"Why Aren't You Working If You're Broke?"

Summary

Podcast Summary: The Ramsey Show Highlights - "Why Aren't You Working If You're Broke?"

Episode Details

• Title: Why Aren't You Working If You're Broke?
• Host: Ramsey Network
• Release Date: May 16, 2025

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Introduction

In this episode of The Ramsey Show Highlights, hosted by the Ramsey Network, Dave Ramsey addresses a pressing question from a 64-year-old caller who finds himself living paycheck to paycheck despite owning an insurance agency and having some passive income streams. The discussion delves into financial struggles, decision-making in the face of economic uncertainty, and strategies for rebuilding income.

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Caller’s Financial Predicament

At 00:06, a concerned caller reaches out to Dave Ramsey, sharing his distressing financial situation:

Caller (00:06): "I'm 64 years old. I have no retirement. I work a commission job. I've built an insurance agency. Passive income to some degree. And my question is this, that I'm living paycheck to paycheck right now with no retirement..."

The caller elaborates on the precarious nature of his income, especially with the anticipated public offering of his company's stocks, which he estimates would yield between $600K to $1.5 million after taxes. However, the uncertainty surrounding the timing—ranging from one to three years—and his current financial strain intensify his concerns.

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Dave Ramsey’s Guidance

Dave Ramsey empathizes with the caller's situation and probes deeper into the reasons behind his financial instability despite owning a business. At 01:41, Ramsey questions:

Dave Ramsey (01:41): "And why are you after all these years of building a book of business, why are you still living paycheck to paycheck? That makes no sense."

The caller explains that health issues forced him to relinquish 50% of his passive income, reducing his earnings from approximately $120,000 to $70–80,000 annually. Ramsey encourages the caller to maximize his active income during this interim period rather than settling for lower-paying temporary jobs.

At 03:20, Ramsey delivers a pivotal piece of advice:

Dave Ramsey (03:20): "Go make sales calls, dude."

He emphasizes the importance of leveraging his expertise to rebuild his business and secure short-term income until the stock payout materializes. Ramsey stresses that taking on low-wage jobs like working at Target is not a viable solution compared to reinvesting his efforts into his primary field where he can earn significantly more.

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Financial Strategy and Long-Term Planning

Ramsey discusses investment strategies, suggesting that with the anticipated stock payout, the caller could invest wisely to sustain his retirement. At 04:51, he advises:

Dave Ramsey (04:51): "If you can live off of 8% and you invested at 12%, that's a good number."

He explains that with prudent investments in mutual funds, the caller could potentially live comfortably on his earnings, ensuring financial stability beyond the immediate crisis.

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Addressing Tax Debt and Urgency

The conversation takes a serious turn as the caller mentions owing the IRS, adding another layer of urgency to his financial woes. Ramsey underscores the necessity of taking immediate action to mitigate this debt. At 07:46, he urges:

Dave Ramsey (07:46): "You got to go make some money... You know, roll up your sleeves and get it. Suck it up, buttercup. Here we go."

Ramsey's direct and motivational approach aims to push the caller out of complacency, emphasizing that proactive efforts are essential to overcome financial setbacks.

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Notable Quotes

• Caller (00:06): "I'm living paycheck to paycheck right now with no retirement."
  (00:06)

• Dave Ramsey (01:41): "Why are you still living paycheck to paycheck? That makes no sense."
  (01:41)

• Dave Ramsey (03:20): "Go make sales calls, dude."
  (03:20)

• Dave Ramsey (07:46): "Suck it up, buttercup. Here we go."
  (07:46)

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Conclusion

In "Why Aren't You Working If You're Broke?", Dave Ramsey offers a candid and motivational discussion aimed at individuals struggling financially despite existing business ventures. By highlighting the importance of active income, strategic investment, and immediate action to address debts, Ramsey provides actionable advice to help listeners navigate their financial challenges effectively. This episode serves as a reminder that resilience and proactive efforts are key to overcoming economic hardships and securing a stable future.

Transcript

[Dave Ramsey]

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[Caller]

Well, I'm 64 years old. I have no retirement. I work a commission job. I've built a insurance agency. Passive income to some degree. And my question is this, that I'm living paycheck to paycheck right now with no retirement. What do I need to do when my stocks, which I have no control over, will start holding value? That value should come in. They're telling us when we go public somewhere at 15 to $30 a share, with what I have after paying the 40% tax, I believe that is what it is. You're looking at about 600 on the low end to 1.5 on the high end that I will get when I cash those stocks in.

[Dave Ramsey]

And when is this?

[Caller]

What would I do, Dave? That's the problem. We were being told it could happen in a year, could happen in three years.

[Dave Ramsey]

So the insurance agency that you're a part of is going to go public.

[Caller]

The imo, that we. That we are part of, I own my own agency with. Under the imo, the IMO is going to go public in one to three years. They're telling us.

[Dave Ramsey]

Okay. And you don't have any control over any of that?

[Caller]

No.

[Dave Ramsey]

Okay. And why are you. After all these years of building a book of business, why are you still living paycheck to paycheck? That makes no sense.

[Caller]

I had to let go of 50% of my passive income due to health reasons. And I have an opportunity to build that back up, which I can. Or do I go out.

[Dave Ramsey]

Why did you have to surrender your book of business for health reasons? Because you couldn't service it.

[Caller]

And basically was out of the field for a while. Long story short, you have a spread with the agents underneath you, and largest leg was flanking me. And once you get flanked, then you have no override. That passive income basically goes away. When that happened, 50% of my passive income, I was making about 120,000. I'm making probably 70 to 80 now.

[Dave Ramsey]

Okay. And you're not. That's the passive side. Are you. Are you actively working again? Are you able to work?

[Caller]

Yeah, yeah. I stay in the field to some degree just to keep my licenses in.

[Dave Ramsey]

Why aren't you working like a maniac if you're broke?

[George]

Hey, George.

[Caller]

Here.

[George]

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[Dave Ramsey]

Why, why aren't you working like a maniac if you're broke?

[Caller]

Well, I'm lazy. I mean, that's the question that I kind of teach presenting is do I put my time and energy because I need them to go back out. I've taken some time off, which shouldn't have, but based on getting myself where I needed to be emotionally, mentally, my question is, do I put it back into the agency and rebuild that I can. There's an upside to that. Or do I just go out and get a twenty to thirty dollar remote phone gig that would.

[Dave Ramsey]

Well, where do you make the most money? I assume you make the most money in your craft. You should make a lot more than $20 an hour if you start making sales calls again.

[Caller]

Absolutely.

[Dave Ramsey]

Well, go make sales calls, dude.

[Caller]

I, I'm doing that on a limited basis. The bigger piece to that is what I've let go of, Dave, is the building piece. So there's two pieces to our business model.

[Dave Ramsey]

I understand produce.

[Caller]

Right. Which I can do with my eyes shut.

[Dave Ramsey]

Well, you need, yeah, but you need the money. You need the short term money until the thing goes public.

[Caller]

Correct.

[Dave Ramsey]

Okay. So go work your butt off till it goes public. When it goes public, you can quit.

[Caller]

Well, possibly.

[Dave Ramsey]

My question, if you get a 600 to 1.2, I think you can invest that at 67 years old and you'll be able to quit.

[Caller]

Well, what is a good number? Do you know what that number is with life expectancy that if you can live off of.

[Dave Ramsey]

If you can live off of 8% and you invested at 12%, that's a good number. Okay, so if you got a million dollars, you'd be living off 80k. If you invested in good mutual funds and it makes an average of 12, which the market has averaged 11.8 since it began. The last two years, 23 and 26 or 20, 24 and 23, it averaged over 25%. Now that's not normal though. But in those two years, if you'd taken off 8, your portfolio would have grown substantially. Okay, so if you take off eight, as long as it's making more than eight, the thing will run perpetually and that's invested in good growth stock Mutual funds. But I think you're sitting around whining about all this stuff in the rear view mirror and you don't feel like you want to go get it again and you don't really have a choice. You gotta go get it. You got an IRS bill, you got all this stuff stacking up around you and it all reflects back on this time that you took off and it cost you half your book of business, cost you your overrides and yeah, now you got to go back and rebuild your short term income. All I want you to do is go make 100, 150 a year for the next three years while you're waiting on to put a little money in the bank. Put a little money while you're waiting on the other thing to your ship to come in, for God's sake.

[George]

I wouldn't wait for this payout to get control of your money and get rid of this debt.

[Dave Ramsey]

You can't live on 60K and pay off 70,000 to the IRS while you're waiting. And you don't know when it's coming. So you've got to go make some money and $20 an hour. So that's just a, that's a false offer. You're not going to go do that. Because that'd be dumb to go do that when you can go make 60 or 80 or 100 bucks an hour out there selling. So you're not going to go work at Target. Shut up. Don't even make that offer. You know, go do the thing you, that you don't want to do. Oh, well, it goes with the choices you've made. And so that's what you got to do, man. So you know, I've been in those same exact situations. So I'm not fussing at you. I'm coaching you. I'm your coach at halftime and we're behind and you need to go out there in the third quarter and catch us back up. And I'm saying, go hit somebody, dude. Roll up your sleeves and get it. Suck it up, buttercup. Here we go.

[George]

We've seen some incredible inspirational stories of people in their 60s who cleaned up a mess and still were able to retire with dignity.

[Dave Ramsey]

Why, he's going to have a lot of money when the story ends.

[George]

There's a silver lining here.

[Dave Ramsey]

But, but you got to, you got to get to that ipo. You got to get to that public offering and that's when you get there. You're going to get 6 to 600 to 1.2. You said out of your share of the stock at that point. And nothing bad is going to happen by you increasing the book of business and increasing your income in the meantime. Nothing bad happens except you're not going to get to sit on your butt. That's the only bad thing that happens.

[George]

I do appreciate the honesty of him just coming out and saying I'm lazy. I'm really.

[Dave Ramsey]

I don't want to do it. But, you know, you put yourself in a position where you don't have that option. When you owe the KGB money, I mean, the IRS money, you've got to go do stuff to get the wolf away from the door. Because that wolf's got teeth, man. You don't want those people in your life.

[George]

They'll just go right into your bank account. They're not scared. They have the power to do whatever they want.

[Dave Ramsey]

Yeah, it's pretty rowdy, so. And yeah, they're scary people. They scare me. In honor of tax Day, I'm not afraid of many things, but on April 15th, I'm afraid of the IRS. And here's what's interesting. I heard this on I was on Fox Business this morning. The IRS has issued all these guns, and they've had more accidental discharges, the gun going off accidentally, than they have people, them actually ever firing the guns at a bad guy.

[Caller]

Oh, boy.

[Dave Ramsey]

Well, it's an IRS agent with a gun. Come on.

[George]

That was a bad idea.

[Dave Ramsey]

Not a highly trained individual.

[Caller]

It's not.

[Dave Ramsey]

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