

It definitely is. I moved to Knoxville from Florida back just this last December, and I had a pretty decent job. I didn't pay too great, but it was all right. It was my first job since I moved here. I got laid off. After three months, they just didn't need me anymore. I've been door-dashing 72 hours a week ever since. I have another job that I started, but they're just trickling me in with work. I'm not full-time with it yet. Once I do, that should be about 72 a year.

That'd be huge. That changes everything, Ken.

Yeah, I'd love to see her really hustle through this quickly because that car is going to be a problem pretty soon. Yeah.

Yeah, but I don't want to stop doing it. No, no, no. In lieu of something hadn't happened yet.

I'd let that be that extra motivator.

Yeah, exactly. This is The Ramsey Show. When you're tired of feeling stuck with money, there's just one solution. To get different results, you have to do something different. No one accidentally wins with money. You have to have a game plan, and that begins with our get started assessment. Go to ramsey solutions. Com/start, answer some questions, and we'll show you what steps to take next. Don't stay stuck. Take control of your money starting today. Go with ramsey solutions. Com/start. Have you all noticed that real estate is weird right now? It's weird out there. I mean, it's strange. If you're going to buy a house right now, if you're going to sell a house right now, you don't really need to be screwing around with this unless you're dealing with somebody that really knows what they're doing. Because it's a strange time and you need someone to help you navigate that. If you're a buyer, that way you don't get ripped off and you don't get pushed into some weird thing. Or if you're a seller, you get the proper amount for the property and the right marketing advice from a pro who's actually done it before.

Not your uncle Henry, who got his license three weeks ago and demands that you list your largest asset get with him. That's dumb. Don't do that. No, we're going to get somebody that sells 30-300 houses a year. That's somebody who actually stays in the business when things are good and when things are bad. They know the market, they know how to navigate weirdness, and they can help you. We vet all of the agents that we put in the Ramsey Trusted program. We coach them. They're lined up with what we teach here. They understand what you're called. If you're listening to this show, that you're going to be calling with that mindset, and they really are high octane, high protein, get-or-done people with proven track records. To find a Ramsey Trusted real estate agent for free, just go to ramseysolutions. Com/agent. Amit is with us in Greensboro Nicaro, North Carolina. Hi, Amit. How are you?

I'm great. How are you guys?

Better than we deserve. What's up?

Long story here, but my background, technical background, is engineering and science I did that for a few years.

I went to school for it and everything, but loved basketball, ended up switching careers, and I ended up coaching basketball, first at the collegiate level, Division One, and then into the NBA for the last two years. The NBA is moving more and more towards hiring players.

Even with 10 years experience in coaching at those levels, I'm having a hard time finding jobs that are paying me enough to get by.

I'm married.

I don't have any kids, but my wife makes exponentially more money than me. So So financially, we're okay.

We have no debt, nothing. Homes paid off, cars are paid off, so we're good there. But I'm thinking now of transitioning into a different career.

I have no idea what to do.

I've been so out of touch with what my degrees are in that I don't know if I could go back or if anybody would take it, bring me back there, if that makes sense.

It does make sense, but I want you to know that that's your fear and doubt that's clouding your judgment. Just somebody who's completely objective, a former Division One basketball coach, a former NBA coach is a highly attractive bio and resume, especially if you have some skillset that will apply to what you're going for. I'm just interested. What's your favorite part of coaching?

To me, it's about the relationships and the people I interact with every single day, whether it's players or other coaches or executives, whatever, administrators, whatever it may be. It's a very people-in-relationship-driven business.

And that, to me, is why I got in in the first place.

I know the salaries are crazy right now, especially in the NBA, but I never was about it for the money. I was in it for experience, opportunity, and just because it felt so satisfying, and it still feels satisfying, and I want to keep doing it as long as I can while I'm getting up to do it.

Did you play college basketball at any level? I did not.

Did No, it did not.

That's the crazy part. No, it's not. I'm 5'10, I'm Indian, and there are not a lot of people that look like me that do this.

You actually led me right into my question, and you're making my case for me. You aren't in that position because of your X and O's knowledge and being a guru, a guy who put up 25 points a game. You're not in that role, and you haven't gotten into that role based on that. Is that true or false?

My success is all from work and relationships. That's it.

I don't have the 15-year NBA career that some of these guys. Exactly. You have managed to get to the highest level of a sport, the NBA, as is a 5'10 Indian. I mean, you really are an absolute freak in a good way. It's all based on your skill set of connecting with others. Can I just tell you something, and Dave can chime in here. He's a guy that is the founder and active CEO of a company of over a thousand people, and he hosts one of the largest, most influential leadership podcast in the world. We talk about leadership all the time. America needs leaders. I'm paying attention to this stuff every day. Companies need people who can lead people, who know how to connect with people, who know how to communicate with people, who know how to instruct people, who know how to encourage people. Amit, you got an incredible resume. Oh, an engineering degree. If I'm you, I'm going, I'm going to start with, let me take that degree of engineering, and I'm going to look at the engineering field. I'm not going to limit myself to engineering, but I'm going to start there because I got the degree.

Then I'm going to start working my connections. By the way, I'm going to give you my book, The Proximity Principle, which for a guy like you who's a learner, it's going to give you the absolute formula, the five people you need to be around that will help you get where you want to go. By the way, you have an unbelievable network. All those coaches who know business guys, your college connections, all these business guys who used to donate money big time, they were hanging around those D1 programs. Those are your connections. You go, Look, I got an engineering degree. I can get in the engineering field and lead people today. I may not be the most talented engineer, which, by the way, Amit, tell me if I'm right or wrong, the guys and gals that are leading teams of engineers are rarely the most talented engineer. True or false?

I wouldn't know. I've been removed from it for so long that I don't remember what you're talking about.

All right, I'll tell you the answer. The answer is leading engineers, you don't have to be the smartest, Dave, the most talented engineer. You just got to know how to lead people. And this guy, he's bona fide. That's my take. And he's going for management leadership positions across the spectrum of the business world. I think it can go just about anywhere because it's not about the trade and it's not about the industry. It's about his ability to come in and bring a team together. That's my two cents on that one.

Exactly right. What we teach when we're teaching Entree leadership to business people is what happens a lot of times is small businesses, people become accidental entrepreneurs. I'm really good at heating and air, and I get me a truck, and then I look up, and I got 40 people and 10 trucks running around. Now, I'm no longer a heating and air technician. Now, I'm a leader. That's right. Leading and running a business is a different skillset than fixing your air conditioner. Leading and running a people is a different skillset than playing basketball or being an engineer. The leadership skillset you Excel in. That's right. And so you do have a great resume in that sense. Now, the trick is, where do you want to plug it What type of a business, what dynamic environment do you want to be in where you're leading and then finding people through your connections with Proximity Principle to plug into one of those locations? You It's going to be amazing. Yeah.

He can absolutely make this transition and do very, very well. Because what he has going for him that a lot of MBA coaches don't have if they leave that industry is he's got a really good degree. That engineering degree is very helpful, meaning he's got that skill set, he's got the mindset to think like an engineer. You add the leadership to it. Unbelievable.

Absolutely. That's exactly how it works. Hang on. We'll have Christian pick up, and we will get you signed up for that. I'll send out that book to you. I Can the proximity principle give us the thesis of that?

It just simply means this. If I am around the people and in the places of the space that I want to be in, then opportunities come my way. The formula is this, the right people plus the right places always will equal opportunity. I got to get around the right people, and then I get in the right places. When I'm in the right places, I meet more of the right people, and then they point me to the right places. It is this knowledge and connection combination that just keeps moving, moving, moving, moving, moving is Hollywood bravado. It makes for great fantasy. But in the real world, connections come at the most unexpected times because we keep showing up in the right place, or we keep showing up around the right people. And all of a sudden, I'm top of mind, or I've got the experience, and I was showing up, and then boom, I'm ready to step into it. She's speaking of basketball, John Wooden, arguably one of the greatest coaches all time. Certainly basketball. My favorite quote, Dave. He said, When opportunity comes, it's too late to prepare. And the proximity principle gets me in a place.

When the opportunity shows up, I'm ready to step right into it because I kept putting myself around the right people and in the right places.

This is The Ramsey Show.

All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates. But when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near you at ramseysolutions. Com/agent. That's ramseysolutions. Com/agent. Our scripture of the day, Proverbs 3: 6, In all your ways acknowledge him, and he shall direct your paths. Thomas Sowell says, Some of the biggest cases of mistaken identity are among intellectuals who have trouble remembering that they are not God.

Classic. Classic passive-aggressive just mic drop there by Thomas Sowell. Boom.

There he goes. David is in Chicago. Hi, David. Welcome to The Ramsey Show.

Oh, thank you very much. Thanks for having me. Sure.

How can I help?

My question is that I'm trying to do the baby steps.

I got myself a little bit of a quagmire with my debt, mostly real estate investment, but nothing horrible.

So I'm trying to imply the baby steps, and I'd like to sell one of my rentals, but I just don't think my tenant is going to be able to relocate and/or. It's somewhat of a A moral quandary. That makes me think.

Why can't your tenant relocate?

I just don't think that she'll be able to get another home, especially one as nice and large as this one, to house her and her kids.

So you're not charging her market rent?

Yeah, it's close. I mean, I could probably charge her more.

So if she's getting close to market rent, why can she not take close to market rent and go rent something else?

I just don't think that it's really available. I think it's really going to put her in a position.

I think she's going to- Why is it not available? You think you have the only house?

No, I don't. But I think She was paying for her mom's rent, too, and I tried to counsel her to maybe they could live together, but I don't think it's available. She's been late and behind. You know how it is, the rentals. I just Like I said, right.

Well, let me ask a question. I'm curious, did you feel this way? Did you have this concern for her before you talked to her about the possibility that you were going to do this?

Yeah, I did.

Okay. What was her reaction when you told her that this was a possibility?

I broke it to her a little bit, but I really haven't come down.

You didn't answer my question. What was her reaction?

I didn't really say I didn't really say anything about selling it. It really haven't come up yet. I know it's not going to go over well because I don't think she's going to find- Well, but there's a lot of thinking.

You keep using the word think.

Listen, it's not your job to manage her house. That's right. You're her landlord, not her boss, you're not her daddy. She's paying almost market rent so she can pay this, take the almost market rent and go rent something else. If she wants to combine households with her mom, that's completely her business and her problem. It is not your job to manage her life. Yeah, you're right. You're not doing anything wrong to take an asset of yours and say, You don't want to Are you really mean or nasty about it. If you want to give a little bit more notice, there's nothing on fire here. Instead of giving you, I don't know, she on month to month?

She is now. She didn't want to resign last summer.

She didn't want to resign last summer?

No.

I get a fair amount of runners like that that don't want to resign.

But they're not committed to you. You don't have to commit to them.

The point is, you're not a bad guy. I think if you said, Okay, I'm legally bound by the lack of a lease to give you one month's notice, I'm going to give you three months. That's a good compromise. That gives you plenty of time to work your way through this. I've appreciated you being our tenant, except for those times that you didn't pay on time. You don't have to say that, but you're acting like this is some freaking stellar tenant. They don't pay market rent, and they don't pay on time. I missed where I'm excited about this tenant. That's not being mean. It's just you got really one job when you're a tenant. Two, don't tear up the house and pay the rent on time. These are the two jobs you got. It's your job to make sure you're charged market rent. No, you don't have a moral dilemma at all. You can be kind and you could give more than adequate It's a quick notice and say, I'm sorry, gosh, if there's any way I can help you with this, I'll try to help you. But if helping you means you staying in the house past this 90-day mark, that's not the type of help I'm talking about.

But if If we can assist you in any way, I can tell you about my friends that have properties, help you find something like that. I appreciate this, but that's what we're going to do. We're going to give you three months notice. Listen, she can process this in three months. If she's angry at her landlord who she refused to sign a lease with for giving her three months notice, who's only required to give her one month notice, that's her fault, not yours. That's her fault.

I think this is all about David. He's such a nice guy that he's worried about a confrontational situation. I understand that, but this is nothing more than a difficult conversation, and it's not his bag, and I get it. But she's going to be fine just by virtue of only... She don't want to sign a deal anyway. She's got options. She knows it could change at any time. David, you're a really good dude, and you're just fretting over a difficult conversation.

It's going to be over in about 45, 50 seconds. I mean, there's not a lot to it. It's, Hey, going to be selling the house. I'm going to be sending you a note in the mail so we make it formal that July first, we're going to be done, August first, whatever it is. I'm giving you plenty of time. You had 30 I have a 30-day, right? But I'm going to give you 90 days just because you've been here a while and I want to be kind. And thanks. That's it. I'm done. It's really it. We really don't have to have a big long thing here. It's not a whole bunch of feelings. I've had landlords in my life, and none of them had any feelings for me. That's right. Just none of them did. I never had one that did that. If you get a situation like we had one one time, the guy got a terminal cancer diagnosis. He's got four months to live, and he lost his job because he lost his health, and his wife had three little kids at home and all this. We just didn't charge him rent. We let him live there and let her live there after he passed for a little while.

We I've worked with him, but that can't go on for eight years either. No. Even that. It's a period of time we can have some grace and mercy with somebody in that situation. But just simply, they're going to have to move. This lady, she really just got to move. I mean, folks, that's why you want to be an owner when you can be, and not in a stupid way. Don't go buy something you can't afford because I'm afraid my landlord is going to do that. Oh, by the way, if you don't want to move, sign a Hello. If he had a one-year contract, then he'd have to honor that, morally, ethically, legally, everything at that point. So there's the process. Here's the other thing. Those of you that are thinking of owning real estate, you need to have a policy of raising the rent every single year. Because I've been doing real estate for about 40 years, and rents have gone up every single year. The people that I know that get stuck in situations like this, they don't raise the rent for five years because it's a nice person and they pay on time, and they cut the grass in a little pattern, and then we just love them.

You don't raise the rent for five years, and suddenly you've got a way below market situation. Then you try to raise the rent, and they have a fit like they think they're the owner. It's really good. It just keeps the relationship accurately defined when we raise the rent, even if it's a little bit.

What's the Dave Ramsey way on that? Do you look at the market and then just undercut it a bit?

We look at the market and we go, if they've been with us a long time, it's a little under market. But I'll take it all the way the max plus sum. Been there one year, we just take it up to market. If they've been there five years, we tell them when they come in, too. Next year, rents are going to be higher. Go ahead and know. And that way, they're not shocked like, What? What? I don't understand. What do you mean what? Rents are going up. If you don't have that pattern, you set an entitlement expectation in place, and it creates real serious problems later. It's a real bad idea. That puts us hour The Ramsey Show in the Book. 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.