The Ramsey Show - Normal Is Comfortable, but Comfort Doesn’t Build Wealth

Starting point is 00:00:00 Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love and create actual amazing relationships. I'm Dave Ramsey, your host, Jade Walshaw. Ramsey personality is my co-host today. Open phones here at 888-825-5225. The call is free and some say the advice is worth exactly what you pay for it. Vinny starts this hour in New York City. Hi Vinny, how are you? Hey, how are you? Pretty good. Good. How can we help?

Starting point is 00:00:53 So I'm looking to get advice. I have a small business. I have about $95,000 in debt in our business and we make good money in sales but every time I feel like I make money all of my profit just goes to my credit cards and I never see anything and it's just very frustrating because I make two steps forward one step back if that makes sense so I'm trying to see what I can do to get my debt down. I also have a small debt in the personal because I'm also looking to buy a house next year as well. So that's what I need help with. Okay. Well, bad news, you're not going to buy a house next year because you're going to be getting out of debt.

Starting point is 00:01:40 Yeah. You can't do both of these things. Right. me getting out of debt. You can't do both of these things. So you financed the start of your business on credit cards? No, no, so we've been in business. You said you had business debt and then you said credit cards were taking all your money. That's where I got that. Well, so we have business debt because we purchased, I made some, you know, terrible financial decisions as far as buying a truck at the wrong time, purchasing a newer truck instead of an older truck.

Starting point is 00:02:13 One of the biggest, I'm sorry. Oh, go ahead. Keep going. One of the biggest debts is in February, I had to spend 30,000 on a pickup truck. I had to spend 30,000 on a pickup truck because in February I had an accident and I had a clean snow and I had no choice but to purchase another truck to complete the snow for the commercial properties. You didn't have insurance? I have insurance.

Starting point is 00:02:39 They fixed my other truck, but now I have two trucks when I didn't even budget for that or plan for that. Are you still are you still actively taking out debt or have you decided I'm done? Like have you changed your philosophy around debt? Yeah right now I'm done. I right now I try to make uh you know the lowest of my expenses like I for, I don't even go out to dinner anymore. I try to cook food at home. Let's go back to the business. Let's go back to the business a second. In your business, what do you do? What is your business? We do landscaping and construction. Okay, all right. And now you have two trucks and you only need one.

Starting point is 00:03:24 Okay, all right. And now you have two trucks and you only need one. Yeah, exactly, pretty much. Yeah, not pretty much. Absolutely. You were doing it on one and then you stupidly went and bought another one to plow three streets while the other one was being fixed. Okay. So, how much do you owe on the stupid truck? Thirty thousand. Okay, sell it Yeah, let's get rid of that debt I guess we have a third of your debt dude Yeah, and you didn't need it Right you panicked

Starting point is 00:03:58 Right okay next time you panic debt is not your answer Mmm. That's what she meant by are you through with debt. Every time you have a problem in business if you go borrow money you'll be out of business in about 20 minutes. That's the path you're on. Okay and how much credit card debt have you got? I have about another 30. Okay and what's the other 30? So I have, it's a couple credit cards. I have one credit card at 16. Yeah. And then I have another credit card that is 6. And then I have another one that's about 8.

Starting point is 00:04:41 Okay, that's 30 and 30 on a truck, but told me 95 so what's the other 35? So the other 35 is I have my original the first truck I had I still owe 15,000 on that. Okay. And then I owe my dad 12,500. Okay all right good okay so and what did you what was your profit in the year, uh, 2024 net profit that you paid taxes on? I met profit was around 40,000. Okay. All right. And you live in New York city? Uh, in Connecticut, but it's a worse city. Yeah. Yep. Extremely expensive. You can't, you know, you're not making any money. You're starving to death. Yeah. I mean if you had a job making forty thousand

Starting point is 00:05:31 and no debt, we would tell you to look for a job. So is the business growing? The business is growing. Last year in sales in twenty-four did it on 200,000. In 23, we did 100, so definitely it's growing. Okay, well if you can double it again, you can get there, right? So if you sold the truck and doubled it again

Starting point is 00:05:57 and lived on beans and rice at home, you can plow your way through, there's no pun intended. Are you single? I am yes Yeah, and and if you're not working on your construction stuff, you're working doing something else you work all the time you're broke Hmm, so pick up pick up a side gig working for somebody else if you can't stay busy with your construction landscaping stuff for somebody else if you can't stay busy with your construction landscaping stuff. Okay? So, that's the trick, man.

Starting point is 00:06:29 I mean, you've got to get some income coming in to offset this because it takes more than $40,000 a year to eat in Connecticut. And so there's nothing left. That's why it feels like the credit cards are killing you. However, it's actually the stupid second truck that's killing you. How many employees have you got I have a full time yeah okay you gotta get more work in there you got four people working creating 200 grand you got to get more work going you got to get this to 400 grand to make these

Starting point is 00:06:59 numbers work but it sounds like you're on that track that's a positive part of the story. The business is actually growing. If you can maintain your margins by carefully managing the business and managing the accounting of the business and quit borrowing money every time something goes sideways. Like you borrow money from your dad, you borrow money on a credit card, you borrow money to buy a truck, you borrow money to buy another truck. It's got to stop. You're killing yourself. So if you stop that what what Jade said is exactly right you stop that And you divorce yourself from debt is my provider to I am my provider

Starting point is 00:07:32 I am going to get up leave the cave kill something and drag it home to the tune of 400 grand Because see you go to 80 if you kept your margins you go to 80 No Yeah, yeah, you'd go to 80 if you made 40 on 200 you'd go to 80. No. Yeah, yeah, you'd go to 80. If you made 40 on 200, you'd go to 80 on 400. Yeah. And so keep your margins right there. And at 80, you live on 40. 40 and you sell the truck, you're almost out of debt. Sell the $30,000 truck, you got 60 left, you throw 40 at the 60, you're almost out of debt in a year. But that's kicking it, man. And it's all going to debt. No lifestyle, no weekends. I don't want to hear about happy hour happy hours I'm happy I'm working more okay that's where

Starting point is 00:08:10 you are right now that's the business you got to get in is making money and throwing it all at the debt and then reverse the stupidity I've done dumber things and you've done Vinnie but but you're right I mean you got a couple things on the dumb list there so you got some stupid tax being paid. You don't spend $30,000 to plow four driveways. Nuke, not on this planet. You give the work to one of your buddies and you pay him to do it. That's got a snow plow because your truck's in the shop.

Starting point is 00:08:38 And you just miss that revenue right now. That kind of stuff instead of buying a $30,000 truck. No more panicking. And even if you do panic,000 truck. No more panicking. And even if you do panic, dad is not going to answer it. This is the Ramsey Show. Hey guys, I'm super excited to announce that two of the goats of sticking to a budget have finally teamed up. That's right, Ramsey and Aldi are partnering together because, well, groceries cost a lot of money. And besides that, most stores are designed to trap you in a maze, a sad, expensive maze.

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Starting point is 00:09:37 If you're a business owner or you know one, you know one thing about business. It's hard. You go to work for yourself, find out you work for a jerk. Yeah, when you work for yourself, that guy's a slave driver. He will drive you into the dirt, man. Just crack the old whip, you know? Hey, I know this, and this is why we've been running, I mean, I know this from running our business and from coaching now About 10,000 businesses through entree leadership. That's why we wrote the new book build a business you love where we unpack The proven step-by-step method to go through the five stages of business. It's hard, but it's easier if you know where you're going and

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Starting point is 00:10:50 to get that the book and date is actually April 15 so pre-order Ramsey solutions.com slash store Matthew is in Austin Texas hey Matthew what's up hey mr. Ramsey hey Jay thank you for taking my call. Sure, how can we help? Well, my fiance and I are getting married in October. Yes, it's exciting. So I've been using y'all's resources online so I have a good picture of you know how to set the budget but my question today is how do we approach and ask our parents how much if any they're willing to contribute to this wedding? Ah, how long have you been engaged? We got engaged in February, okay, so they know it's they know what's coming up has it have they said to you

Starting point is 00:11:37 Hey, we have some money set aside Not specifically her parents we kind you know, started the planning process and both her and our parents were kind of like, don't assume like you're on your own. Oh, okay. Her parents offered to pay for her dress. Okay, great. And seemed like they want to help with the venue. Okay.

Starting point is 00:11:58 My parents, they haven't told me specifically, you know, amounts or what specific expenses they would want to. So, how old are you two? They said the same thing. you know, amounts or what specific expenses they would want to. Uh huh. So, I'll be the same thing. I'm 23 and she is going to be 22 in about two weeks. Okay. So, if I were in your shoes and I was in your shoes when I got married, I would have, I would go to my parents and say, here's the date, you said that you were going to help

Starting point is 00:12:22 with the rehearsal dinner, what does that look like and what does that mean for you? I'm trying to lay out the budget, help me plug into it what you want me to plug into it. And then she goes to her parents, that way if there's any feelings, like they don't have to deal with having some expectation from the in-law, if that makes sense. Yeah, it'd be fine if you went with her to her parents, but don't talk. Yeah, exactly. And it'd be fine if she went with her to her parents but don't talk. Yeah, exactly. And it'd be fine if she goes with you to your parents but she shuts up. But it's not something where it's like,

Starting point is 00:12:51 we're inviting both of our parents to dinner and we're figuring this out because I feel like there could be a level of pressure if you do it that way. No, no, I wouldn't put them together, no. Yeah, definitely not. Definitely, that's a nightmare right there. Well, actually you could get them, if they're competitive,

Starting point is 00:13:03 no, I'm kidding, I'm kidding. And do a bidding war, a bidding war, I love it. Her parents are no. No, no. I just I would just say mom dad I need clarification. Just because I'm guessing the way you phrase these sentences that between you and your fiance you would be the nerd she would be the free spirit. Does that sound right? 100%. You're the detail guy. It's easy if you just say to your mom and dad, hey, you know how I'm detailed and you know how I'm nerd out about this stuff.

Starting point is 00:13:34 It'll help me a lot to feel, to have peace about the planning if I just know what to plug in here. You just tell us what you wanna plug in. And I need to know, I need to know. And then she can say the same thing to her parents and say, you know, Matthew's a big planner and it just helps us to have peace and less stress, less anxiety if we know the amount.

Starting point is 00:13:55 Yeah, and not only the amount, but you know how these things are. People need deposits and they need, they need the money well before the fact. So make sure that you also reiterate that because you need to understand if it's gonna be a situation where you're fron need the money well before the fact. So make sure that you also reiterate that because you need to understand if it's gonna be a situation where you're fronting the money and then they're giving it to you as a gift on the backend

Starting point is 00:14:11 or if they have the money today, right? To put those deposits. So just make sure you get clarity on the timeline and make sure they know, hey, if you said that you're paying for the venue, I'm just letting you know that they need a deposit in the next three weeks here. That way, cause sometimes they're not thinking of it in the same way that you're thinking of it.

Starting point is 00:14:28 They're thinking of it October, right? And so just that clarification is going to help everybody. Yeah, but I think it's in person, calm, you don't have an attitude or a voice tone of entitlement or expectation. It's simply a question of clarification. That's all you're looking for. Honestly, I ran the numbers, we can cash flow this ourselves. That's not the issue. The issue is we need clarification of what you're not cash flowing because you're going to put together a budget. Unless, let me throw this out there, if you have some indicator, and you didn't say it,

Starting point is 00:15:03 but if you have some indicator that taking you didn't say it, but if you have some indicator that taking this gift comes with something and you don't want the something that it comes with, yeah, then you do have the ability to- I'll pay for the venue if you take the venue I want. Or if you invite all my friends or if you, you know, that sort of thing. If you don't want that and you can cash flow it, that's also fine. It's up to you and your wife to be. Yeah.

Starting point is 00:15:26 We took the more, back in the day, the bride's parents paid for stuff, paid for the wedding. We took the more traditional approach with Rachel and Denise and sat down, proactively the other way, sat down with their fiancés,'s Winston and bill and said, okay, here's the amount At the top line now you guys have got to figure out how to buy everything within that number And here's some budget items you need to look at okay reception is the most expensive thing Dress is not flowers can be if you lose your freaking mind And so on. So you're gonna discover this

Starting point is 00:16:06 as you actually start putting the thing together. And so you do a line by line by line itemized budget for the wedding. A zero based budget, just like if you were spending every dollar on paper before the month begins. It's project management, it's a project. It just has a lot of emotions

Starting point is 00:16:22 and usually involved are a couple of human projects. But you know. And people's definition of work, let me just say people's definitions It just has a lot of emotions and usually involved or a couple of human projects, but You know and people's definition of work Let me just say people's definitions of words are different and it's worth always Clarifying because I know with my wedding my parents said we'll pay for the venue in their mind. That was the backyard They said we'll pay for the food and they thought that was barbecue. You don't say like so don't stop by the barbecue trailer It's like on father of the Bride, Steve Martin and Visions. The cheaper chicken. Yeah.

Starting point is 00:16:49 So you have to make sure, hey, this is what I have in mind. What do you have in mind? Definitions matter. Our girls grew up on Father of the Bride, so we had Frank. Oh yeah, Frank, yes. That is so funny. Yeah, that was just, it was classic.

Starting point is 00:17:02 And we're like, yeah. And you're writing the check just like, ugh. I'm not dealing with Frank, you're dealing with him. Here's one check, you're done, it's going in. The wedding account, got your names on it. It's a gift, I'm done. I'm not gonna tell you, you have to do anything except don't come back to me for more.

Starting point is 00:17:17 That's it, that's all you get. And if you spend less than that, you got a down payment for a house. There you have it, oh I love that. So you can do that, none of them did. Yeah, they just, they just, we just had a house. There you have it. Oh, I love that. You can do that. None of them did. Yeah, they just, they just, just had a, we just had a huge party and it was wonderful.

Starting point is 00:17:29 Oh yeah, my parents. I love a big party. I do too. Especially if you can afford it, you know? So that's the thing. So a good rule of thumb too, guys, the average wedding in America today is a little over $30,000.

Starting point is 00:17:42 Okay, that's an average, which means up to half of them are less and up to half of them are more. The average household income in America is about 70,000. So maximum wedding budget would be 50% of your household income if you are paying for it all. And for that matter, moms and dads, if you're providing it for the bride of your, for your daughter who's the bride, it would still be the maximum of half your annual income

Starting point is 00:18:10 and you're paying cash. That's a good parameter. And so, other than that, is it too much? Like I went to a guy's wedding, his kid's wedding, it was like, I mean, they dropped like 100 grand on this thing. It was a, it was a partay. That's a partay.

Starting point is 00:18:23 It was serious. I know it is. But you know, he makes about several tens of millions of dollars a year so it really was a nothing expenditure for him but it was way different than the typical thing and I'm kind of walking around going you just burned all this in one day but for him is like buying a biscuit. It's a ratio thing so that's the trick. Look at the ratios. I mean, if you make $40,000 a year and you want to spend $40,000 on a wedding, the answer is no. That's stupid. You're out of control. You are going to be in the backyard with the barbecue.

Starting point is 00:18:57 Just telling you. Not that there's anything wrong with that. No, nothing wrong with it at all. Just make sure we have clarification. That's all we want. That was a good point, really good point. This is the Ramsey Show. Let's be honest, shopping for health insurance can be confusing. With high costs, complicated terms, and customer service that doesn't really serve you, most folks just pick a plan and hope for the best. See, insurance companies don't work for you. They work for themselves. Meaning they love it when you overpay. So you need a guide on your team to help you make the best choices. Health Trust Financial Works for you. They're not salespeople. They help you find the health insurance option that makes sense and saves you money.

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Starting point is 00:20:30 follow button helps a bunch with the algorithms and the stuff on the internet that lead you your friends to watch the show that didn't even know it was here before but you helped by subscribing following leaving that nice five-star review mama said if you ain't got nothing nice to say don't say nothing at all. Yeah so move on troll. But other than that yeah I mean the rest of you you're loving this thank you. It's very helpful to us. Very helpful we appreciate it. Rita is with us in Phoenix. Hi Rita how are you? Hi Rita. Hi Dave.

Starting point is 00:21:04 I'm sorry I'm nervous. That's okay, we're good. How can we help? Thank you. Well, I'm 63, my husband is 60, we've been married 36 years and most of our marriage has been full of debt. Right now we have about 44,000 in credit card debt, we have an $800 truck payment, $200,000 between the two of us in student loans, and I just feel we have no retirement whatsoever except our home. You know, and so... Help me with how you have $200,000 in student loans at 64 years old. Oh, we're late bloomers. Yeah. Who's the doctor? I know.

Starting point is 00:21:49 My husband felt the need to go and get two master's degrees. He's a teacher and I'm a teacher. And so, we got a late start probably in our mid-fifties and I taught, you know, I'm teaching wonderful at great- So, one of them was not in math? No, I know teaching wonderful. So one of them was not in math? No, I know. No. Wow. So what are your incomes between the two of you with these degrees and these

Starting point is 00:22:11 careers? So between the both of us, I added it up. Take home only is $5,635 a month. Okay. You make $30,000 a piece and he has two master's degrees Well, yes in teaching it helped him make more money but Are it our debt just seems to no no no no no no wait a minute. Yeah, you don't make anything Teachers that have two master's degrees should each be making sixty one. What are you doing? Are y'all working in a preschool? No, he's teaching high school and I'm teaching middle

Starting point is 00:22:50 school. So that was your take-home. What's come, what is it before that? Are you taking a bunch out of your check? Oh, well for the credit card debt, I don't even know how much it's taking out of that. It's doing it automatically? Oh, you're paying the truck payment and the credit card debt, and you're putting money in retirement, and you got all this other stuff. Yeah. Okay.

Starting point is 00:23:11 And you're getting a tax refund too, probably. Right. Okay, so you might be making 120. So what do you owe on the truck? Right. Oh, goodness. About 34,000, which is about what it's worth. Oh yeah, sell that today.

Starting point is 00:23:26 Sell it. That's the problem. I don't think my husband's willing to sell it. Then I don't think I can help you. Does he know that you have, does he feel that you guys have a financial problem? I've kind of hidden it from him, so that's my fault. That's my fault.

Starting point is 00:23:43 So if you told him today, hey we have $44,000 in credit card debt and $200,000 in student loans that would be a light bulb moment for him? He doesn't know that? It would and if I may let you guys know He picked up the truck, he drives it. He didn't think that Santa Claus brought it and he picked up the two master's degrees. He didn't think Santa Claus brought those. Very true. But he may not know the exact numbers, but he knows he has made a mess and he knows it. And I feel like I've allowed him to because when his dad died, he gave him a hundred thousand dollars. But listen, you're both, you're both complicit because you're married, right? You're both in on this. It's just the level, whatever the level of denial is or the level of, you're both complicit because you're married, right? You're both in on this. It's just whatever the level of denial is or the level of, you know what I'm saying.

Starting point is 00:24:28 So you're both in on it. We can go back and forth on who did what and who knows what, but you're both in on it. So I would say- And both of you are required to fix it. Yes. And if he does not want to buckle down and clean up the mess that by and large he is responsible for, It was his choice to buy a truck, it was his choice to go to school and get degrees that have

Starting point is 00:24:50 not monetized. These were his choices and so now at 60 years old he gets to be a man and own his choices and go, my family is in jeopardy, I've got to sell my truck. Your family is in jeopardy, I've got to sell my truck. Your family is in jeopardy, he has to sell his truck by the way. This is not an option. This is why he won't sell his truck because when his father died he inherited a cabin in Colorado that's free and clear. It's worth about $500,000 and so he doesn't want to sell the cabin because it's emotional. You know, his. And so he doesn't want to sell the cabin because it's emotional.

Starting point is 00:25:26 You know, his dad memory is tied to it. What's that got to do with the truck? Yeah, you're right. You're right. I mean, you linked it. I'm asking that as a real question. Is there a link or? Oh, he feels that once we sell the cabin someday,

Starting point is 00:25:43 that he'll be able to pay the truck off. And you'll get a choice. You got a choice. Friday one of them goes up for sale. You decide. Okay. It sounded like the cabin had way more sentimental value. When I look at this, I go, okay, the truck, you're not even upside down.

Starting point is 00:26:00 You get rid of that today. Do you have any money saved anywhere liquid? We have, we have $ thirty thousand dollars in our checking account But I don't I don't want to pay anything off with that because that's my security nest over the summer when he doesn't get paid Okay, oh you're but you guys make enough throughout the year Yeah work in the summer When you don't get paid that's what don't know where it goes, okay. Work in the summer when you don't get paid. That's what other teachers do.

Starting point is 00:26:27 Two homeworks. First homework is you gotta have a budget. If you don't know where your money, when you said that, I said, okay, they don't have a budget, there's no plan for the money. So you're downloading every dollar tonight. Second homework is when you go to open up every dollar tonight because you've already downloaded it,

Starting point is 00:26:41 you sit with your husband and say, we have a crisis. And I don't know if you know it, but here's what it is. And you start laying out those numbers and say, I have a solution, and you've gotta open up the lines of communication tonight. There's a couple of things we can do. We can either sell your truck and buckle down

Starting point is 00:26:57 and get on beans and rice and both take extra jobs, or we can talk about selling the cabin now. We cannot stay on the trajectory making the stupid butt decisions we've been making for the last decade and have anything but Alpo for retirement. You've gotta say this out loud. Yeah, you do.

Starting point is 00:27:14 Okay, and I'm scared for you, honey. I want you to go win, but I'm scared for you because every time we bring up something, there's a reason to not do it. You've got about five things you've been doing wrong. You've got to reverse all of those in dramatic fashion and then slam on the accelerator in the other direction. Number one, you're not disclosing and working together on every detail of your budget and

Starting point is 00:27:41 your future. You're treating him like he's a little boy and his feelings are hurt when his daddy died and so he can't make a grown man decision. Sorry, you get to be a man when you're 60. No way around it, you gotta deal with it, okay? Number one, so you gotta be on the budget, you gotta be on the same page.

Starting point is 00:27:58 Number two, you guys are gonna have to chop something with a freakin' machete because you have a mess, because you've been spending money like you're in Congress around there, and you've got to stop it. You've got to chop some stuff, and this car is one of them, but the car really points to the cabin. If I woke up in your shoes and I was him, and I had to come Jesus meeting and I decided I was going to be a grown man, the decision I made to go get two master's degrees that I couldn't afford to do was the day I made the decision to sell the daddy's cabin.

Starting point is 00:28:31 You didn't mean to sue it, but that's the day, that's exactly what happened. You lost the cabin when you went and got two master's degrees that didn't monetize. That's what you did. You traded the two because it's a balance sheet thing. You got over here you got a $500,000 asset over here. You got $200,000 debt. And the sooner you fix that, the sooner you can get in gear and start saving and actually retire, not eat Alpo. That's right. And Rita, you need to run actual numbers because what's going to make this compelling, not just to you, but to your husband is to say, hey, here's what we have. You know, teachers, they set aside, you know,

Starting point is 00:29:02 you have to pay into the pension. Here's what we have if we continue to go at this rate here's what our retirement will look like. Dollar-wise here's what we'll be bringing in and that's gonna shed some light when we compare that with what we owe on our mortgage and what we have to like real numbers are gonna make this a very compelling argument for you guys to do what Dave said and go in the opposite direction. So 36 years you've been taking care of him and now it's time for him to step up and say I'm gonna be a man and we're gonna make grown-up decisions together because we have made a mess by

Starting point is 00:29:36 and large he has made a mess. That's what it is you're trying to take care of him you're trying for him not to have any hurt feelings. Tuffies you signed up for this trip he did and he gets to take it I'm sorry this is the Ramsey show statistics show that half of Americans don't have enough life insurance or they don't have any at all I don't understand this John Why don't people want to take care of their family? They think they're not going to die or something. Well, I used to be one of those guys. I didn't even think about it.

Starting point is 00:30:09 And one of my buddies said, Hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance. That's a gut punch for decades. Dave. I've sat across people who've lost a spouse. They've lost somebody important to them. They don't know what to do next. Terrifying. You're going to have a crisis here. You know, you got two options while you're sitting and talking to a young widow. She's concerned about how she's going to invest all this money properly and not mess this up, or she's concerned how she's going to eat tomorrow.

Starting point is 00:30:36 That's exactly right. These are the two options. It's saying I love you to your family. Term Life Insurance. Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. The Ramsey Show Question of the Day is brought to you by YREFY, our defaulted private student loans. Keeping you up at night? Well, ReFi can help you lower your payments and your interest rate, get you out of default.

Starting point is 00:31:12 Visit whyrefi.com slash Ramsey and start resting easier. That's the letter Y, R-E-F-Y dot com slash Ramsey, might not be in all states. All right. Today's question comes from Nora in Wisconsin. He says my mother purchased a Gerber life insurance policy for my son and daughter when they were babies. My mom has since passed away so I called before my son's 18th birthday to inquire about cashing out. The representative said if we wait until he turns 21 it would be worth 30,000. Fast

Starting point is 00:31:43 forward and my son is now 21, so I called again to inquire about my son cashing out so he could use the 30,000 for a house down payment. This time a representative informed me that he had an upon death policy and he can only cash out for the money that's been paid in, which is 22,200, not $30,000. Needless to say, I am in the process of closing the accounts for both of my kids. I will still give them the amounts their policies are worth, but what a letdown.

Starting point is 00:32:14 Tell people to avoid this trap at all costs, and we do. We do tell people to avoid these traps. Gerber life insurance is probably one of the worst ones out there it's humorous it's so bad it's really bad life insurance this his sweet mom who's passed bought life insurance from a baby food company yeah i mean just think about that when you say it out loud it tells you there's a problem right absolutely so um yeah what a rip and then they lied to him too which absolutely they do I mean they just lie all these people in this business they because what the guy

Starting point is 00:32:54 meant to say was he forgot to say it correctly was that the death benefit would go up at 21 because he becomes an adult but the death benefit is not worth anywhere near what they paid for it. The poor lady, if she had put that money, oh she did, she put it in a fruit jar. That's, yeah. She put it in a cookie jar and it laid there for 21 years. And you got your money back with absolutely no interest.

Starting point is 00:33:18 And so what that means is, da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da-da that it should have been close to $20,000. If it was in just maybe a decent mutual fund, not even a good one. Yeah, you would have had, oh my gosh. Yeah, that's painful. Yeah. And here's the sad thing too, that sweet Nora, his mother, that passed away,

Starting point is 00:33:42 I think that was her name, right? Did he call her that? Yeah, the mom's name was Nora Yeah, sweet Nora thought she was doing something sweet for her grandbabies, which every grandparent wants to do and these freaking people at Gerber Completely predatorily fed on her grandmotherly love and ripped her off Well when you're in if I remember I hope I wasn't unclear about how I feel about this Well, when you're in if I remember I hope I wasn't unclear about how I feel about this When you're in the delivery room of all the papers that they give to you

Starting point is 00:34:14 They give you the Gerber life insurance policy in in the room when you're having the baby, you know We ought to just talk to some hospitals about how they're that's malpractice. It is I remember saying that I thought man It's great to want to invest for your kids and invest for the future, but they give you the worst possible thing. If they, I would rather them give you a paper that says, Hey, from here on out, if you just put a hundred dollars a month when your kid is, you know, 30, you know, they'll have almost $400,000 like anything. I don't care. You could put it in a index fund and have that. Do you see what I'm saying? Yeah. You fall off. No, Nora, who asked the question, I'm sorry. It was not the mother Nora. My mother, she said, yeah, that's right. That's right. I'm sorry what I'm saying? Yeah, you fall off. No, Nora's who asked the question. I'm sorry, it was not the mother, Nora. My mother, she said. Yeah, that's right. That's right. I'm sorry. I'm sorry about that, Nora. Okay. Just now looked down at the email and

Starting point is 00:34:51 saw it, but it's so aggravating. Yeah, it is. But it's kind of like this, guys. Look, if you, people call and ask us about like reverse mortgages. Okay. Where do you hear about reverse mortgages? Now think with me, okay? The advertisement before the reverse mortgage is a walk-in bathtub. The advertisement after the reverse mortgage is a snuggie. This is where you're picking up your financial products. I mean right there, and who's advertising it? Actors that are done. That's right. Actors that are way done.

Starting point is 00:35:28 Yeah, Montel, Mon-Tol, Williams. I mean when you reach the end of your career that the agent calls and says you can do a reverse mortgage commercial and you go, yeah baby, sign me up, we know where your career is, okay? It's gone down the tubes. It's in the, it's in the snuggie toilet, that's what I'm saying. But yeah, it's the same thing guys. Just think about where you're learning about this Here's another one. Okay. Let's just think about this. Okay, how many cash advance?

Starting point is 00:35:52 places Do you see in the rich end of town? They're not there Dave Okay, there's a clue right how many title pond places do you see in the rich end of town? Okay, there's a clue, right? Think about this. Oh yeah. Did you know that something like 78% of the lotto tickets are sold in the poor zip codes in town? And have you listened to the lotto commercials? They're not appealing to the highest common denominator of humanity. Pretty much

Starting point is 00:36:32 Darryl and his other brother Darryl are their target market. I mean think about it guys. Yeah. These are people that can't afford to go to Vegas and lose money. Okay. So you take some clues from the proximity of the marketing on this and it will, it will help you too. I'm sorry you got ripped off, Nora. And I thank you for giving us the opportunity to completely trash Gerber again. We do it pretty regularly, but whole life life insurance, insurance that has a cash value insurance, insurance has a cash value buildup, has a savings program in it, 100% of the time is a bad product. There's not a good one. There's

Starting point is 00:37:12 some that stink less than others, but that's true of humans. Okay? So it's just, it's just both of them stink. They're all bad. Do your investing investing not with an insurance company and by the way with investing even if she had had the 30,000 that's still a crappy rate of return now that would be you know it's only what a 2200 like a hundred bucks a year until 21 hundred bucks a year that would have been they are that that would have come out probably about 30k, but about 25k probably but anyway It's not putting a lot in 100 bucks a year not a month. Yeah, so But yeah, still yeah a year. Mm-hmm. It's not it is $8.33 a month. So you put that in the calculator

Starting point is 00:37:58 I was thinking a month. Yeah, but anyway the Wow, ouch I'm sorry. I hate that. So what do you do if you have kids? Well, they might get juvenile diabetes and be uninsurable when they're older. Yeah, they might. You know what the percentage is on that?

Starting point is 00:38:16 Almost zero. Yeah, so let's talk about- They might get childhood cancer too and be uninsurable. But you know what the probabilities are on that? Almost zero, okay, percentage-wise. And so you don't buy life insurance on someone whose income you aren't trying to replace. And children do not have an income.

Starting point is 00:38:33 From a financial perspective, they're a liability, not an asset. They're not creating money, they're drinking it. And so, you know, and eating it and whatever and all that. And that's fine. We're not mad at at the kids send them to the salt mines no that not what wasn't what I said no what I said was is they're wonderful perfect little things that are to be taken care of and it costs money they don't make money so you don't insure something that doesn't make money it's that simple and yeah yeah I

Starting point is 00:39:02 I like the way to think of it is if somebody's dependent on your income, that's. That's when you get life insurance. And you get insurance only, do your investments somewhere else. That's right. 100% of the time. So we may as well go through it. So if you're working, if you're the working adult,

Starting point is 00:39:20 for me, 10 to 12 times my income. On you. Right, on me. And then if you have a spouse that stays at home what do you say like four times the amount or up to well what I always just say is you know let's say Sharon was a full-time mom if she had passed away when I had little kids at home I would have had to hire Mary Poppins right and that's a lot of money Mary Poppins I mean that we're talking cook food do homework drive kids drive kids around, all that.

Starting point is 00:39:47 In today's world, that's 50 grand. Yeah, that's a huge monetary value on that. So you need five, 600 grand on a stay at home mom, because that's the economic value that she brings to the table in that example. But if you're working and you make 100,000 bucks, you need a million too. Yeah, definitely.

Starting point is 00:40:02 A million too invested at you know 10-12 percent will replace the hundred k without touching the million two. It'll create a hundred k a year in an income for the remaining spouse. That's right and our friends at Zander are the ones you want to go to to get that locked in and in place really today don't wait on that. Insurance is not a baby step. Life insurance is not. Good point. George brought that up recently. Yeah. Very good. This is the Ramsey Show.

Starting point is 00:40:32 Let me tell you the guy that's gonna cut you. It's Holy Week in Jerusalem. Crowds welcome Jesus as king. Rebellion is in the air. Jesus operates outside our jurisdiction. Rome will descend on us all. But instead of taking the throne, Jesus turns the tables.

Starting point is 00:40:49 My house should be called the house of prayer, but you make it a den of thieves. The world will never be the same. Now in theaters, The Chosen Last Supper. Get your tickets now. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. Where we help people build wealth, do work that they love and create actual amazing relationships. Jade Washoff, Ramsey personality number one bestselling author, is my co-host today.

Starting point is 00:41:22 The phone number here is 888-825-5225. Thomas is in Honolulu. Hi Thomas, how are you? Hi, I'm Mr. Ramsey and Mrs. Washa. So I'm currently unemployed. I recently got terminated from construction services company, Zilpe, North America. Also have had some extensive experience in sales and customer service, some operational stuff is why. Recently, last year actually, I graduated the University of Hawaii at Manoa with a Bachelor of Science in Biology degree. 25 years old got roughly 13 around $13,000 in savings right now. I just paid off my rent for the upcoming

Starting point is 00:42:21 month. I'm actually just not sure where to go from here. I've been applying some sales positions and some operations positions, but haven't been getting as much interviews, whatnot. Why'd you get fired,? Yes so my previous position they said it was due to negligence actually I so locked up the store in my role at Hilti was part of the account manager development program basically we would run the store to send out packages, receive packages, inventory sales and whatnot. But the store is the role and then we've always had issues with the door to go in and out. Some people they've gotten locked out. We had to call locksmith whatnot. but one evening after I locked up an hour after it, um, after I left the door popped open.

Starting point is 00:43:29 Um, and then I got, um, told it was negligence. Um, I didn't secure the entrance, but I do think that they were kind of. I'm hoping to kind of cut me because the previous two employees in my position, they got, uh, terminated and the last one before that you just quit without any two weeks notice I think they're trying to maybe get like the fresh start there or something. Okay so you've been applying for sales positions is it that you're not are you even getting in the room for an interview or you're not even receiving interview callbacks? So I've had some sparse, um, I've had two interviews so far, um, account,

Starting point is 00:44:13 executive role and then a project management, um, role, but it seems, um, for me, I, uh, I realize, um, uh, with my age and then what not, I, uh, I realize, um, uh, with my age and then how old are you? What not? I, I, I'm 25 years old. What's wrong with that? I put a lot of, I feel like, um, over here anyways, a lot of the applicants, um, they seem to be a little older.

Starting point is 00:44:38 So I, I kind of put a lot of pressure on it and I feel like I'm not, um, performing as, as well as I can and maybe should be in the time. It's possible. Yeah, I'll tell you right now. I think you might do well with some coaching or you might do well with a little bit of help in that area. Are you limited to Honolulu or are you looking elsewhere as well?

Starting point is 00:45:00 I am. Yes, so I am open to moving to the mainland, but right now with my current living situation, it's just me and my younger brother actually. Have you got some kind of a limitation or a slight disability or anything you're facing? No, no. Okay. All right, no. Okay, good. Okay, you just sound really, really nervous on the air, which I would be nervous too

Starting point is 00:45:32 if I wasn't used to being on the radio or on the podcast, so I understand that, but I'm just trying to check and see what's going on, because your voice cadence, it sounds like you're scared to death, and maybe that's all it is, okay? That's fair, I'm picking on you, I'm just trying to find out what you're dealing with, why you're scared to death and maybe that's all it is. Okay, that's fair. I'm picking on you I'm just trying to find out what you're dealing with why you're not landing these positions. Okay, I would if I'm in your shoes

Starting point is 00:45:50 I want to step back Two or three steps from this and say okay. Where do I want to be when I'm 30? Where do I want to be when I'm 40? What do I want to be doing and what are the steps to get there and why do I want to be doing that. It's not necessarily go back to school but it sounds like a lot of your jobs you just fell backward into them. Whatever landed at your feet you took it because you were hungry and you wanted to eat. By the way that's not a bad thing as a temporary measure take a job and so you can eat that's an okay

Starting point is 00:46:21 thing. But I doubt when you were getting a four-year degree in Biology your dream was to manage the warehouse and try to lock the door. That's broken No, that was not like that you weren't sitting around dreaming of doing that when you're 25 years old So you fell backward into that jobs what I'm saying It just it just came at your feet and you took it. Some of the sales things you took, it's the first thing that came up. You may or may not like sales. You may or may not be good at sales. I don't know, but it feels like that just whatever rolls in front of you, you pick it up and go with it. And again, to eat, you do a lot of things on the short term, but I want you to start doing some thought about

Starting point is 00:47:01 where I want to be five years from now and 15 years from now. And I'm going to send you Ken Coleman's book, Find the Work You're Wired to Do. It has the Get Clear Assessment built into it. It's my gift to you. And then I'm also going to send you his book, The Proximity Principle. The Get Clear Assessment takes about 20 minutes to take and it will point out to you what some of your strengths are, your passions are, and it'll help you point in a direction that is a good long-term career path not just a job because you

Starting point is 00:47:35 got to get out of the business long-term of a job. Short-term take a job, take three jobs. I don't care. Short-term is anything. Go make some money, right? But long-term I don't want to Short term is anything, go make some money, right? But long term, I don't wanna be stuck in something where their biggest crisis of the week is a door that won't lock. Oh my God, really, let's move on. Thank God you got fired. And so you get to go do something

Starting point is 00:47:57 with your life that matters now. And yeah, so I'm gonna lean into that. And I may take some jobs while I'm working towards my career, but get in an apprentice program. It could be something in the trades. You could go that way. Yeah, that's true. Could be something in technology.

Starting point is 00:48:15 It could go that way. It could be you wake up that biology itch and scratch it that was there. I don't know, but I'll send you those two books as my gift, Thomas. And so while you're looking for a job, I also want you working on your career. Yes. And do your best to prep for these interviews as best as you can. You know, role play these interviews, go over these interview questions and get good at really being prepared for them so that you can answer them like in a concise way and really get across what it is that you want to say. If the place is open to the public, go walk it.

Starting point is 00:48:49 That's right. And feel the air. That's right. And get on their website and read everything about them. Yes. Read the history of the founder of the organization. If you're going to go to work for Amazon, know about Bezos. Know how he started in his garage.

Starting point is 00:49:02 Know all that. That's right. If you're going to go to work for Dell, know he started in his garage, right? if you're gonna work for Dell know he started in his garage Right and so you know and so what does Michael Dell do? How's he think because that does run down through that organization even to this day. That's so true. Yeah Preparation remember this preparation is a gift you give yourself That's some of the best advice I've ever gotten and in an interview situation It's well and what'll happen is you'll chill out and then your vocal cords will sound confident,

Starting point is 00:49:28 not freaked out. That's right. And that'll help you with that whole process. This is the Ramsey Show. Hey, what's up guys? It's Jade Warshaw. And look, if there's anybody who knows student loan debt is a problem, it's me.

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Starting point is 00:50:47 to find out more about student loan refinancing. Again, that's laurelroad.com slash Ramsey. Laurel Road is a brand of Key Bank National Association. All credit products are subject to credit approval. Listen, I know a lot of you would rather watch paint dry in slow motion than file your taxes. But thankfully, you don't have to dread filing when you've got Ramsey Smart Tax. It comes packed with everything you need to file online before the big deadline.

Starting point is 00:51:12 That means all major federal forms and deductions are covered with no hidden fees. Plus, with Ramsey Smart Tax, you can save up to 70% compared to other tax software out there. It's a no-brainer. Just go to ramseysolutions.com slash smart tax and see how simple tax filing can be. That's ramsysolutions.com slash smart tax. Jade Wachow, Ramsey Personalities, my co-host.

Starting point is 00:51:35 Drew's in Fort Worth, Texas. Hey Drew, how are you? Any better, I'd be you, Dave. Ha ha ha ha ha ha. That's cute. How can I help? I was calling in to let you know I'm a you, Dave. Ha ha ha ha ha ha. That's cute. How can I help? Oh, well, I was calling in to let you know I'm a millionaire, thanks to you.

Starting point is 00:51:49 Woo hoo hoo! Baby steps millionaire. What's your net worth? So right now we're sitting just at $2 million. Nice. What's interesting about it is we hit our first million just before we turned 40, and then seven years later, we just turned 47. And like you say, it doubles every seven years.

Starting point is 00:52:08 We just hit $2 million. Wow. Love it. Give me a little breakdown on the mix. How much of that's real estate retirement and so on. Yeah. So, uh, we recently hit a million dollars in our retirement, thanks to, uh, the guidance of your smart Vestor pros.

Starting point is 00:52:24 So a big shout out to Chris and Tyler out there. Good. It was awesome. When we saw that seven figures on there, I'll tell you, that was so inspiring and exciting. That's sweet. We also have about 750 in our home equity, another 150K in our college savings and then the remaining hundreds in like cash and cars and things like that.

Starting point is 00:52:46 Got it. Well done, sir. Well done. How much of this did you inherit? Well, interesting enough, so my grandmother passed away about seven years ago and she gave the grandkids just a thousand dollars with a message of saying, hey, live life, have great, have great experiences. And today would have been her 106th birthday. So this is an experience that I'll never forget. Wow. How fun is that? Very cool. Good for her. That's great, man. That's amazing. So, she was like 99. Yep, 99 and a half. She was the matriarch of our family and my daughter is named after her. She's the fifth Adelaide named after her grandmother.

Starting point is 00:53:31 Adelaide the fifth. That's sweet. So what was your income during this time? Highest to lowest or lowest to highest? Yeah. So our adult income, you know, range from 45 K to 220 is about what we make right now. Um, but I'd say probably since we started the babysit process, you know, 15 years ago, it's probably averaged about one 60 to 170. What do y'all do? Uh, I am in medical device sales leadership and my wife is the COO of this household.

Starting point is 00:54:02 Love that. Love that. I love it. Very cool. And so you got a four-year degree? Yes. I graduated in three and a half years from Miami University in just business marketing. Okay, very good. All right, good. Marketing degree. Of course you're in sales now. That's good. What was your GPA? So I'm sure you could relate to this. I graduated with a 3.07.

Starting point is 00:54:26 I was dying to get that 3.1. Look at you. But unfortunately I fell a little short. Well you were over three. So that's the one that killed me. Good for you man. Excellent. Excellent. What do you drive? So in Texas you're required to have either a pickup or a Jeep. So I went with a 2018 Jeep Wrangler Sport. Love it. I love that you went with the Jeep. That would have been my choice too. I like it.

Starting point is 00:54:50 What about your wife? Well, we just upgraded her car. She had been driving our last, the last thing we ever took dead out was in 2009 when we bought her a Traverse. But now living here in Texas, she wanted a convertible. So we upgraded to a 219 Buick Cascada convertible. Oh, that's fun. That's nice.

Starting point is 00:55:10 Yeah. That's very cool. That's my $2 million net worth car. Yeah, living the dream. I like it. Put the top down. I like it. Good job, y'all.

Starting point is 00:55:19 Well done. So I have a question. What role did budgeting play in this? Oh, it played everything. I mean, I tell all the people, because we do financial piece and lead that, we're going through, we're leading a class right now, and I tell everyone when you start, it's amazing,

Starting point is 00:55:34 you immediately get a raise. The advice I give people all the time is, dream big, but act small. Ooh, I like that. So like, yeah, my wife and and I we always have these conversations about you know what we want our future to look like and it's just exciting to kind of see like what goals are we gonna have what do we want to do it keeps us motivated but dreams you know without actions just a wish so you know if we

Starting point is 00:56:00 if we want to do these small things your future is determined based on these small little decisions every single day And the budget you know keeps us on pace with with what those small decisions are so that we could reach those goals You're right. Yeah, the budgets the map to get you to all your money goals. That's so important. Very cool That's a good that's good advice that I was gonna ask you what you tell the youngsters and that's younger than you You're a youngster, but younger than you, you're a young millionaire, young, two millionaire for sure. Very well done, dude. Well done. Proud of you. How's it feel?

Starting point is 00:56:35 It's, it's so freeing. I mean, the journey worked $2 million, but to be, you know, completely honest and stuff, it, it isn't such a, it's not always a smooth ride right no the last year I mean I've gone through a couple different layoffs and medical device sometimes you have that with startup companies or different things there's been some layoffs and through the entire time like we weren't stressed we knew we had the emergency fund we knew we had our budgeting we knew we had all this stuff in there, and we're just constantly at peace

Starting point is 00:57:08 with where we're at today and where we're gonna be tomorrow. Yeah. That's great. Well done, sir, very proud of you. Thanks for calling in and sharing your dream with us, because you're living it. You are living the dream. I like it, I like it.

Starting point is 00:57:20 So what do you say, dream big, act small. Yep. And I would say if you're going to dream big, you better work big. Gotta work big. Cause if you don't work big, it's not common. The work goes with it. Cause otherwise you get called a dreamer,

Starting point is 00:57:34 which is a negative thing, right? You don't want your daughter dating a dreamer. They'll live in your basement. So no, we want people that get stuff done. They leave the cave, kill something and drag it home. Obviously Drew is one of those. You know, Jade, I think I'm just visualizing out of the 30 or 40 million people

Starting point is 00:57:52 that are gonna consume this particular moment on this show, that there's a couple things Drew's family understood that the typical person walking around doesn't understand. Number one, 89% of America's millionaires are first generation rich. They did not become millionaires because of an inheritance. That is good news for all of us who didn't have a rich uncle or rich parents. All we've got to do is leave the cave, kill something something and drag it home. And you remember a couple of principles. Principle number one is the power of compound interest will make you wealthy

Starting point is 00:58:30 and that's what happened to Drew. It's also making him double wealthy fast. So what that means is a hundred dollars a month invested from age 25 to age 65 is $1,176,000. So you're a millionaire. That doesn't count buying a house. That would even take you up higher. You'd do even better. And that doesn't count the fact that you're probably gonna put a lot more than $100 in in your 401K,

Starting point is 00:58:59 your Roth IRAs and stuff as you go along with matching. But $100 a month gets you there. That's principle number one. Piece of knowledge number one was that 89% of America's millionaires are not millionaires because of inherited wealth. We get that from the largest study of millionaires ever done in North America, airtight research

Starting point is 00:59:23 that Ramsey Research did, it's in the book, Baby Steps Millionaires, my latest number one bestseller. And that book has the white paper of all the research in the back for those of you that are interested. But, so Drew is a Baby Steps Millionaire and that's the third piece of information is he followed the Baby Steps. That's right. And Baby Step 1? Yeah, Baby Step 1, you are saving a thousand dollars, a thousand And that's the third piece of information is they followed the baby steps. That's right. And baby step one. Yeah, baby step one, you are saving $1,000, $1,000 saved after that. Baby step two, you're paying off all of your consumer debt.

Starting point is 00:59:52 That's everything except your mortgage. Baby step three, you're walking in and you're saving up three to six months of expenses. After you've done that, now we're at baby step four where you're investing 15% of your income. Baby step five, we're putting away for kids college. Baby step six, we're moving on to pay off the house. Finally, baby step seven, living and giving like no one else.

Starting point is 01:00:11 And there you have it. And typically to get all the way through six, meaning houses paid off, takes people between seven and 10 years from today, ready, set, go. They typically are out of debt, consumer debt and everything. If they lean in using the debt snowball and beans and rice, rice and beans, quit spending money that they don't have, sell stuff, sell so much stuff the kids think they're next, they're out of debt in

Starting point is 01:00:32 24 to 30 months. Two, two and a half years. And then about seven years later, the house is paid off. Or at the seven year mark rather, the house is paid off. And that's right where Drew is. He's got there at 40 and now it's gonna double about every seven years for him Yeah, and it's not a magic act. You know, a lot of people think this just magically happens, but it's not magic It's very intentional. It's very intense. And if you do that you can make it happen

Starting point is 01:01:01 Absolutely. That's the moral of Drew's story right there. This is the Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession? Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest

Starting point is 01:01:49 opportunities. With one unified business management suite, there's only one source of truth for the visibility and control you need to make quick decisions. NetSuite's real-time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days, not weeks, you can spend less time looking backward and more time focusing

Starting point is 01:02:15 on what's next. And speaking of what's next, download the CFO's guide to AI and machine learning at netsuite.com slash Ramsey. It's learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. I talk to people every day who want to know how to do better in two areas, money and relationships. That's why I'm pumped to bring the money and relationships tour to a city near you. Join me and Dr. John Deloney for a night that will challenge the way you think about this stuff and possibly change how you live forever.

Starting point is 01:02:48 Starting April 21st we'll be in Louisville, then on to Durham, Atlanta, Phoenix, Fort Worth and Kansas City. Grab your tickets at ramsysolutions.com slash tour before they're gone. We do our show on the glass Monday through Friday meaning there's a window and you get to watch the monkeys in their cage here that would be me and used to have a little sign up that said don't feed the monkeys and George camel took he took exception to that sign so we had to take it down because he was afraid that he was being called a monkey but that's not cool cool. So anyway, I'm the self-proclaimed monkey here.

Starting point is 01:03:27 So I'll take credit for that. Anyway, we're on the glass, and you can stop by and hang out. Watch the show happen from 1 to 4 Central Time Monday through Friday. Two of us will be in here all the time. And we're in here to help you. And also, just outside the glass, in the lobby with all the folks, there's usually 50 to 200 folks

Starting point is 01:03:46 sitting around watching the show. There's free homemade cookies, there's free coffee, and there's a debt-free stage. And standing on the debt-free stage is Josh and Rebecca to do a debt-free scream. Hey guys, how are ya? Good, how you doing, Dave? Welcome, welcome, where do y'all live?

Starting point is 01:04:03 Zebulon, North Carolina, a little small town just east of Raleigh. Okay fun. Welcome to Nashville and how much debt have you two paid off? two hundred and three thousand four hundred dollars Oh, love it. How long did that take? 63 months right at five point three years. I like it good for you and your range of income during that five years about 105 to 165 Cool. What do y'all do for a living? I work in retail merchandising. I'm a systems analyst at a transportation company. Great, very cool. So five years, $203,000, was that your house? Yes it was. You paid off your house? Only debt we've ever had. You're looking at weird people. I know. 100% debt free. How old are you two weirdos?

Starting point is 01:04:48 I'm 30. Wow. 29. Woo! Wow! With a paid for house in Raleigh, North Carolina. Especially weird. What's the house worth?

Starting point is 01:04:58 Right at 360. Wow, how fun. And how much have you guys already got in your NIST tick? Roughly 250. Alright, so you're halfway to, a little over halfway to being a millionaire and you're third, not even 30 years old and barely 30 years old. Yes. Excellent.

Starting point is 01:05:13 Excellent guys. Way to go! Thank you. Wow, wow, wow, wow, wow. So you start this and you're not even 25 years old. How long have you all been married? Five and a half years. Okay, so boom, right off the, right out of the gate.

Starting point is 01:05:24 Here we go. Game on. So tell us the story, how in the world do you get this smart, this young? I'm very thankful to say very little of it has to do with us. So we both were raised with parents and even grandparents that modeled biblical principles for how to handle money from a very early age. They modeled giving, they modeled investing, they modeled living on less than you make,

Starting point is 01:05:47 living on a budget, and just generally managing God's resources well. And I'll give you a short story that illustrates what I mean. So I grew up with a dad that I've always called the boring version of Dave Ramsey. He has a little more hair, but you're a lot more fun to listen to.

Starting point is 01:06:03 And I remember one story in particular, he went to a yard sale and haggled with this poor old elderly lady for a nutcracker. She had the nutcracker marked at 50 cents and he walked up and the nutcracker had a chipped tooth so he got that thing for a quarter. Well there you go, that's how you do it, I love it. That's fun.

Starting point is 01:06:26 And then if I can say it so, and then college, this is where the Ramsey organization comes in so I at college found your videos, I'd never heard of you before college and FPU made such a big impact on me even though I hadn't actually taken the course. As soon as I graduated our church started offering it, and I think I took it three times because I liked it so much, and then Rebecca attended the last one, and we also led a couple of small groups,

Starting point is 01:06:54 and so FPU was a big part of that. So our story is a success story, not so much because we're fantastic or amazing, but because the people around us are fantastic and amazing, and you, Dave, and the entire us are fantastic and amazing, and you Dave, and the entire organization are certainly a big part of that, and we cannot say thank you enough. Well, thank you.

Starting point is 01:07:11 You had the option of doing stupid, and you chose wise. So I'm still gonna blame you for your success. Well done, Hero. Good job, because not everybody gets a good pattern and follows it. I know, that's right. Like Dave said, you have a choice and you guys chose right. And I love that you were both immediately on board.

Starting point is 01:07:29 So you never really had the consumer debt. You just both got in, locked in and said, we're gonna do this. Did it feel like a sacrifice or was it just kind of, hey, this is just part of our budget. We don't really feel it. Tell us how it felt paying off the debt of the house. I know for me, I know paying off the house

Starting point is 01:07:46 was a big thing for Josh. Like let's try to pay it off early. For me, I came into it, I like to say I got married and got into debt for the first time ever because he had bought the house just a couple months before we got married, but it was able to see just the weight and the stress that was taken off of Josh once the house was paid off. And now we just have a lot more freedom as a result of that.

Starting point is 01:08:10 What's the first big thing you're going to do to celebrate? Buy a car. Good! Rebecca totaled, well actually a deer totaled our only half decent car last Thursday. Oh wow. So we lost our only decent car. And so I looked up the Kelly Blue Book value of our two remaining vehicles, an old truck,

Starting point is 01:08:27 my grandfather's truck, and the first car she ever bought. And it's like $4,900 between two vehicles. So. Yeah, you need to upgrade. We need something a little bit more reliable. Both of you do, yeah, instead of deer fodder. Yeah, I like it. So what are you gonna get?

Starting point is 01:08:43 I have no idea. I am not a car person, so I'm leaving that up to him. I just want a better car. Okay you just want something that's a little nicer. Yes. Not not doesn't take much to upgrade that. No it doesn't. You're gonna get a little insurance check and you're gonna put a little money with it and try to try to get a little better place. We're going to get anything that allows us to have enough confidence such that we're not preying on the way to Ramsey Solutions. That's pretty sweet. I hear that.

Starting point is 01:09:07 Oh my gosh. Way to go you guys. I'm very proud of you. How's it feel to not have a payment in the world? Wonderful. It feels great. It feels amazing. What do you tell people the key to getting out of debt

Starting point is 01:09:19 is you paid off your house by the time you're 30. So I've been very blessed to get to know a 99 year old World War II combat veteran over the past few years. He was my grandfather's best friend and he told me once, once you become emotionally invested in something, it becomes virtually impossible to change your mind. And so I think the key to getting out of debt is simply becoming emotionally invested in it. Allowing the stuff to drop from your head to your heart. You know rain that falls on grass doesn't actually do anything. It's the water that soaks down to the roots that causes life change. Yeah, wow. Very good. That's very true.

Starting point is 01:09:59 Very, very true and well put. Exactly. Yeah, it's um, you become what you think about, you know. Bible says, as a man thinketh in his heart, so is he. So that's the deal. And it's the power of focus, the power of intentionality, all of that is a biblical principle, you're exactly right. So very well done, sir! Proud of you guys, and Lady, you guys are awesome. This is great. We'll pray you get home. Thank you. So you can get a new vehicle. So you can both get a new car. Yeah. Because now without any house payment or anything else, now you've got the ability to save and pay cash for that. And you probably don't realize what the next three years is going to look like. How much freedom you've really set yourself up to be. Because you've only really known one way while you were married.

Starting point is 01:10:45 But now you've got a whole new version of you two to learn about and it's gonna be pretty incredible. So way to go. You guys are heroes. Yeah. Man, you're amazing. So, you know, every time someone tells us that there's a Gen Z problem or a millennial problem, I tell them, no, there's not. I point, I got excellent versions of both on this stage every week coming in here and showing us how it can be done. No, there's not I point I got excellent versions of both on this stage every week Coming in here and showing us how it can be done And so you guys give us hope for the future us old people so good job guys well done Josh and Rebecca Raleigh, North Carolina

Starting point is 01:11:16 203,000 paid off in 63 months making 105 to 165 house and Everything at 30 years old. Count it down. Let's hear a debt free scream. Three, two, one. We're debt free. Yeah.

Starting point is 01:11:35 Woo. Love it, love it, love it. Wow. Well done. 29 years old. Man, that's beautiful right there. They'll be able to do anything. I mean, you take a couple hundred thousand dollars

Starting point is 01:11:53 a year of income, which is what they're approaching, and no payments of any kind. They're not even, they're 30 years old. It could be so much money. So much money. Unbelievable. Wow. That's inspiring. I'm inspired. Very cool. This is The Ramsey Show. You spend hours researching before making a major purchase like a home or car, but it's also a good idea to put in the work searching for the right insurance coverage. To protect your biggest assets, I recommend using Ramsey Trusted Pros.

Starting point is 01:12:30 Whether you're looking for car, home, or any other type of insurance, Ramsey Trusted providers have been coached and vetted to serve you like we would. Find what you need at ramsysolutions.com slash insurance. Jade Walsh all Ramsey personalities my co-host Mike is in Idaho. Hey Mike welcome to the Ramsey show. Oh how's it going guys? Better than we deserve what's up? Alright so um I think I started a business and I need a little help here. Explain. All right, so I'm a high school photography teacher and I teach yearbook and journalism

Starting point is 01:13:16 and all that kind of stuff. I started taking senior photos and sports team photos and designing banners and essentially I started doing it simply to essentially pay for my classes in Idaho. We really don't have a lot of money for things. And I want my students to actually, you know, have cameras to take a photography class, which I think is super helpful.

Starting point is 01:13:40 Anyway, so. Yeah, you think? Yeah, right. So anyway, I've taken all that money and I just donate it to my classroom. I hire some of my students in order to get them experience. My problem, I suppose is a good problem here, but words really gotten out

Starting point is 01:13:58 that I'm doing pretty well with this stuff. I'm starting to get booked up with a lot of different senior photo sessions. Great. A lot of different teams are contacting me with to get their photos and right now I'm looking at like $400 to $800 a month I'm bringing in for my program that I'm donating. Because I'm making actually a lot more money than I originally thought I was going to, I want to make sure I'm protecting myself and I you know I'm very ignorant when it comes to business. I still want to donate a lot of this

Starting point is 01:14:31 money but down the road I would really like to maybe start compensating myself with all the hours that I put into this. Yeah. Do I need to file for an LLC or I guess what are my next steps here? No you don't need an LLC you just need to make a decision. Yeah how much you have to LLC. You just need to make a decision. Yeah, how much you have to decide at what point does the- You used to give 100% of your proceeds to the classroom and now you're not going to. Correct.

Starting point is 01:14:56 Again, I'm not sure yet. I'm not sure which route I wanna take, but I suppose that would be my next step to decide. If I wanted to start compensating myself, what would be my next steps just making that decision is anybody else I mean this is for your class in your classroom is anybody else dependent on this money that they're going oh man we were expecting that money from Mike that needs to be involved yeah then at that point it's just me at that point it's you figuring out okay what percentage of is it 50 percent Is it 80% that I want to give away

Starting point is 01:15:25 versus keep? And what's your intent with the money? Is it that you're getting out of debt? Is this just to help build up savings and kind of have a clearer picture for all of that? And then you just push play. Yeah, exactly. Sounds good. Yeah, the first thing, and then I would open a separate checking account for your business. You can open it in your social security number. It doesn't require a tax ID and it doesn't require an LLC. The only reason you would need an LLC is if you get big enough, the business is big enough or

Starting point is 01:15:54 your personal wealth is big enough that you have a target on your butt and somebody wants to sue you. Right now you're a broke photography teacher. Nobody wants to sue you. Correct. You're not going to get any money from me anyway. Exactly. So I mean what are you going to do? Drop a camera on their toe? I mean there's not a lot of potential liability here okay. So I'm not worried about it if I'm you. So you would open it under what's called a sole proprietorship and so your checking account would be Mike so-and-so DBA doing business as Mike's photography or whatever you call it okay okay and then all the money that you make doing that goes into that account all expenses come

Starting point is 01:16:39 out of that account and all contributions come out of that account and keep some money aside for taxes because you're gonna, you know... You're gonna have taxes on the net profit. And the other thing with taxes is is there a some kind of a nonprofit associated with your school that you can donate this money to that ends up in your classroom? Yeah, so we all have our own accounts for each one of our programs here. So is that a tax deductible account? Could I make a contribution to it and get a tax deduction?

Starting point is 01:17:11 Yes, sir. Okay, great. Then you're making a contribution to that account. You take a tax deduction for your contributions. You take a tax deduction for your expenses. What's left is taxable profit. Okay. And you would set aside a fourth of that and you file quarterly estimates on your income taxes for your taxable profit.

Starting point is 01:17:33 But that just depends on how much of it you're not going to donate. As long as you're donating everything net of expenses, you have zero taxes. Okay. But once you decide... Yeah, and right now, every single dime is going to it. And right now, right now every single dime is going to it. So am I okay right now at least? You're fine. You're fine. But I mean if you're doing 800 bucks a month, that's $10,000 a year. Correct. That's pretty, pretty generous to a single classroom. Well again, we don't have a whole lot here.

Starting point is 01:18:05 Yeah but I mean how many times you got to buy all this stuff? One time? Correct well cameras break down and all that kind of stuff and new equipment comes out and they keep filling my classrooms full of more and more kids and I need more resources I guess it's it's well you also know in the technology world or the camera world that that is an endless. That's a bottomless pit. Correct, yes. Right.

Starting point is 01:18:28 I mean, I've got several million dollars in various kinds of cameras inside this building and I'm constantly having to look at people and go, no, I think we've got enough. Because the people that are on the backside of those cameras love buying more. That's true. Yeah, you'll have to draw a line there. People that are on the backside of those cameras love buying more. That's true. Yeah, you'll have to draw a line there. Yeah, so you get your gadget people and gadget people just always want more gadgets.

Starting point is 01:18:53 That's life and so yeah, you wanna do that. Very generous of you, Mike. Very, very. Pretty cool. That's like the cool teacher. He is the cool teacher. I'll give the cool teacher a piece of advice though because we didn't talk about it,

Starting point is 01:19:04 but Mike, if you have debt, you do need to take some of this to put towards getting out of debt. Just saying. Absolutely. You know, absolutely split the difference. I'd probably go as much as half or more. Yeah. Yeah. But this guy is just very generous and he loves what he does. He loves taking, he loves photography. He loves kids. And that clearly shows because people keep coming to him. That is a huge ingredient when you're building your business, I think, is clearly having a passion for it, having a love for it because people can sense that.

Starting point is 01:19:35 Yep. And you're better at it because of it. Yeah, that's exactly how it works. So, very well done, Mike. You're the cool teacher, man. We dubbed you that for the week, good stuff. Open phone's here at triple 8 8 2 5 5 225 Anthony is in Cleveland. Hi Anthony. What's up?

Starting point is 01:19:51 Hi, how you doing Dave? Great. How can we help? So I'm 20 on I write right now, but I'm looking to buy a home. I only make 30,000 though What's your advice on Being so young and not making a lot of money trying to buy a house. I wouldn't buy a house You're 20 and you don't make a lot of money. I Would go make some money It's okay to rent rent as cheap as you can rent and let's work on the career side of the equation

Starting point is 01:20:23 Let's get the income way up start stacking cash yeah I feel like I'm bad at budgeting my money in like when it comes to like rent and all my bills and actually budgeting I don't know where my money's going. Well do you have debt? I learned about you in high school. Um yes I got 17,000 in a no 16,000 in a car. Well that's where a lot of it's going. 1600. Wait a minute you owe 16,000 on a car? Yes. And you make 30,000? 1600 in credit cards. Yeah that means when you took our class in high school, you flunked it. Mm-hmm, yeah. Yeah. That's where the money's going. Sell the car.

Starting point is 01:21:10 Yeah, you got to. And you gotta decide today that you're not borrowing money because I can tell you, as long as you're taking out debt, buying a house is gonna become further and further and further and further away from you as a goal. So if you wanna lasso that and pull it closer, you need to stop borrowing money, especially, especially things like credit cards and car payments.

Starting point is 01:21:30 Yeah, that's the deal. So yeah, you listen folks, when you owe more than half your annual income on a car, the car owns you, you don't own the car. You can't breathe. All you think about is making car payments. So all you can can think about. The things got your handcuff and it's dragging you around the parking lot. It is no fun at all. That thing's eating you alive, dude. So yeah, the way don't even talk about buying a house. And let's

Starting point is 01:21:57 get our income up, get the car gone, get the car debt gone, get all debt gone, and lean into that budgeting stuff. You'll be okay, keep at it dude, keep at it. This is the Ramsey Shack. Thanks for watching!

The Ramsey Show - Normal Is Comfortable, but Comfort Doesn’t Build Wealth

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