"Should I Leverage Debt To Buy Cows?"

Summary

Podcast Summary: "Should I Leverage Debt To Buy Cows?"

The Ramsey Show Highlights – July 29, 2026
Host: Ramsey Network
Guest/Caller: Stephen, 18-year-old cattle business entrepreneur

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Episode Overview

In this episode, the Ramsey Show takes a call from Stephen, a remarkably enterprising 18-year-old who’s facing a classic business dilemma: Should he borrow a substantial sum to buy more calves for his thriving cattle operation, or opt for a less risky, lower-profit role as a custom cattle feeder? The discussion centers on the wisdom (or danger) of leveraging debt in agricultural ventures, especially for young entrepreneurs, and explores principles of risk, scaling at the "speed of cash," and maintaining financial peace.

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Key Discussion Points & Insights

Stephen’s Background and Dilemma

• Stephen’s been raising cattle since age 16, funded initially by an operating loan his dad secured.
• He purchased 200 baby calves, raised and sold them for a solid profit, and reinvested in a second batch.
• Current Situation: Dramatic increase in calf prices—from $100,000 to fill a barn two years ago, to $250,000 today—means profits are tighter and risks are higher.
• Stephen faces a choice:
  • Option 1: Borrow $250,000 to buy calves, potentially yielding ~$60,000 profit per cycle, but with high risk.
  • Option 2: Custom feed calves for someone else (who supplies cows and feed), earning ~$35,000 a year—enough to cover barn payments, but with much less risk and effort.

The Economics of Cattle Business (00:26–02:00)

• Rising costs are driven by a shortage of cattle and continued strong demand for beef.
• Profit margins are decreasing due to increased input costs.

"Shortage of cattle in the United States. And consumers just keep eating beef and it's crazy."
— Stephen (01:04)

The Debt Question & Risk Assessment (02:02–04:01)

• Host draws a parallel between flipping real estate with high leverage and buying cattle on borrowed money.
• Emphasizes that leveraging in volatile markets (like agriculture) amplifies risk dangerously.
• Encourages a long-term, debt-free vision for Stephen, suggesting slower growth as the safer course.

"Leveraging yourself for anything, especially business, is very risky. Especially as, you know, something as volatile as cattle farming... What does it look like five years from now for 23-year-old Stephen to be completely debt free, running this business, to where every single piece of profit comes home to him instead of out to a lender?"
— Host (02:19–03:01)

Exploring Profit vs. Peace (04:04–07:07)

• Comparison between the custom feeding job and owning calves:
  • Custom feeding is less work, less pay, but much less risk, just enough to cover barn payments.
  • Owning calves could be more lucrative, but the risk of loss (disease, market crash) is significant.
• Stephen currently works 30 hours a week as a herdsman (earning $50,000/year), supplementing his cattle business income.

"All you need is one mad cow disease spread and all of a sudden you're screwed. So that's my fear with you leveraging yourself, especially at 18."
— Host (05:14–05:31)

• Host counsels calculating how to scale using only available cash, even if it means “going slower.” Suggests tracking cash accumulation to reach a position for future, debt-free expansion.

Long-Term Perspective and Cautionary Wisdom (07:07–08:41)

• Warns about the illusion of rapid wealth from leveraging and the downside risk that’s not always visible.
• Advocates for prioritizing financial peace over short-term gains, noting many Ramsey Show callers "didn't go to plan" due to overleveraging.
• Encourages Stephen (and young listeners) to be patient, stack cash, and grow at the “speed of cash." Living simply at home gives Stephen a strategic advantage without the risk burden.

"You can get rich quick, all day long until you lose it all. Everyone's a genius at the blackjack table until they get a bad hand."
— Host (07:07–07:17)

"There is so much you could do to make so much money so fast. The question is, is it worth your peace? Is it worth your sanity? Is it worth the risk?"
— Host (08:05–08:18)

Personal Values & Business Legacy (08:41–09:20)

• Stephen shares his desire to follow in his father’s footsteps—raising a family at home, living the farming lifestyle.
• Host encourages him to focus on stacking cash while living at home, taking advantage of low expenses, and planning for debt-free business growth.

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Memorable Quotes

• "Moving at the speed of cash." — Host (03:09)
• "I'm going to place the bet on Stephen instead of on this pile of debt to get these calves." — Host (07:26)
• "It's okay if you go slower. No one's forcing you to make money. You seem to live a pretty simple life." — Host (08:18–08:36)
• "The show only exists because everybody's plans didn't...didn't go to plan." — Host (07:54–08:04)

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Key Action Steps/Advice Recap

1. Avoid Borrowing to Buy Cattle:
   Rapid scaling via debt is too risky, especially in volatile markets like cattle.

2. Work at the Speed of Cash:
   Grow only as fast as available funds allow—even if it takes longer, it’s far safer.

3. Stack Cash While Expenses Are Low:
   Take advantage of living at home to build capital, then expand debt-free.

4. Weigh Risk vs. Reward Honestly:
   More profit now doesn’t outweigh the peace and security of being debt-free.

5. Prioritize Long-Term Stability Over Quick Gains:
   Success is not just about profit, but about sustainability and peace of mind.

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Recommended Resources

• Host offers to send Stephen Dave's book: Build a Business You Love to guide him through debt-free business scaling (09:12–09:20).

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Conclusion

This episode provides a case study on the dangers of leveraging debt for quick business expansion, especially for young entrepreneurs. The hosts champion patience, risk-awareness, and financial peace, offering practical wisdom for anyone trying to build wealth and a legacy without undue risk. The message: “Go slower, live simply, and grow at the speed of cash.”

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Transcript

[A]

Brought to you by the EveryDollar app. Start budgeting for free today. I am 18 and I kind of been in the cattle business here for like two years. Got in back in 24 when there was pretty good profit in it. And now if you've bought hamburger recently, you know what what beef's like.

[B]

And I grilled out for the fourth. I'll tell you, that was a. That was an expensive party.

[A]

Yeah. Thanks for buying it. Oh, yeah. So back in 24, I was wanting to get into it. I was only 16 and my dad got an operating loan for me. I bought 200 head of baby calves, like two days old, fed them milk and took them up to 15 months. Sold them for a good profit. And I'm on my second batch now. And it's costing a whole lot more. Obviously. Now get baby calves went from costing $100,000 to fill a barn to $250,000 to fill a barn.

[B]

Now what was the cause of that? I'm not in the loop on the economics of cattle.

[A]

Shortage of cattle in the United States. And consumers just keep eating beef and it's crazy.

[B]

Just too much demand, not enough supply. Economics 101. Okay.

[A]

Yep.

[B]

All right.

[A]

So now the numbers are tight and. But my real question is I'm selling these cattle in October and making a pretty good profit on them. And I could buy another group then for this high cost. 120 or, well, 250,000 or so to fill. And that would be on borrowed money. I would make quite a bit more money than if I went this other route. But another opportunity came up where I could custom feed for a fella and have zero overhead. He would buy the calves, he'd deliver the feed, but I wouldn't make near as much money. I would simply be making a barn payment, not much more. And wondered what your thoughts on that was.

[B]

Man, I'll tell you, this is definitely the first call I've taken on, can I borrow money to buy my own cows? I look at it this way. If this was real estate, we would go, no, don't leverage yourself to your eyeballs. Going to buy houses, hoping to flip them.

[A]

Right, right.

[B]

I understand that's a very different scenario. These are living organisms, but still the principle applies that leveraging yourself for anything, especially business, is very risky. Especially as, you know, something as volatile as cattle farming, ranching, whatever it may be. So the question I want to give to you as an 18 year old who has a very bright future ahead of him. I don't even know if you had a Childhood, I think you just like came out of the womb going, all right mom, I'm going to start milking those cows over there. But what does it look like five years from now for 23 year old Stephen to be completely debt free running this business to where every single piece of profit comes home to him instead of out to a lender?

[A]

Well, that'd be pretty awesome. Obviously.

[B]

So what it probably means going slower, right?

[A]

Yes. Right.

[B]

Moving at the speed of cash.

[A]

Yeah. A ten year. Well, but you see, cabs cost 1500 bucks piece.

[B]

Okay. How much money do you have? You said you made a pretty penny off that first batch.

[A]

I made about 60,000 off that first batch.

[B]

Where did that go?

[A]

And invested into the next group.

[B]

Okay, so you have some now?

[A]

Yes, I have a group now. I'll sell in October and my question is whether I should buy another group in October and probably make around the same amount of profit or if I should custom feed for this fella. And I would be making about 35,000 a year doing that versus about 60,000 buying them myself and taking the risk

[B]

for the same amount of effort.

[A]

Considerably more effort doing it if I own them because I have to mix all the feed and everything. They deliver feed.

[B]

So it's an easier task. But you're cutting your pay in half.

[A]

That's correct. But also simply make my barn payment. My Barn payments like 28,000. So it would simply make my barn payment, not a whole lot more.

[B]

Yeah, I want to see you. I mean, you're so talented. I think you can thrive and make good money doing this. The question is if you split the difference when. Okay, with the cash that I have on hand from the profit, how much can I buy? Like do you need a barn full at a time or can you go, all right, I got 60 grand. I'm going to take that 60 divided by 1500.

[A]

That's coming from. Well, but 40 head. The profit on 40 head wouldn't near make the barn payment.

[B]

What's the barn payment?

[A]

It's like 28,000 a year.

[B]

Are you doing any work outside of this or is this your full time gig?

[A]

I work, I work about 30 hours a week. Make about 50,000 a year at that. Doing actually at Herdsman Cattle Management for this company. I'd be custom feeding for.

[B]

That's if you move to the custom feeding that.

[A]

No, I do that now.

[B]

Okay, so you're making 50 grand on top of any profit.

[A]

I'm thinking about my barn here going ahead and being one of their, one of their growers. Instead of what I'm already doing, what my dad's been doing all his life.

[B]

Well, it sounds like your dad was going into debt and it worked out for him. That's correct at the time. But the times have changed. Now you're talking more zeros on the end, more risk. I mean, all you need is one mad cow disease spread and all of a sudden you're screwed.

[A]

Yeah, right.

[B]

So that, that's my fear with you leveraging yourself, especially at 18. And so this is, this is your homework, is you know this business a thousand times better than I do. You sit down and say, okay, how. What's the best path for me to scale this thing completely debt free with the cash that I have on hand? And that might mean year one, you made 20,000 profit. Year two, two, you had 40,000 in profit, you doubled what you could buy. Year three, you scaled up to 80. And so over time, think about where you'll be at 21 if you do this completely debt free versus well, I made some money, but then I had to pay back the loan. So it's really not as sexy as it seems once you actually do the math on this and factor in the risk, which is kind of hard to factor in on paper.

[A]

Mm, right. Yeah, risk is super hard to factor. That, that's the problem is there's no doubt if I, if I borrow the money and do it all myself, my own cows, there's more profit. Because the guy that I'm growing them for, he's got a. I mean, he's gotta own them. He's got to make some money on them too.

[B]

Yeah. So what would give you more.

[A]

Definitely.

[B]

What would give you more peace? Could you do the custom feed, make 35 grand a year on top of your job?

[A]

Mm.

[B]

Is that what would happen?

[A]

And then, like, then eventually I'd like to get back into buying them myself if I could stack up enough cash for that.

[B]

Exactly. And so that's where I'm going. What can you do now to stack up enough cash to where you could have 100 grand or 200 grand in cash to basically now restart this business completely debt free, where you're on top of it instead of behind it? That's the key.

[A]

But if I was going to keep doing what I had been doing, I would get there faster.

[B]

Well, that's the problem. I mean, you can get rich quick, all day long until you lose it all. Everyone's a genius at the blackjack table until they get a bad hand. And so that's, that's My fear for you, especially at 18, like the risk meter hasn't really developed yet because you're not, you don't have like a family, I'm guessing that's relying on this, right?

[A]

I live at home.

[B]

Yep, exactly. And so there are risks you can take. I would not do that with debt. I'm gonna place the bet on Steven instead of on this pile of debt to get these calves. And so I want you to go. I know I could make more money faster, but is it worth the risk? Because I don't want you calling back in going, I took out a loan for $200,000 and it didn't work out. Now what do I do?

[A]

Mm, yeah, right.

[B]

That's a much scarier scenario. And it's the ones we get on the show. If everything worked out perfectly, the Ramsey show would not exist. This show only exists because everybody's plans didn't. Didn't go to plan.

[A]

Right? Yep.

[B]

So as an 18 year old, whatever it is, for any 18 year old watching out there, there is so much you could do to make so much money so fast. The question is, is it worth your peace? Is it worth your sanity? Is it worth the risk? And that's so much harder to factor on, on paper than using your iPhone calculator to go, I could make quarter million dollars in the next two years. It's okay if you go slower. No one's forcing you to make money. You seem to live a pretty simple life. Like you don't have a crazy lifestyle. You don't have any other area.

[A]

That's the point. No, I don't. Just these, this, this cattle project.

[B]

So you're living at home.

[A]

I mean, it's all about the lifestyle. I want to, I want to be at home eventually raise a family at home. And that's how I was raised. It's just, just been awesome for my dad and his family. And I'd like to do the same thing. And I just, I love it.

[B]

Well, here's the deal. Do the math on if I just work for someone else full time, even extra, and, and just stacked up cash, living at home with almost no bills, how much could I save in 12 months? In 18 months, in 24 months. And move at the speed of cash, and your life will be so much better. Hang on the line. I'm going to send you Dave's book. Build a business you love. We're going to walk through this whole process and show you how to scale this thing the right way.

[A]

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