Building Wealth Requires a Long-Term Investing Mindset

Summary

Podcast Summary: The Ramsey Show – "Building Wealth Requires a Long-Term Investing Mindset"

Date: June 2, 2026
Host: Dave Ramsey
Co-Host: Jade Warshaw
Podcast Theme:
This episode of The Ramsey Show focuses on the principles and real-life challenges of building wealth through disciplined, long-term financial management. Through live caller interactions and Dave & Jade’s signature tough love advice, the show demonstrates that overcoming debt, budgeting strictly, and developing a patient investing mindset are foundational to financial peace and long-term prosperity. Key themes include breaking self-sabotaging financial behaviors, the dangers of lifestyle inflation, navigating income changes, staying the course in investing, and keeping a unified front as a couple.

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Key Discussion Points & Insights

1. Caller Case Studies: The Realities of Budgeting & Debt

• [01:00–08:53]
  Leonard from Sacramento shares he and his wife make $200,000/year but are living paycheck to paycheck with $86,000 in debt—mostly from a $55k truck and high rent.

  • Problems Identified: Overspending, failure to budget daily, lifestyle inflation, and a huge vehicle loan.
  • Advice:
    • Go "scorched earth" on lifestyle until the margin is found (cut dining, activities, vacations, etc.).
    • Sell the expensive truck immediately, cut up the credit cards.
    • Use a detailed, daily-tracked budget (EveryDollar app) for real awareness.
  • Notable Quote:
    • “When you first do a budget, you look at it and go, I’m so bad. Where’s all this money going?” — Dave Ramsey [05:13]
    • “You’re not stupid, but you've been doing stupid stuff.” — Dave Ramsey [05:14]

• [10:39–17:25]
  Timmy in Salt Lake lost a high-paying insurance job, now earning half as much, with $24k left in debt and several cars (including a Corvette and Fiero).

  • Advice:
    • Take any job to get back in and seek higher earning opportunities.
    • Sell unnecessary vehicles immediately for a cash influx.
    • Recognize the current struggle is an income/career problem more than just a debt problem.
    • Encourage spouse to convert hobby into significant side income.
  • Quote:
    • “The big deal is for you to get back to 100k. … This is just a temporary setback, not a permanent path.” — Dave Ramsey [16:29]
    • “Once you have driven at 112 miles an hour, it feels weird to drive at 50.” — Dave Ramsey [16:36]

2. Spending Decisions and Spousal Dynamics

• [17:25–21:01]
  Stephanie in Canada wants to upgrade her 15-year-old car; her husband disagrees despite recent major purchases for himself.

  • Advice: If you have no debt and can pay cash, there is no reason for this hesitation.
  • Humorous Take:
    • “Federal law in America: Wife gets the good car. Y’ all need to pick that up in Canada.” — Dave Ramsey [19:27]
    • “You lose the argument, my man. Stephanie, she’s right.” — Dave Ramsey [19:06]

• [22:03–29:58]
  Keith in Omaha is frustrated that his mother keeps bailing out his overspending sister, eroding the family inheritance.

  • Advice:
    • You’re not entitled to your parents’ money; focus on building your own strength and financial independence.
    • The real issue is enabling behavior in the family, not inheritance.
  • Quotes:
    • “I want you to go have a life and then not worry about it…Don’t wait on your mom’s income to make your life good.” — Dave [25:13]
    • “The wealth didn’t ruin your kids. They were already ruined. The wealth exposed it.” — Dave [28:26]
    • “The antidote to entitlement is gratitude, humility, and contentment.” — Dave [29:03]

3. Drama-Based Financial Decisions

• [33:03–42:11]
  Marie needs a bigger house for a growing family but is trapped by a 40k solar panel loan from a panicked, drama-based decision.
  • Dave’s Tough Love:
    • Many large decisions were trauma/reactive (“drama-based”) and not thought through (solar panels, home too small, windows replacement).
    • Pattern of making large, emotional decisions leads to long-term setbacks.
    • Pause, breathe, research decisions carefully before acting.
  • Quote:
    • “Every time I get desperate, I get stupid. And most people do.” — Dave [39:29]
    • “You’ve made three large bad decisions … break the pattern or it never goes away.” — Dave [42:11]

4. Wealth Building as a Gradual, Unsexy Process

• [44:17–58:48]
  Andy in Dayton illustrates that even after following every Ramsey step, life still feels tight at a modest income and debt-free.
  • Discussion:
    • Even when mortgage-free, budgets are tight if income is modest.
    • Check your percentages—food, taxes, and giving may be higher than you realize.
    • The "arrived" moment at Baby Step 7 is often anticlimactic; the pressure only truly lessens at a high net worth or high income, but the sense of crisis fades.
  • Quotes:
    • “What used to be a crisis is no longer a crisis. You don’t feel like you’ve arrived – there’s not a ‘woo-hoo’ moment.” — Dave [54:16–57:29]
    • “When you’re a millionaire, you drive a two-year-old Toyota. You don’t have three houses; you don’t have a private jet…” — Dave [52:07]

5. Stay the Course Investing

• [66:08–74:46]
  Donna, 71, and her 84-year-old husband repeatedly pulled out of the stock market after short downturns, missing subsequent rebounds and long-term gains.
  • Dave’s Core Message:
    • Do NOT invest in the market if you can’t emotionally handle volatility.
    • History shows market downturns almost always recover within months or a few years; withdrawing after a loss locks in the loss.
    • If you can’t stomach it, stick with high-yield savings for peace of mind, but accept much lower returns.
  • Quotes:
    • “No one gets hurt on a roller coaster except those that jump off in the middle of the ride.” — Dave [85:40]
    • “If you just ride it out…it comes back. 97% of five-year periods have made money.” — Dave [73:07]
    • “If you’re going to do that again, stay away [from the market], I made 100% on my money while you did that.” — Dave [67:17]

6. Home Ownership as Core to Wealth-Building

• [76:16–84:18]
  Zach in New Hampshire’s email: He and his wife debate whether to buy a home or keep investing since their rent hasn't increased and they have a large down payment saved.
  • Dave & Jade's Consensus:
    • Homeownership is key to wealth-building and protects against inevitable rent inflation.
    • Most American millionaires built wealth simply by paying off a house and investing steadily—boring but effective.
  • Quotes:
    • “Almost all of them...looked like this: They worked and got their home paid off…and steadily invested in their 401ks. It’s not sexy, it’s boring.” — Dave [78:31]
    • “Don’t be a renter. … That house is worth $600k now.” — Dave [81:15]

7. Caller Success Stories: Consistency Pays Off

• [107:02–114:13]
  Gregory & Kimberly from Michigan paid off $300,000 in debt (including house) over 72 months, now net worth $1 million+ and living debt-free.
  • Notable Moments:
    • Sold their home, downsized, and paid cash for their next house—bucking the trend to "move up" and take on more debt.
    • Kids and coworkers cheered them on; a friend introduced them to Ramsey Solutions.
  • Debt-Free Scream:
    • “Three, two, one…WE’RE DEBT FREE!” — Gregory & Kimberly [114:08]
    • “Who pays cash for a house? You do.” — Jade Warshaw [111:25]

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Memorable Quotes & Moments

| Timestamp | Quote / Moment | Speaker | | --- | --- | --- | | 05:13 | “When you first do a budget, you look at it and go, I’m so bad. Where’s all this money going?” | Dave Ramsey | | 19:27 | “Wife gets the good car. Y’ all need to pick that up in Canada.” | Dave Ramsey | | 39:29 | “Every time I get desperate, I get stupid. And most people do.” | Dave Ramsey | | 52:07 | “When you’re a millionaire, you drive a two-year-old Toyota. You don’t have three houses…” | Dave Ramsey | | 67:17 | “If you’re going to do that again, stay away [from the market]…I made 100% on my money while you did that.” | Dave Ramsey | | 73:07 | “97% of the five year periods, if you leave it alone five years since the stock market began, have made money.” | Dave Ramsey | | 81:15 | “Don’t be a renter. That house is worth $600k now.” | Dave Ramsey | | 107:07 | “About $300,000 [paid off]…” | Gregory | | 114:08 | “Three, two, one…WE’RE DEBT FREE!” | Gregory & Kimberly |

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Timestamps of Key Segments

• [01:00–08:53] – Overspending at high income; truck loan & budgeting
• [10:39–17:25] – Income drop, car sales, and side hustles
• [17:25–21:01] – Spousal car upgrade disagreement
• [22:03–29:58] – Enabling family, wealth, and entitlement
• [33:03–42:11] – Drama-based financial decisions and breaking the cycle
• [44:17–58:48] – “Arriving” at debt-freedom, but it doesn’t feel like winning the lottery
• [66:08–74:46] – Investing panic, market cycles, and why to stay put
• [76:16–84:18] – Rent vs buy; building wealth through home ownership
• [107:02–114:13] – Debt-free celebration: millionaires who did it the “boring” way

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Ramsey-Style Wisdom: Recurring Lessons

• Follow a Real Budget—Daily: Success and margin are found by tracking all transactions and confronting where the money actually goes.
• Cut the Lifestyle Before You Cut the Savings: Living “scorched earth” with a purpose can reclaim huge amounts of lost margin.
• Sell Expensive Cars/Assets: Don’t let pride or emotions tie you to a vehicle or “toy” that’s wrecking your budget.
• Don’t Panic-Sell Investments: If you can’t sleep at night seeing market fluctuations, don’t invest, but know you’re sacrificing long-term returns.
• Home Ownership = Wealth Foundation: Renting is not a long-term wealth strategy; mortgage-free living has generational impact.
• Wealth Feels Mundane: The end-goal isn’t a feeling of “extra” or “freedom”—it’s simply not worrying about a blown tire or an emergency causing chaos.
• Unified Finances in Marriage: Budgeting is for both partners. If one refuses, it’s not a money issue—it’s a marriage issue.
• Learn from Mistakes Without Shame: Most Americans “do stupid stuff” with money; awareness and a willingness to change are what matter.

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Engaging Closing

Through candid stories, direct advice, and illustrative data, this episode reinforces that building wealth is not the result of clever tricks or windfalls, but the sum of patient, disciplined, and sometimes “boring” decisions. Whether you’re struggling with overspending, are afraid of investing, or just questioning why it still feels tight after all the right steps—the Ramsey philosophy is clear: stick to the plan, stay patient, and keep a long-term mindset.

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For further resources and free budgeting tools:
www.ramseysolutions.com

Transcript

[Dave Ramsey]

This is an ad for BetterHelp. Stress from money problems doesn't just stay in your bank account. It shows up everywhere in your life. Talking to someone can help you sort it out. Go to betterhelp.com Ramsey to get 10% off. Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fair Winds Credit Union studio, this is the Ramsey Show. I'm Dave Ramsey, your host, Jade Washall, number one best selling author, Ramsey personality is my co host. Today open phones here at 888-825-5225. That's a free call and some say the advice is worth exactly what you pay for it. Leonard is in Sacramento. Hey Leonard, how are you doing?

[Caller]

Good. How are you guys today?

[Dave Ramsey]

Better than we deserve. What's up?

[Caller]

So long story short, me and my wife have together about $86,000 in debt. We make about 200,000 a year. And our current house and situation where we're living has rendered us paycheck to paycheck every single month. We have no money in savings. We have no dispensable money whatsoever.

[Dave Ramsey]

Okay, and what is the, what's your house payment?

[Caller]

So we pay rent. Our house is 3,300amonth.

[Dave Ramsey]

Okay, and, and all of our other. Go ahead.

[Caller]

All of our other like utility bills accumulate up to about an additional between 4 to 600. So we're paying about 4,000 alone in just rent and utilities.

[Dave Ramsey]

What's the, what's the 86,000 in debt?

[Caller]

So we got a little marriage happy and got into a truck payment on a high interest rate and high monthly payment.

[Jade Warshaw]

So it's just one truck for 86?

[Caller]

No, the truck is, we bought it for 62,000 and we currently of 55,000. And that 55,000 has not moved at all in the past 12 months due to interest.

[Dave Ramsey]

Got it. I think we've identified the problem, Leonard.

[Jade Warshaw]

It's one of the problems. What's the payment on the truck every month?

[Caller]

$1142.70.

[Jade Warshaw]

Okay, that's one of the problems. But there's something else going on here because you're taking home over $12,000 a month, right?

[Caller]

Yes and no. I Also, I pay 1500amonth in child support. Okay, so that's another 1500 per month. And then we have credit cards, like credit card bills that take up, you know, hundreds, a couple hundred bucks a month as well.

[Jade Warshaw]

Right. But I still got A lot going on here.

[Dave Ramsey]

How much is coming out for your 401?

[Caller]

I do not have 401k.

[Dave Ramsey]

How much is coming. How much of a tax refund are you getting?

[Caller]

None. IMAX. The past three years, I have owed like 6,000 every year.

[Jade Warshaw]

Okay, then this has got to be a budgeting issue. I think that you guys make a good income, and as a result of that, you can get a little bit reckless. I think that's what happened with the truck. And I think that if I were to plug your numbers into every dollar, I'd see a lot of areas that would surprise you that you could cut back in, and probably a lot of them are food and lifestyle. Is that fair enough?

[Dave Ramsey]

Are you there, Leonard?

[Jade Warshaw]

I think Leonard flew the coop a little bit. Here's. Here's where I get that from Dave. If he's bringing home over 12,000, he gave me 4,000 of rent, he gave me 3,000 of child support and truck payments. He's still got a lot left to go. That's only 7,000 doll.

[Dave Ramsey]

So unexplained.

[Jade Warshaw]

Unexplained. So that's why I say that. And I think that that is a key problem. When people have a higher income. It gives you more. More margin to act silly and more margin to get sloppy. And I think that's probably what's going on here.

[Dave Ramsey]

Yeah, we're training the next Olympian in dance class, the next MLB player in travel ball.

[Jade Warshaw]

There you go.

[Dave Ramsey]

We're eating out, fine dining frequently. We have a wonderful vacation every year, but we can't make ends meet. And so. Yeah, so you're going to have to go to Scorched Earth on the lifestyle. Get a detailed budget. Find the margin in the detailed budget by using every dollar. It'll point the margin out to you. It's one of the things that it's built to do. It'll show you immediately. And you'll be going, oh, my God. Every time. Every time somebody does it. Me included. When you first do a budget, you look at it and go, I'm so bad. Where's all this money going?

[Jade Warshaw]

Yes.

[Dave Ramsey]

It just. You have this moment, you're like, I'm stupid. And so. You're not stupid, but you've been doing stupid stuff. And so all of us. And so when you find that margin in there and you get that stuff going and you sell the truck.

[Jade Warshaw]

You got to sell the truck.

[Dave Ramsey]

Sell the truck, cut up the credit cards, go to scorched earth, and you'll be out of debt and in control and have Margin year. A year.

[Jade Warshaw]

Oh, yeah. And, and part of that when we talk about the budget, probably the key behavior that a lot of people don't do is you've got to track your transactions just about every day. And that's the way that you stay on top of the numbers. A key thing that I find that people do that's actually wrong is they make the budget for the month, green check, that's great. But then they don't check in with their budget until the end of the

[Dave Ramsey]

month, which means you're not living on it.

[Jade Warshaw]

You're not living on it.

[Dave Ramsey]

It was a theory.

[Caller]

Yeah.

[Dave Ramsey]

And then you, it wasn't a guardrail, it was a theory.

[Jade Warshaw]

And then you track everything and you realize, oh, I was over budget here and I was over budget there. And by it's spilled milk. There's nothing you can do about it.

[Dave Ramsey]

Yeah. It's like you put, you put the address in your GPS and then you never look at the map.

[Jade Warshaw]

Right. You just. I think it's this way.

[Dave Ramsey]

Right.

[Jade Warshaw]

Bad idea.

[Dave Ramsey]

Pretty over there. Let's go over there and let's go over there.

[Caller]

Squirrel.

[Dave Ramsey]

Let's go over there. Yeah.

[Jade Warshaw]

But when you track the transactions in real life, in real time, you say, okay, here we go. I've already spent half of my grocery budget and it's only, you know, a week into the month. I need to pull back. Right. You can start to make changes.

[Dave Ramsey]

You and Sam did a lot of work on cruise ships. And you know this, that a cruise ship is Never on course 100% of the time. They are adjusting 1%, 2%. 1%, 2% based on the currents, based on the winds, based on the weather, based on speed, whatever. But they're all. You're 100% and if you actually, you can't see it because it's imperceptible, because it's 1 in 2%. But they're constant feedback and constant adjusting to the plumb line to the actual target. And that's what the daily check ins do. And it forces you to do this stuff and it forces you to look at stuff like that car is brain damage. We can talk about it a lot of different ways, but the largest thing that Americans buy in the typical American budget that is stupid is cars.

[Jade Warshaw]

Yes.

[Dave Ramsey]

And it's like stupid on steroids. The level of money we spend and go and get a car that's completely out of control and well, just sign me up for 21% because while I'm out of control, I'm just going to be all the way out of control. But we do it. And guys are worse than gals. You think so? Men will impulse a freaking pickup for 80,000 bucks. He said a marriage thing, and he's driving the pickup and he blamed it on the marriage. Come on, Leonard.

[Jade Warshaw]

You know, car pays.

[Dave Ramsey]

I'll blame it on Leonard. Okay, so when Dave buys a pickup, it's Dave's fault. Hello. Because guys get into cars. Some guys are more into cars than others. But I'm redneck. I like the loud mufflers and all that stuff. I love a good muscle car, a good sports car. I love all that. Now, my wife thinks a car is just a really large purse, but she's not as into the car other than she wants it to start when she sits down in it. But other than that, she's like, oh, this seems to be a nice car. Yeah, you have no idea how nice this car is. You should really enjoy it. No, it's just. It's a place to put the things I just bought at Target.

[Jade Warshaw]

Wow. You know, car payments have caught up to student loans, Dave. 1.66 trillion. That's painful. I didn't think much could get as stupid as student loans, but there you go.

[Dave Ramsey]

I just had a whole nother rant.

[Jade Warshaw]

Took your breath away.

[Dave Ramsey]

And I'm not gonna have time.

[Jade Warshaw]

We got another se.

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[Dave Ramsey]

Timmy is in Salt Lake. Hi, Timmy. How are you

[Caller]

doing?

[Dave Ramsey]

Whoa. Try again. You're absolutely broke up. Your phone's not working.

[Caller]

I'm sorry. Can you hear me better now?

[Dave Ramsey]

Yes, sir. Try again.

[Caller]

I was just saying it's a pleasure to speak to you. I'm doing great. How are you guys doing today?

[Dave Ramsey]

Better than we deserve. What's up in your world?

[Caller]

Thank you, sir. So first, I just want to say I'm really grateful for what you guys do, and I'm calling for your advice. I'm a husband, father, and I just need some guidance in my situation here. So I've been laid off for two months. I just accepted a job offer, but it is a major pay cut, and we still have $24,000 left in baby step two. My question today is, should I sell our vehicles and just get a second job to attack this debt or focus on replacing my old income first?

[Dave Ramsey]

Both.

[Jade Warshaw]

Yeah. You need to take any job until

[Dave Ramsey]

you get the job you did. So what were you making?

[Caller]

So I was making $112,000.

[Dave Ramsey]

Doing what?

[Caller]

I was a manager at an insurance company.

[Dave Ramsey]

Okay. And the insurance company wasn't doing well and laid people off. And you were one of them?

[Caller]

Yes, sir. Yeah. And I got some severance pay. We had a little bit of savings. We were just tackling debt, like knocking out credit cards. We were on this final one here, and then, boom, I got laid off. I finally received a job offer. I've been applying like crazy, interviewing a ton, and I got an offer for about $27 an hour, which is basically like half of what I was making. Yeah.

[Dave Ramsey]

Doing what?

[Caller]

It's still an insurance. It's a different type of insurance. Kind of starting out from my level one, basically, but it'll be under the small business side of things.

[Jade Warshaw]

Okay. I would take that for the time

[Dave Ramsey]

being because you need something, but I'm not settling for that. That's for today to get you off the street. Okay. What do you owe? What kind of debt are you carrying in baby step two?

[Caller]

It's just a personal loan. Our payment is about $600 a month. Now I have three vehicles that I'm considering selling and just like getting a second job just to knock it off.

[Jade Warshaw]

Well, tell us about the cars. The three of them. What are they each worth?

[Caller]

So to our dad's fun car, I've got a Corvette. It's a 1986 Corvette, pristine condition. And then a Pontiac Fiero. I could probably get like, 12 grand for both. And then we have a second family car that's probably worth 6, $7,000.

[Dave Ramsey]

So you own a total of three cars, including the Vette and the Fiero?

[Caller]

Yeah, we. Well, we have three cars. And then we have like. Like a family car that we would just use four Cars.

[Dave Ramsey]

Four cars?

[Caller]

Yes, sir. Oh, yes.

[Dave Ramsey]

Okay. So if you sold the Vet and the Fiero, that would pay off the family or the personal loan.

[Jade Warshaw]

Pay off half of it?

[Caller]

Yeah, pay off about half of it. I think I could probably get down the personal loan from 24 to about 10.

[Dave Ramsey]

Oh, they're not worth 12 each.

[Jade Warshaw]

12 together?

[Caller]

No, no. Yeah, I've been like going to dealers, Carmax, Kelly Bugler, trying to like sell it online.

[Dave Ramsey]

Yeah, that's usually wholesale. And those are cheap enough cars, you probably could attract somebody in private sale and get a little bit more. They're only selling for six or eight grand a piece, so. I mean, the Corvette, you're going to attract somebody that's just interested in that cool old car, you know, same thing with the Fiero, I guess. Sorta. But you know, are you the only one?

[Jade Warshaw]

Are you the only one working?

[Caller]

Yes, ma', am. I am the primary breadwinner. My wife, she takes care of our kids. She does have a small side hustle. She does like flower arrangements.

[Dave Ramsey]

And how many children do you have, sir?

[Caller]

I have two, sir.

[Dave Ramsey]

What age?

[Caller]

Five year old and one year old.

[Jade Warshaw]

Okay.

[Dave Ramsey]

All right. Well, yeah, she's probably gonna have to do more than arrange flowers. And she can do that from home while they're in daycare, taking a nap or whatever it is that she works her schedule around to where she can make a lot more than the few hundred dollars a month doing flowers. She's not making anything doing that. That's a hobby. And then you're gonna pick up an extra job and you're gonna sell at least those two cars for sure. But this is not a debt problem. This is an income problem. This is a career crisis where you go from 112 to 50 grand. That's your problem. The other things are little things we can do to kind of shore up while the waves are crashing in. But the big deal is for you to get back to 100k and where are you going to do that and how are you going to do that? And it's not just applying for jobs. It's getting your foot in the door on a job and using the skills that you used to run the insurance company before. You know, you could be a project manager with those kinds of skills because you have administrative skills and people skills. You know a lot of different things you're doing when you're a general manager in an agency like that. So you need to start looking at that that way and reset this in your mind so that you don't look up four years from now still be making 50 or 55?

[Jade Warshaw]

Absolutely. Yeah. You can't, you can't consider the 112 a fluke. You have to consider that your new standard.

[Dave Ramsey]

Once you have driven at 112 miles an hour, it feels weird to drive at 50. Your body has now reset at 112. Your mind is reset. Your spirit is reset at 112. And so you're going to. You should. If you keep a positive attitude and keep looking for opportunity. And how can I do this? Who do I know that works over at that place where I want to be doing that thing. What is it I always wanted to be and I accidentally got in the insurance business. What was it I wanted to be before that? That pays 200 and just reset your whole way of looking at things and continue this career to where this is just a temporary setback, not a permanent path.

[Jade Warshaw]

Yeah. And we can give you find the work you're wired to do that'll help you convert those skills into other career paths along the way.

[Dave Ramsey]

Stephanie is in Canada. Hi, Stephanie. How are you?

[Caller]

Hi.

How are you guys?

[Dave Ramsey]

Better than we deserve. What's up?

[Caller]

So my husband and I are having a little bit of a disagreement on when the right time to. To upgrade my car.

[Dave Ramsey]

Cool. How long y' all been married?

[Caller]

Over 13 years.

[Dave Ramsey]

How old are you?

[Caller]

And I've been driving. I am 40.

[Dave Ramsey]

What are you driving?

[Caller]

About 15 years old? 15 year old Honda Civic.

[Dave Ramsey]

Okay. It's a piece of crap. All right. Are y' all broke?

[Caller]

Not at all. We make about 250 combined.

[Dave Ramsey]

You have money?

[Caller]

I can pay cash.

[Dave Ramsey]

But we can pay cash. We make decisions on our car.

[Jade Warshaw]

How much are you thinking of spending on the new car?

[Caller]

This is a bit. The disagreement. The car. This is Canadian dollars. So the numbers are a bit bigger. The second hand suv, it's not Honda basic, but it's slightly above and it. With taxes it is about 50.

[Jade Warshaw]

50.

[Dave Ramsey]

Okay.

[Caller]

And what does he drive like five zero.

[Dave Ramsey]

What does he drive?

[Caller]

He drives. He drives a Hyundai. Another piece of.

[Jade Warshaw]

Oh, his is. His is old too.

[Dave Ramsey]

Okay, so this guy hates spending money on.

[Caller]

He got it. No, he got it last year. It's. It's not old. It's not new. New. It's.

[Jade Warshaw]

What's it worth? What? What do you pay for it?

[Caller]

It. We paid about 47 for it.

[Dave Ramsey]

Okay, you have debt.

[Caller]

Zero debt. Except for.

[Dave Ramsey]

So we can buy his car for 47 but we can't buy yours for 50. I'm confused.

[Caller]

Well, it's. It's not that we Can't. It's more.

[Dave Ramsey]

No, I mean, I'm talking. I'm looking at him. He says, no, you can't buy a $50,000 car. I just did. But we won't, one by one, buy one for you.

[Caller]

Yeah, that wouldn't go at my house.

50. But he wants me to wait another two, three years. And it's already. No AC in my car, no backup camera.

[Dave Ramsey]

Well, just tell him. Tell him to take your car and you drive his.

[Jade Warshaw]

Yeah, there you go.

[Caller]

My car is manual. He doesn't know how.

[Dave Ramsey]

Well, then he's gonna have to learn because he thinks it's an awesome car. And I guess that's besides that. We have a law. It's federal law in America. Wife gets the good car. Y' all need to do. You all need to pick that up in Canada. I'm just saying. I think that's a good rule. So. No, this is. This is weird, honestly. The fact that if you have the cash and you're just wanting to spend what he just spent on a car, but you're not. Yeah. You lose the argument. My man. My man. Stephanie, she's. She's right. You done lost. We're throwing a penalty flag on this one. Statistics show that half of Americans don't have enough life insurance or they don't have any at all. I don't understand this, John. Why don't people want to take care of their family? They think they're going to die or something.

[Guest/Caller]

Well, I used to be one of those guys. I didn't even think about it. And one of my buddies said, hey, the only reason to not have life insurance is if you hate your wife and kids. And I immediately went and got term life insurance.

[Dave Ramsey]

That's a gut punch.

[Guest/Caller]

You're telling me. And for. For decades, Dave, I've sat across people who've lost a spouse. They've lost somebody important to them.

[Dave Ramsey]

Me, too.

[Guest/Caller]

They don't know what to do next.

[Dave Ramsey]

Me, too. I mean, you're going to have a crisis here, and, you know, you got two options. While you're sitting and talking to a young widow, she's concerned about how she's going to invest all this money properly and not mess this up. Or she's concerned how she's going to eat tomorrow.

[Guest/Caller]

That's exactly.

[Dave Ramsey]

These are the two options. And take care of your dadgum family.

[Guest/Caller]

Term life insurance can replace income, pay off debts, cover funeral expenses. So your family can actually have the opportunity to just be sad.

[Dave Ramsey]

Yeah.

[Guest/Caller]

To just miss you.

[Dave Ramsey]

That's exactly what it's supposed to be. It's saying I love you to your family. Term life insurance, Jeff Zander and the team at Zander Insurance makes it easy and affordable. I've used them personally for 25 years. They're the only people I trust. Go to Zander.com or call 800-356-4282. Keith is in Omaha. Hi, Keith, how are you?

[Caller]

Oh, thank you. I'm fine.

[Dave Ramsey]

What's up?

[Caller]

How are you? Good.

[Dave Ramsey]

How can we help?

[Caller]

Okay. Yes. I'm in a situation where my sister is running without any financial conscience at all. She's running up her credit cards and my mom is willing to bail her out. And it's at least into the hundreds, hundreds of thousands of dollars over the last five or 10 years. And so that's really eating away at what should be coming to my inheritance, my kids inheritance. If there's anything I can do, I would love to know.

[Dave Ramsey]

Okay, so your mom is wealthy

[Caller]

there. Yeah, there's money coming in. There's. Yeah, there's a real, real significant amount of wealth in the family. Yes.

[Dave Ramsey]

So what does your mom, how much does she have? A million? 20 million?

[Caller]

It probably could be. I don't, I don't know exactly, but.

[Dave Ramsey]

No, I mean, you have an idea? Give me a guess.

[Caller]

Oh, it's, it's probably a million. Could be 2 million. I don't know.

[Dave Ramsey]

Okay. But it's not 100 million.

[Caller]

All right. Okay.

[Jade Warshaw]

And the problem is your sisters.

[Dave Ramsey]

It's just you and your sister are the only two siblings.

[Caller]

That's right. You're still not in the one coming into the estate too.

[Dave Ramsey]

How old are you?

[Caller]

I'm. I'm approaching 59.

[Dave Ramsey]

Okay. And what do you make a year, sir?

[Caller]

Okay. I have a long career as a software developer. We're in a new career now. We're managing apartments and we're in a basically low income, low expense mode here and basically starting to get up and about 35,000 a year range.

[Dave Ramsey]

So is there a plan for that to be a good income later?

[Caller]

It's building. We acquired a new property. We are trying to turn the corner and start getting some savings from it. We've got my retirement funds available, especially as it's a 59 and a half to help us.

[Dave Ramsey]

How much do you have saved in your retirement?

[Caller]

In the neighborhood of 500,000.

[Dave Ramsey]

Okay, that's good. Good job on that. So the apartments, did you buy them?

[Caller]

Yes, we own them. Brain clear, haven't taken any loans.

[Dave Ramsey]

And you and you, what are they worth?

[Caller]

It's three different properties together could be probably about 800,000 foot micro.

[Dave Ramsey]

And you only make $35,000 on an $800,000 investment. That sucks.

[Caller]

Well, one of them is the one we live in, so we're, you know, I can't, I can't separate it exactly out because we have one. One apartment that we do in our. In our building. But.

[Dave Ramsey]

And what does that work? If you took your home out of it, you still don't have a good rate of return. What's. Why, what's wrong with the rent roll on this?

[Caller]

The new. The second proper. So we take my mine out, then we've just got the two properties and the one is still just finishing, so we haven't really turned it around to start the interim on it yet.

[Dave Ramsey]

Oh, it's being renovated.

[Caller]

It's. It's just almost finished being renovated. We got one.

[Dave Ramsey]

So when it's renovated, what will your income be?

[Caller]

Well, that's what I'm hoping is going to down the corner into more toward 40, 45,000.

[Dave Ramsey]

So you're going to be making a whole 45,000 on all of these apartments. That still sucks, man. Your rental rates are horrible for the money you put into these things. So my reason for asking all of this, Keith, is very simple. Your mother has some money. It's her money. She's allowed to do with her money whatever she wants to, even if it's stupid and even if it's harmful to your sister. And I agree that what she's doing is harmful to your sister. But the basis for you having an argument here is not that you are entitled to this money. I would prefer you, sir, at 59 years old, to go have a life and not be worried about your mama's income or your mother's inheritance. To make your life good. I want you to go make your life good. And then we can look at this through eyes of strength and say, how can I lovingly help my sister get her act together and my mom quit being a classic serial enabler, but instead you're worried about you getting some money because you don't have any money other than you've done a good job saving for retirement, but your income sucks. Especially if you've got $800,000 in paid for real estate and you're making a whole 45,000 bucks on it. This is horrendous. I mean, I love real estate. I own a bunch of real estate. I can't imagine how mad I would be at myself if I bought into something that paid no more than that as a Rate of return. That's nothing horrible. So, you know, we've got some work to do to get our rates of return up on these rents and not $45,000 as your new career after you've been a software engineer. And we're going to go into retirement broke and wait on mom to die. This is not a good plan.

[Jade Warshaw]

Not a good plan.

[Dave Ramsey]

So, you know, I want you to approach this subject of dysfunction in your family, not from your rights, because you don't have any. You're not entitled. Your mother could leave it all to your sister. She's allowed to do that. Would I agree with that? No. Do I agree with her paying, bailing her out on credit cards and continuing her overspending? No, I don't. But mainly because it's harmful to your sister and your mother, not because you are entitled to some of the money. You, sir, need to go have a life and then not worry about it. And that puts you in a different place.

[Jade Warshaw]

I agree.

[Dave Ramsey]

Yeah.

[Jade Warshaw]

It's not a good look.

[Dave Ramsey]

So, moms and dads, Rachel and I wrote about this in Smart Money, Smart Kids, many years ago. And I was just talking about it with a content team this morning. I think I'm going to do a talk out of it. I haven't done it in a while. I'm doing it with a bunch of wealthy people, and they always ask me, how do I become wealthy and not ruin my kids? And I always tell them, well, you can't. The wealth didn't ruin your kids. They were already ruined. The wealth exposed it that you sucked as a parent. That's what it was. And so, you know. But the wealth, money doesn't ruin people. It exposes the fact that people suck.

[Jade Warshaw]

It makes you more of what you already are.

[Dave Ramsey]

It makes you more of what you are. So the way you break that is from the time they're. They can talk and walk. We start with gratitude.

[Jade Warshaw]

Yes.

[Dave Ramsey]

Gratitude. Thank you. Please. In the south, we called it manners.

[Jade Warshaw]

I know. That's right. Yes.

[Dave Ramsey]

Thank you, mom, for dinner, for standing over that hot stove. Mom, I'm gonna help with the dishes.

[Jade Warshaw]

Yes.

[Dave Ramsey]

Because if I don't, Dad's gonna hurt me. Because you're gonna learn gratitude. You're gonna count your blessings, right? You're gonna say, thank you, Lord, for bringing me this food. Thank you.

[Jade Warshaw]

The world doesn't revolve around me.

[Dave Ramsey]

Thank you. And that leads to the next one, which is humility. But you can seldom be humble without first being grateful.

[Jade Warshaw]

I agree. Yes, Dave.

[Dave Ramsey]

And then if you're humble, and you realize it's not all about you. The axis of the world doesn't run through the top of your head after all. Then the natural thing that happens is contentment. This is where contentment comes from. Contentment doesn't just evolve as lightning in a bottle. It's a series of events that comes through gratitude and humility. That says, I'm not entitled. No, it's the antidote to entitlement is gratitude, humility, and contentment. And so I can remember one of my kids, we finally. We were driving this old piece of crap car, and we were broke and finally scraped a little bit of money. Things were starting to get a little better at the Ramsey's, and we got the. And, you know, at our house, we always would, especially when I was growing up. But even with our kids, we'd do it, too. Get a new car. Everybody gets in the car. It's not a new car, but it's a new to us car. Just a slight upgrade. We're all gonna drive around the block in the new car, and one of them lays back in the back seat and says, we're doing pretty good.

[Jade Warshaw]

My favorite story.

[Dave Ramsey]

And I said, we aren't doing anything. And you are broke. I am doing pretty good.

[Caller]

It.

[Dave Ramsey]

You got nothing.

[Jade Warshaw]

I know that's right.

[Dave Ramsey]

You are a poor child that lives with me. That's what you are. We aren't doing anything. You got a mouse in your pocket. We. We hadn't done anything. All you do is consume me.

[Jade Warshaw]

I know that's right.

[Dave Ramsey]

You are not a producer at this stage.

[Jade Warshaw]

Freeloaders.

[Guest/Caller]

This show is sponsored by Better Help. Summer is here, and.

[Dave Ramsey]

Whoa.

[Guest/Caller]

Everything changes this time of year. The kids are out of school, routines are out the window. You're traveling more, probably sleeping less. If you're not careful, you and your family can end up running on fumes. I know I'm running on fumes right now. If you don't take time to slow down and take care of yourself, all that stress is not just going to disappear. It will show up in your body. It will show up in your relationships. It will show up in your work, in your patients, everywhere. This is why I'm a big fan of Better Help. Better Help is an online therapy platform that matches you with a licensed therapist based on your goals and preferences. All of their therapists follow a strict code of conduct, and you can message yours or schedule sessions right in the app. And if it's not the right fit, you can switch therapists at any time for no extra cost. Listen, you don't have to carry everything all by yourself this summer. Go to betterhelp.com Ramsey to get 10% off. That's betterhelp. H E L P.com Ramsey.

[Dave Ramsey]

Marie is with us. Hey Marie. Welcome to the Ramsey Show. What's up?

[Caller]

Hi. Nice to meet you all.

[Dave Ramsey]

You too. How can we help?

[Caller]

So we desperately need to buy a new house. And we are trying to become as most debt free as we can. I don't think we're going to be able to do it all by the time we need this house. But our biggest loan is our solar panels. It's 40,500 and we'll pay it off by the year 2047. Might as well be dead by that point.

[Jade Warshaw]

What in the world?

[Caller]

So long. It is so bad. But the reason we did it was because we were homeless for two years before that. And our budget was so tight we needed. We couldn't have our bills fluctuating every month. And then sometimes it would go to 400, sometimes it would go down to 80 and we never knew what we were going to get.

[Dave Ramsey]

Wait a minute. Stop. Please. Please tell me you know how stupid this is now that you traded $47,000 for $100 fluctuation in your utility bill.

[Caller]

Yeah, it was like a 300. Yeah, it was, but it.

[Dave Ramsey]

But still, either way, there's no possible way any of this math accomplished what you wanted to accomplish. You completely surrendered major long term debt for a tiny little movement in your monthly budget. And don't blame it on you being homeless.

[Jade Warshaw]

Tell us why you desperately need. Which is a strong language to move right now, why you need a new house.

[Caller]

We have a two bedroom, one bath, 900 square foot house. We have four kids and one on the way that's coming in December. We have our three oldest kids sharing a room and the baby sleeping with us in our room. But my boys, my oldest are boys and they're getting to the age where they need to be.

[Dave Ramsey]

How long have you been in this house?

[Caller]

Four years.

[Dave Ramsey]

How old were they when you moved in this house?

[Caller]

Well, My oldest is 11 now, so I.

[Dave Ramsey]

So you already were the old woman in the shoe when you moved into the house?

[Caller]

Yeah.

[Dave Ramsey]

You barely fit in there when you bought it.

[Jade Warshaw]

Wow.

[Caller]

Yeah.

[Dave Ramsey]

You don't even know what that is. You gotta look that up after you get off the air. Okay.

[Caller]

The better than living in the street.

[Dave Ramsey]

So yeah, you remember being in the street, but you also bought a house that wouldn't handle your family. And now you're. Now you're realizing that it certainly wasn't a crisis when you bought it. And things have not changed except by one baby. Okay, now. Now what is this house worth?

[Caller]

This house has about 35 to 40,000

[Dave Ramsey]

in equity right now, not counting the solar panels.

[Jade Warshaw]

So nothing.

[Dave Ramsey]

So it doesn't have any equity when you pay off the solar panels because they're attached to the house. And what's the house worth?

[Caller]

About 235. Where we're at 186 right now. And after all the payments we've made. So.

[Dave Ramsey]

Okay, now my screen says. My screen says, should we get our solar panel loan canceled? Why would you be able to get your loan canceled?

[Caller]

Well, you know how Facebook is. As soon as you start going in and searching something, it sends a bunch of ads your way. And you never know what's a scam.

[Dave Ramsey]

Everything on Facebook is a scam. All of it. This is not a place to get solid information.

[Caller]

Yes, that's why I was calling, because it's. They sell a really nice story. So my. I keep seeing the. The same name of the loan, which I'm sure is done on purpose of the people who sold us the solar panels and saying that because they were making shady deals and things like that, that people are getting their loans forgiven.

[Jade Warshaw]

Is it a lawsuit?

[Dave Ramsey]

Was there? Yeah.

[Caller]

I don't. There have been some lawsuits, but it feels a little shady.

[Jade Warshaw]

Like I need to do some independent. You need to do some independent research on that. Don't go by Facebook if you want to know. Just research. If there's a lawsuit ending against that company.

[Dave Ramsey]

Is there a class action lawsuit or is the Federal Trade Commission gotten a ruling?

[Jade Warshaw]

There you go.

[Dave Ramsey]

Go to the ftc.gov go to ftc.gov federal trade commission.gov have you done that?

[Caller]

No. I was going to ask what are some good places to search because I go on Google and I get all these companies that pop up with the same stuff. So I don't want to go in the wrong direction and then go into debt because of a lawyer fee or whatever. And that was unnecessary.

[Dave Ramsey]

What's your household income?

[Caller]

84,000.

[Dave Ramsey]

Okay.

[Caller]

We have our three or three kids or older have special needs, so we homeschool. I have several chronic illnesses as well.

[Jade Warshaw]

What's the nature of the special needs for the three kids?

[Caller]

Well, my oldest has severe anaphylaxis to a lot and they have. All three of them have ADHD and anxiety and two of them have autism. Okay. And I have Lyme disease and rheumatoid arthritis.

[Jade Warshaw]

Oh, my goodness. Boy, oh boy. Okay. There's a lot going on. What are you guys paying? What do you pay for the mortgage every month? What do you pay?

[Caller]

1400. And in November that will go up by $300. The windows on our house were cracking and it wasn't safe. They were single pane from 1984. So we have to get new windows for the house.

[Jade Warshaw]

So to answer, let's answer your question at hand. You don't have the money today to move up in house. You just simply don't. And we don't want to add insult to injury. The, the, the best thing I could think of is if you're trying to find another place that you could rent for a while that's got an extra bedroom that's in the same range, the seventeen hundred dollar range, if you got your house sold. Uh huh. If you sell this house and that can buy you some time to save up a down payment.

[Dave Ramsey]

Yeah. Okay. Maria, I'm going to be honest with you and love you. Are you ready for me to do that?

[Caller]

Absolutely.

[Dave Ramsey]

You sure? Brace yourself. Put your seatbelt on.

[Caller]

Okay. I know it's already ugly here. It's all good.

[Dave Ramsey]

Okay. All right. You guys make a lot of decisions that are large, decisions that are very drama based. Suddenly the 1984 windows were dangerous. No, they weren't. A window salesman called, suddenly we couldn't afford, we were homeless. And so we bought a house that doesn't fit our family instead of going and renting something that fit our family. And so we went from drama to drama to drama. Oh, and we bought $47,000 worth of solar panels to stabilize a $300, $200 utility bill with another bill that is equal to almost that. So all this stuff is you go to drama. And every time I do drama. And you too, Marie, every time you've done drama, you've made bad decisions. Anytime I get feeling desperate, right after I get desperate, I get stupid. And most people do. So if you feel this rising up anxiety inside of you that this house is a crisis, this utility bill is a crisis, this homelessness is a crisis, and you build it to where you justify doing something really dumb to get away from the crisis, you're making things worse every time you do that. You've made three large bad decisions in this phone call and they all were based on that pattern. So you've got to take a step back and take a breath and you've got a lot on your plate. I mean, you got all kinds of special needs in the house. You're doing it all in 900 square feet. You were doing it in a homeless situation before. Those are all real stressors. But when you're in the cooker like that, you gotta be real careful to move carefully and slowly on the next step. Otherwise you're gonna step on a rock and fall in the creek. And that's what I do. I get desperate, I get a little jinky and all of a sudden I get stupid. And you've done three really large bad ideas. You should not have bought that house to stop being homeless. You should have gone and rented something that fits your family. You shouldn't have bought windows because they suddenly were a problem from 1984. Crap. Those windows were in that house when you bought them. And then you shouldn't have bought solar. So, I mean, I'm picking on you. I told you to put your seatbelt on. But I'm loving you. Well, hear me, because I can see this pattern real clearly. And if you don't break it, it's never going to go away.

[Caller]

Yeah.

[Dave Ramsey]

And so I want you to stop. So, yes, I want you to investigate and see if you can get rid of the solar loan. It's possible. I'll give you a 10% probability that this particular company has been set up by the FTC and the loans are being forgiven. You can check it out. Federal Trade Commission ftc.gov I would pay a lawyer 500 bucks to research it for me and check it out against 47,000, that's a good investment. And find out if there's a class action suit or something out there or a Federal Trade Commission ruling out there to get rid of this that'll help you get this house sold. And then gently and carefully and calmly go rent something. If you run a business, you already know this bad information leads to bad decisions. And right now, AI is everywhere. But AI is only as good as the data behind it. The best AI is built on the best data. That's why I recommend NetSuite. NetSuite is the number one AI cloud ERP and more than 43,000 businesses run on it, including us here at Ramsey Solutions. Their AI isn't bolted on, it's built in. And it connects everything that runs your business, accounting, inventory, customer data, all in one place. Because when your numbers are connected, AI actually works like it's supposed to. NetSuite's AI helps flag cash flow problems, spot inventory issues, close your books faster, and cut down on manual reporting. If your revenue is at least seven figures, go to netsuite.com Ramsey for a free product tour. That's netsuite.com Ramsey. Welcome back to the Ramsey show in the Fairwinds Credit Union Studio. Andy is with us in Dayton, Ohio. Hi, Andy. How are you?

[Caller]

I'm well, Dave. Good.

[Dave Ramsey]

How can we help?

[Caller]

Well, before I ask my question, I just want to say, first of all, thank you so much to you and your team at Ramsey Solutions for helping my family and I to be able to get out of debt and be successful financially. And then to be. To equip your equipping of us to be able to help other people through doing FPU at our church and doing personal financial counseling.

[Dave Ramsey]

Wow.

[Caller]

And you guys have just been such a blessing to us.

[Dave Ramsey]

Thank you. Sounds like you guys are a blessing. We appreciate you partnering with us. Thanks.

[Caller]

Well, it's been great. So here's my question. And this is. It's kind of a summary of experience that we've had counseling people, but it also includes our own experience. And I'm using our numbers because it's what I have available. Okay. So I'm not. I'm not trying to convince you to change your program, but I am kind of asking for help for those of us who are still. It feels like we're still in the trenches even after following your programming, being successful with it. So my wife and I started the baby steps in 2011. It took us seven years to finish baby step two. We taught FPU several times during this period. And eventually we paid off our home in 2023. And in 2025, we paid cash for a new roof. In 2026, we paid cash for a new to us car. We believe in the baby steps and we stick to the plan. But our problem is it sometimes it just feels like there isn't enough. So here's the numbers. 17% of my income goes to taxes. 25% is just for groceries. We give 20%. Our utilities are 17%. Transportation is about 12%.

[Dave Ramsey]

Wait a minute, wait a minute. What do you make? What's your household income?

[Caller]

About 67, not including overtime.

[Jade Warshaw]

Okay,

[Caller]

so if you total all those numbers up, that leaves 9% for retirement insurance and lifestyle. And we're not looking to live an extravagant lifestyle. But I guess our question is, when do we. When do we get to take a real vacation?

[Dave Ramsey]

Well, whenever you want. I mean, you have to budget that in. I don't know how. You're spending 25% of $67,000 on food.

[Caller]

Well, grocery costs went up 38% in the last.

[Dave Ramsey]

I know what they did. I'm sitting here. I'm talking about $67,000 times 25%. I mean, you don't have children. You have eight children.

[Caller]

Nope. Both of my children are married and out of the house.

[Dave Ramsey]

But two people are spending. Two people are spending $20,000 on food, $15,000 on food.

[Caller]

Groceries are expensive. Yeah, that's the number that we have. And we're not living extravagantly now. We try to stick to a carnivore diet, but. But that's not exclusive.

[Dave Ramsey]

Okay, so back to your original question then. I just got sidetracked on that number. It was throwing me. All right, anyway. Well, you have a below average household income. Household income in America is 78. And yours is slightly below average. And you have zero debt, but all of your bills don't go away when you have zero debt. So I think the only. I don't think you're going to live a millionaire lifestyle on that income. But your income taxes shouldn't be 17% either. They shouldn't be that high. So I'm. You're a detailed guy. So I'm struggling with to be the guy to question all of your numbers, but I'm questioning some of them already. So I don't know the answer to your question philosophically except to back up and say if I had debt, I'd be screwed. In this scenario, if you had a house payment and two car payments, I don't know how you'd make it in the scenario where you've got. Where you've locked this down so tight that you only have 9% left to save for retirement and you don't have a stinking payment in the world, including a house payment. And somehow from 2011 to 2023, wasn't it like 12 years you found enough margin in your budget to become completely debt free and pay off your house. And now there's no margin. That's weird.

[Jade Warshaw]

Yeah, that is weird. I mean, I think, think my guess is there probably is margin. It's just not what you thought it was going to feel like. And there's something to that. You made the point about the income, which is true, and there's something to that. If we talk to a teacher who makes a lower income because they love teaching and they love that, then we say, well, you're going to have a Camry lifestyle. That's just part of it. You're going to drive a used Camry, you're not going to have a ton of margin because that's the income, that's the life that your income is affording you. And I think that There is just part of that, that the cost of living is high. And because of that, your income doesn't go as far. It doesn't mean you're not free or.

[Dave Ramsey]

Did he say 20% on giving?

[Jade Warshaw]

He said 20% on giving, 17% on taxes.

[Dave Ramsey]

That doesn't feel right. Neither one of those makes sense.

[Jade Warshaw]

Yeah, 20% giving is a choice. He could be.

[Dave Ramsey]

I would be doing my tithe at 10% until I got my retirement funded.

[Jade Warshaw]

I agree. I agree.

[Dave Ramsey]

Until I got my retirement funded says you're okay. And biblically speaking, the tithe is off the top before anything. Offerings are from surplus. And regardless of whether some preacher tells you he wants the widow's mite to build his building. But I can argue about that teaching all day long. But the offerings come from surplus all through scripture. And the tithe is baseline, off the top before you do anything. And that's how Sharon and I have given our whole lives. And so, yeah, I'm going to check in on a bunch of these percentages if I'm you.

[Jade Warshaw]

Yes.

[Dave Ramsey]

I got three of them written down right here. 17% income tax, 25% grocery and 20% on giving. That I question all three of them. So anyway, check in on all that and dial it in. And then redistribute. And let's make sure we're getting 15% of our income into retirement. Because you said you only had 9% left over to do that with and to upgrade a car and so on.

[Jade Warshaw]

So now there is something to be said. He said he put a new roof on, he did new cars, things like that.

[Dave Ramsey]

Where'd that money come from?

[Jade Warshaw]

You saved it up and you did it with front.

[Dave Ramsey]

What, there's not enough margin here? He explained a budget that was gone went down to 9%. And 9% won't do those things if you did nothing. You know, I mean, so it didn't get him out of debt. It didn't get his house paid off. So that's the other thing. So something's changed. And it's gotten. Some of these percentages have fattened up a little since everything got paid off and since we did these other things. But you're always gonna have stuff come up and you're never going. People get confused. I wrote about this in Baby Steps. Millionaires, too. We get emotionally confused because when the word millionaire kind of came out was the 1920s, 1910, 20, right in there. And in those days, a million was a lot like a billion today.

[Jade Warshaw]

Yeah.

[Dave Ramsey]

And so when you're a millionaire, you drive A two year old Toyota. You don't have three houses.

[Jade Warshaw]

No.

[Dave Ramsey]

And you don't have a private jet. Those are all billionaire things and a billion is a thousand million. So it's not going to feel like you're rich.

[Jade Warshaw]

Yeah, yeah, absolutely.

[Dave Ramsey]

Like unlimited funds for some something. So A your income's low. B lower lowish. B you did this before somehow did made these other things accomplished. C look at your percentages again cuz some of them are a little wonky.

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[Jade Warshaw]

Y'. All.

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[Dave Ramsey]

Continuing that discussion for just a second, there is something I have observed as you go through the baby steps and as you go through your wealth building process that gradually shifts and it's so gradual it's almost imperceptible. And that is that as you build wealth and as you get more and more margins in your budget because you don't have any payments and because you start to have a pile of Money in your retirement 401k, you've got a good strong emergency fund. The further down that you move. And it makes sense when I say it out loud but you don't realize it's happening the further down that you move, the bigger the event has to be before it financially the dollar amount has to be larger to emotionally strain you. Yes. So like if I had a flat tire when I was broke, my life looked like a Country song. Everything that could go wrong did go wrong, you know, and so a flat tire was the national debt. It was drama, drama, drama, drama, drama. Because it was yet one more thing. And I was so broke I couldn't pay attention. Now I would have to total a car. To have the same with no insurance. To have the same feeling, you know, or bigger, you know, even. And it's not just because I'm older or I get a. But your perception is different. The more wealth you have built and the more margin you have in your monthly budget. And so what used to be a crisis is no longer a crisis. You will experience that. But. But it is so subtle and incremental that you don't feel like you've arrived. People have a perception, and this is one of the things he was asking about that I didn't properly address, that's why I wanted to continue the conversation into his defense, was that when you people have the perception that when you hit baby step seven, you're gonna feel like you hit the lottery, but you're incomplete. Woo hoo moment. Yeah, there's not a woo hoo moment. There's a it takes a lot bigger problem now to be a problem moment. And it snuck up on you, so you don't even realize it. So you don't feel like you got there. You don't have this top of the mountain, put the flag in or something celebration moment. When you get to baby step seven, it's kind of a yawn.

[Jade Warshaw]

Yeah, I could see that.

[Dave Ramsey]

And so I do want you to go there because it's a better yawn than the nightmares you're living in before you get there. So let's have a yawn for sure. But you're not going to have the suddenly I have unlimited funds feeling because you don't.

[Jade Warshaw]

I think that's the difference. You become a baby steps millionaire. Maybe you have a million bucks in the bank between all your assets in your home, but you don't earn a million dollars a year. You still earn 60 or 70 or $80,000 a year. The only difference is instead of the 800amonth going to the debt, now it stays in your pocket. And most people say, okay, we're going to bump up giving a little bit. Maybe now you increase the grocery budget a little bit. But it's not these.

[Dave Ramsey]

But 800 is not two weeks on Santorini and Mykonos in the Greek island.

[Jade Warshaw]

And that's my point.

[Dave Ramsey]

That's $800.

[Jade Warshaw]

Yeah, yeah. You know, it's the ability to have freedom in the day to day. The small things in life that you used to. Used to go to the grocery store and the budget strings had to be ultra tight. Now it's okay to loosen it up a little bit. You used to. You see what I'm saying? It's these little things.

[Dave Ramsey]

We can upgrade.

[Jade Warshaw]

Yes.

[Dave Ramsey]

And pay cash. We can put a roof on and pay cash. And by the way, and those are the celebrations, but they feel so mundane that you don't feel like the celebration is there. That you should have felt. It should feel better than this. When you get his point was it should feel better than this.

[Jade Warshaw]

But you're still doesn't because you still have to have delayed gratification. I think that's why.

[Dave Ramsey]

And you still have limited dollars. You're still not in Congress.

[Jade Warshaw]

That's right. Yep.

[Dave Ramsey]

You know, it's still. That's it. You still have to say no.

[Jade Warshaw]

It still takes time to save what

[Dave Ramsey]

you're buying and everything else. Julia is with us in St. Louis. Hi, Julia. How are you?

[Caller]

Good. How about you guys?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

All right. So I started listening to the Ramsay show probably about six, seven months ago. I recently got married and I had a virtual job that was in my hometown. And it was great. I had full time hours. I moved here about two hours north of where I'm from in St. Louis here. And my work downgraded my hours. It's a smaller startup company and there was a bad business venture on their part. And long story short, I only getting 10 hours per week, which really sucks comparison to like 25 or even 30 at this point. So I had the bootstrap up and I say, what can I do in my community to make myself make money? And I started a small cleaning business.

[Dave Ramsey]

Good.

[Caller]

Now I'm cleaning up to four or five different houses and they're big square footage houses. So I'm getting about anywhere from 250. That's the, you know, smallest range, all the way up to like maybe $1,000 per week. When it comes to just cleaning houses

[Dave Ramsey]

on the side, you are a grind and hustle girl. Way to go.

[Caller]

Thank you. Thank you. Yeah. Long story short, that has become my main source of revenue at this point.

[Dave Ramsey]

You make it more than you ever

[Jade Warshaw]

made in your life. Yeah. Are you making more from the houses than you made full time doing the other gig?

[Dave Ramsey]

Yes.

[Caller]

I mean, whenever I was full time, I got smaller. Smaller doctor's office. Like it was a virtual.

[Dave Ramsey]

That wasn't what she asked. You're making more Money now than you used to make at a job. That's what I said.

[Jade Warshaw]

Yeah.

[Dave Ramsey]

Yeah. Okay. Good.

[Jade Warshaw]

Good.

[Dave Ramsey]

Now.

[Caller]

Yeah.

[Dave Ramsey]

All right. So what's the problem?

[Caller]

If anything, when should I decide to make this an llc?

Because you don't need an llc.

[Dave Ramsey]

Do you have a separate checking account that you run your business on?

[Caller]

Correct.

[Dave Ramsey]

You do. You have a DBA account doing business as.

[Caller]

Yes.

[Dave Ramsey]

As a sole proprietor. And you run all of your income from the business into that account and only expenses out of the account. And then when you take money home from that account, you set money aside for your quarterly estimates. One fourth of what you take out of the business to take home, you set aside for taxes. Okay.

[Caller]

Yes, definitely.

[Dave Ramsey]

Yeah. When you do all of that, you do not. The LLC does not save you a dime on taxes. The sole proprietorship has exactly the same write offs. An LLC does. Exactly.

[Caller]

Okay.

[Dave Ramsey]

The only thing you have, only thing you need an LLC for. The only thing you need an LLC for is risk. If you are. If you have. If you're a multimillionaire and you start a business and you think somebody might sue you because of the business and try to get your multimillion dollars, then you would start an llc. If you're in a business that is high risk, where you could get sued inside the business and you're not, you would start an llc. Or if your company starts making over a million dollars a year, you would do it for risk. But the LLC is only for risk. Meaning that if you're doing business as an llc, everything's in the LLC name. It's Julia's House Cleaning llc. Right. And that's the name of it. And everything, everything's billed to that. All the workers are working from that. If somebody falls while they're working on the job and they want to sue the company, they have to sue the LLC. And all they can get is the LLC's assets. They couldn't take your home, they couldn't take your cars, they couldn't take other stuff. Because your LLC is the one doing business as a standalone entity. That is what it's for. It's for risk management. So she does not save on taxes.

[Jade Warshaw]

If she started hiring on other house cleaners to clean as a part of her business.

[Dave Ramsey]

Yeah, we're five or six weeks into this.

[Jade Warshaw]

I'm just saying.

[Dave Ramsey]

Yeah. I mean, if she's been running this thing six months or a year, it starts making bank, it starts getting really complicated. There's a whole bunch of players involved. You're in rich people's houses or you're in a high risk environment, like some kind of sensitive office situation where the, you know, somebody misbehaving in that situation is at risk and you're sending employees into that, not yourself. Then yeah, you know where you start perceiving risk is what, an llc. But. But there's all this crap on the Internet. That llc, you'll save on taxes and that, that's what happens when you're so stupid. You listen to TikTok. But yeah, oh my gosh. And I'm on there. I know, I know, I know. Shut up. But anyway, If you've had your phone two or three years, there's a chance it's unlocked. So bringing your own phone is a great way to unlock savings on your wireless bill. You can switch to Boost Mobile to get unlocked, bring your own device and save big. See, the big wireless companies count on you staying right where you are, paying more than you should every single month. They make it sound complicated to switch. It's not, by the way. And meanwhile, your bill keeps going up. That's not inflation. That's them taking advantage of you. But Boost Mobile is different. They make it simple. You bring your phone, keep your number and get unlimited wireless for just 25amonth. And that price is locked in forever. No contracts, no hidden fees, no surprises. So if you're tired of wasting money on your phone bill, this is your chance to do something about it. Go to boostmobile.com Ramsey get unlocked and keep more of your hard earned money. That's boostmobile.com Ramsey $25 forever requires customers

[Jade Warshaw]

to remain active on Boost Mobile.

[Dave Ramsey]

Unlimited plan. One of our favorite things is when people send us notes saying they love every dollar. Recent quote Love this app makes it super easy to budget. With my husband, we've implemented this practice since our wedding day. Zero money fights because there's full transparency. We're on the same page. See, that is a key to winning right there. That'll cause you to be able to build wealth and to win in your relationships. Every dollar. The budgeting app. It'll help you work the Ramsey plan exactly like you had us in your back pocket. It's in the app store for free and Google Play for free. Donna is in Dallas. Hi, Donna. How are you?

[Caller]

I'm fine, thank you. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Okay, so my husband and I are older. I'm 71, he's 84. During COVID we had our 401ks, our retirement accounts, and the stock market took a dive and we went down, like $26,000 in a week. And we got nervous, so we took it out real quick. And our thought was. I know. Our thought was that we don't have time to recover.

[Dave Ramsey]

And you've been out since then.

[Caller]

Tried it one more time. The same thing happened, and we just couldn't do it again. We just couldn't do.

[Dave Ramsey]

Went up 25% three years in a row, and you missed that.

[Caller]

I know, but I keep thinking it can't stay like that. It's going to be gone. But am I going to feel worse if I lose it or. Or go up?

[Jade Warshaw]

But Donna, Donna, the problem is the first dive, when you said you lost the 26,000, it recovered in, like, 50 days. The moment you took it out, you just locked in that loss. You 100% lost the 26,000.

[Dave Ramsey]

You do not need to be. You do not need to be investing in the stock market.

[Caller]

Yeah, that was kind of like my thought. So we did try.

[Dave Ramsey]

Because you don't have the backbone to stand the volatility.

[Jade Warshaw]

Yeah, the stock market's not the problem.

[Dave Ramsey]

No. The history of the stock market. You. You lost your butt. You got out at exactly the wrong time, like the worst possible. You did it the worst possible way you could have done it. And so if you're going to do that again, you need to stay away. Meanwhile, I made 100% on my money while you did that, because I just rode the roller coaster up and down and enjoyed the ride. Got off, got on it again and rode. Never, never got off. I just stayed on. Said, take me around again. Take me around again.

[Jade Warshaw]

I think there's a bigger issue at hand. How much did you have in the stock market?

[Caller]

We had about 190,000.

[Jade Warshaw]

I think that's the issue. I think the. The bigger problem is you're worried that you don't have enough to live on throughout the entirety of your retirement. And so that's what's causing you to be very, like, trigger happy with this and very, like, quick to move.

[Dave Ramsey]

Well, now, what's causing that is a lack of knowledge of the market. And you. You're not. You're not familiar enough with the history of the market to be comfortable. So you think all bad news is the only news. And so if you can't get past that, you're going to do this again and again. And I would recommend you don't do it again and again because you're taking a beating. Yeah. And at 71 and 84, you don't want to take a beating more than Anything? You're taking a beating emotionally. Your 200 would be 400 if you'd have left it alone. Yeah, yeah, that's what I'm saying.

[Caller]

My sister in law back, I think it was in the 80s or something, the stock market went bad or the 90s. It was hers was the 91. And she lost almost everything.

[Dave Ramsey]

No, she did not. No, no, no, no. There's no time in the stock market's history it went to zero.

[Caller]

Well, it was such a small amount and I don't know, I mean she's my first.

[Jade Warshaw]

She only would have.

[Dave Ramsey]

She emotionally lost everything, but she did not lose. That's like in 2008, okay, the stock market dropped in half. It went from the Dow Jones went from 13,000 to 6,500. And people said I lost everything. No, you lost half.

[Jade Warshaw]

And the only way you lost it is if you took it out.

[Dave Ramsey]

If you took it out at the bottom perfectly.

[Caller]

Meanwhile, how long does it take to recover?

[Dave Ramsey]

One year. And it's not 13,000 now where it started down to 6,500. It's now 36,000. And that's since 2008. Okay, and so in the last year the market has made 13%. Since the first of the year we started bombing Iran and the market went down and then back up and it's currently from January to today down 1%. 1%. That's not losing everything. That's losing $19. Okay, okay, so that, that's. But you've got to get your head around this, both of you. Because if you're going to believe sister in law's mythology and you guys are going to sit and watch the news every night and freak out, then you're going to do this again and again and again. And I don't want that for you. I think you're better off making too little money and not being awake all night.

[Caller]

Okay, right now we have it in C.

[Dave Ramsey]

Put it in a high Yield savings account, you know, go to Fair Winds Credit Union, dump it in a High Yield savings account and let her ride. And you're gonna make 3 or 4%. You're gonna break even with inflation, but you're not gonna lose anything. And you, and you're gonna sleep beautifully. But I gotta make fun of you, okay? Because I love you.

[Caller]

I know, I know.

[Dave Ramsey]

Meanwhile, meanwhile, my money's gonna be doubling while you're making 3% because it's going up.

[Caller]

I can convince myself to suck it up.

[Dave Ramsey]

You would have to, you'd have to read enough. Sit down with one of our SmartVestor pros and read enough and look at the market. So here's the numbers. 97% of the five year periods, if you leave it alone five years since the stock market began, have made money. That's all of them. Okay? So if you had left it alone five years in any scenario that we're talking about, you would have made some money even in a weird, crashy, weird thing like Covid or Iran war or 2008. Okay, all of those. Actually you can look at it. It's about the same time. It's Covid hit in March and so did Iran Moore. And so Trump starts bombing Iran. The market dives. All right, because it always does that with geopolitical stuff. And so if you understand that every time it does that it returns very quickly, then you start getting the opposite mindset that like, oh, he bombed Iran, great, I'm going to get to buy this on sale. The stock market's now on sale because I know it's going to go up instead of, oh God, I'm going to lose everything. Because my sister in law told me a mythology, she gave me a lesson in mythology. And so you know, that's. But if you're going to invest again. So here's what I would do. Let me get back up. If I'm 71, I'm 66, I'm 65, getting ready to be 66. So we're close to the same age. I would put this money in a high yield savings account and let it ride and sleep at night. Meanwhile, I'm going to challenge you intellectually to sit down with a smartvestor pro and start learning because knowledge of how these markets return, how they go down, how often they come back, what the bounce back period is and all that will cause you to ride out the waves.

[Jade Warshaw]

Yeah, let me go over it because this is so cool to see. So what I'm going to tell you is a major market crash that we all know and how long it took to recover the losses. So you could go back to 1987. You were there for that Black Monday, Monday.

[Dave Ramsey]

Yeah.

[Jade Warshaw]

All right, it dove it 34.

[Dave Ramsey]

34.

[Jade Warshaw]

And it took 22 months in one day. 22 months. That's less than two years to recover. 1990, Gulf War recession, it dove 20%. It took four months to get back. Just four months. Let's go to the dot com crash. You said 49. Half. It took less than seven years to completely recover. Half, Half. That's one of the big. That's crazy. Look at this one 2008, the Great Recession. I remember that 57 it dove. It took less than four years to recover. 2018 federal rate sell off. 20 crash. Less than four months to recover. 2020 Covid crash. We remember that 34 dive. It took less than five months to recover. And then most recently the 2022 inflation bear market that we all experienced. 25 dip. It took less than 22 months to recover. You just have to ride it out if you can. If you can sit tight for two

[Dave Ramsey]

years, you get back that one, that one's wrong because in we had a 25, a 24, 3%, a 26 market three years in a row. We did and that. So that last one's wrong. But the others are correct.

[Jade Warshaw]

Others are correct. All right, here you go.

[Dave Ramsey]

The Internet, the others. So yeah, okay, interesting studying this stuff and going how fast does it bounce back after the towers get bombed Right over the top of Wall Street.

[Jade Warshaw]

Yep.

[Dave Ramsey]

57 days. Wow, that one came back. Sam, New to the Ramsey show. Well, don't worry, we'll help you figure out your next step. Take our free get started assessment to see where you are in the baby steps and get a custom game plan for getting out of debt and building wealth. It's all free. Tap the link in the show notes and take the assessment. Our question of the day is brought to you by why Refi? When people get buried under private student loan payments they can't keep up with, they might think there's no way out out. Well, why refi does help borrowers explore solutions with fixed rate refinancing and a payment plan tailored to that situation. Go to yrefi.com Ramsey that's the letter y r f y.com Ramsey might not be in all states.

[Jade Warshaw]

Okay, today's question comes from Zach in New Hampshire. He says, my wife and I have $250,000 in various savings accounts. My wife wants to use the money as a down payment to buy a home. I think it would be a waste to use it that way. I would rather keep investing the money and eventually live off of the interest and dividends. Our rent is affordable and has not increased since we moved in. We have one child and a combined income of about 200,000. We're debt free and our monthly expenses are very minimal. If you were in my position, what would you do? Well, I'd buy the house. I would because number one, you're stabilizing one of the largest line items on most people's budget, which is their housing. And your rent may have not have gone up yet, but it will eventually. So I would do that. And I also just think there's a peace of mind with having a place that you can call home that's yours, that is gaining equity. And I think, Dave, what I, what I sense in this conversation, and we've had this with many people who've called in, is it's almost like people forget that purchasing a home is a form of investing. It's like I just want to invest my money in the stock market. I'm like, well, I love the idea of investing. Can you do both? Can you do 15% in the stock market? And can you invest in real estate, which is your primary home? Yeah, I think they're both very good to do.

[Dave Ramsey]

Agreed. So the premise that the person writing the email basis us on is that he's got cheap rent and it hadn't gone up, up, but everyone listening knows that's going to be false. It will change so that you can't expand. You can't extrapolate that out. 40 years. Okay, again, I'm 65 years old. So when I was 25, if I had been renting, can you imagine how much my rent would have gone up during that 40 years of my working lifetime?

[Jade Warshaw]

Absolutely.

[Dave Ramsey]

Even if I had a good deal initially with the first landlord who didn't go up on me for three years or something.

[Jade Warshaw]

Right.

[Dave Ramsey]

But that's going to come to an end at some point. That guy's going to die and the next investor is going to go way up or whatever. It's going to. 100% of rent goes up.

[Jade Warshaw]

Yeah. And while that's happening, by the way, the real estate market's going up exactly as well.

[Dave Ramsey]

And so during that time, you know, again, you've heard us say this before, we've done the largest study of millionaires ever done in North America, detailed, airtight research. And what we have found is that 89% of America's millionaires started with nothing, did not inherit the money to become a millionaire and became millionaires. So then you have to ask the question, what did they do? If you want to be one, you do what they do. You study best practices and you emulate it. Right. So what did they do? Almost all of them, like 85, 90 percentile looked like this. I mean, they all kind of fit the same mold. They were boring. And what we found is they worked and got their home paid off. And it was six or eight hundred thousand dollars and it took them ten or twelve years to get the home paid off. And then during that Time. They've been investing steadily in their 401ks and in their Roth IRAs. And they had another 800 or 900,000 or a million in that, and it took them 16 years to do that. So you got an $800,000 house and you got 1.2 million in your retirement or less anywhere in there. And you got a 1 to 2 million dollar net worth. So those are the two components of the first one to 5 million dollars of net worth that we see people build. And that's normative among them. They bought a house and paid it off. They steadily invested in 401ks. That's what I mean by it's not sexy. It's boring.

[Caller]

Boring.

[Dave Ramsey]

It's just like buy a house and pay it off and put Money in the 401k and go to work and come home and eat your meatloaf. I mean, this is what you're doing, right? And you become a millionaire. It's not like you, like, like you, like you somehow invented applesauce. I mean, you didn't do anything that was that brilliant. You were just steady. And so that's why his idea is flawed, because that house becomes one of the two components of wealth building to your point of investing that causes people to become wealthy. And during that time, 100% of the time, rent's going up. Yes, it is 100%. There's very few things you can predict with 100% probability, but you can predict 100% of the time in the last hundred years, rent has gone up.

[Jade Warshaw]

Yeah, that's right.

[Dave Ramsey]

And so, I mean, the house that I sold When I was 18 years old, my first house was a real estate agent. I got my real estate license when I was 18. I sold a house. Two weeks later, I sold it on East Ridge Drive in Antioch, Tennessee for $42,500. That house sells for 600,000 now. Don't be a renter.

[Jade Warshaw]

Yeah, that's the moral of the story.

[Dave Ramsey]

I mean, hello, if you were renting that house the entire time rent is gone, you would have been paying. Let me think what the rent would have been. The rent would have been 150 bucks. Probably in those days. Wow. Maybe 200. We rented an apartment a couple of Years later, a one bedroom apartment for 235.

[Jade Warshaw]

Oh my gosh. Wow.

[Dave Ramsey]

And so right after we got married, and that was 1982, so this would have been 78, so four years later. So yeah, probably been 150, 200 bucks for the rent on that $42,500 brick ranch built in 1948. 1,000 square feet with an unfinished basement. And yeah, and that house will go for 600k right now.

[Jade Warshaw]

Oh my goodness.

[Dave Ramsey]

And that rent, which means the rent would probably be. Probably renting that for 2,500 bucks.

[Jade Warshaw]

Oh my goodness.

[Dave Ramsey]

So that's the problem with this theory. And that's everywhere in America, right? That's not in Antioch, Tennessee. That's everywhere. That's all over America. And so, yeah, now not ashamed. I sold that guy that house, by the way. I think I did him good. I was 18 year old idiot, but I still did him good. You know, I didn't know what I was doing, but I thought I knew what I was doing, but it turned out I knew what I was doing. There we go. So, yeah, so real estate's a great investment when it's a part of your plan where when you're out of debt, you have an emergency fund, your payment's no more than a fourth of your take home pay on a 15 year fixed. If you can put down, and this guy has 250,000 bucks to put down, if you can put down 20%, you can avoid PMI, which is private mortgage insurance. And that is a good thing. If you can avoid that, first time home buyers often can't get a whole 20% down. I understand that in this market though,

[Jade Warshaw]

you, you, you're putting down more if you want the payment to be less than 25% of your take home. So you got to get there.

[Dave Ramsey]

Depends on the house. Yeah. And where you're living and all that. But yeah, you're exactly right. It's all numbers, numbers, it's all math.

[Jade Warshaw]

Why? You know, one thing I find on the show a lot is people are always willing to sacrifice their personal residence, whether they haven't bought it yet and they want to put their margin towards investing, or maybe they have bought the house and they don't want to put the margin towards paying it off, they want to invest instead. They're always willing to put their personal mortgage and the piece of that on the line. And I find that to be interesting because the truth is there's more tied up in that than I think people realize in their day to day life. But all you have to do is be in a situation where you're up against the wall and you realize how much it matters to you. Anybody who's had a diagnosis, anybody who went through COVID 19, anybody who's been laid off or lost a job, the number one thing that you start thinking about is your home. And you want your home safe and you don't want to lose your home and you want to make sure you can make the payment. So don't forget that.

[Dave Ramsey]

Don't forget that there's something very primal about that.

[Jade Warshaw]

Yes.

[Dave Ramsey]

And a different kind of anxiety than and I can't get the coffee that I want today.

[Jade Warshaw]

Right.

[Dave Ramsey]

That's a different kind of anxiety. So when you're in I'm gonna lose my home.

[Jade Warshaw]

Yes.

[Dave Ramsey]

That's different than having the lights cut off.

[Jade Warshaw]

That's right.

[Dave Ramsey]

I've had both. But I don't want and I don't want either again. And I don't recommend it as a method of learning, but so protect it.

[Jade Warshaw]

Protect it before your backup is up against it, and I hope it never is. But protect it when you have the ability to and pay it off when you have the ability to.

[Dave Ramsey]

So circling back on that guy just for a second, if he keeps investing steadily, his investments will not be enough to cover the difference in rent going up. So he's going to end up, he's going to end up going backwards.

[Jade Warshaw]

That's a good point. You're saying percentage wise.

[Dave Ramsey]

Yeah, he's going to end up going backward. In that scenario, your investments won't do well enough for you to stay ahead of that. And if they are, you're playing stuff you shouldn't be playing in.

[Caller]

SAM.

[Dave Ramsey]

Welcome back to the Ramsey show in the Fair Winds Credit Union studio. I'm Dave Ramsey. Your host, Jade Washaw Ramsey personality is with me. We were talking about stock market returns earlier and during that break, we actually got to play with the actual app a little bit and look at it. And I misquoted some stuff. So I need to clean up my mess. If some of you are still listening before you're bitching on the comments that Dave Ramsey's an idiot because he was, he messed up. So anyway, the thing to remember about the S and P, it is it recovered in about 90 days from the high. It was up in February. Trump bombed in Iran. It dove, it came back in, I think it's 92 days. It recovered to where it was and it's well beyond that now. And I said the rate of return for the year was down 1%. I was wrong. It's up 10% for the year. So if you've been in the stock market, invested in S and P, which is the stock market from January 1st to today, you know, then you June 1st, then you have made 10% on your money. Meanwhile, it went down and back up. And so you wrote roller coaster down, and you wrote it back up 10%. Now in 2020, 24, 2024, the stock market made 23%. The S&P did, then 25 and then 26 and then 17. And so those are the returns for the last several four or five years under different administrations and all kinds of different situations and different volatility and gone up and gone down and back and forth. But you can go back and just pull up an S and P app and look at it online. You can see the thing going up and down. And you say, okay, there's a dip. What was going on at that time? And you go back and look at the news stories of the day. And so you'll see it comes back in 57 days or whatever like that, just like we just did on the about 90 days, on that, around more or 60 days. So anyway, that the moral of the story is you do not put money in the stock market unless you're going to leave it alone at least three years and preferably five. If you don't have that mindset, you're going to panic every time you read a news story or see a new story on. And FOX and CNN are going to tell you that Chicken Little, the sky is falling every day. It's what they do. It's fear porn. And they're going to tell you every day that the world's coming to an end. The world's coming to an end. They always report when the market is down. They never report when it's up, ever. They never say record stock market returns. Now a business channel like a Fox business might. Or in the old days, the old cnbc, back in the day, not there anymore. But if it was a pure business channel with stock market reports, they might say the market's up at a record level. And I think I did say the dow was at 36. It's like at 50,000. So I'm not even close on that. So I screwed up two things in one of those other segments pretty dramatically. But the moral of the story still is no one gets hurt on a roller coaster except those that jump off in the middle of the ride. I do not take my money out of the market based on any singular event because I think the market's going down every time the market goes down. Instead, I am tempted to scrape the nickels out of the corner of the couch and put more in because it's on sale. When I was a kid, there was a store called Kmart. It's gone now. And when you Went in Kmart, they had these little things that own rollers with a blue light on top. And they would roll this thing over to the whatever aisle, the tulle aisle or the socks aisle or the underwear aisle, and they'd turn the blue light on, and there would be a blue light special, and you could get a bargain. And so the rednecks would flock to the blue lights. Right? Like a moth towards a flame. And so I remember my mama running down the aisle at Kmart to the blue light. That's what you should do. When the stock market goes down, the blue light is on. On. It's on sale. Get a bargain. Run down the aisle. You redneck. Get you some money. Okay? That's what we did. And so there's nothing wrong with that. But if you've got the mindset of it has always come back, and the only game is how long it takes it, then when it dives on one of these news items or geopolitical events, whether it's Covid or, you know, fires in Australia or whatever it is it causes, you know, the Russians launch a satellite, somebody invades Ukraine. Somebody doesn't invade Ukraine. Somebody's oil barrel goes up. Whatever it is, whoever, you know, whatever it is, whatever mess Trump is making this week ends up in the stock market. Right. Or whatever victorious thing he does this week ends up in the stock market. And so for. But for a short period of time overall, you just make money.

[Jade Warshaw]

Yes.

[Dave Ramsey]

So that's the moral of that story. I'll get off my soapbox. All right, let's go to Jay in Richmond, Virginia. Hi, Jay. How are you?

[Caller]

I'm good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So be. My wife just had a baby in January.

[Dave Ramsey]

Yeah. What'd you have?

[Caller]

A girl.

[Dave Ramsey]

Awesome. You're ruined.

[Caller]

Yeah, I know, right? And so doing the current bills, we're trying to pay off debt, but she just had a school payment come up and that kind of threw everything off. And then daycare is coming up in September, and right now we don't have enough to cover daycare. So we're trying to figure out what can we do to get to at least where we can afford daycare and then also pay off debt.

[Dave Ramsey]

What kind of school pay payment?

[Caller]

The school payment itself right now is $360. But that's just one. That's the PER. The private. You know, Sally, Matt, right now. I'm sorry, Everything.

[Dave Ramsey]

You know, it's a loan. It's a student loan.

[Caller]

Yes. That's my wife's Student loan.

[Dave Ramsey]

Oh, I thought she was meant she was in school. Okay, got it.

[Jade Warshaw]

And how much is daycare?

[Caller]

She's in it.

She's in a break right now. Daycare is going to be $1,600 a month.

[Jade Warshaw]

And when you say your wife is in a break, when does she go back to school or when did you plan for her to go back?

[Caller]

That's up in the air. She finds out by tomorrow whether she's allowed to go back. Right now, the school is not being very kind with her having a baby. So she plans on going back in the fall.

[Jade Warshaw]

Can you afford for her to go back in the fall? It doesn't sound like it.

[Caller]

She's. She's on grants for school, so that. That is. Her school's covered. And if the grants don't work, her schools pay or her work pays for it. So they do like a. They pay for her college.

[Dave Ramsey]

So she works also.

[Caller]

So she does. Yes, full time.

[Jade Warshaw]

And the 360 is for an old student loan. It's not an ongoing tuition payment.

[Caller]

Correct.

[Jade Warshaw]

Got it. Okay.

[Dave Ramsey]

Why are you paying? Is that a federally insured student loan or a private student loan?

[Caller]

It's a private.

[Dave Ramsey]

Oh, okay.

[Jade Warshaw]

All right.

[Dave Ramsey]

All right. So what does she make it work? She brings in 2000amonth, and 1600 is the day. Kirk care.

[Caller]

Yes.

[Dave Ramsey]

Well, that doesn't work.

[Jade Warshaw]

No.

[Caller]

And of course, you know, our money's combined, so together we make 7,600amonth.

[Dave Ramsey]

I know, but her working. If she's not working, you don't have a $1,600 daycare.

[Caller]

Right, correct.

[Dave Ramsey]

Well, she not making 400 bucks. I mean, we're not working full time to make 400 bucks.

[Caller]

Right.

[Dave Ramsey]

That doesn't work. So we got to figure out a different job that she does from home or makes twice as much money. Because her being her working and making $2,000 and paying $1,600 for the privilege is not logical. Yeah, no. I would work part time from home and make more money net of daycare and be home with a baby. That's step one. Then step two is you look at what you can do to pick up extra jobs and. Oh, so the car. I didn't even ask about it. I don't even know if it's there, but probably sell the car. All right, let's cut to the chase. It's easy to get discouraged about crazy house prices and interest rates, but when you have the right real estate agent to help you buy and sell the right way, you'll have confidence to make Smart decisions. Ramsey trusted agents aren't just experts who guide you through buying or selling. They're people you can trust to have your back from the first call to closing day. Find a Ramsey trusted agent near [e-mail] agent. That's ramseysolutions.com. Faith is in Boise. Hi, Faith. How are you?

[Caller]

Hi. Thanks so much for taking my call.

[Dave Ramsey]

Sure. What's up?

[Caller]

I just want to start off with saying, I just know that this is a first world problem, and I'm grateful to have it, but I really need your advice.

[Dave Ramsey]

I'll try.

[Caller]

Okay. Okay, so we need to know if we should pay capital gains at the number of $50,000 to the IRS or if we should reinvest using a 1031 exchange.

[Dave Ramsey]

So you're selling a piece of investment real estate.

[Caller]

Yes, we are.

[Dave Ramsey]

For how much?

[Caller]

Probably. We're listing it at 499.

[Dave Ramsey]

So you've depreciated, your adjusted basis is approaching zero.

[Caller]

No, but we are. Will probably make about 300,000 equity on it.

[Dave Ramsey]

Yeah, that would be 45,000. But that's. Equity is not equity. Equity is not your basis or your tax basis.

[Caller]

Right. And let me tell you, we've gone over this with all kinds of, like, tax people and.

[Dave Ramsey]

Okay, so the tax people are saying you have a $300,000 gain at 15%. That'd be $45,000.

[Caller]

Right.

[Dave Ramsey]

Okay. That's what you're hearing. Correct.

[Caller]

And then with all of the money we've invested into the rental, they're saying we'll probably walk away with a $50,000 capital gains tax. So we can pay that, or we can take that money and reinvest it into something else.

[Dave Ramsey]

Okay, let me stop. Let me stop you a second. Because I'm concerned that the number you're giving me is where it's coming from. Because. And I want you to go back and double check that. Let's walk through the basics of that, and then we'll go back to your question. Okay, so when you bought the.

[Caller]

To me, but I'll try.

[Dave Ramsey]

That's okay. When you bought the property, you're selling it for approximately 500. And you're thinking you have about a $300,000 gain. So when you bought it, you probably paid 300,000 for it. Let's call it. Okay. And then you've been depreciating it, which lowers your basis. And you've been doing capital improvements to the property, which increases your basis.

[Caller]

Yep.

[Dave Ramsey]

Okay. That adjusted basis down by depreciation and up by capital Improvements subtracted from your sale price, subtract. And that number subtracted from your expenses for selling is your gain. And I can't tell from the way you're wording this if that gain is 50,000 or if your tax is 50,000.

[Caller]

The tax, I was told, is 50,000. After someone else worked out all the numbers, you just.

[Dave Ramsey]

And the property, what kind of property is it you're selling?

[Caller]

It's a single dwelling.

[Dave Ramsey]

Okay, so it's a rental house. Okay. And you sold it. Why?

[Caller]

Well, we want to sell it because where we're living now and we're renting right now is so extremely expensive. So our ultimate goal is to lower our monthly housing costs and take this

[Dave Ramsey]

equity and buy a home.

[Caller]

Yeah. Either buy a home or we thought buy a duplex so we don't have to pay capital gains tax.

[Dave Ramsey]

If you live in it, which is

[Caller]

a whole nother thing.

[Dave Ramsey]

Yeah, that's a mess. That's a hot mess.

[Jade Warshaw]

Can she do that and live on the other side of the duplex?

[Dave Ramsey]

Yeah, but you got to try to figure out a way to bifurcate the duplex, and that's really troubling.

[Caller]

And in the area that we're wanting to live, a duplex, even if it was only like 1400 on each side, square feet on each side would be close to a million.

[Dave Ramsey]

I would pay the gains and use the money and buy the home that you need to buy. You're forcing yourself all into a duplex. You wouldn't have bought a duplex anyway. The only reason you're doing that is to save this gain and to try to play some kind of shell game with this money. And so, no, I'm going to pay the tax, get clean, and just buy the home that you're supposed to buy that you need to buy that fits your budget with the money that you guys have from the sale of this and from what other money you've stacked up. Put as much down as you can put down and don't get caught up because you're forcing yourself into a duplex. And. And if you're living in one side of it, you can't 1031 that side. And yet there's not two sides to a duplex in terms of there's no line down the middle that you can say one side's investment, one side's not, unless it's a zero lot line, and it's not. It's a duplex. So you're getting yourself into a real potential barrel of fish hooks. If you get audited And I'm not sure how you'd come out on that. I wouldn't screw with it for all that. And you wouldn't be buying a duplex if it wasn't for this one simple issue. And so I just ignore the issue and go do the house you're supposed to do. Not met taxes force you into a decision you wouldn't have made otherwise.

[Jade Warshaw]

I like that. I like that.

[Dave Ramsey]

And that's the way I would go at it. So. Yeah, but if you live in one side, does it become your personal residence? Oh, but the other side is rented. So that's a rental property. Yeah, but it's one property.

[Jade Warshaw]

Very confusing.

[Dave Ramsey]

A singular property. It's not a dual property. If you bought two properties attached to condos that were attached at the wall, then one of them would be an investment. You could 1031 into that. You could not 1031 into the other, because you can't 1031 into a personal residence, as she's already discovered. But I also. Faith want you to go back. Unless you guys have owned that property a very long time, I'm not sure the numbers you're getting. That's an unusual. If you've spent money on the property doing capital improvements, that's an unusual gain. So. But I would look at it and try to just make sure that your adjusted basis, that you understand that and that the Difference is times 0.15. 15% for your capital gains tax is the 50,000. It might be. It might be. I might be wrong. But I really want to understand it before I move forward just to be double sure. Triple sure. But no, I would not do a 1031 in this case because it's forcing you into a purchase you would not otherwise.

[Caller]

Mate.

[Dave Ramsey]

It's a good question. Interesting discussion. Thank you. Zach's in Lubbock, Texas. Hi, Zach. How are you?

[Caller]

Hey, I'm great. How are y'? All?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Well, doing well until your lady volunteers beat my lady Raiders in softball. But all things considered, pretty well. But my question is, I'm a 1099 employee. 1099 here in Lubbock, and I have. Have recently done better and better in our career field.

[Dave Ramsey]

Good for you.

[Caller]

Thank you. And I've been definitely trying to. I've been maxing out my Roth ira, and that's gone well. And. Well, even maxing that out, I'm not hitting my 15%. And the baby step that I'm in, where I'm debt free and everything, but my home but my Question revolves around. I have a tax professional with the heart of a teacher that is telling me, hey, you might consider a traditional IRA with your S Corp as a 1090 tax break.

[Dave Ramsey]

You have an S Corp?

[Caller]

I do, yes. Okay, yes.

[Dave Ramsey]

Well, cheaper than that. You have employees in your S corp other than you?

[Caller]

No, it's just me.

[Dave Ramsey]

Okay. Yeah. You can set up a. What's called a simple IRA, which is a 401k for small businesses. And you're the only employee.

[Caller]

Yes, sir.

[Dave Ramsey]

And you can max it out.

[Caller]

Okay.

[Dave Ramsey]

And just hit your SmartVestor Pro up. And the good news is that it's basically 401k for small business. They call it a simple IRA. And the good news is it's $15 a year administration cost. It costs nothing.

[Caller]

Oh, it's nothing.

[Dave Ramsey]

Yeah, yeah, like a big 401k. Like our company, you know, we pay tens of thousands of dollars a year to administer it for 1,000 employees. Right. And then we have to pay another 40,000 to have it audited and all that stuff. You don't have to do any of that with a simple. It's all just $15. It's like setting up an IRA. It's like setting up another Roth IRA and you can do a simple Roth. So you can just make it more Roth, more good and put it in there. If you did have employees, you have to match 3%. If you ever hire someone for your S corp other than yourself, you'd have to match 3%. But the weird thing is you can actually match yourself, so. Which really serves absolutely no purpose unless you're. Well, if you're maxed out, it would serve a purpose. If you're going to put all the full amount in, that would get you there.

[Jade Warshaw]

Hey, what's up, guys? It's Jade Warshaw. Listen, summer spending adds up so fast. Between vacations and road trips and camp fees and events and all the extra gas and grocery runs, money can get tight before you know it. To really get your money under control and keep it that way, you're going to need a plan. And that's what you'll get with the EveryDollar budget app. It helps you track your spending, free up cash to put toward debt and savings. And it's the simplest way to make a plan for your money before the month begins. So no more wondering where your money's going. You're telling it where to go. Download EveryDollar in the app Store or Google Play and start for free today.

[Dave Ramsey]

So Jade's just teaching me something at the break that Goes to our last caller. So the Simple IRA for small business is what I said it was. It is an inexpensive way to set up a 401k for a small business. If you have have employees, you have to match 3%. All that was correct that I told him you cannot put as much into a simple IRA as you can a solo 401k. But Jay, the solo can only be if you have only yourself and your spouse.

[Jade Warshaw]

That's right, only the owner and the spouse.

[Dave Ramsey]

But you can't have any employees with solo. But you can put more in it.

[Jade Warshaw]

That's right.

[Dave Ramsey]

So if you're a high, ultra high income earner on self employed, 1099, no employees, and you max out your, both of you max out your Roth IRAs, you can also do the solo, which will get you way up there then. I mean, you can put

[Jade Warshaw]

up to 72,000 is the contribution limit with matching

[Dave Ramsey]

yourself and doing all kinds of other gyrations in there to get it to work. Yeah. Okay. So there's two types that'll work for you. Solo and Simple. Simple. They are a little different product, but you can learn about both of them from a SmartVestor Pro. And you can find your SmartVestor Pro at ramseysolutions.com Gregory and Kimberly are on the debt free stage in the lobby of Ramsey Solutions, which can only mean one thing. Where are you guys from?

[Caller]

Bay City, Michigan.

[Dave Ramsey]

I love it. And how much debt have you two paid off?

[Caller]

About $300,000.

[Dave Ramsey]

I love it. How long did it take you?

[Caller]

72 months.

[Dave Ramsey]

72 months. And your range of income during that time?

[Jade Warshaw]

About 180,000.

[Dave Ramsey]

Okay, cool. What do y' all do for a living?

[Jade Warshaw]

I'm an occupational therapist, rehab director.

[Dave Ramsey]

Awesome.

[Caller]

And I'm an electrical manager at a pickle plant.

[Dave Ramsey]

Great. Very cool. And I'm guessing with that length of time and that amount of money, where are y' all from again? Basically City, Michigan, which is near what,

[Caller]

two hours north of Detroit.

[Dave Ramsey]

Okay, cool.

[Jade Warshaw]

All right, I have something in mind here. When I'm thinking about 300k of debt, what was it?

[Dave Ramsey]

Must be your house.

[Caller]

Well, we had about $70,000 in consumer

[Jade Warshaw]

debt and student loans, credit cards, leased cars. Wow, Silly things.

[Caller]

And our house.

[Dave Ramsey]

And the house.

[Jade Warshaw]

And the house. Saved it for last.

[Dave Ramsey]

And the house. You are dead everything. I'm looking at weird people. Look at you guys. Way to go, y'.

[Caller]

All.

[Dave Ramsey]

Excellent. So what's this house worth?

[Caller]

$275,000.

[Dave Ramsey]

I love it. And how much have you got saved in your nest egg?

[Caller]

So far about $688,000.

[Dave Ramsey]

All right, we're creeping. You were almost millionaires.

[Caller]

Well, if you consider that we also have about $46,000 in liquid assets.

[Dave Ramsey]

You do. You are baby steps. Millionaire. Way to go, you guys, I'm so proud of you. So, wow. How old are you? Two?

[Caller]

I'm 58.

[Jade Warshaw]

54.

[Dave Ramsey]

And you're millionaires, and you started with nothing.

[Caller]

Surreal.

[Dave Ramsey]

How long you been married?

[Caller]

33 years.

[Dave Ramsey]

Wow.

[Jade Warshaw]

Congratulations.

[Dave Ramsey]

That is so cool. So very well done. So tell us your story. How'd you get started on all this Ramsey stuff? 72 months ago?

[Caller]

Well, it actually started in 2020, 2014, when we moved to town in Ohio and wanted to start working on my retirement and went to a financial advisor, and they said, well, you can't really invest until you get out of debt. It was at that point where I felt like I was going to die at my desk. And in 2018, I met a guy where I worked named Jeff. I called him 1F Jeff because I messed up. Messed up. He's only 1F and his Jeff. I told him about my situation, and he says, you need Dave. I said, who's this Dave? Dave Ramsey, he says. I was like, who is this? Some snake oil salesman. What's up? Yeah, so I started listening to your show, and I listened to about for

[Jade Warshaw]

about a year, and it took me a while to get on board.

[Dave Ramsey]

Yeah, yeah. Because a snake oil salesman takes a. I understand. I've got no issues issue with that at all.

[Jade Warshaw]

What changed your mind, Kimberly? We were just drowning in debt, living paycheck to paycheck, and just tired of being stressed out all the time.

[Dave Ramsey]

So I'll try anything.

[Jade Warshaw]

Yeah.

[Dave Ramsey]

Even Dave. Yeah. I understand. That's how it happens a lot. I like it. I like it. Very cool. Okay. So at that point, sometime y' all had to have a sit down and go, all right, let's do something. Well, tell me about that moment. Do you remember it?

[Caller]

We started selling everything. And her and I, we did agree to it's time to do something. Because like you keep saying, we're sick and tired of being sick and tired. And so we. I think it was April of 2019. We said, it's time. Let's do it. And we started selling everything. As you said, the kids were concerned about they were next and just started pouring money. We had spreadsheets. We used the every dollar. We just did everything we could to get out of debt. And December of 2019, I turned in a stupid car, a lease. And it was at that point where we're like, holy smokes. We're out of debt.

[Dave Ramsey]

Everything but the house. Just in time for Covid.

[Caller]

Yeah.

[Sponsor/Ad Voice]

Yeah.

[Caller]

And then last year. Last year, we decided to move out of Ohio and move back to Michigan, and we sold our house down there. It took a while, but it was about December 9th when we closed on our house in Bay City and we paid cash for the house.

[Dave Ramsey]

Wow.

[Jade Warshaw]

Wow.

[Caller]

We walked out of the title office, which blew my mind. It only took a half hour.

[Dave Ramsey]

Yeah.

[Jade Warshaw]

Yeah, I bet.

[Caller]

I looked at her. It's like we're debt free.

[Jade Warshaw]

Completely debt free.

[Caller]

It was just. We're in baby step seven. What is this? And who pays cash for a house?

[Jade Warshaw]

You do. It was amazing.

[Caller]

Wow.

It was insane.

[Jade Warshaw]

Exhilarating.

[Dave Ramsey]

Congratulations. How's it feel to have no payments in the freaking world?

[Jade Warshaw]

It's awesome.

[Caller]

It makes the monthly budget a lot easier. Let's put it that way.

[Dave Ramsey]

Yeah. It's pretty simple. Now, so what big thing, Kimberly, are you guys going to do to celebrate that you have no payments in the world and you're millionaires?

[Jade Warshaw]

We came here to do the this.

[Dave Ramsey]

Y' all are people of simple taste.

[Caller]

You are.

[Dave Ramsey]

No, seriously. You're going to go on a trip, buy a car. What are you going to do? You need to do something.

[Jade Warshaw]

Look for another sailboat.

[Dave Ramsey]

Yeah, sailboat. Bay City. All right, so you have a little one. You need a bigger one. No, you sold it, so you got to replace it.

[Caller]

Yeah, we sold it, and when we moved out of Ohio, we sold it.

[Dave Ramsey]

Okay. So what's the budget on this, sailor?

[Caller]

Yeah.

About 16,000 maybe.

[Dave Ramsey]

Okay. All right. That's nice. Very nice.

[Jade Warshaw]

I love that for you guys.

[Dave Ramsey]

Good for you. Congratulations. And I got to tell you, it will glide on the water better than that one with payments.

[Caller]

Even the one we sold didn't have payments.

[Dave Ramsey]

Okay. All right. It just was helping you get out of the other payments. Okay.

[Jade Warshaw]

A lot of people would have taken the 275 from the sale of the house and used it as a down payment on a bigger house. No. How did you walk us through your mentality? That there last kid was out of the house, we were empty nesters. So we went from four acres and a huge house down to a very simple, you know, 1200 square foot, easy to take care of, half acre house, house.

[Caller]

That made it a lot easier.

[Jade Warshaw]

Yours. All yours, homes. Always. Yeah.

[Caller]

Wow.

[Jade Warshaw]

Way to go.

[Dave Ramsey]

Excellent. Guys, I'm proud of you. Who was cheering you on as you went?

[Caller]

Our kids, mostly. And co workers from time to time, you know.

[Dave Ramsey]

Yeah. The Guy that recommended Dave.

[Jade Warshaw]

Yeah, Jeff with one F. Yeah, I

[Caller]

wish I could find him. I would give him a drink or something.

[Dave Ramsey]

Well, congratulations. We're very, very proud of you and we really appreciate you coming all the way down here and sharing your story. And I can't wait to send us pictures of the sailboat.

[Jade Warshaw]

Yeah, okay.

[Dave Ramsey]

Yeah, that's very cool. Cool. Good for y'.

[Caller]

All.

[Dave Ramsey]

You get to. You're living the dream, man. This is how it works. Well done. Gregory and Kimberly. Bay City, Michigan. Quite a journey. 300,000 paid off over 72 months. Debt free, everything, house and everything. And in the process become baby steps millionaires making 180. Count it down. Let's hear a debt free scream.

[Caller]

Three, two, one.

We're debt free.

[Dave Ramsey]

Yeah. I love it. There we go.

[Jade Warshaw]

So good.

[Dave Ramsey]

Oh, man. Hey, you know you're serious when you sell the sailboat.

[Jade Warshaw]

You know you're serious when you take the 275 and buy a house in

[Dave Ramsey]

cash and move down.

[Jade Warshaw]

Go down in house to make.

[Dave Ramsey]

Well, the kids are gone. Yeah, we don't need to. Yeah. And don't have to. To keep up the. The upkeep. She's right about that,

[Caller]

Sam.

[Dave Ramsey]

You spend hours researching before making a major purchase like a home or car. But it's also a good idea to put in the work searching for the right insurance coverage to protect your biggest assets. I recommend using Ramsey trusted pros. Whether you're looking for car, home or any other type of insurance, Ramsey trusted providers have been coached and vetted to serve you like we would would. Find what you [e-mail] insurance. Buying or selling a home is a big decision as people sold their house and changed cities and moved down. You gotta make decisions carefully about that. That's a big one. House is one of the biggest transactions you'll ever do and you need a high quality, high octane, high protein real estate agent. If you want a Ramsey trusted agent, go to ramseysolutions.com agent. If you want to learn more about the market trends, you can go to ramseysolutions.com morgan market or click the link in the show notes. If you're listening on the podcast or on YouTube, our scripture of the day is Psalms 143. 10 Teach me to do your will, for you are my God. May your good spirit lead me on level ground. Henry Ford said, the only real mistake is the one from which we learn nothing.

[Jade Warshaw]

Love that.

[Dave Ramsey]

There we go. Ben is in Raleigh, North Carolina. Hi Ben, how are you?

[Caller]

You better than I deserve.

[Dave Ramsey]

How you Doing better than I deserve. What's up?

[Caller]

A question or need some help? Really help? Any questions? I have a issue trying to get my wife to agree to a budget. The way things are is that she will look at money in the accounts account and look at as a way of. There's this amount of money. This is how much I can spend. And I've been struggling. I've been. If the money in the account has always been causing problems as far as.

[Dave Ramsey]

Okay, your phone's breaking up. Can you get where you can speak directly into it and keep it clear?

[Caller]

Hear me now. I'm sorry.

[Dave Ramsey]

That's okay. Try again. So. So your wife thinks there's money just because there's some in the account. Account. And you're having trouble getting her to understand we don't have all that money because some of it's got to pay the electric bill next week.

[Caller]

Correct. So what I've done is caused problems in the past. So what I've actually done is I've. I've pulled money into the. To the account onto one account to make sure the house gets paid. But we constantly run into issues with money being left in the primary account.

[Dave Ramsey]

Okay, so let me stop you for a second. How long y' all been married?

[Caller]

We've been married for just 14 years.

[Jade Warshaw]

Oh, gosh. And how old are you guys?

[Caller]

I'm 58. She's 42, let me tell you.

[Dave Ramsey]

So why does a 42 year old woman not grasp the idea that we have bills to pay?

[Jade Warshaw]

Right?

[Caller]

She does. But anything outside of that is a open invitation to speak.

[Dave Ramsey]

No, it's not. She's a 42 year old grown woman. She's not a 4 year old.

[Caller]

I agree with you completely. I agree with you completely.

[Dave Ramsey]

Okay, so why when you look at her and say, I need a grown woman to join me in my marriage and join me for our household good and that's. You can't spend like you're in Congress. We're going to write down together where the money's going to go and you and I are going to stick to that. And if you can't keep that contract, we need to sit down with a marriage counselor.

[Caller]

I agree. Let me give a little bit more of a backstory. So I did lose my job probably about a year and a half ago, and that put a lot of financial burden on her. Since that time, I've got the job. You've gone through baby step one.

[Dave Ramsey]

Okay, I'm sorry. What financial burden did it put on her? She was the only one working Working.

[Caller]

She was the only one working.

[Dave Ramsey]

No, it put a financial burden on the household.

[Jade Warshaw]

Right. Because her job remained the same.

[Dave Ramsey]

So there's no financial burden other than the household had less income during the fact that one of you weren't working. For richer, for poorer, in sickness and in health, that does not give you a reason to overspend. Quite the opposite.

[Jade Warshaw]

Are you back to working?

[Caller]

I'm back to working.

[Jade Warshaw]

Are you making what you were making? Making.

[Caller]

I'm actually making more.

[Jade Warshaw]

Good.

[Caller]

What do you make that's stabilized?

[Dave Ramsey]

What do you make?

[Caller]

I make roughly about 125.

[Dave Ramsey]

What does she make?

[Caller]

She makes around about 35.

[Dave Ramsey]

Okay, so let's start fresh. Here's how the conversation needs to go. Honey, we've tried to work on this together several times. I'm very concerned and I'm really worried about our relationship, our marriage and our future. And I need desperately to get closure on our money. If we put all of our money in one account and before the month begins, we both sit down and we both have a vote and we both decide where this $150,000 a year, $160,000 a year is going to go. We're going to decide this month. Here's what our take home pay is and every dollar is going to have an. Every dollar is going to have a name. You get a vote. I get a vote. We're going to come to a conclusion that every one of those dollars is allocated. We're not going to spend anything except what you and I have decided is good for our future. Can you help me and can we do that together? If she says no, you don't have a financial trouble. You have a marriage problem. If she says yes. Now put your big girl pants on, your big boy pants on. And both of you sit down like two grown ups and make adult decisions without any shame of I've lost my job or somebody had stress because of that. Well, we all had stress because of that. Hello. But that's in the past. Today we make $160,000. And today we need to get out of debt and become wealthy and outrageously generous and have a wonderful life. But that's not gonna happen by accident. It's gonna happen when we sit down. Both of us have a vote, both of us have a voice and we plan it out. What am I missing?

[Jade Warshaw]

Jade, I don't think you're missing much. I think that I don't wanna say this, but I think he's afraid to challenge her and like push on this.

[Dave Ramsey]

You sound like you're A little too sweet.

[Jade Warshaw]

Yeah.

[Dave Ramsey]

Too nice.

[Caller]

I'm a Southern boy.

[Jade Warshaw]

You're here.

[Dave Ramsey]

You have Southern boys on me too.

[Jade Warshaw]

I think she can take it. I think she can handle you having a. A very serious conversation when you're saying this can't continue. This is of detriment to both of us. It's a detriment to our relationship.

[Dave Ramsey]

And I'm not asking you to do what I say. I'm asking you to do what we decide to gather.

[Jade Warshaw]

And I think that she can handle it.

[Dave Ramsey]

And if she can't handle that, then there's something else going on. But this thing of I just do whatever the flip I want after 14 years of marriage and I'm 42 years old. There's nothing Southern about that. That's just crazy.

[Jade Warshaw]

Yeah. Because it wouldn't fly if you were doing whatever you wanted. I guarantee you that.

[Dave Ramsey]

Yeah. And she'd be calling us, going, how do I get my husband under control? My husband under control. Right. I mean, it's like, wow.

[Jade Warshaw]

Yeah. There's. When you become an adult, you have to do the things that require adulting in your marriage. You know, you have bills to pay. You gotta pay the bills. You have to work together.

[Dave Ramsey]

And here's the thing.

[Jade Warshaw]

Do your own thing.

[Dave Ramsey]

You can use the downloading of the EveryDollar app. And we're gonna build this together as a way to do the conversation because you're kind of starting to fret. This is a whole new way of us doing this. Instead of me being your daddy and little girl does whatever she wants, or you being my mommy and I get an allowance from you.

[Jade Warshaw]

Do it together.

[Dave Ramsey]

I don't care what your mom and daddy did. I don't care what my mom and daddy did. I don't care what we did for the last 14 years. We're gonna build a new thing going forward, starting with his EveryDollar app. Tonight, let's sit down together and both be grownups and both decide on purpose what's going to happen to this money? And both of us push through. And there's some relational breakthroughs when that happens.

[Jade Warshaw]

I agree. Because for him, it's going to have to be. He's going to have to share something with her beyond dollars and cents. It can't just be. Well, you gotta stick to the budget. You're not doing the money. He's gotta share something that has a greater why behind it. It makes me feel scared when I see this. It makes me have a hard time trusting you when you react like this. He's gonna have to share something that's a little bit of a deeper level when talking about the money so that she understands it and vice versa.

[Dave Ramsey]

The breakthrough at our house was when Sharon finally CL clicked that this was the best way she could get her voice to her vote counting.

[Jade Warshaw]

This is how she.

[Dave Ramsey]

The budget was a mechanism for her to have a vote that counted because she's dealing with Mr. Strong Personality over here. Right. Who just does, you know, just does it and then you figure it out. Right. But that was. That was like, I don't know, 30 years ago. Right. But that was still a breakthrough. That's how she got a vote with a strong personality. And sometimes that's how you get the princess off the couch or the. Or the irresponsible guy to plug in and be a man. Yeah, whatever analogy you want to use on this. But that's, that's what a lot of people face, Ben. It's not just you guys. It's. Most people struggle in this area. But if you can't, if you can solve for it, it's game changing. That puts us out of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace Christ Jesus.