Ramsey Everyday Millionaires

Episode Summary: "How Much of My Net Worth Should Be Cash vs. Assets?"

Release Date: December 17, 2025
Hosts: Dave Ramsey, Rachel Cruze
Caller/Guest: Les from Greenville, SC

Episode Overview

This episode centers on a listener question about the ideal breakdown between cash holdings and home equity for someone approaching retirement. Les, a 72-year-old with a compelling journey from bankruptcy to multimillionaire, seeks advice on whether to upgrade his home and how much net worth should be kept in cash versus tied up in property. Dave Ramsey and Rachel Cruze unpack his scenario, provide guidance based on the Ramsey method, and use Les’s story as inspiration for listeners seeking financial peace and wealth-building strategies.

Key Discussion Points & Insights

1. Les’s Financial Situation (00:14 – 02:22)

• Background:

  • Age: 72 (wife is 69).
  • Ongoing business income: $300,000/year (expected to gradually decrease).
  • Net worth: $2.5 million (currently $2M in cash, $0.5M in home).
  • Considering: Upgrading home to $1–1.1 million ($1M in house, $1.5M in cash post-purchase).

• Home Purchase Intent:

  • Les is drawn to a limited-availability home site overlooking the city, with a potential home upgrade budget capped at $1.1M.

2. Timing and Longevity of Retirement Income (02:22 – 03:30)

• Les estimates five more years of sufficient business income before he’ll need to draw on investments.
• He expresses conservative intentions, only upgrading if it won’t compromise their financial stability.

3. Les’s Journey: From Bankruptcy to Financial Independence (02:56 – 03:42)

• Turning Point:

  • Les shares he and his wife attended Financial Peace University after bankruptcy at ages 57 and 54, respectively, with $320,000 in debt and no assets.
  • Achieved their first million in 10 years, second in the next five, and are on track for a third in three more years.

  “After bankruptcy and foreclosure at age 57… Nothing to our name, $320,000 in debt. Exactly 10 years almost to the day…We hit the first million, the next five years, the second million, we're on track that the third million would be in three years.”
  — Les (02:56)

• Hosts’ Reactions:

  • Dave and Rachel commend Les’s commitment and results, highlighting the power of discipline and long-term planning.

  “Well done, you guys. That's incredible. Absolutely incredible.”
  — Dave Ramsey (03:44)

4. Evaluating the Asset Split: Cash vs. House (04:01 – 07:47)

• Rule of Thumb:

  • Dave and Rachel emphasize there’s no strict “percentage” rule for cash vs. home equity in retirement, but discuss scenarios and guiding principles.
  • Upgrading to a $1M home while keeping $1.5M–$2M cash (even as income declines) is “totally fine” if all else remains stable.

  “You have 500,000 in your primary home now, it's just pulling out another 500,000 to upgrade to a million dollar home. And then you guys will have that 2 million in cash.”
  — Dave Ramsey (06:12)

• Ongoing Investment:

  • Les is contributing $150,000/year to investments, giving significant runway for compound growth.
  • Rachel advises considering the “doubling every seven years” rule of thumb for invested money’s growth.

  “Yeah, lump sum is going to double every seven years.”
  — Rachel Cruze (05:10)

• Spending & Margin:

  • Current household expenses: $7,000/mo ($2,800 for vacations).
  • Dave and Rachel agree there’s substantial financial cushion (“margin”) for Les’s lifestyle.

• Withdrawal Rates and Long-Term Planning:

  • The panel discusses safe withdrawal rates (e.g., 6%) and highlights the variability of market returns (e.g., 23% some years, 8% others).
  • Importance of personalized, long-term projections (preferably with a financial planner), especially for a retirement horizon that could extend 20 years.

  “Run all scenarios with somebody who’s looking at the market...there is the percentage of what you want to withdraw that makes sense from a historical perspective.”
  — Dave Ramsey (06:22)

• Significance of a Paid-Off Home:

  • Both hosts stress the freedom a paid-off home brings in retirement, reducing financial pressure and required withdrawals.

  “Having a paid off house is a huge, huge upside to when you start actually pulling some money from retirement of how much you actually need to pull when you don't have to pull a mortgage or rent.”
  — Dave Ramsey (07:37)

Notable Quotes & Memorable Moments

• On Wealth Building:

  “Money long term [is a] marathon, you guys. But it works. If you do the right stuff over and over again, it works.”
  — Dave Ramsey (07:48)

• On Financial Recovery and Discipline:

  “We said, well, when Dave showed us the path, we said we're committing to this. We're doing this almost 10 years. Exactly.”
  — Les (02:56)

• On Upgrading the Home:

  “If it doesn’t stay within 1 million or 1.1, then the deal’s off the table.”
  — Les (02:06)

Key Timestamps

• 00:14: Les introduces his scenario and asks about net worth allocation.
• 02:56: Les reveals his inspiring bankruptcy-to-millionaire story.
• 03:44: Dave congratulates Les on his transformation.
• 04:35: Les discusses potentially managing finances himself versus hiring a planner.
• 05:10: Rachel explains the potential for Les's investments to double over time.
• 06:12: Dave and Rachel discuss the safety of Les’s proposed asset split.
• 07:37: The importance of a paid-off home in retirement.
• 07:48: Dave summarizes the episode’s lesson on the long-term process of wealth building.

Takeaways

• Flexibility, not rigidity, in retirement asset allocation: No strict percentage, but ensure stability, liquidity, and peace of mind.
• Invest in Financial Education: Transformative, as illustrated by Les’s story.
• Compound growth and margin matter: Aggressive ongoing investment and controlled spending expedite wealth accumulation.
• Paid-off home enables freedom: Reduces retirement expenses and withdrawal pressure.
• Work with a financial advisor: Especially when approaching major life transitions, even if you’re financially savvy.

Episode Tone: Encouraging, practical, and inspiring; full of praise for financial discipline and the power of focused, methodical wealth-building.
Main Message: Steady commitment and smart asset management—centered on debt freedom—create lasting financial security, no matter your starting point.