Building Wealth Happens One Baby Step at a Time

Summary

Podcast Summary: The Ramsey Show – "Building Wealth Happens One Baby Step at a Time"

Episode Information:

• Title: Building Wealth Happens One Baby Step at a Time
• Host: Ken Coleman, alongside Dr. John Deloney
• Release Date: January 28, 2025
• Description: The Ramsey Show focuses on empowering listeners to build wealth and take control of their lives through practical financial advice, expert insights, and interactive discussions.

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1. Introduction and Listener Interaction

[00:00] Ken Coleman:
Ken Coleman opens the show by welcoming listeners and emphasizing the mission to help them "win in their money, win in their profession, and win in their relationships." He introduces Dr. John Deloney as his co-host and encourages listeners to call in with their financial questions.

[00:36] Dr. John Deloney:
Dr. Deloney joins Ken, expressing enthusiasm about assisting callers with their financial challenges.

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2. Building Wealth and the Importance of Giving

Caller Corey from Detroit, Michigan [00:58–03:01]:
Corey and his wife, both teachers with a net worth of around $900,000, seek advice on when to start giving away their wealth. They have maximized contributions to their Roth IRAs and 457 plans and own additional properties.

Dr. John Deloney’s Insight [02:15–05:19]:
Dr. Deloney emphasizes that giving should begin immediately as a fundamental stance rather than waiting for a specific wealth milestone.

Dr. John Deloney [04:30]: "Generosity is a position, a stance you take on the world. Giving is a way of saying I got struck by lightning, and I'm going to let a portion of this wealth pass through me to bless others."

Ken Coleman’s Recommendation [05:19–07:28]:
Ken suggests balancing continued investment (maintaining a 15% investment rate) with a dedicated giving budget, advocating for starting to give immediately while managing investments.

Ken Coleman [06:10]: "If you’re investing 15% and you’re giving 20%, you could start right away without waiting for a financial finish line."

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3. Announcement of "Front Row Seat" Show

[10:14–15:08]:
Ken Coleman announces the premiere of his new show, "Front Row Seat," an interactive interview series inspired by "Inside the Actor’s Studio." The show features live and virtual audiences, allowing viewers to engage directly by asking questions. The debut episode features Nikki Haley, former governor and first female governor of South Carolina.

Dr. John Deloney’s Enthusiasm [10:29–15:08]:
Dr. Deloney praises the new show’s format, highlighting its unique interactive elements and the opportunity for deeper, more engaging conversations with guests.

Dr. John Deloney [14:28]: "You're going to learn something from this interview. That's all I'd say on that."

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4. Caller Sarah from Charlotte on College Savings and Future Education Costs

[15:24–18:12]:
Sarah seeks advice on contributing to her children's 529 plans, expressing concerns about future college costs amidst changing educational landscapes due to AI advancements.

Ken Coleman’s Advice [16:00–17:01]:
Ken recommends using the Ramsey Solutions investment calculator for personalized projections and suggests maintaining a balanced approach to saving and investing.

Ken Coleman [17:10]: "I think a hundred grand's pretty good."

Dr. John Deloney on AI’s Impact [17:01–18:12]:
Dr. Deloney predicts that higher education will undergo significant transformations, potentially reducing costs but increasing exclusivity for remaining institutions.

Dr. John Deloney [18:12]: "Higher ed is going to look dramatically different. It could become much less expensive if decentralized."

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5. Caller Jack from Cleveland on Co-Parenting and Managing Expenses

[21:22–30:47]:
Jack discusses challenges in co-parenting with his ex-wife, particularly regarding non-essential expenses for their teenage child, such as braces and a new car. He feels financially strained and unsure how to communicate his limitations without causing discord.

Dr. John Deloney’s Guidance [23:03–27:06]:
Dr. Deloney advises open and honest communication with his ex-wife, emphasizing the importance of setting realistic financial boundaries and avoiding loans or credit to meet demands.

Dr. John Deloney [26:32]: "I think you've taken her out, your 16-year-old out and just said, I just let me paint you a picture of how the world works."

Ken Coleman’s Supportive Strategy [25:55–30:47]:
Ken encourages Jack to have a direct conversation with his daughter, explaining the financial reality while showing commitment through potential increased work hours or matching contributions to her goals.

Ken Coleman [28:34]: "Go one to one with the daughter and do your best to, and I don't want to say this the right, I don't want to mean controlling, but the narrative needs to be between you and your daughter."

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6. Caller Darren on Early Retirement and Societal Norms

[32:17–38:47]:
Darren, a 50-year-old retiree with a net worth of nearly $5 million, feels guilty and socially embarrassed about not working despite being financially secure. He questions whether he retired too early and contemplates ignoring societal expectations to enjoy his financial freedom.

Joint Response from Ken and Dr. John [32:56–38:47]:
Both affirm that Darren did not retire too early and should embrace his financial independence. They discuss the psychological and societal pressures that equate one's identity with their professional status.

Dr. John Deloney [33:29]: "Stop allowing other people to speak into your value or embarrassment because of how you answer that kind of question."

Ken Coleman’s Perspective [83:05–85:16]:
Ken emphasizes the importance of redefining personal identity beyond professional achievements and encourages Darren to engage in meaningful activities post-retirement to maintain purpose and fulfillment.

Ken Coleman [85:05]: "We're moving now out of baby step three... downshift to intentionality."

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7. Caller Will from Phoenix on Retiring and Real Estate Decisions

[43:42–52:03]:
Will seeks advice on selling his Airbnb properties to pay off his current home and invest in a new, more expensive house. Concerned about capital gains taxes and rising construction costs, he wonders if this strategy is advisable.

Ken Coleman and Dr. John Deloney’s Recommendations [48:17–52:03]:
They advise against withdrawing retirement funds for the purchase. Instead, they recommend paying off existing debt, refinancing for better rates, and carefully evaluating the investment potential of new properties. Emphasis is placed on strategic financial planning and avoiding unnecessary debt.

Dr. John Deloney [51:43]: "But you're about to have a baby, you need to protect your family and financial future."

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8. Caller Zach from Lexington on Debt Management and Strategy

[43:42–52:03]:
Zach and his wife are burdened by multiple debts, including a mortgage, truck, cars, student loans, and credit cards. With an impending addition to their family, they seek a comprehensive plan to eliminate debt and secure their financial future.

Ken Coleman and Dr. John Deloney’s Step-by-Step Advice [44:12–52:03]:
They recommend selling the truck to free up significant funds to pay off high-interest debts first (credit cards), refinancing the mortgage for a lower rate, and aggressively building an emergency fund. Additionally, they suggest seeking certification or changing fields to increase income, thereby accelerating debt elimination and savings growth.

Ken Coleman [50:30]: "You can't afford to take time off with your wife. You got to be working."

Emphasis on Financial Discipline [51:04–52:03]:
They stress the importance of maintaining a disciplined approach, prioritizing high-interest debts, and securing refinancing options to reduce financial strain. Encouraging hard work and leveraging existing skills to boost income is also highlighted as critical for financial recovery.

Dr. John Deloney [51:08]: "You have to get out of these problems. Get a second job, sell the truck, and pay off the debts."

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9. Caller Vanessa from San Antonio on Selling Airbnbs to Pay Off Home

[53:44–75:11]:
Vanessa seeks guidance on selling her Airbnb properties to pay off her primary residence and invest in a new Airbnb on her property. Concerned about capital gains and the feasibility of building another rental property amidst rising costs, she questions the wisdom of her strategy.

Ken Coleman and Dr. John Deloney’s Analytical Approach [68:15–75:11]:
They guide Vanessa through a financial breakdown, reinforcing the benefits of selling high-interest rentals to eliminate debt and invest in future properties prudently. They emphasize focusing on long-term financial freedom over short-term obligations and validate her financial strategy as sound.

Dr. John Deloney [74:46]: "What is your future preference? Paying off the house and building residual income."

Encouragement to Stick to the Plan [73:25–75:11]:
Both hosts affirm that Vanessa’s plan aligns with sound financial principles, encouraging her to proceed confidently while managing risks associated with real estate investments. They highlight the importance of not yielding to external pressures or misconceptions about capital gains.

Ken Coleman [74:49]: "You got it right, Vanessa. Do your plan, not theirs."

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10. Caller Adam from Phoenix on Arranged Marriage and Financial Insecurities

[53:44–62:06]:
Adam, a 19-year-old, is faced with an arranged marriage setup by his parents with a Moroccan girl from a wealthy background. He feels inadequate in matching her affluent lifestyle and seeks advice on navigating the financial and emotional pressures of this arrangement.

Ken Coleman and Dr. John Deloney’s Frank Advice [54:25–62:06]:
They address the situation with a mix of humor and directness, encouraging Adam to prioritize personal happiness and financial stability over fulfilling parental or societal expectations. They stress the importance of love and mutual understanding in marriage, beyond financial metrics.

Dr. John Deloney [60:22]: "If this is an arranged marriage where your mom is insisting, and you're not on board, then you need to reconsider."

Emphasis on Personal Choice and Financial Stability [60:09–62:06]:
Ken and Dr. Deloney advise Adam to evaluate his true desires and ensure that financial concerns do not overshadow the foundation of a loving and supportive relationship. They encourage taking control of his financial future to build a secure and fulfilling life.

Ken Coleman [61:04]: "You can't let it ride, dude."

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11. Caller Allison Georges on Dream Home and Overcoming Debt

[75:11–81:44]:
Allison faces significant debt accrued through business loans and credit cards, threatening the completion of her dream home. She grapples with feelings of embarrassment and safety in her home amidst financial turmoil.

Ken Coleman and Dr. John Deloney’s Emotional and Practical Guidance [75:45–81:44]:
They provide compassionate advice on coping with financial setbacks, emphasizing the importance of emotional processing, open communication with her spouse, and strategic financial planning to overcome debt. They highlight the necessity of rebuilding trust and securing financial stability for personal peace.

Dr. John Deloney [80:22]: "You need to get somebody to talk to and say these things out."

Strategies for Financial Recovery [78:05–81:44]:
The hosts recommend practical steps such as seeking professional financial advice, reassessing business strategies, and prioritizing debt repayment while maintaining emotional resilience. They also suggest leveraging personal support systems to navigate the challenges of financial distress.

Ken Coleman [81:04]: "Have the people that you can sit in front of them and cry and be vulnerable without judgment."

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12. Caller Valerie from San Antonio on Budgeting During Baby Steps

[81:50–85:16]:
Valerie seeks clarification on balancing contributions to Baby Steps 4, 5, and 6, specifically asking whether to prioritize maxing out Step 4 before moving to subsequent steps.

Ken Coleman’s Clarification [82:07–85:16]:
Ken explains the flexibility within the Baby Steps framework, emphasizing that while the principles suggest a priority (e.g., saving 15% for retirement), simultaneous progression through steps is possible based on individual financial margins.

Ken Coleman [83:05]: "You're moving now out of baby step three... into intentionality."

Dr. John Deloney’s Reinforcement [82:35–85:16]:
Dr. Deloney echoes Ken’s sentiments, highlighting the importance of aligning financial actions with long-term life goals and maintaining financial discipline to achieve stability and growth.

Dr. John Deloney [84:46]: "The cornerstone principle is... saving for retirement to ensure life after work."

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Conclusion

Throughout this episode of The Ramsey Show, Ken Coleman and Dr. John Deloney provide comprehensive and compassionate financial advice to listeners facing a variety of challenges, from managing debt and planning for retirement to navigating complex personal relationships and investments. Emphasizing the core principles of financial discipline, generosity, and personal growth, the hosts guide listeners through practical strategies aligned with the well-established Baby Steps framework. The introduction of the new "Front Row Seat" show adds an interactive dimension, promising deeper engagement and personalized solutions for attendees.

Notable Quotes:

• Dr. John Deloney [02:15]: "Generosity is a way of going through the world saying I got struck by lightning... It's wired into human history to be generous."

• Ken Coleman [05:38]: "If you want to do more than 15%, you can, but start immediately doing it with the margin you have."

• Dr. John Deloney [17:01]: "Start giving today. Find causes that matter to you and practice it in little ways."

• Ken Coleman [33:29]: "Retirement is overrated and I'm not going to ever retire."

• Dr. John Deloney [60:22]: "If this is an arranged marriage where your mom is insisting, and you're not on board, then you need to reconsider."

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Final Note: For more insights and personalized financial coaching, listeners are encouraged to visit www.ramseysolutions.com and engage with the Ramsey Network’s resources and upcoming shows.

Transcript

[Ken Coleman]

Foreign. Welcome to the Ramsey show where we help you win in your life, we're gonna help you win in your money, win in your profession, and win in your relationships. The phone number to jump in today so we can coach you up is triple 882-55-5225, alongside the incomparable the doctor is in sign is hanging above my head. Dr. John Deloney.

[Dr. John Deloney]

What's up?

[Ken Coleman]

My pal and seat mate, if you will. And I'm Ken Coleman. And so we are here for you today. So no money personalities, but we know the basics and we're going to help you out. We're going to. We're going to get behind some of this stuff. So excited to have you with us. Cory's going to start us off. John in Detroit, Michigan. Corey, how can we help today?

[Caller]

Thank you for taking my call.

[Ken Coleman]

You bet. What's going on?

[Caller]

My wife and I are kind of trying to think in the future, and we know that our wealth is going to be significant. And we're just trying to figure out when do we start to give.

[Dr. John Deloney]

Yes.

[Ken Coleman]

Tell us about this wealth. We know we're going to be wealthy. Give us a picture of what's going on and when it happens.

[Caller]

We're currently at around 900,000 and my wife and I are teachers, so we have a pension as well. He's about 320in Roths. We have 210in. Sorry, 457. We currently max out our Roth, our 457s every year. And then we have two additional properties besides our single residence.

[Ken Coleman]

And those are paid for?

[Caller]

Yes.

[Ken Coleman]

So what's your net worth? 900.

[Caller]

Around 900.

[Ken Coleman]

Okay, so what, what is the question? I love how John answered. He's absolutely right. So what, what is the specific giving strategy or question marks you have around this? What are you pondering?

[Caller]

So we live comfortably as we are and as we're saving and our kids, colleges are taken care of and our goals, like, are set and we know we'll achieve our goals. The question is, it's like, when do we, when do we stop building our wealth and when do we start giving it away?

[Ken Coleman]

What if it's both?

[Caller]

Exploring that part.

[Dr. John Deloney]

It's both. And do you not give at all right now, at this moment?

[Caller]

Now.

[Dr. John Deloney]

Okay, what has inspired the question about giving?

[Caller]

We sat down and we've paid off our properties. We are, I mean, we're saving 35% of our income and we still are comfortable. So we're realizing that we have an excess.

[Ken Coleman]

Yeah. But back to John's question. Is there A specific cause, something that has spurred this on where you want to give. You're wondering about it.

[Caller]

We're maxed out. We have a child that's going to be leaving daycare, going into kindergarten. That's when we kind of really sat down. What do we do with this additional money? So we're trying this to figure out do we continue investing, do we keep.

Building wealth or at what point do.

We start to share?

[Ken Coleman]

You do both.

[Dr. John Deloney]

My honest answer would be you start to share you years ago. Because I think, I think generosity is, is a, it's a, it, it's, it's a, it's, it's a position, it's a, it's a stance you take on on the world. When you look at giving as a number. We'll, we'll start doing X when we get there. What most people find is their life continues to grow. Their, their needs and their expenses grow with them. And that number just that the finish line keeps moving and moving and moving. So giving is a way of being, it's, it's a, it's a way of going through the world saying I got struck by lightning in that I married well, my jobs have been stable, I've worked out, I was left in inheritance, I worked really hard, I owned a small porta potty company and then all of a sudden some guy bought 40,000 acres next to us and now I'm a millionaire. Like whatever the posture is, or I'm a person of faith and everything, every single breath it takes a blessing. And so I'm a pass through. I'm going to let this thing, I'm going to let so much of this go back to those who need whatever your position is. Every single psychological study, every single faith community throughout all of human history has wired into it generosity, giving, being a pass through. And so for the sake of your soul, not like in a, like in a go to church or you go to hell. That's what I'm talking about. But for the sake of your spirit, of your soul, your marriage, your kids. Yeah. Start giving today. Find causes that matter to you. Find moments that matter to you. Find people that, that you see that we can be a blessing towards and be to practice it. And, and Ken, I tell people, practice this in little ways. Meaning wait until you see a, at a restaurant when you see a waitress who's working five different sections because people didn't show up on their shift and she's exhausted and your food's a little bit late and tip her 100% of the tab and write her a note that says, we saw how hard you're working, we're grateful for you. Do that. And then just watch her when she, when she opens it up. Do small things like that and then find somebody at your kids kindergarten who can't afford the tuition and tell the headmast, hey, we'd like to pick up somebody's tuition. Just let us know or be more strategic about it. Once you, once you think about it. But it's just a posture.

[Ken Coleman]

Yeah. Corey, did I hear you say you guys are investing 35%?

[Caller]

Yes.

[Ken Coleman]

Yeah, you know, look, here's what Dave has taught for years and of course we sing that chorus as well. What we teach is in the baby steps. Are you familiar with the baby steps? I'm assuming you are.

[Caller]

Yes.

[Ken Coleman]

We went, so we went through them.

[Caller]

And paid everything off and.

[Ken Coleman]

Exactly. So you get to do whatever you want, but we've prescribed for 15% and you guys are in great shape. So you could say we're going to go back to that and we're going to invest 15% and we're not going to stop. Okay, that's the when John and I have said yes and that's that. Now if you want to do more than that, you can, but that's the rule of thumb and you're in great shape. So at which point you now go, okay, if I'm going to invest 15% or 35%, then whatever's left over, how much of my income am I going to set aside for continuous giving? So John's right. You can, you can give where you are. However you're moving throughout the day you find opportunities to give. But for strategic giving, then I would put a budget number on it. And so let's say you said we're going to do, for sake of discussion, let's say you're going to go back to investing 15% and that's the continuing build. But then you go, okay, we're going to, then we're going to take that 35 we've been investing. We're only going to invest 15. We're going to take 20% of our income and that is now our giving fund. And to John's point, if you feel generous and you want to leave a 500 tip that comes out of that number. If you want to invest in a non profit, a mission organization, your church, some type of charity, I would find a cause that's near and dear to both you and your wife and something that has a story attached to it that connects to you. All's story. I think that's a great way to do it. But you get to decide. But. But I would just start immediately doing it. And you've got the margin. And so now if you're investing 15% and you are giving 20% or whatever ratio you want to do there, I would start right away.

[Caller]

Okay, just kind of tap onto that. Would you give smaller or would you invest and then give later in larger amounts?

[Ken Coleman]

Again, we're not genie in a bottle, so I'm not going to answer that. I like John's answer. You get to decide. Corey, there's no. I'm not turning to page five in the Ramsey manual right now to answer that question because that is so individual to you. We're not being.

[Dr. John Deloney]

It's a posture. It's a posture.

[Ken Coleman]

You do what you want to do. But my only advice on that is John, and you weigh in on this. If I was in your position, Corey, I would be giving a substantial chunk.

[Dr. John Deloney]

Yes.

[Ken Coleman]

Consistently correct. To something that I deeply connected to.

[Dr. John Deloney]

Absolutely.

[Ken Coleman]

I would leave it at that. You get to fill in what deeply connected to looks like.

[Dr. John Deloney]

Yes. And I think what you need to do, Corey, is get out of the spreadsheet and into life. And so, yes, there's going to be a library someday that wants an extra GARGOYLE that your $9 million could pay for. You're right. But you want. You want something special? Go tip your waiter a hundred bucks at a Waffle House and he'll chase you out into the parking lot and hug you because you just took care of his. His kids light bill. Right. You just put food on their table for a month.

[Ken Coleman]

I love that your brain go do that special customized gargoyle.

[Dr. John Deloney]

I don't.

[Ken Coleman]

There's a lot to unpack there. On a commercial break. It tells me so much that I love about you.

[Dr. John Deloney]

Hey, we have something special coming back.

[Ken Coleman]

Big news. We'll tell you.

[Dr. John Deloney]

Can't wait.

[Ken Coleman]

We'll be right back.

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[Ken Coleman]

Welcome back, America. Thrilled to have you with us here on the Ramsey show alongside side doctor John Deloney. I'm Ken Coleman and we're here for you. The phone number, by the way, to jump in is 888-255-225. That's triple 882-55-2225.

[Dr. John Deloney]

All right, Ken, I got to jump in.

[Ken Coleman]

You're jumping in.

[Dr. John Deloney]

I have been waiting for weeks and weeks and weeks for to be able to talk about this publicly. Man, this is amazing. This is a huge day for Ken Coleman, for your family, for this company, and this incredible new show called Front Row Seat that you're premiering this week.

[Ken Coleman]

So thank you.

[Dr. John Deloney]

Tell us the genesis of this thing. Tell us how it' and I'm so jealous of everything. From the, from the.

[Ken Coleman]

It does look cool.

[Dr. John Deloney]

The team's, the talent, the, the team, the videos, all of this, the set design, everything's rad. But tell us all about it.

[Ken Coleman]

So if, if you're old enough to know the show Inside the actor studio legend, if you remember that, where, where Fame movie, television and producer professor James Lipton would interview the best of the best of actors, directors, producers, and you would do it in front of a classroom in a theater, but a true classroom, and then the students themselves would get a chance to jump in and ask questions. That's the concept of front row seats. Why we call it front row Seat, because we will be doing this in front of live audience surrounding a very small, intimate audience surrounding me and the guest. And then we will do virtual audiences. And so where you can sit in almost on a group zoom with somebody that you would never get the opportunity to talk to, but you don't just listen and learn. You actually get to ask questions. That's why we call it front row seat. And we're focused on three things. We want people to get better personally. Think of all the areas of your personal life. You think about your relational life. It's where you're focused on helping people. You think of your physical life, your mental and emotional life. We bring whatever version we have to work. And so we want people to get better. So bringing in people that are experts in all of those areas. Deep dive. How can we get better so that we can go to work and we have the best opportunity to do our best work and move up whatever move up looks like. And then ultimately, as you move up in America, you get thrown into leadership positions that you're largely not trained for. So some leadership 101 stuff. So you're thinking about, you know, personal growth topics, growth development topics at work, and then Leadership 101 stuff from some of the best voices in the world. Our debut episode out today, former governor, first female governor of South Carolina, Nikki Haley.

[Dr. John Deloney]

Yeah.

[Ken Coleman]

Now, if you're on the Trump side of things, you're gonna have to get over it, because it's not a political interview.

[Dr. John Deloney]

Well, it's a great interview.

[Ken Coleman]

This is a leadership interview. And I'm gonna be sitting with people that are. Left.

[Dr. John Deloney]

Yeah.

[Ken Coleman]

Right. Middle. Don't even want to talk about it, because this. This conversation is designed to make us think, to make us feel, and to make us do. And that's what we're doing with the show. And I'm really excited about. It's my roots, by the way.

[Dr. John Deloney]

Yeah, yeah, that's what I'm saying. You've been people, athletes, presidents. You've been interviewing people who are extraordinary in what they do forever. Like, for. Way before you were.

[Ken Coleman]

Yeah. And I've had the opportunity to do a lot of coaching here on the Ken Coleman Show. But this is a natural evolution of what I've always wanted to do. And I think that, you know, I always tell people, do what your heart tells you to do. Follow your heart, Dave and the leadership. This is a show that I've wanted to do for a very long time. And so we're. We're doing it. And it's designed to, again, bring in a large audience. If you listen to this show for money issues, you're going to love this show. And so the audience themselves brings in a representation. That live audience represents the people listening, watching. So I would say this, and we'll move on to the calls you can get it on YouTube, podcast app, the Ramsey network app. All you got to search is front row seat, Ken Coleman. It'll come up. And it's live now. And. And I will say this. This interview with Nikki Haley, a deep dive on her past as a child. An immigrant who dealt with bullying because of her race. A woman who broke a barrier and then stood up for one of the biggest issues.

[Dr. John Deloney]

Yeah.

[Ken Coleman]

That divides us racially. I mean, this is. This is a woman of great substance, whether you like her or not.

[Dr. John Deloney]

Right.

[Ken Coleman]

I think you'll learn something from this interview. That's all I'd say on that.

[Dr. John Deloney]

Well, in my favorite. Here's what I think sets this whole show apart. And I can't wait to see this thing just hit the ground running. Dude, is. I don't know how many times we listen to podcasts and someone's doing an interview and I think, yeah, but hold on, but what about. And I want to inject myself in that conversation or at least ask the next question or. That felt like a softball. And you have a live audience. You have real people in there that get to do that and that. I don't know that that show exists anywhere. Right.

[Ken Coleman]

My favorite part is allowing people to get a chance to spe up and ask a question.

[Dr. John Deloney]

That's their question. So I love it. I love it.

[Ken Coleman]

Front row seat now available from Ramsey Solutions. You can get it wherever you get your podcasts and on YouTube. All right, to the phones we go. Sarah is joining us in Charlotte, North Carolina. Sarah, how can we help today?

[Caller]

Hi.

Thanks for taking my call.

[Ken Coleman]

You bet. What's going on?

[Caller]

So my question is, how much should.

I be contributing to my kids? 529. You know what, what's the.

I know there's no magic number of.

What, you know, what college is going to cost for them, but is there a point of, you know, you get $100,000 in there, should you be putting.

It in a high yield savings account.

Instead, just in case?

[Ken Coleman]

Sure. How old are they? And have you done any investing so far?

[Caller]

So they're six and three.

[Ken Coleman]

Okay.

[Caller]

And my six year old, we have 15,000 sitting in his account at this point.

[Ken Coleman]

Good.

[Caller]

And my three year old?

Six.

6,700.

[Ken Coleman]

Good. So if you were just. Look, if you get on ramseysolutions.com after this call and pull up our investment calculator, punch those numbers in and it'll be a real fun exercise for you to see. Okay. At 18, based on those two amounts and. And put in a modest return, nothing crazy, then you're going to see what that number is going to add. Add up to. But I think, John, I like her question. You know, there's no magic answer, but you get to about a hundred grand. I'm curious if, if, if I were you and I. And I'm thinking what education may or may not look like.

[Dr. John Deloney]

Yeah.

[Ken Coleman]

Hey, 15 years.

[Dr. John Deloney]

You can know this, Sarah, that with AI, without, with college will look different for your kids than it did for us.

[Ken Coleman]

I think a hundred grand's pretty good.

[Dr. John Deloney]

Just know that. Yeah.

[Ken Coleman]

What are your thoughts on that number?

[Dr. John Deloney]

Yeah.

[Caller]

And I will also add our mortgage.

I've calculated out that once our kids are out of daycare that we're going to increase our mortgage payments. And I should have it paid off the year my oldest goes to college.

[Dr. John Deloney]

Sure. So there's, there's a, there's a, an awesome. And then a. Let me just check you on it. Okay. That will be the year also that one of your parents calls and says, we need to move in with you. So I know in your head probably I want to get to a place where I can just cash flow all of this. And I like that idea. I like that sentiment. And also just be prepared for life to happen along the way too. Right.

[Ken Coleman]

Yeah. I would really do the investment calculator, Sarah. I really would. So that you can actually see how these numbers play out. Because again, if you, you could make the case to put 150 to 200 away per kid. That's real right now, that won't cover a lot of schools for four years. We know that if you put 200.

[Dr. John Deloney]

Away, you'll be fine.

[Ken Coleman]

200, you're easy. Okay. You're fine. But I, I just believe that it's a tough thing to discuss, John, because you and I both, we talk about this all the time. Higher ed is going to look dramatically different. Would you agree with that?

[Dr. John Deloney]

1,000%.

[Ken Coleman]

Okay. Let me ask you this. Actually, we've never talked about this.

[Dr. John Deloney]

Yeah.

[Ken Coleman]

If that's true, I don't see how it gets more expensive. I see it getting less expensive.

[Dr. John Deloney]

The only way it gets. If you see a. And again, this is what, what higher ed people talk like me and my colleagues have talked about for years behind closed doors, like just having those. We call them sad lunches. Right. If you saw a, A dramatic number of colleges close, which I don't think is. It's wild speculation.

[Ken Coleman]

Oh no, I think it's gonna happen.

[Dr. John Deloney]

Then it will make the remaining colleges very, very exclusive and thus very, very expensive. Right. And I think the Marquee will be on a shared experience. It will be the cultural aspect as much, if not more so than the information. If I've got a personal boss who can just coach me along the way.

[Ken Coleman]

And see, that's where I think I. You know what, I'm, I'm. That's a fun discussion.

[Dr. John Deloney]

For another time, the human element will be, can I associate and talk to and hang out with other people my age and older? Can I have multiple leaders like you have multiple.

[Ken Coleman]

I think there'll be more. I think that there will be a premium level. Just like there's really fancy restaurants now.

[Dr. John Deloney]

That's exactly right.

[Ken Coleman]

But I do think we're seeing the. The cost of tuition, student loans. I think Covid started the tide. I do think we're going to see decentralized higher ed, and thus I think it's going to be a lot less expensive. That would be my prediction. I could be wrong. I still think they'll be your premium place. There's always going to be a Ritz, Carl.

[Dr. John Deloney]

That's right. That's right.

[Ken Coleman]

But.

[Dr. John Deloney]

There's a. But Airbnb didn't exist.

[Ken Coleman]

That's exactly right. All right, quick break. He's Dr. John DeLoney. I'm Ken Coleman. You're listening to the Ramsey Show.

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[Ken Coleman]

Welcome back to the Ramsey Show. Thrilled to have you with us. Triple 882-55-5225 is the number to jump in. I'm Ken Coleman. Dr. John DeLoney is joining me today. Jack is with us now in Cleveland, Ohio. Jack, how can we help?

[Caller]

Hey, guys, how are you?

[Ken Coleman]

We're having a blast. What's going on with you?

[Caller]

Okay, so I just need some advice. I, my, my, my ex, I have a kid with my ex and my kid is getting older and big expenses are starting to come up and I don't know how to tell my ex. We're pretty good co parenting. We just talk about things a lot. But I think there's an expectation with money and I don't think I can meet their expectation with money. So I have, it's like a finance question and it's really morale, you know, like my kid needs braces or wants braces. It's not medically necessary. And that's $6,000. She wants to split it with three grand a piece. I just don't have it. Is that something I am just obligated to pay anyway and just figure it out?

[Ken Coleman]

No.

[Caller]

Or am I allowed to say no? And then there's a car that's being brought up right now and there's just some big expenses coming up and she wants to split everything. And I don't know how I can really do that.

[Dr. John Deloney]

Well, it's pretty common, well, it's pretty common that people get sideways at this age and some parents like you are just steeped in reality. This is how much money I have. Like, even if I wanted to buy you $6,000 braces, which I do, I want you, I want you to have the things that you think are going to make you feel beautiful. I want you to have that. And I don't have that. Those dollars. Right. And then there's other parents who, as the kid gets older, they want to, they want to use money and stuff as a proxy for the world that they thought they would have been able to give them had there not been a divorce.

[Caller]

Yeah.

[Dr. John Deloney]

I want you to have this fancy car. I want you to have these fancy clothes and this fancy whatever. I want to say yes to everything that you want. What's your relationship with, with stepmom? You'll communicate. Well. Y'all co parent.

[Caller]

Well, it was really, really rocky in the, in the early years and we, we've worked on it really well. And I think that we're, I mean, at One point, we've even had a couple of beers together, so I think we've gotten pretty okay. But I just, you know, I just, you know, my kid is, you know, 15 going on 16, and she's so getting so expensive now with bigger ticket items. It's not just clothes anymore, so.

[Dr. John Deloney]

Well, I. So here's what you have to do. You have to sit down with your ex wife and say, hey, could we meet? And I'm glad that y'all are acting like adult. It's awesome. I love it when adults act like adults. It's so good, so rare. So high five to you, and just say, hey, here's my financial situation. Here's where we are.

[Advertiser]

I.

[Dr. John Deloney]

It would. It would be honoring to you that you're. She doesn't say, I want to buy this, but your dad's too cheap to. Because at the end of the day, that doesn't hurt you as much as it hurts that kid. And so if y'all could come to some sort of agreement on those kind of things, and maybe you can't, and you'll remember, oh, this is why we got divorced in the first place. Hopefully she could say, well, in my new world, I've got 5,000 bucks. If you could do 1,000. I'm gonna tell the kid that we're splitting this together, and you all work out the money behind closed doors like adults, whatever you can put in there. But you have a financial reality that you want to stick to, and. And I. Hopefully y'all can sit down and have an adult conversation to come to some consensus here. We're not getting her, Alexis. That's never possible. I can come up over the next year with $3,500 that I could contribute to a Camry. Right. And if you wanted to have a new camera question. Okay, go ahead.

[Caller]

So we were kind of going down that path right now, and I think you're going to say no. I'm assuming you're going to say no.

[Dr. John Deloney]

But don't take out any loans. Please don't.

[Caller]

Okay, yes. Well, that's exactly kind of where she wants to go. It's not necessarily a loan. It's an IOU to her. She wants.

[Dr. John Deloney]

God, no. If you don't borrow money. But if you have to choose between a bank and your ex wife, good God, at least there's, like, laws regulating a bank.

[Ken Coleman]

Yeah, I mean, I. Jack, I'm sitting there listening to you and John talk. You already knew the answer to the question that you asked. I think you're. And again, no judgment. Here. I'm seriously putting myself in your shoes. I would be a mess internally if I were in your shoes right now because I would be afraid that my ex isn't going to like what is the reality and she's going to say something or do something and then my kid is going to think that I don't love him as much. I would be sick to my stomach just being honest. Honest, John?

[Dr. John Deloney]

Yeah.

[Ken Coleman]

Heck yeah, Jack. I think that's what you're dealing with, how I feel. All right, so. So now that's what we need to address. Because when you started this call, you already knew what's reasonable and what's right.

[Dr. John Deloney]

And what is real. I can't afford it.

[Ken Coleman]

You can't. But what's also real, John, is that Jack can be manipulated. Correct into.

[Dr. John Deloney]

And I could too overlook all of us. I'm just overloving our 16 year old daughters. Yes.

[Ken Coleman]

Into credit cards and all the other things to just get through this. And you know what? I'd rather deal with the financial pain than the emotional pain of disappointing my kid. I think that's where he sits. Am I right, Jack?

[Caller]

Yeah, that's, that's right. Spot on.

[Dr. John Deloney]

Okay, so I think you've taken her out, your 16 year old out and just said, I just let me paint you a picture of how the world works. Here's how much money I got. And your mom loves you and she wants to buy you this. And I love you and I want to buy you this. And here's what reality is.

[Ken Coleman]

I, that's what I agree. I agree. That's the tack, Jack. You got to go directly to your daughter. She's 16. I agree.

[Dr. John Deloney]

And I know leather seats feel like it's more love. It's really not. Right. Like, yeah, that conversation.

[Caller]

I don't know. I've, I, I used to make a lot more money and I have spoiled, you know, my kid a lot. And her family, they're just used to me just handed over money. What did you do beyond the child support?

[Ken Coleman]

What did you now, what did you do, Jack? And how much did you make versus how much you make now?

[Caller]

I was just a supervisor. I just worked a lot of hours and I didn't really have a good relationship with my kid and I made about 90 grand. And now I just, I work at the local lumber yard. I just order lumber and I make about 40. I actually have a separate phone call I'm gonna have to call you on, Ken, about a different, different job. But.

[Ken Coleman]

Well, that's why I bring that just.

[Caller]

To be home more.

[Ken Coleman]

I, I think there's two things. I get that, but I think there's two things. And again, I'm, I'm. And John, you weigh in on this. But Jack, I'm going to talk to you as if I was in your situation. And I think that number one, I agree with, with Doc here that you're sitting down with your daughter and you're explaining reality and you give her a lot of why. Here's why I've cut back if you want to go to that. I got a different thought on that one. But you can explain all that. Explain I don't want to go into debt. Here's why. Explain all of that. Be really honest, really humble, not defensive, but explain the situation. Whether or not she gets it in the form of agrees with it or not.

[Dr. John Deloney]

Doesn't matter.

[Ken Coleman]

Does not matter. But I think you got to go one to one with the daughter and do your best to, and I don't want to say this the right, I don't want to mean controlling, but the narrative needs to be between you and your daughter. That's the first thing I do. The second thing I do, interesting enough that you said I used to make 90, now I make 40. I think for this season you got three more years with this kiddo, right?

[Caller]

Yep.

[Ken Coleman]

I'd be working a little bit more and I would be doing what I could to cash flow and I'll come up with three grand for braces. I'll tell you what I'll commit to if she, whatever she earns towards her car, I'll match it, I'll match it up to five grand or whatever number and then, then now we got girls skin in the game, mom's skin in the game, your skin in the game. And I, I, I think for this season I'd be pulling some more hours and leveraging my past experience to meet this situation in the middle. No debt, no manipulation and pressure from daughter or ex wife. However, I can bring more to the table and out of a good gesture, I'm going to do that. I think I would try to do that. John, is that 100?

[Dr. John Deloney]

Because here's what gift you're going to give her. A gift that's infinitely more valuable than braces. Jack, if you sit down and have this conversation with her and say, I know you really want braces. I know right now you don't as much have to have them medically as your, your teeth make you feel less than and you don't smile. There's actually some research about Smiling and teeth. Okay. But I'm gonna go take a second job here and I'm gonna bust my butt and I'm gonna knock this out for you. And here's my expectation. You're gonna put some skin in the game. Like Ken said, when it comes to grades or comes to working, whatever. But you showing her that extra hours and that extra work and I took a second job driving for Amazon when she was at mom's house and you're exhausted and you put that cash on the table, she will understand the value of a dollar infinitely more than you just throwing money at a problem or just saying no to problem. So I like that, Ken. But all of this starts with real, honest conversations.

[Ken Coleman]

Jack, you're a good man and I'm going to tell you I think you're a good dad. So believe that. Act that way. Hold the line. I'm not doing anything that hurts you financially. This is the Ramsey Show.

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[Ken Coleman]

Welcome back to the Ramsey show alongside Dr. John DeLoney. I'm Ken Coleman. So excited that you're with us. Triple 882-55-5225. Our Ramsey network app. Question is from Darren. He writes in My wife and I are 50, debt free and have a net worth of close to 5 million. I retired last year and it's allowed me to lean into many fun hobbies. That said, I feel guilty that I'm not working even though we don't need the money. I'm embarrassed when people ask what I do for a living. Did I retire too early or Should I just ignore societal norms and enjoy the fruits of a lifetime of hard work? I'm gonna go yes and yes, John.

[Dr. John Deloney]

Correct.

[Ken Coleman]

A little bit controversial, maybe. And what I mean by yes is did he retire too early?

[Dr. John Deloney]

Yes, absolutely.

[Ken Coleman]

And should he ignore societal norms and enjoy the fruits? Yes.

[Dr. John Deloney]

Yes.

[Ken Coleman]

Now, I'll explain the first part of that.

[Dr. John Deloney]

I'll get the second half because I like this question.

[Ken Coleman]

Yeah, I don't think retirement is good for us. No, I'm sorry. Let me. Let me. Let me go back. I know it's not good for us, and that's not my opinion. That is based on all the data. You know about all the data. You and I are both data nerds. And the data says it's just not good for us physically, mentally, spiritually, the whole nine yards.

[Dr. John Deloney]

But if retirement means going home and doing nothing, which is what he's.

[Ken Coleman]

He's doing, fun hobbies, which is great. I would say that. And this is my goal. And by the way, this is a very unpopular opinion. I was on Graham Stephan's show, and they asked me about retirement, and I said, it's overrated and I'm not going to ever retire.

[Dr. John Deloney]

I have no interest personally.

[Ken Coleman]

We'll slow down.

[Dr. John Deloney]

Yes.

[Ken Coleman]

I will diversify, but I will be doing something that looks, sounds, smells suspiciously like work until. Until God takes me home.

[Dr. John Deloney]

Yeah.

[Ken Coleman]

And that's because, a. I believe it's what's best for us. Now, again, downshifting. So all I would say here is. Is, Darren, hey, man, keep doing the hobbies, but find something. Even if, by the way, here's. Here's. Here's what's interesting. I would say, John, that volunteerism is in the category of not retiring. In other words, he may not have to collect a check, but let's say he's going in and let's say he used to run a sawmill. Random thing. That's what came to my head. If he just goes in, he starts consulting with a couple young guys that are in the wood business or whatever, and he tells them what he knows, and he does it one day a week.

[Dr. John Deloney]

And it's about purpose and providing value.

[Ken Coleman]

That's the idea.

[Dr. John Deloney]

That's it.

[Ken Coleman]

So one can volunteer. And by the way, volunteers work.

[Dr. John Deloney]

Exactly.

[Ken Coleman]

So that's my little spiel, and I'll leave it at that. Let you jump in on the second part of that.

[Dr. John Deloney]

I just. I 100 agree. I am also one. I've got. One of my closest friends in the world is counting down the minutes. Just counting down the minutes. And so I'm with you when it comes to work. I have a buddy who has a giant ranch that he, he messes with. You would say it was a hobby, but he provides a great place when somebody needs, wants to go for a hunt and bring their kid out for their first, you know, hunt. He is, he manages this thing so that people have a welcome place to come.

[Ken Coleman]

He's not retired.

[Dr. John Deloney]

He is not retired. He works really hard. I love that he doesn't draw a paycheck. Right. And so I think I also want to get down to this societal norm thing. If you at 50 years old are financially independent and you're still quote, unquote embarrassed when people ask you what you do. Stop. Stop. The reason people work their lives to become financially independent so that they don't have to care what people think. And so for some reason you are still attaching your self worth and your quote, unquote feelings to other people's perceptions and opinions of you.

[Ken Coleman]

Stop. Yeah, because you know the irony, John, I think most people would love to be where that dude is.

[Dr. John Deloney]

Yes, 50.

[Ken Coleman]

Yes, I'm 50.

[Dr. John Deloney]

That'd be amazing.

[Ken Coleman]

I think I'm young. I know I'm delusional. But, but, but I still go. I mean, now, again, I wouldn't stop today. Right, but you'd go to fewer meetings. Yo.

[Dr. John Deloney]

Sure, but I'd still come be on the, on the show.

[Ken Coleman]

Sure, sure. Yeah, that's a good point.

[Dr. John Deloney]

Yeah.

[Ken Coleman]

I don't. Neither one of us like meetings. No, but, but I don't think there is. I think that, I think the societal norm is that everybody wants to be where he's at. He's in the 1/2 of 1% of all people who do walk at 50.

[Dr. John Deloney]

Right.

[Ken Coleman]

Or maybe smaller percentage than that. So what is, what do you think? And again, I'm putting you on the spot, but real quick, we'll get to a call, but I would love to know, 30 seconds on. What do you think is the source of that feeling he gives us in the last sentence that he thinks people are going, dude, you're 15, you're not working?

[Dr. John Deloney]

Well, I think it goes back to something I heard an AI pontificator talking about. More than a work crisis, more than an economic crisis. We are going to have a massive, especially in the United States, a massive social unrest when it comes to an identity shift. Because in the west, our identities are based on what do you do and how hard do you work at it. That's. If you don't answer those questions appropriately, you are seen as less than culturally. And so we don't have a psychology for what if a robot just does it? Right. And what if the job that you had as an attorney making $700 an hour goes away because chat GBT will do it for 35 cents. Right? And so we don't have a psychology for that. So I think it comes down to just breathing our the cultural air, which is if you don't have an answer to the question, what do you do? My God, what if you could answer that. I love my life. I hang out with my family. I am currently working on woodworking projects, but I'm also starting a radio building thing and I play in a punk band on the weekends at 50. Like that should be a great answer. I'm creative, I solve problems for people, etc but anyway, I think I want to be free from other people's allowing other people to speak into my value or quote unquote embarrassment because of how I answer that kind of question.

[Ken Coleman]

Yes and amen.

[Dr. John Deloney]

And by the way, last one, enjoying fruits of a lifetime of hard work is not in opposition to doing hard things and showing up at a scheduled time. So enjoying the fruits of a lifetime of hard work doesn't mean you stop doing hard work. I think hard work is good for you. And every single nutritional, physical, psychological thing would say keep doing hard things. So maybe you don't do it with a mean boss or something like that or shareholders, but keep doing hard things while you're enjoying the fruits of your labor.

[Ken Coleman]

Yeah, I love it. Let's see if we can get Will in here in Phoenix, Arizona. Will, how can we help?

[Caller]

Hi guys. Thanks for taking my call.

[Ken Coleman]

You bet. We got about two and a half minutes and I'm sorry to do that to you, but see if you can get us your quick question and see if we can help.

[Caller]

All right. I hope you guys can hear me. My wife and I are in baby step seven. Our home is worth 400,000. Of course it's paid off. And my question is I'm 61 and potentially in four years like to possibly retire not entirely like you guys were just talking about, but from corporate America anyway. And the home that we sell for 400 now, which I'm assuming will go up and the home we want to buy in the same area is possibly about 100,000 more. Currently have about 700,000 plus in retirement savings and liquid combined. And want to know if you guys guys think it's okay to spend a hundred thousand of the retirement to buy a 500000 house instead of the 400.

[Ken Coleman]

We'Re in now, I wouldn't take the money out of my retirement to do that. I'd work a little bit longer and pay it off quick. You know, you're. And again, you could still retire from corporate world, and I think you can still accomplish what I'm suggesting.

[Dr. John Deloney]

Well, why would you move up in house? Most people retire and then they decide we're gonna, we're gonna sell the big house that we raised a family in.

[Ken Coleman]

I'll tell you why. We're gonna tell him, downshift, tell him why. I know.

[Caller]

Well, believe it or not, I don't want to. My wife doesn't want to go upstairs when she gets older. She's like. She's putting something on herself that hasn't happened yet. She thinks she can't get up the stairs of the two stories to go to a one story.

[Ken Coleman]

That's. I knew it, Will. I feel you, dog. I saw it coming like a freight train. I knew it was the wife.

[Dr. John Deloney]

Hey, the house I just bought has one of those rad chair lifts in it.

[Ken Coleman]

I'm coming over tonight. I'm coming over tonight.

[Caller]

The house.

[Ken Coleman]

Yeah.

[Dr. John Deloney]

Well, fair enough, fair enough. I, I single story.

[Ken Coleman]

So if that's going to be the case, John, I really don't want him pulling out of the retirement fund. I want that money staying, Will. And, and, and again, you have the income and the experience to, to, to. If you got to do a mortgage on 100 grand at such a small amount and pay it off quick. If you can't convince the wife.

[Caller]

Yeah, well, one thing I didn't throw in is that between now and those four or so years, we will probably reinvest another hundred or so between now and then, so.

[Ken Coleman]

Oh, I wouldn't do that.

[Caller]

850.

[Ken Coleman]

I wouldn't. Oh, you're talking about. Invest in your retirement account.

[Caller]

Well, the whole question is about a house, but the retirement savings, right, which is 750, will probably be at about 850 by that time.

[Ken Coleman]

I know, but I still.

[Dr. John Deloney]

Yeah, I. If you at that million mark or more, I'd feel a little bit more comfortable about it, but I wouldn't. Yeah, I wouldn't pull 100 grand out when you only have 750.

[Ken Coleman]

I tell her she's got to work a little bit longer.

[Dr. John Deloney]

Yeah, I wouldn't have that conversation either.

[Ken Coleman]

I agree. Just a joke, Will. You're on your own, pal. This is the Ramsay show.

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[Ken Coleman]

Where we help you win with your money, win in your profession and win in your relationships alongside Dr. John Deloney. I'm Ken Coleman. The phone number to jump in today is triple 8825-5258-8885-5225. Let's get it started with Zach in Lexington, Kentucky. Zach, how can we help today?

[Caller]

I'm trying to figure out how to budget my money to get out of debt.

[Ken Coleman]

Okay, tell us a little bit more. What's the debt?

[Caller]

Car payments, house and a lot of small debts, a couple credit cards and a student loan.

[Ken Coleman]

All right, let's go. Let's list them out for us. So go smallest to largest. The biggest debt down to the smallest. Start with the biggest debt.

[Caller]

150,000 for my house.

[Ken Coleman]

Okay. We'll leave the house out right now because we want to work on that other debt. So keep going.

[Caller]

$12,000 for my truck, 3,000 for my wife's car, about 2,000 on a student loan. And then two different credit cards are 1701 600.

[Ken Coleman]

Okay. And what is your combined income? Do you have two incomes or one, two.

[Caller]

Me and my wife.

[Ken Coleman]

So what's your combined income?

[Caller]

Roughly 60,000.

[Ken Coleman]

Okay. All right. What are, what's the truck worth right now? If you were to sell it? Private sale, not to a dealer. What's the truck worth?

[Caller]

Roughly 25.

[Ken Coleman]

Okay. That's great news. Okay. And how much is the $3,000 car? How much is that worth?

[Caller]

About six.

[Ken Coleman]

Okay. All right. So we got, that's everything you got, correct?

[Caller]

That's everything.

[Ken Coleman]

Do you have any cash Outside of your checking account at all, what kind of cash do you have?

[Caller]

None. I just sold a four wheeler to afford tires for both of our vehicles because we live paycheck to paycheck.

[Ken Coleman]

All right, so you guys are struggling just to make it to the end of the month?

[Caller]

Yeah. Okay, Nigel.

[Ken Coleman]

All right, so what. What is specific? What is your question today? Are you struggling with budgeting or is it a bigger issue where you guys are on the same page about money? I'd like to see more income, but what do you think is the big cause of this? Is it a lack of budgeting or is it you guys are on two different pages. One's trying, the other spending like crazy. Give us a little bit more.

[Caller]

I think it's a lack of budgeting because, I mean, we would buy our groceries. We eat most of our meals at home. We eat about one meal out a week. You know, it's kind of like a date. It's just we live, you know, our bills, take most of our paychecks. We don't really have much income week by week. And it's just. I feel suffocated and I got a baby on the way in about three weeks. Okay, so what I'm gonna For. Okay, child care.

[Ken Coleman]

All right, let's figure this out. So what is your income and what do you do? And then tell us your wife's income and what she does.

[Caller]

My income is like, I want to say 32 or 35 and I don't know exactly. I make about 17 an hour.

[Ken Coleman]

What do you do?

[Caller]

I am a water plant operator.

[Ken Coleman]

Okay, great. What does your wife do?

[Caller]

She is. She works for the courthouse and she makes about 1550.

[Ken Coleman]

Okay. All right. What is the. The mortgage? You don't have a very big mortgage. What's your mortgage payment?

[Caller]

It's almost twelve hundred dollars.

[Ken Coleman]

Okay, well, that's. That is a huge chunk of your take home.

[Caller]

It's a massive. And we don't even owe that much. I think it's because we're so young.

[Dr. John Deloney]

Yeah, no, they don't have any. What's your interest rate on that? Do you know?

[Ken Coleman]

It's all interest rate.

[Caller]

I think it's almost 8%.

[Dr. John Deloney]

Good.

[Ken Coleman]

That. That's the issue.

[Dr. John Deloney]

Call my friends at Churchill Mortgage. Right. When you get off this call and see about a like refinancing that house.

[Ken Coleman]

Yeah, I agree. What's your truck payment?

[Caller]

It's $330.

[Ken Coleman]

Okay, I'm gonna start there. And the reason I'm gonna start there is because that's A$300 a month raise, which is a massive deal for you. And you've got, you've got equity in that. And I would sell it. If you can sell that for 25, you owe 12. That's gonna leave you 13. I would go buy a $5,000 truck because I can find them all day long online and have done it before. And then I'm gonna take that 8,000 and I'm going to knock out your wife's car payment. I still got 5,000 left over. I'm taking out the $2,000 student loan. What do I got left? I'm trying to run this in my head.

[Dr. John Deloney]

Then I'm putting the rest of it in a, in a savings account that's going to be in my emergency fund because I'm about to have a little baby in my house.

[Ken Coleman]

I agree, but I mean you also.

[Caller]

Got the two credit cards, which is 1300 for both.

[Ken Coleman]

I got that.

[Dr. John Deloney]

Those are gone then.

[Ken Coleman]

But I think he can get rid of it all. If I, if I did the math right, I think you pay all of your, you pay your entire debt off with, with the proceeds from the truck.

[Dr. John Deloney]

Brother, you're free.

[Ken Coleman]

That's massive. What is your car payment on the, on the, on the wife's car?

[Caller]

180.

[Ken Coleman]

Okay, so that's 480 bucks. All right. And we should start going down the list.

[Dr. John Deloney]

Yeah, you just got a six thousand dollar year raise if you do this. Five hundred bucks a month.

[Ken Coleman]

Now I'm going to say one other thing. You, my friend, your wife's pregnant. So I'll let her off the hook. Although I'd like to see her pick up some hours. Pick up 15 to 20 hours a week at Walmart, working evenings while the baby's in the oven. But you definitely need to be picking up another 20 to 30 hours a week to actually get this emergency fund built up. Because you can be debt free and start stacking in the emergency fund really quickly. But this is all effort. I'm going to sell my truck, pay off all the debt, stick the rest in savings and my wife and I are going to work like we got no tomorrow in order to stack up five, six, seven grand. All this is doable. My right, John, all this is doable.

[Dr. John Deloney]

But hey listen, you're on it. You say the baby comes in three weeks.

[Ken Coleman]

Oh, three weeks.

[Caller]

Yeah.

[Dr. John Deloney]

Okay. And your wife works hourly, right? So if she is at home for two or three weeks on maternity leave, or six weeks, we just took a huge hit. You lose half your income. Right.

[Caller]

She has Paid maternity leave for six weeks.

[Dr. John Deloney]

Oh, outstanding. Right? High five. Those people in election.

[Ken Coleman]

Listen, listen, my man. We live in a world. Adam. Excuse me, Zach. That would tell you. Well, you take off time. No, you're not.

[Dr. John Deloney]

You don't. You can't afford it.

[Ken Coleman]

You can't afford to take time off with your wife. You got to be working.

[Dr. John Deloney]

Yeah.

[Ken Coleman]

Crazy hours.

[Caller]

Yeah.

[Dr. John Deloney]

And so you go get a second job, sell everything. If you sell this truck, you are debt free.500amonth raise right there.

[Ken Coleman]

And let's also call Churchill like you said.

[Dr. John Deloney]

Let's call Churchill and get this house. See if we can't get the. The house refinanced. That's number two. And number three. Brother, you're on the horn. Get another job, I think.

[Caller]

Yeah.

[Dr. John Deloney]

With someone who works in a water treatment plan. Who works as hard as you do on a. Day in, day out, you should expect to make 50 to 60 grand. Yeah, okay.

[Caller]

Well, my biggest. My biggest issue is I'm unlicensed, but I'm supposed to be licensed in April, and that should be a little bit of a pay rise. And then I've been picking up odd jobs like crazy and working, you know, 16 or 16 hour shifts about four days a week.

[Ken Coleman]

But let's go get the best hourly rate we can right now. I don't care what it is.

[Dr. John Deloney]

Let's don't get a certification for a little bitty raise.

[Ken Coleman]

Yeah, I agree with. With that.

[Dr. John Deloney]

Let's go get a certification or change field so that in two years, you're doubling your salary.

[Ken Coleman]

I'd like to see you be looking at the trade, Zach. I really would. I want you to get through, baby, and get out, get a. Get a nice emergency fund. But I'd like you to start thinking about the trades. You know, you're talking about a plumber, electrician, that down the road, if that's something that you're interested, I want to push you into that. But the type of work you do, I think it'd be a nice transition. And we're talking about a much better situation when it relates to hourly rates plus benefits, plus a nice ladder forward. But listen, Zach, we just gave you. I mean, this is easy that we get. Selling that truck changes your life.

[Dr. John Deloney]

It also signals to your wife and that new baby. I'm the husband, and I'll do anything for my family. By the way, honey, I sold the truck, and I picked up a second job for the next six months so I can get us ahead financially.

[Ken Coleman]

You guys will be fine. You got a small mortgage. See if we can get you a better rate on that. But just doing what we said to sell on the trucks, gonna make the margin there.

[Dr. John Deloney]

So get it, brother.

[Ken Coleman]

Get after it. My man. There's no sitting around waiting anymore. You gotta move. This is the Ramsey Show.

[Advertiser]

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[Ken Coleman]

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[Dr. John Deloney]

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[Advertiser]

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[Ken Coleman]

Welcome back to the Ramsey show alongside Dr. John DeLoney. I'm Ken Coleman. Glad you are with us today. 8888255225 is the phone number. We'd love to hear from you. Let's go to Orlando, Florida, where Adam is joining us. Adam, how can we help today?

[Caller]

Hello and thank you for taking my call.

[Ken Coleman]

You bet. What's going on?

[Caller]

Well, I'm expecting to get married in the next year and a half and the person I'm expecting to get married to comes from a lot of money and as someone that's in school and I'm expecting to have a stable career, I'm a little nervous because I don't think I can match that lifestyle that she's been exposed to.

[Ken Coleman]

You can't.

[Dr. John Deloney]

You can't let it ride, dude.

[Caller]

I mean, her father's an entrepreneur, and he makes a lot. He makes a lot of money. And I know that that type of wealth that she comes from is only available for an entrepreneur or businessman or have her own thing going on. And. And I honestly, I'm not too confident that I could match that.

[Ken Coleman]

I thought we just covered.

[Dr. John Deloney]

You can't.

[Ken Coleman]

And John said, let it go.

[Dr. John Deloney]

How do you think. How do you think any of the men marrying Dave Ramsey's daughters felt? You don't. And you know what? Both of those men, I know them. They're friends of mine. They're confident, they're smart, and they do good work. But they ever gonna have $750 million.

[Ken Coleman]

That's right.

[Caller]

And, yeah.

[Ken Coleman]

Is the issue you. Which we would understand that. You got to get over that. But I understand you feeling that. Or is it her? Is she. Is she putting pressure on you? I mean, what's. What's the reason for this call? What. What can we help you with?

[Caller]

Well, I don't know her too well, is the issue. It's sort of an arranged marriage type of situation.

[Ken Coleman]

Okay, hold up. Now we're digging in. Hold on. So are you actually, actually engaged? Because you started off the call saying, I. I'm gonna get married in about a year and a half. Is there a ring?

[Caller]

Well, there's not a ring.

[Ken Coleman]

Are there animals going back and forth with the arranged marriage, like 150 goats. What are we doing?

[Caller]

Well, she's from Morocco. As you know. I. Freda mentioned my cousin married her sister, actually. And this is. Actually, we went to the wedding and things of that nature. And the way it works is she asked her dad, and her dad came to me, and her dad said, are you married? And I said, no, I'm not. I'm actually 19 years old. I'm not married. And we kind of hit it off from there.

[Ken Coleman]

Whoa, whoa. Who hit it off? You and the dad or you and this girl?

[Caller]

Me and the dad. I haven't really talked. I've talked to him.

[Ken Coleman]

That's what I thought. I thought I heard you say, me and pops hit it off, and I think I might marry his daughter.

[Dr. John Deloney]

I don't know if you know this, but she is a key component of this marriage setting up.

[Ken Coleman]

Not really. Not with this deal. Is it really an arranged marriage?

[Caller]

Yes. Yes, sir. Not this. My mom. My mom and dad. Mainly my mom. I actually have seven siblings, and my mom tried to get each of us Arranged. And I'm the last one. And she always wanted. She's always talked about it, all this. And when she came in contact with her parents, like, done deal. They don't like the word arranged. Use the word insisted. I don't know. That's more.

[Ken Coleman]

I think that's probably the better word. I think that's what it is. I think that's actually the right word. Let me ask you this. Where are you at on this deal? Do you want to do this? I don't care how cool Pops is or not.

[Caller]

Well, I mean, she's pretty. She's really pretty.

[Ken Coleman]

No, bro, you're not answering my question. And I think I know the answer. Do you want to marry this girl or not?

[Caller]

I think. I think I do.

[Ken Coleman]

No, you don't.

[Dr. John Deloney]

No, you don't even know her.

[Ken Coleman]

You want to please your mom is what you want to do. You want to make your mom happy because she insists that you marry this wealthy Moroccan girl.

[Caller]

Well, for me, honestly. Well, I understand that. I forgot to mention I talked to her here and there. Like, not nothing crazy, nothing like, bro.

[Ken Coleman]

Marrying somebody that I talk to here and there, that's an equivalent doing. Why'd you.

[Caller]

I. And I. I believe I will marry this girl. In all honesty, I. I saw Set up. So basically set in stone.

[Ken Coleman]

Okay. In all honesty, why did you call?

[Dr. John Deloney]

Doesn't matter that you call.

[Ken Coleman]

John and I want to help you, but we've already told you how we feel.

[Caller]

Yes, sir. So how can we. Well, I don't know if I mentioned that. Well, I'm set up for a stable career later on down the road, and I. I again, I. I don't know how to. I can't match this lifestyle with. I really. I don't know her.

[Dr. John Deloney]

Hold on.

[Ken Coleman]

Listen, Adam, I feel like we're on a hamster wheel.

[Dr. John Deloney]

Yeah. None of the things you're saying matter. It doesn't matter that you don't. That you've. Hold on. It doesn't matter that you don't talk to her regularly. It doesn't matter that you haven't been on dates. It doesn't matter that you haven't kissed her yet. It doesn't matter. Any of that. None of that matters because you said this thing's arranged. So if it's arranged and you, as a grown man in the United States of America are going to get in that boat and say, all right, mom, you're going to direct the rest of my life, then, bro, it doesn't matter what you make. It doesn't matter Any of that stuff because you got in the arranged boat and you took off down down the river.

[Ken Coleman]

What do you care?

[Dr. John Deloney]

Let that be. If you want to be a grown up and decide I love you, I want to create a life with you, us two, as two individual adults, creating one, not letting my mom and your dad drive our future. If you want to do that, then yes, I get there being feelings like, man, I didn't make as much money as your dad. You're gonna have different lifestyle. We may have Honda lifestyle when you're used to a Alexis lifestyle. That's all well and good, but that's not your situation right now, dude. So just get, if that's what the choice you're making, get in the boat, prop your feet up and put your hands behind your head and then just ride on down down the river out into the ocean, man.

[Ken Coleman]

Yeah.

[Caller]

Yes, sir.

[Dr. John Deloney]

Does that make sense?

[Caller]

It makes sense. It makes sense.

[Ken Coleman]

So you called us saying, guys, I don't know what to do. I don't think I can provide for. Doesn't matter. She chose you and pops chose you. It sounds like. Or the two of them got together and said this is my guy and you're just going to go along with it. So therefore it doesn't matter if she's disappointed. It's got to be the greatest get out of jail husband card of all time like.

[Dr. John Deloney]

And Adam, for what it's worth, absurd. How old are you, man?

[Caller]

19.

[Dr. John Deloney]

I tell 19 year olds to get off their parents cell phone plan, much less their marriage arrangement plans. So knock your lights out, man. You're an uncharted water for me.

[Ken Coleman]

So I would tell pops to get you a good job. That's what I would do.

[Dr. John Deloney]

Yep.

[Ken Coleman]

What are you worried about? Why are we even going to school? I mean, this guy's wealthy and he selected you. The whole thing is foreign to me, Adam. And we're having a little bit of fun with it because quite frankly, it's so absurd I only laugh with it. And what, and what is absurd is I'm not insulting other. I probably already have. But we'll get over it. The absurdity is your attitude towards it. I, I, I'm not going to judge another culture and arranged marriages. I don't get it.

[Dr. John Deloney]

But it doesn't feel like a cultural practice. This feels like an overbearing mom.

[Caller]

Yeah, you could say that.

[Ken Coleman]

What culture, what culture you come from? Are you, are you an American family?

[Caller]

Oh, I was born in, I'm born in America. Raised in America. But my, my, my father's from Yemen. We're Muslim, they're Moroccan. So there's obviously some differences.

[Ken Coleman]

This is a generational thing for your parents. This is a very normal thing for them to arrange or insist.

[Caller]

Yeah, My. My parents weren't arranged. My. My dad's parents were arranged and their parents are arranged.

[Advertiser]

Yeah.

[Ken Coleman]

It's what I'm getting at. So I don't understand it. But I'm not. I'm not knocking the tradition because I don't understand it. And I want to be very clear. Our large audience on that. What I'm saying absurd is your response to this, because I feel like you got an option to go deuces, I'm out. Or I kind of think I'm gonna do it. And yet you called us to go. What do I do? And I. I just. I'm pleading with you, and I mean this. I hope you remember my voice multiple times tonight before you go to bed. Please don't do this, John. Am I right? You can hear it all over him.

[Dr. John Deloney]

Yes.

[Ken Coleman]

He feels like he has to do.

[Dr. John Deloney]

Yeah, that's the thing, Adam. If this is a Like the. I've actually looked at the data on the traditional cultural arranged practices. It's remarkable. It's robust. But there's entire family systems around these new married couples and families and all that. So I'm with you, Ken. Not knocking it at all. This doesn't sound like that. It sounds like a mom that wants to make sure her boys marry somebody who's going to have a lot of wealth. Right.

[Ken Coleman]

And good on mom.

[Dr. John Deloney]

She's.

[Ken Coleman]

She got you there.

[Dr. John Deloney]

Well, she got you. Yeah. You, though, Adam, aren't in. And if you're not a part in to the cultural practice, if you're not on board with the family practice, you're not on board with this woman that you are gonna. They're gonna. At some point, they close the door. And it's just. Y'all too.

[Ken Coleman]

This is. This is awful. But I'm gonna be real.

[Dr. John Deloney]

Okay.

[Ken Coleman]

If I was in Adam situation and the father approached me and we're hanging out, we're bros, and he goes, hey, by the way, my daughter over there, it's my fourth one. Would you like to marry her? She thinks you're cute. I'd go, let's talk terms.

[Dr. John Deloney]

Yeah. I would be like, can I get an offer sheet? I need to run to the bathroom real quick. And I would go to Washington D.C. and I would never be seen again.

[Ken Coleman]

That true. But I mean, if we're gonna do all this, let's go all right, what's the job? Do we got a slush fund? This is wackadoodle. I don't know how else to process that. Oh, Adam, he needs to fall in love. Hey, let us know.

[Dr. John Deloney]

Send us a wedding invite. Me and Kid May show up. This show is sponsored by Better Help. Hey everyone, listen. We all have stories. The family and cultural stories that we were born into. The stories of the things that have happened to us, both the good stuff and the challenging stuff. And we have those stories that we constantly tell ourselves. And none of us can go back and change any of our old stories. But the world is waiting to see what each of us is going to write next. As we enter 2025, I encourage you to examine your old stories and be intentional about the new stories that you're going to write. And I'm not talking about making goals that are going to be long gone by February. I'm talking about writing new stories that will change your life and the lives of those you love for the better forever. If you're like me, therapy can be a great place to explore the old stories and heal from them and begin writing new ones. If you're thinking about starting therapy, I want you to consider my friends at Better Help. BetterHelp is 100% online therapy, and you can talk with your therapist when it works for your schedule. You just fill out a short online survey to get matched with a licensed therapist and you can switch at any time for no extra cost. So start writing a new story this month with better help. Visit betterhelp.com DeLoney to get 10% off your first month. That's BetterHelp. H-E-L-P.com DeLoney it's that time again, folks.

[Advertiser]

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[Ken Coleman]

Welcome back to the Ramsey Show. Thrilled to have you with us. I'm Ken Coleman. Dr. John DeLoney joins me, and the phone number for you to jump in is 888-255-2225. That's triple 882-55-2225. Okay, folks, a little bit of a mild roller coaster going on in real estate right now. That's just the reality. You know, a lot of experts are saying we're going to stay in this interest rate range for most of this year. Who knows? They don't know. We don't know. But the reality is, is for years we've said marry the home, date the rate. And so whether you're buying a home or selling a home, this is a massive, massive decision and transaction. And it's why you need the tools and resources to get you prepared. And so that's why we have the Ramsey real estate home base. Fabulous location for you. You're going to see calculator, start to finish guides, how tos, a podcast, books, and even a video course, all giving you actual steps so that you can navigate the buying and selling process without any massive errors. And it's painless. Ramsey Solutions.com Real Estate RamseySolutions.com Real Estate or you can click the link in the show notes if you're listening on YouTube and podcasts. And I want to point out when we tell you about all these things and if you miss it because we know you're listening to us and watching us while you got other things going on. The show notes. The show notes. The show notes, all of the links, things we talk about are in the show notes of the podcast app that you're listening to and on YouTube. All right. And Ramsey solutions.com you can usually find it. All right, let's go back to the phones. Vanessa is joining us now in Phoenix, Arizona. Vanessa, how can we help?

[Caller]

Hi, thanks for taking my call.

[Ken Coleman]

You bet.

[Caller]

So I just had a quick question. Me and my husband and my brother in law and sister in law, when we first got married and started having kids, we bought a piece of land and built two houses on it in the city, which is kind of a unique property. Then we refinanced, we bought a house separately, they bought their house separately. We long term rental those two homes and then we turned into, into Airbnbs about five years ago. My question is this. I'm wanting to sell my Airbnb and to pay off my house I live in now and then build an Airbnb on the back of my property. The problem is is everybody tells me this is going to be the biggest mistake of our life because I can't buy into real estate like I did 20 years ago. I am going to have to pay capital gains because I already own the land. That I'm going to build an Airbnb off of. And obviously you have to pay capital gains if I pay my house off. So I'm just wondering, is selling my rentals to pay off my house and build another residual income a bad idea or not?

[Ken Coleman]

No, of course not. You know that, don't you?

[Caller]

I do, but something about. Because people are saying the interest rate that I own, I owe 238 on my home, and I'm at an interest rate of 2.99. I owe 166. My rentals at an interest rate of about 4.25. So they're saying, you know, you know, lumber's gonna go up. How do you know you can build an Airbnb on the back?

[Ken Coleman]

And my God bless them, they don't know as much about real estate as you do. True or false?

[Caller]

Well, I don't feel like I know a lot, and so.

[Ken Coleman]

All right, never mind. Okay, bad tech, let's go this. Okay, let's go by the numbers. Can we do the numbers?

[Caller]

Okay.

[Ken Coleman]

All right.

[Caller]

Yeah.

[Ken Coleman]

Let's say I want you to give me these numbers. Super simple. You sell both rentals, okay? How much money do you walk with cash?

[Caller]

Well, so that's another problem because we. To find a comp in our area with two houses on one piece of land is very difficult. So when we do the numbers in our head, like to pay, you know, the mortgage off, to pay capital gains, like, I think I need at least, minimum, I need to walk away, me and my husband personally, with 500,000.

[Ken Coleman]

Okay, I didn't ask that. And I want you to keep this simple because I'm trying to help you, but you're confusing me in your answer. You sounded like a congressman on a Sunday morning show there. So direct question, stay with me. I'm trying to help you. Okay?

[Caller]

Okay.

[Ken Coleman]

First of all, you need to get a great real estate pro, okay? Somebody who can give you real comps.

[Dr. John Deloney]

Real numbers, real comps.

[Ken Coleman]

But I want you to be modest, okay? You own two homes. What do you think you walk away with on a modest sale price of both rentals? Give me a modest ballpark figure. You've thought through this, haven't you?

[Caller]

Yes.

[Ken Coleman]

Okay, then give me the number.

[Caller]

500.

[Dr. John Deloney]

All right?

[Ken Coleman]

You're going to walk away at 500. And your current home that you live in that you want to pay off is how much. How much do you owe on it?

[Caller]

238.

[Ken Coleman]

Okay, so you're going to have 500 minus 238 is what? 272 left.

[Caller]

Yes.

[Ken Coleman]

Am I doing my math right? I'm doing it quick. I was a history guy. Polyside. So, 272, that's after we've paid our house off. Now, what is it going to cost you to build this property, this next Airbnb property, on your actual house? Now that you have a paid for home as your main living, what's it going to cost to do that?

[Caller]

My husband believes, being very generous, about 200.

[Ken Coleman]

So if I'm hearing you right and I'm going to round down, we got $30,000 cash left over. We have no debt at all on any properties. My home that I'm living in is paid off and I've got an actual rental property that is going to spit off cash in perpetuity that it's paid for.

[Caller]

Yes.

[Ken Coleman]

Versus being $238,000 in debt on your main home. And how much in debt on each of the rental homes together?

[Caller]

They're 166.

[Ken Coleman]

Okay, so what do you like better? When I just ask you those numbers, what future do you like better?

[Caller]

I want my home paid off and to have residual incoming money with that paid off as well.

[Advertiser]

Great.

[Ken Coleman]

So I'm going to hand you over to my friend who's really smart with emotions and mental stu and John, now that I've just pulled out what she would prefer to do, which interestingly enough, lines up with what we would tell her to do.

[Dr. John Deloney]

Right.

[Ken Coleman]

What about these people in her life that know so much about lumber?

[Dr. John Deloney]

I, I, I guess I'm trying to think of the right way to ask this question.

[Ken Coleman]

He's stumped. No, there he goes.

[Dr. John Deloney]

It's this Vanessa, what do you do? What do you do for a living?

[Caller]

So I clean our Airbnbs and manage them.

Okay.

My husband works for ups.

[Dr. John Deloney]

What is your take home salary every year combined?

[Caller]

This last year it was about 115.

[Dr. John Deloney]

$115,000?

[Caller]

Yes, sir.

[Dr. John Deloney]

How somewhere along the way did you get the understanding that, that you're dumb? Who told you that?

[Caller]

Well, not that I'm dumb, but accountant like, you have such a great interest rate on your home. Why would you pay that off? And I'm like, well, because then my husband can work, but he can be basically retired. You have no car payments, you have no credit card.

[Ken Coleman]

Really smart answer.

[Dr. John Deloney]

Okay, so somebody is trying to tell you that you're, you're able to see into a future that most people who are obsessed with their stupid spreadsheets and Instagram can't, and that is this. What is life on the other side of not owing anybody anything. Or did I say it another way? What is life on the other side of freedom? And our culture is so stupid and obsessed with short, inch by inch gains that they don't look at the long picture, the long game.

[Ken Coleman]

It's so true.

[Dr. John Deloney]

You already have. Right. It's the same reason companies hire a bunch of people to goose the Q1 numbers and then fire them all. Q4. Not like realizing that at some point people just quit working for you because you're terrible people. But they're so obsessed with the little notch here and the little notch there. The little notch here. So in the same way, you've already projected a future where your husband laughs every morning.

[Ken Coleman]

So true.

[Dr. John Deloney]

Where you have a cup of coffee on those rare cold Phoenix mornings in your paid off house that nobody can ever take away from you and y'all just can go for a walk together.

[Ken Coleman]

Hey, Vanessa and John, do you both remember the classic Miller Light ads where it was like, when we grew up, it was like, great taste. And then the other half of the bar would yell, it's less filling. And it was a debate. Here's what's going on, Vanessa. Here's what I'm hearing. You're saying my life is better and they're going better interest rates.

[Dr. John Deloney]

Yes.

[Ken Coleman]

And it's this goofy, weird.

[Dr. John Deloney]

What?

[Ken Coleman]

My life is better. And they're yelling, but you got a better interest rate.

[Dr. John Deloney]

Exactly.

[Caller]

Capital gains doesn't. It's the cap. People are like, well, you're just giving capital gains away. But then when I do the math, I'm like, but I'm gonna pay more in interest over the next 25 years.

[Ken Coleman]

Vanessa, you're not dumb. Good answer.

[Dr. John Deloney]

Vanessa, Ken and I in your seat would both do the exact same thing that you're talking, talking about. And I'll pay the 3% difference on my APR that I'm losing for my new property. I'll pay that difference in a peace tax every day.

[Ken Coleman]

You got it right, Vanessa. Do your plan, not theirs. This is the Ramsey Show.

[Advertiser]

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[Ken Coleman]

Welcome back to the Ramsey Show. I'm Ken Coleman. Dr. John DeLoney joins me this hour. We are thrilled to have you with us. This triple 882-55225. That's the number to jump in. Today's question of the day is brought to you by. Why Refi? Now, we don't recommend refinancing on everything, but for distressed private student loans, there is why Refi. We trust Y Refi because they can help you with a low fixed interest rate that you can't get anywhere else to help you stick to your budget and get out of debt. Learn [e-mail] Ramsey that's the letter. Yes. R e f y.com Ramsey it may not be available in all states.

[Dr. John Deloney]

Oh, I started pre reading this question, Ken, and it's already giving me gas. All right. Today's question comes from Allison Georges. Yeah, you're gonna want to scoot over a few feet here.

[Ken Coleman]

Okay.

[Dr. John Deloney]

My husband and I started building our dream home last year. We took out a HELOC to fund the down payment. Oh, God. And start the building process. We struggled financially for the last few months due to low profits at my husband's business. No way. Things weren't going to always just continue to go up and up and up and up forever. So he took out several more loans to help with the cash flow. These ended up strangling us. So we used most of the HELOC to keep the business afloat, along with using personal credit cards to make business purchases. The business now owes us over $300,000. And y'all owe the banks and the credit card companies. I'm assuming. Our house is almost complete, but closing on it is in jeopardy due to all of this debt. How do I come to terms with the fact that my dream house is probably gone? How do I deal with the embarrassment and the shame? And how do I feel safe in my home when everything is falling apart?

[Ken Coleman]

A lot of questions for you there, Doc.

[Dr. John Deloney]

Well, I, I mean, a lot of emotional questions.

[Ken Coleman]

I mean, I, I would just say on the dream home, as I would. If you can get out of it, get out of it. Yeah. And then start to. To dig out of the situation from the business. Because this is. There's a lot of stress right now.

[Dr. John Deloney]

There's a marriage issues. There's the. By the way she's putting all this on her husband. She doesn't say here that either she was complicit in this, like she participated and. Well, I guess I'll just put this on. Or she needs to deal with some serious financial infidelity issues in her Home where her husband came and said, by the way, I just lost the house.

[Ken Coleman]

And there are times where that happens.

[Dr. John Deloney]

He basically gambled it away. Yeah. I think when it comes to dealing with when dreams are gone or as, as when you have to grieve what you wanted to be, man, it just takes time. You got to write some things down. I, I recommend people go through some sort of, for lack of better words, a funeral, some sort of ceremony that says this was. And it's not going to be anymore, embarrassment and shame. It's just kind of part of it. If you participated in trying to rob Peter to pay Paul, and you ended up gambling away all of your losses, gambling away your home, then yeah, there's some embarrassment, there's some shame. I, I recommend dealing with those head on, walk straight into them. When somebody asks, you say, me and my husband made some dumb business decisions. We ended up having to pick between the business and the home, and we chose the business. And you run straight through it and you'll find that the embarrassment, the shame, lose their power over you when you say them out loud and you head directly into them. And then how do I feel safe in my home when everything's falling apart? That sounds like a marriage question, Ken. And that's when you and your husband get away for half of a morning and go to breakfast at a cheap diner and say, right, we got to rebuild. What, like the, Our ability to trust one another.

[Ken Coleman]

That's right.

[Dr. John Deloney]

Forget the business, forget the house, forget all.

[Ken Coleman]

I agree. And to your point, the only thing I'd say on that is if she doesn't feel safe financially, which the. This circumstance would absolutely do that to anybody, then what you got to do is, is you. I'm going to take shame, whatever shame there is, and it shouldn't be, but I understand that's a natural emotion.

[Dr. John Deloney]

Of course there is.

[Ken Coleman]

But I'm going to go ahead and take shame over feeling unsafe, meaning I'm going to get out of these problems. I'm going to back away slowly.

[Dr. John Deloney]

I'm going to go get myself a job and get myself a checking account.

[Ken Coleman]

I'm going to do what we need to do so that I feel like that my financial world isn't crumbling. And then once I get there, that's going to do wonders for dealing with the shame.

[Dr. John Deloney]

That's right. That's right.

[Ken Coleman]

But it's really hard to deal with all that at the same time.

[Dr. John Deloney]

Time. That's exactly right. And it's easy for me to say on this side, but it's Just a house. So if their marriage is intact and they made some strategic gambles by taking out a HELOC to fund down payments and putting everything on credit cards, and we triple stamp, a double stamp, it all came down. Everything's not falling apart. Yeah, right. But if your husband's lying to you and now you've lost your house and you may have lost your marriage, it can feel like everything's falling apart. You need to get somebody to talk to and say these things out.

[Ken Coleman]

And you know what? Just. I want to throw this out there, John. I know you're going to agree with it, but it just popped in my head. We need to say that if we are very wise and intentional in who we choose to be our friends, those are the people you need to go talk to about this.

[Dr. John Deloney]

Not need. You have to.

[Ken Coleman]

Instead of shame, just. You can enter with shame. But real friends will go, hey, don't worry about it.

[Dr. John Deloney]

Oh, I, I, I'll bring the nachos, you bring the beers. We're gonna sit on top.

[Ken Coleman]

They're not gonna leave you.

[Advertiser]

No.

[Ken Coleman]

They're gonna actually make you feel good and, dare I say, safe.

[Dr. John Deloney]

Yeah. And they'll weep with you. They'll laugh with you. A good friend will poke at you, and how can we.

[Ken Coleman]

I'm gonna tell you, and I, and I mean that with everything in my being. Stacy and I have always been intentional. But I'm telling you, we've got friends like that around us right now. That. I'm just telling you, it's everything. You just have to have the people that, no matter what's going on, you can snot in front of them and cry and ugly cry or be weak or doubtful or insecure or whatever. And they just come around you and they lift you, and it is so important. So I just saw, I heard that, and I was like, you know what? I get the shame feeling. But take that shame, Take it to real friends and watch shame disappear.

[Dr. John Deloney]

That's exactly right.

[Ken Coleman]

It's really good. All right, let's go to Valerie in San Antonio, Texas. Valerie, how can we help?

[Caller]

Hello.

[Ken Coleman]

I was just wondering, when I'm looking.

[Caller]

At baby steps four, five, and six, are you supposed to, you know, max out number four first before you move to five, before you pay more towards the house or.

[Ken Coleman]

I know you're supposed to do them.

[Caller]

All together, but I just don't know how much of each.

[Ken Coleman]

Yeah, it's a good question.

[Dr. John Deloney]

I love a good Ramsey rule follower. Valerie.

[Ken Coleman]

Yeah, so, so, so basically, what that means is, is, like, once you get out of baby step three. Okay. And you've got that three to six emergency fund, three, six months. Then you begin to take the budget. We reorder the budget. Right. And so we take 15% of take home and we invest that. And that is for retirement. And so you begin to make that happen now. Now you start working the rest of the budget.

[Dr. John Deloney]

Right.

[Ken Coleman]

And so now we go, okay, we're going to put some, we're going to put what we can away for baby step five. Right. And, and, and so you may have enough income where you can do all at the same time, but you may not have enough income to be able to do that. And so you may be in 4 and 5 for a while. Does that make sense? Yes.

[Caller]

So you suggest putting all 15% before you do 5 and 6, right?

[Ken Coleman]

Yeah. Because it's not about before. It just becomes the thing. It's now this is the next thing we do. It's like budgeting. Right. So once we get through baby step three, the automatic is every time we get a paycheck, we're putting our money away for retirement. So it is, it's just in perpetuity. Does that make sense?

[Caller]

Yes, it does. Thank you so much.

[Ken Coleman]

Yeah, absolutely. That's a really good call actually, you know, because we have a lot of people that join us all the time, John. And so do you want to talk about the momentum behind that and, and why Dave over the years developed that? So it, it feels. And there are times where you can do four, five and six all at the same time.

[Dr. John Deloney]

Sure.

[Ken Coleman]

But that's a function of margin, right?

[Dr. John Deloney]

It's exactly. Or sometimes like I was really close to paying off a house. So I paused in quote, I guess technically four or five. I paused putting money in retirement because it was like six months away and I could escalate. I'm just going to hammer it. But so there is so much 4, 5 and 6 flexibility. But the cornerstone principle is if you got kids, there's going to be some educational expense at some point that you don't want them to have to choose between no education or debt. Right. There is you are going to have life after work at some point or life after an ability to go in and be given a paycheck. And you have to prepare for that. So you start saving for retirement. Dave's found 15% over the long haul is a good amount of money that's going to give you a good lifestyle on the end of it. And then, yeah, dude, try to work towards a world where you don't owe anybody anything, including your mortgage, man. But yeah, I think that the hard part for me for hard part for most people is toggling out of the ah which is baby step one, two and three, getting out of debt and getting an emergency fund and then settling into living a life. Right? Like what do you want life to look like for you? And I think that's a hard part for everybody.

[Ken Coleman]

It really is. And we say we use this phrase a lot and it can sound cliche and I don't want it to be cliche today. But we talk about we're moving now out of baby step three and we've been super, super intense and now we want to downshift, if you will, to intentionality and it's intensity to intentionality.

[Dr. John Deloney]

It's always easier to blame Dave for all your decisions. 4, 5 and 6 is where you guys guys sit down and say what kind of life do we want to build for ourselves and what's that going to look like? And you got to own some of the the consequences there.

[Ken Coleman]

Good stuff. Good hour. Dr. John Deloney. Want to thank James Childs and our amazing crew behind the glass to keep us on the air and you America, for listening. This is the Ramsay the right questions are the key to unlock personal and professional potential. That means if you're not where you want to be, you are not asking the right questions. I'm Ken Coleman and this is what my new show Front Row Seat is all about. Over my career, I've had the distinct privilege to interview successful people from all walks of life and to coach over 10,000 professionals who wanted more. What sets successful people apart is a never ending desire to learn and grow. Each week I'll be joined by industry leaders and world class experts to have a conversation about how to get better, move up and lead well in what work and life. But the best part of this show is you get to be a part of the conversation. Live in studio, we'll have a group of professionals just like you who have the power to ask questions and steer the discussion in real time. It's an opportunity to get real answers to real questions like how to make the right decisions, have hard conversations, live a balanced life and discover your next steps to growth. Join us every Tuesday for conversations that are guaranteed to surprise, challenge and inspire you. Check out Front Row Seat wherever you get your podcasts.