Don’t Throw Away Your Long-Term Security for Quick Fixes

Summary

Podcast Summary: The Ramsey Show – "Don’t Throw Away Your Long-Term Security for Quick Fixes"

Release Date: April 22, 2025
Host: Ramsey Network (Dave Ramsey and Co-host Jade Washall)
Description: In this episode of The Ramsey Show, Dave Ramsey and Jade Washall delve into the critical importance of maintaining long-term financial security over opting for short-term fixes. Through real-life caller scenarios, they provide actionable advice on managing debt, rebuilding after financial setbacks, and making informed financial decisions to ensure lasting wealth and stability.

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1. Rebuilding After a House Fire – Jamie from Dallas, Texas [01:00 - 07:24]

Situation: Jamie shares a harrowing experience where her house was completely destroyed by fire in January. Although the insurance covered the structure, it was significantly underinsured, providing only $230,000 against the $525,000 needed to rebuild a similar home. Currently mortgage-free since 2019, Jamie and her husband find themselves in a precarious financial position, with minimal emergency funds and limited retirement investments.

Key Points & Advice:

• Insurance Importance: Jade emphasizes the necessity of regularly updating insurance policies to cover full replacement costs, especially as construction costs rise.
• Budgeting and Debt Reduction: Dave advises Jamie to utilize the $230,000 insurance payout wisely by building a robust emergency fund, saving 15% of household income for retirement, and aggressively paying down the new mortgage on a 15-year fixed plan.
• Avoiding Scope Creep: He warns against allowing unnecessary additions to the rebuilding process that can inflate costs.

Notable Quote:

“Once you've built your four walls—food, shelter, and utilities—you can negotiate with collectors and prioritize your debts accordingly.”
— Dave Ramsey [06:19]

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2. Navigating Job Loss Due to Health Issues – Abigail from Baltimore, Maryland [11:28 - 21:05]

Situation: Abigail calls in distressed after a coworker-caused car accident led to severe health complications, rendering her unable to work. With no current income and mounting medical bills, she seeks guidance on managing her finances during this challenging period.

Key Points & Advice:

• Income Solutions: Jade suggests exploring remote work opportunities, citing platforms like Arise that offer customer service jobs suitable for Abigail's condition.
• Emotional Support: Dave underscores the importance of addressing emotional trauma by seeking counseling through church support systems or professional therapy.
• Financial Prioritization: Emphasis is placed on maintaining essential expenses—food, shelter, and utilities—before addressing debt obligations.

Notable Quote:

“You have to set your priorities straight. Your children’s needs come first, followed by securing your home and essential utilities.”
— Dave Ramsey [24:11]

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3. Dealing with Collections and Negotiating Debts – Jordan from Spokane, Washington [22:23 - 43:30]

Situation: Jordan is overwhelmed by aggressive collection tactics from a company seeking $5,000 upfront and $800 monthly payments for a repossessed car. With a household income of $92,000 and additional debts totaling $13,000, he seeks strategies to manage and negotiate his obligations effectively.

Key Points & Advice:

• Budgeting Essentials: Dave recommends Jordan create a detailed budget listing all expenses to prioritize essential needs over debt repayments.
• Negotiation Tactics: Advocates for negotiating settlements at a fraction of the owed amount, typically around 20-25% of the total debt.
• Emotional Control: Stresses the importance of not letting collectors induce fear or anger, maintaining control over financial decisions.

Notable Quote:

“These collectors are specialists in emotional terrorism. Don’t let them make you fear or anger; prioritize your family’s needs first.”
— Dave Ramsey [30:10]

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4. Navigating Co-Signing Student Loans – Raquel from Los Angeles [67:00 - 88:25]

Situation: Raquel seeks advice on whether it's wise to co-sign a $4,500 student loan for her 21-year-old daughter, especially after her ex-wife already co-signed $75,000 for the daughter’s tuition. She is conflicted about setting financial boundaries and fostering her daughter's financial responsibility.

Key Points & Advice:

• Avoiding Mixed Motives: Dave cautions against borrowing from family for speculative investments like Bitcoin, emphasizing the strain it can place on relationships.
• Investment vs. Speculation: Highlights the risks associated with high-volatility investments, advising against using funds intended for long-term security on speculative ventures.
• Financial Boundaries: Encourages setting clear financial boundaries to prevent enabling irresponsible borrowing habits.

Notable Quote:

“Don’t change the quality of your relationships by borrowing money. Preserve family ties by maintaining financial boundaries.”
— Dave Ramsey [68:07]

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5. Managing Business Debt and Expenses – Randy from Springfield, Missouri [60:42 - 87:23]

Situation: Randy, a small construction business owner, has accumulated significant debt due to over-expansion and irresponsible business expenses, including a $60,000 truck and an investment property. With declining business performance, he seeks advice on managing his debts and restructuring his business.

Key Points & Advice:

• Asset Liquidation: Dave advises selling non-essential and high-cost assets, like the expensive truck and investment property, to reduce debt.
• Business Efficiency: Encourages focusing on core competencies, improving job costing, and learning to run a profitable business.
• Income Diversification: Suggests considering additional or alternative income sources if the business cannot sustain itself.

Notable Quote:

“You’ve been buying assets instead of working efficiently. Start selling unnecessary assets to regain financial stability.”
— Dave Ramsey [85:00]

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6. Investment Strategies for Older Couples – Meredith from New Mexico [55:44 - 88:25]

Situation: Meredith inquires if the four mutual fund strategy recommended by The Ramsey Show applies to her elderly parents, who are 75 and 72, own a home outright, and have $1.5 million in investments with a monthly income of $7,500 from Social Security and pensions.

Key Points & Advice:

• Investment Horizon: Dave explains that her parents are likely investing for the next generation, hence maintaining a diversified portfolio aligns with their long-term goals.
• Asset Allocation: Emphasizes the importance of not shifting entirely to low-risk investments based solely on age but considering the purpose of the investments.
• RMD Considerations: Advises that required minimum distributions (RMDs) should be factored into their overall investment strategy.

Notable Quote:

“Your parents are investing for the next generation. Maintain a diversified portfolio to ensure long-term growth and legacy.”
— Dave Ramsey [80:22]

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7. General Financial Advice and Strategies

Throughout the episode, Dave Ramsey and Jade Washall reinforce several core financial principles:

• Budgeting: Utilizing tools like the EveryDollar app to track and manage expenses effectively.

  “Get on a budget. Money can’t be saved if you don’t know how much you’re spending in the first place.”
  — Jade Washall [76:56]

• Emergency Funds: Building and maintaining a robust emergency fund as a foundation for financial security.

• Debt Management: Prioritizing debt elimination through strategies like the debt snowball and avoiding high-interest debt.

• Insurance: Regularly updating insurance policies to match current property values and avoid underinsurance.

• Investment Discipline: Favoring long-term, stable investments over high-risk speculative ventures to ensure sustained wealth growth.

Notable Quote:

“The tortoise wins the race every time. Slow and steady investing outperforms high-risk speculation.”
— Dave Ramsey [73:43]

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Conclusion

In "Don’t Throw Away Your Long-Term Security for Quick Fixes," The Ramsey Show underscores the peril of opting for short-term financial solutions at the expense of long-term stability. Through diverse caller stories, Dave Ramsey and Jade Washall offer pragmatic advice on budgeting, debt management, investment strategies, and emotional resilience. The episode reinforces the ethos that enduring financial health is achieved through disciplined planning, informed decision-making, and unwavering commitment to long-term goals.

For more financial insights and personalized advice, listeners are encouraged to visit www.ramseysolutions.com or download the Ramsey Network app.

Transcript

[Dave Ramsey]

Hey guys, this is Dave Ramsey from the Ramsey show podcast. If you're sick of money, stress and tired of living paycheck to paycheck, we're here to help. Check out our latest episode, streaming now on Amazon Music, brought to you by the EveryDollar app. Start budgeting for free today. Live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wealth, do work that they love and create actual amazing relationships. Jade Washall, number one best selling author Ramsey personality is my co host today. Open phones here at 888-255-2225. Jamie is in Dallas, Texas. Hi Jamie, how are you?

[Jamie]

Hi Dave. Thank you for taking my call.

[Dave Ramsey]

Sure. What's up?

[Jamie]

I've been a. I've been a big Ramsay fan since I was young. My dad taught me to be smart with my money and to listen to what you had to say.

[Dave Ramsey]

Well, thank you. I.

[Jamie]

My husband and I, our house burned in January and it was a total loss. The structure and all the content and it was paid for but it was severely underinsured. And so now we're in a situation where we haven't had a mortgage since 2019 but we only got 230,000 from the insurance and it's going to cost us roughly 525 to build a similar house.

[Dave Ramsey]

Oh no.

[Jamie]

And that's just kind of scary for me. I've never, we've never had a mortgage that large. I don't think, I mean I know that we can afford it. We have a nice income. We're currently debt free. But I'm just trying to make sure that I'm making the right decision.

[Dave Ramsey]

And you don't have any money?

[Jamie]

Well, we have the money from the insurance but I mean you don't have any.

[Dave Ramsey]

Go ahead. I'm sorry.

[Jamie]

We have about $5,000 in an emergency fund, but other than that, that's it.

[Dave Ramsey]

So what's in your retirement accounts?

[Jamie]

There is 47,000 in my retirement account.

[Jade Washall]

And what's your income?

[Jamie]

We currently, last year we made 180,000.

[Dave Ramsey]

So why do you have no investments if you've been debt free house and everything since 2019?

[Jamie]

We have not been debt free since 2019.

[Dave Ramsey]

I thought that's what you said.

[Jamie]

No, we haven't had a mortgage since 2019.

[Jade Washall]

Got it.

[Jamie]

We are just recently debt free. Anticipation. In anticipation of knowing we're fixing to have a substantial mortgage. When I got the money from the insurance, we paid off some debts that we had in order to free up some monthly income.

[Dave Ramsey]

So what kind of debt did you have?

[Jamie]

We had two cars and I owed on a mobile home that was my parents. So in 2019, my dad gave us this unfinished house and we bought my parents a single wide mobile home because that's what they wanted.

[Dave Ramsey]

Are they living in it?

[Jamie]

My mother is. My dad actually passed away the same week my house burned down.

[Dave Ramsey]

What a year.

[Jade Washall]

Sorry, man.

[Dave Ramsey]

Yeah, okay. Well, I mean the answer to the question is this is a horrible situation. I'm sorry. You've been through it and you're, you know, you're either going to build a $230,000 house or you're going to take out a mortgage for whatever over that you choose to spend. That's your options. But making 180, you should be able to reduce that and pay it off very quickly if you'll build some discipline that you haven't had before.

[Jamie]

Yes, I recently downloaded every dollar and I've already started working on that.

[Dave Ramsey]

Yeah. What about your husband?

[Jamie]

I. No, he's. He's with me a thousand percent. We've been married almost 20 years, so we've kind of grown up together.

[Dave Ramsey]

Okay, so this, this go round, I mean, because you did everything bass ackwards before, so you got no money.

[Jade Washall]

Where are you staying now? Jamie?

[Jamie]

We are currently living in a rental house because it's going to take roughly a year before our house is rebuilt.

[Jade Washall]

Have you. Okay? Are you okay?

[Dave Ramsey]

So if you did this on a 15 year fixed where the payment's no more than a fourth of your take home pay, it fits our guidelines. It's a shame you're having to start over. But you're not really starting over because you really never started because you were still using debt even though that nice thing you said at the beginning about Dave Ramsey or whatever, that was just bull crap because you were still doing the stuff. Okay? You're still in debt. You're carrying around two car payments and car payments and trailer payments and other payments and payments and payments. You had the house paid off, but the other stuff's still hanging around. So you can't go back to that world. You don't have that option. So now no more borrowing ever again. You take out a 15 year fix, it's no more than a fourth of your take home pay. You build your emergency fund of three to six months of expenses, you start putting 15% of your income away in retirement, and then you throw extra money above that out of your every dollar budget and pay off the mortgage in hopefully seven or ten years. How old are you?

[Jamie]

Okay, I'm 38.

[Dave Ramsey]

Okay. Yeah. So you know, at 48 you'll be back to a paid for property and you'll never lack insurance again. I bet you don't make that mistake again. And no more car payments. No more car payments. Now we're done.

[Jamie]

We've already decided that as well.

[Dave Ramsey]

Mama needs help. You can't borrow to help her.

[Jamie]

Correct.

[Dave Ramsey]

No more. It's over. Because you get this. You got this start now, but you're starting in the hole again and so we don't have to repeat this process.

[Jamie]

Okay.

[Dave Ramsey]

All right. That's a big deal.

[Jamie]

I understand.

[Dave Ramsey]

Okay. So yeah, if you do that, pretty.

[Jamie]

Much just start the debt snowball over.

[Dave Ramsey]

There is no debt snowball. You're starting the baby steps over because there's not a debt snowball because there's no debt except the house. The house is baby step six. So you're going to build your emergency fund of three to six months of expenses and you're gonna do that out of the 230 when you get off the phone. Then you're gonna start saving 15% of your household income into retirement. And you're going, well, you could even save everything towards the house until you close on the house. When you close on the house, put it off.

[Jamie]

I went over the route we were going already.

[Dave Ramsey]

Yeah.

[Jamie]

Every extra penny we have to pay down.

[Dave Ramsey]

Yeah, everything you can. Let's reduce the debt as much as possible. Get on a very tight budget on the building. Don't let the building budget get out of control. No, no scope creep here. Like, oh, I need one of those and I need one of those now. Just, just chill. Just get the house back up. You can add stuff to the house later. Don't let the scope creep hit you on the building budget. Then let's get, get in the thing and then, you know, put it on a 15 year fixed and then pay it off as early as you can and then that'll move you back into a position of strength. Always carry insurance, folks.

[Jade Washall]

And you need to be updating it every year. Like that's the thing, you know, it's hard to find insurance that is like complete replacement at the time. Like you've got to update it every single year.

[Dave Ramsey]

It's almost all gone.

[Jade Washall]

Right. And so as the equity in your home goes up, you've got to make sure that you're on top of that and changing that and updating everybody.

[Dave Ramsey]

That's everybody. You need to be looking, you need to be looking at what your coverage is every year, especially with values Increasing the way they've been increasing.

[Jade Washall]

That's right.

[Dave Ramsey]

And so coverage checkup, cost of construction increasing. Like cost of construction, which is one of the elements of value. That's right. Of market values, cost of construction. So, yeah, you've got to always update, update, update, update, and make sure you've got the proper amount of coverage to do full replacement. In the old days, you could buy a replacement policy.

[Jade Washall]

Yeah, I know. Yeah.

[Dave Ramsey]

And it would automatically whatever. Whatever the value of the house was. I did. That's what it is.

[Jade Washall]

Yeah.

[Dave Ramsey]

State Farm was the first one to do away with that because they were getting cleaned up, and State Farm's really interested in State Farm, and so they were getting their clock cleaned with this stuff, and so they changed it and then. And they have a large enough footprint in the homeowners insurance business that it started changing the whole business. And for a few years there, you could get some of the independence to right replacement costs, but hardly anybody will do it anymore. It's pretty much stated value now. And, you know, you got to go back and just revisit it every year and make sure you raise it. You'd think they'd come in and raise it once you raise it because it raises the premiums, but they don't. They don't follow up. Whoever it is, none of the insurance companies do. So make sure you get it. You get a review with your insurance broker every year and raise them. And that's. That's what Jamie face there. That's so sad. Jamie, I'm so sorry y'all are facing that. This is the Ramsey show. Okay, you guys. 54 of Americans say it's a challenge to save on groceries without sacrificing quality. That's why I'm thrilled to tell you about Aldi. Aldi gives you simpler, better food choices that can save your family nearly $4,000 a year. From the daily essentials to organic produce, fresh meat, and more.

[Jade Washall]

More.

[Dave Ramsey]

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[Jade Washall]

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[Dave Ramsey]

That's a lot of Dave.

[Jade Washall]

Holy smokes.

[Dave Ramsey]

That's a lot of Dave. I'm just saying.

[Jade Washall]

Wow, that's awesome, Dave.

[Dave Ramsey]

It is. And it's a little much, but it's, it's huge. I mean massive. So there you go. Thank you to Amazon Music. We appreciate it. You guys heard me say this over and over. Small business owners are the backbone of the American economy. This book is the exact system we've used to teach people to grow their businesses like we grew this one. From a card table in my living room to where it is now. You can listen to this book and the Ramsey show on Amazon Music Unlimited, which now includes Audible. Go Start listening. Today, Abigail is with us in Baltimore, Maryland. Hey Abigail, welcome to the Ramsey Show.

[Jamie]

Hi Dave. I feel really grateful to get to speak to you today. I really look up to and admire you.

[Dave Ramsey]

Well, thank you. How can we help today?

[Jamie]

So I've recently hit a really hard time. I unfortunately have like no income coming in and I am a single homeowner and I have a lot of bills that I'm responsible for and I just kind of feel at a loss. I don't really know what to do and I have been praying a lot and I don't know, something in my gut just told me to talk to you and that you might be able to give me some good advice on how to navigate moving forward.

[Dave Ramsey]

Why do you have no income coming in?

[Jamie]

So a few months ago my co worker on the clock got us into a car accident and my doctors think that that is triggered some type of like autoimmune or like auto inflammatory disease. So I'm seeing a specialist in a little while. But I've been having really horrible pain like to the point where I struggle with just ordinary everyday tasks. And also the medications I take, you know, I can't drive on them.

[Jade Washall]

Is it something that impedes you from doing some sort of like a work from home or something where you're not leaving your home and not having to drive?

[Jamie]

I definitely could do a work from home. I just am unable to find anything. Also the one, you know, the things that I can find, it's just, it's not really even enough to cover my, my bills.

[Jade Washall]

What was your previous employment? What'd you do before?

[Jamie]

So that's Kind of a long story. Before I was actually in management, I did, like H Vac, so I was an operations manager. Unfortunately, the owner was very unprofessional and inappropriate, so I had to leave the company. And then I had another incident with sexual harassment, so they terminated me. I did file for unemployment, and I. And then I actually got a blessing to do some political initiatives in the swing states last year. Once that ended in November and I came back home, I was just kind of doing side gigs like Doordash, just to kind of make ends meet until I could find something. And then I took the first job that I could find, which was in housekeeping. And then that's when I got into the accident, and I've been out of work since.

[Jade Washall]

Okay, well, the. The answer to the equation is income, right? You're a homeowner. You're on. You're a single person. So there's no other money coming in. So the answer to that is what kind of employment can you do with your current limitations? Right. And it's out there. I think that you're gonna have to spend more time kind of deciding what is it that I wanna do? What is my background? Is it management? Is that really what the area is? And kind of seeing finding that one area, and that's where we're looking for jobs. Because, yeah, if you're not looking for the right thing in your specialty, maybe it won't pay enough. But we know that there's remote work out there. And so my guess is that you maybe did a couple and it didn't pan out and you got discouraged. Am I wrong or am I right?

[Jamie]

I mean, you're. You're kind of right. You know, just right now, like, the job market kind of sucks. You know, I do the name of.

[Dave Ramsey]

That company that just hired you right now that could we work from home. There's two or three of them.

[Jade Washall]

Yeah, there's several of them.

[Dave Ramsey]

So you can know that George was always quoting it. And I don't know the name of it.

[Jade Washall]

I don't know the name of his, but there's a lot out there. I mean, there's several. Like, you could try, like, something like Arise. I don't want to say I'm not giving them a endorsement, but there's lots of them out there where you can do different customer service jobs from home.

[Dave Ramsey]

By the end of the day.

[Jade Washall]

Yeah, by the end. Yeah. Literally, though, when I was getting out of debt, the one I use was called arise.arise.com. you go on there. All you need is a headset and a computer, and you're working almost instantly. And so it's out there. I think that's just what you've got to do to get started. And let me also encourage you that some money is better than no money.

[Dave Ramsey]

How much is your house payment?

[Jamie]

So right now it's $889, but that's going to go back down in October. So basically my escrow there wasn't enough because the. The taxes went very low. Added that.

[Dave Ramsey]

How much other debt. How much other debt do you have?

[Jamie]

I think about like 13. 13,000.

[Dave Ramsey]

So it doesn't take a lot for you to stay afloat.

[Jade Washall]

Are you behind?

[Jamie]

Not yet, but I'm very close to it.

[Dave Ramsey]

A couple of grand a month and you're afloat?

[Jamie]

Yes, yes, but that's the problem, which is getting that. That money. So.

[Dave Ramsey]

No, it's not. It's not really a problem. I mean, she just told you what to do. There's online work you can sign up for with a headset by the end of the day, and you can make. You can make two grand a month.

[Jade Washall]

Yeah. You make 100%. You can.

[Jamie]

Okay.

[Dave Ramsey]

Yeah. That's what you've got to do. So you said. You said you were praying about this. So are you involved in a good church?

[Jamie]

I am, yes.

[Dave Ramsey]

Have you contacted them about sitting down with you and coaching you and counseling you?

[Jamie]

So I did speak with a pastor during the summer last year.

[Dave Ramsey]

I'm talking about right now. You're in the middle of the soup. So here's what I think I heard, and you can tell me I didn't hear it, and I'll be just fine with that. Okay. As I heard your whole story, I think I heard someone who has been hurt somewhere in the past, and that hurt has stolen some of your confidence.

[Jamie]

Yeah, I think he might be right.

[Dave Ramsey]

Okay. All right. And I don't want to go into that on a broadcast. That's not fair to you. Nor is Dr. John here, who's the only one qualified to go into it. Not me. But I just could smell that in the way you told your story. And because you've had so many different things come at you in a fairly short period of time. So I want you to sit down and unpack some of that hurt with your pastor. Why don't you call them today and set up a counseling appointment? If they've got a counseling department or they've got pastoral counseling that they provide. And it may just be a good listening ear, but it may be someone that is More trained too, I don't know. But I think if you unpack that while you jump on a headset and work 40 or 50 or 60 hours a week sitting at a computer or walking around, whatever you're able to do with the limitations you've got from home. But you've $2,000 a month keeps you, keeps you alive right now. That's not your long term goal, it's not your career aspiration. But until you can get your health back and sit down with your pastor, you know, I just want you to have some eating money and some shelter money coming in. Food, shelter, clothing, transportation, that's all I'm worried about right now. And so yeah, our assignment would be to jump online, check, arise and their competitors, other people that do what they do, we're not endorsing them. And find something you can plug into the computer and sit there without driving and without. And you can, you can check in and check out on those type of things if you're hurting. And also jump on the phone and get the pastor and let's sit down and start to unpack some of that pain, kiddo. And we can go from there and appreciate you being in our audience. I think you're gonna have a good year. You need to get some of this in your rearview mirror to do it though. I understand what you're facing. It's scary. This is the Ramsey Show. SA this show is sponsored by BetterHelp. All right, you've heard me say it a thousand times and I'm going to keep saying it. You're worth being well. And listen, therapy can help. I see a therapist and let's be honest, a lot of you should too. But let's be real. Taking that first step to see a therapist can feel overwhelming. Maybe it's the time. Maybe you have some preconceived notions about therapy. Maybe it's the cost. But we spend money on gym memberships, organic growth groceries, essential oils, Little league practices, tracker watches. But for some reason, when it comes to our mental and emotional well being, we hesitate. Your mental and emotional health are just as important as your physical health. And the good news, Better help makes therapy more affordable and convenient than ever.

[Jamie]

It's online so you can talk with.

[Jade Washall]

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[Dave Ramsey]

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[Jamie]

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[Dave Ramsey]

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[Jamie]

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[Dave Ramsey]

That's betterhelp H-E-L-P.com DeLoney folks, if you want to help us out, we can use your help. We would appreciate it. How would you do that? Well, you would subscribe to the show, click the subscribe button, the follow button. If you have a share button on what you're watching or listening on, click the share button. Or just cut the link and send it to a friend by email and go. Hey, check this out. If you're listening on talk radio, tell somebody to listen the time of day you listen. When the Ramsey shows on, we'd appreciate that. That five star review is helpful too. All of that stuff moves the needle in the old algorithms on the Internet and it causes people to learn about this show that might not otherwise learn about it because it moves us to the front of the line when you do all of those things. So subscribe and follow all that stuff. It's a big deal and we really appreciate it. Jordan is in Spokane, Washington. Hi Jordan, how are you? Good.

[Jamie]

How you doing, sir?

[Dave Ramsey]

Better than I deserve. What's up?

[Jamie]

Hey, so I'm just calling. I've been watching show last night. I would like some help maybe figuring out negotiation taxes for collectors. I've had a few things in questions for a couple years now that I've been paying on, but a repo car hit a collection company and he's just coming at me hard. He wants like five grand down to make it like a monthly, hey, lower monthly payment I can afford or 800 bucks a month or a year and a half. And you know, I'm a sole provider of a family of four and so that kind of makes it difficult.

[Dave Ramsey]

Yeah. So what do you make, Jordan?

[Jamie]

About 92, 000 upwards? I make footage. So really just kind of what the construction.

[Dave Ramsey]

Why did you get behind?

[Jamie]

So I found a new job, construction fell behind where I was at and just kind of lost some hours and you know, stuff like that. I can make excuses all day, but really just being irresponsible with my money.

[Dave Ramsey]

Okay, that's a fair, that's a fair answer.

[Jade Washall]

Is the repo the only thing or are there other collections?

[Jamie]

I have some like checking accounts that I overdrew going into collections and some like Xfinity bills and insurance bills, just stuff like that.

[Jade Washall]

Okay.

[Dave Ramsey]

Mm. Okay, well, let's go back to the beginning and then I'll answer your question. Okay. The beginning sounds like this. I want you to make a list of everything you're going to put on your budget. And I'm going to give you the order by which you attack it because you've been disorganized. Now, we're going to go the other extreme. We're going to get extremely detailed, extremely organized. Like, this is the detailed blueprint of the building you're building over there at the construction site. You with me?

[Jamie]

Yes, sir.

[Dave Ramsey]

Okay. All right. So the first rule is you take care of your own household first. Now, what that means is the number one thing in your budget before you buy anything else is food at the grocery store. No food in restaurants. When you're in collections, you're broke. You don't get to go to a restaurant. A restaurant is a luxury. Mama be at home. You're a sole income provider. So mama be cooking. Mama be home. Economist, coupon clipping. She's going to be carrying all the economic weight she can carry while she's got those babies. Okay?

[Jamie]

Yes, sir.

[Dave Ramsey]

All right. She gonna sign up for that? You okay with that? She okay with that? Yeah.

[Jamie]

I think we come to an agreement.

[Dave Ramsey]

Yeah. All right. No. No eating out, no vacations. You're broke people. Till you're not broke people. You don't do that anymore. Food is first before you buy anything else, you feed your little kids. Before we talk about any idiot at the repo company, he's way down on my list of things to worry about for you. Big deal. That you get these priorities straight. Second thing is you take care of water, lights, gas. You have. You have the ability to operate your household with the utilities. Are you behind with any of them?

[Jamie]

Just the electrical bill, but I have a plan to get that caught up.

[Dave Ramsey]

Okay, you have a new plan. You're going to catch it up in the next check before you do anything else other than food.

[Jamie]

Yes, sir.

[Dave Ramsey]

It's the most important thing other than food. Lights, water, basic utilities. I don't give a crap about the cable bill. You can cut that junk off. You can live without Netflix. I'm not talking about that. I'm talking about electricity, lights, water, gas. However, you're heating your house, right? So your family is now warm. And they have lights and water, and mama stove works so she can cook and you've got food. This is a big deal. Once you've. This is because this emotionally sets the table for you to fight these goobers that you've got on the other end of this thing. Okay? The next thing you do is you pay your rent or your mortgage. How much is that?

[Jamie]

My mortgage is 1655.

[Dave Ramsey]

Is it current?

[Jamie]

I've gotten a trial repayment plan, so I paid three months to get caught up and put the equal number on the back end.

[Dave Ramsey]

Okay. Until you do that, I don't care if repo man ever gets another dime. You keep your house. Repo man can jump in the freaking creek.

[Jamie]

Yes, sir.

[Dave Ramsey]

Tell him to bite. Tell him I said to bite me.

[Jamie]

He also threatening to sue me by the time.

[Dave Ramsey]

Oh, just have. Tell him. Have at it. Just get in line, buddy. Right now I'm getting my mortgage current where my babies live. You get to. You get to be at the back of that line. Bite me. No, you don't get any money until my babies are fed and they have a place to live and the lights are on. That's your first job, man.

[Jamie]

Yes, sir.

[Dave Ramsey]

Because you're not going to make it emotionally if you, if you keep putting these idiots at the front of the line because they threaten you. If he wants to sue you, tell him to have at it. We'll just file chapter seven bankruptcy. He'll get nothing. Bite me. I'm serious. Okay. All right. This is how you got to talk to him. And you got to get it straight in your head. What's most important he makes his job is to make you angry or afraid. And that moves him to the front of the line. I want you angry and afraid of nothing because your kids are fed, your house is current and your lights are on, and mama's got food in the pantry. Then, then you live to. You can throw back your shoulders and now we can fight like a man. But right now he's got you against the wall with his arm, with his hands around your throat. Emotionally, this is what these guys do. It's their job to get you on your heels. And I'm getting you back flat footed with your fist doubled up again. You ready?

[Jamie]

Yes, sir.

[Dave Ramsey]

All right, so you gotta. You got a good strong base here. And do you have a car payment?

[Jamie]

Currently, yes, sir.

[Dave Ramsey]

Currently?

[Jamie]

Yes, sir.

[Dave Ramsey]

How much is it?

[Jamie]

231.

[Dave Ramsey]

Okay. Is it current?

[Jamie]

Yes.

[Dave Ramsey]

Really? I'm shocked. Yeah, Good. We one down, baby. All right, we keep it current then. Okay, so if you've got a car to drive and gas in your car, you're not going out to eat, you've got food in the. And you got a place to live. Do you feel emotionally more stable? That's where you got to get to. That's. We call that building the four walls. Then and only then do we negotiate with other collectors. Okay? Now when was the Car repo. That repo man's bothering you about.

[Jamie]

February.

[Dave Ramsey]

And who. Who is the money owed to?

[Jamie]

Associated Credit. Okay, Collection company. Yeah, they bought the. Question, like the. The car. Original car company. Yeah, I was buying the car from. Yeah, they told me they come to a settlement with me right after they auctioned the car, but literally, right off the bat, they just sold the thing to the auction.

[Dave Ramsey]

Yeah. So here's what you tell the guy. You call him back. You can call him if you want to, or you cannot call him. I don't care. But I want you to call him and I want you to say, hey, I talked to my financial coach and he just told me to file bankruptcy. So here's what you're going to get. Nothing. Bite me. You get nothing. Not a zero. That's what you got, okay? Or you can shut the crap up and stand over on the sidelines until I get my family caught up, and then I'll come over and make you a cash offer. But these days of you telling me how my household runs are over, Bubba. And hang up right after you say that. Don't even negotiate with him. Just hang up. What you're doing is you're resetting the emotional table here to where we now know who's in charge of your money, and it's you, not him. You following me?

[Jamie]

Yes, sir.

[Dave Ramsey]

These guys are specialists at emotional terrorism. It's what they do for a living. Okay? Because if he comes and sues you and takes your paycheck, you can file chapter seven bankruptcy. He'll get zero. I'm not recommending that because I think you can settle for this idiot, to the. This idiot for probably four grand, and he'll go away. Do you remember what the deficit was on the repo?

[Jamie]

Yeah, I only got 55. 550 bucks.

[Dave Ramsey]

No, no, the total. The total owed to them after the sale of the car is what?

[Jamie]

I can't remember.

[Dave Ramsey]

Okay, but he wants 5,000 up front and then $800 a month, right? So it must have been 10 or 15 grand.

[Jamie]

Yes, sir.

[Dave Ramsey]

Okay, so they'll settle for a quarter on the dollar. So he'll probably take about four grand for this whole thing and walk away once you get him back on his seat. But now he's standing over the top of you. Hey, listen up. Everyone is at risk of identity theft. I don't care if you're a hermit living off the grid, listening to the show on a battery powered radio. All of your data collected by every company you've ever done business with lives online. Your bank, your doctor's office, retailers, the apps on your phone, the gas station where you have loyalty rewards, they all store your info online, making them ripe for a cyber attack or data breach. That's why I've been telling people for almost 25 years they need an ID theft protection plan, and the only one I've ever recommended is from Zander Insurance. They monitor your personal and financial info, even your home title, and take over the work if you become a victim. It's the most thorough and affordable plan out there. I even have it for my family and our entire team. Visit Xander.com or call 800-356-4282. All right, Jade. It's worth unpacking a little bit, this idea of dealing with collectors. Okay, number one. Number one, if you have the money laying around to pay a bill, you owe the bill legitimately. Pretty simple. Pay the bill, pay what you owe.

[Jade Washall]

Yeah. Otherwise you're just carrying around a mental load for no reason.

[Dave Ramsey]

Yeah.

[Jade Washall]

Why?

[Dave Ramsey]

And so I have them. I have a friend who's going through cancer treatments, and they've got $5,000 worth of bills laying there already early in the. In the process and asked me, should I pay these bills? And I went, well, you've got like a half a million dollars in your investment account. Yes, you should pay the bill. Well, but what should I. Should I put them on? No, you don't need to put them on payments. You have the money. Pay the bill. Yeah, it's not. Well, I don't know. I'm worried. Well, don't worry. It's $5,000. You have 500,000. You're okay. Pay the bill. Yeah, you know, or if you've got $10,000 and it's $5,000, pay the bill.

[Jade Washall]

Otherwise it's just taking up space.

[Dave Ramsey]

Well. And you owe. You owe the bill. Hello. Ethically, it's a thing. It's a. It's a debt. You owe. Okay, that's thing one. Thing two, then is once you don't have the money, most companies would rather have something than nothing.

[Jade Washall]

That's right.

[Dave Ramsey]

I have a company, oddly enough, that has the word integrity in their company title, that owes me $45,000 from 25 years ago. I'm not bitter or anything, but I do remember it just because the irony. The company was called integrity, and they didn't pay me. And so if they call me up today and given the fact I'm probably never going to see that money ever, tax, but if they call me up today and offer me $5,000 a settlement for that 25. I'm going to take it so fast, it's going to be unbelievable. Just because I'm going to be happy. I just found $5,000 on the sidewalk. You know, that's the way companies look at this. And so if you've got a credit card bill that you haven't paid for three years, they probably have sold that to a debt buyer for pennies on the dollar, usually around a nickel on the dollar. And you can probably settle that for around 20 cents on the dollar. If you're broke and you don't have the money to pay your bills, you can settle now. Collections agencies, there are several situations with those. The best of the bunch are the local hometown collection agency. They're people that your kids play ball with. Their kids, they live there and they're just trying to collect a bill that is legitimately owed and they're calling you. And most of them, they'll put pressure on you. They'll say, you need to pay your bill, you need to be honest, they'll challenge you. But most of them are pretty decent folks at the core. Okay, all the way. On the other end of the spectrum, and it goes downhill from there, is a credit card collector. Credit card collectors, 100% are scum. If your child is a credit card collector, you should call them and tell them to stop and get a different job. Cleaning out septic tanks is noble. Credit card collectors, there's nothing. They lie, they cheat, they steal, they break federal law every single day. They're the worst of the worst. And their job, or a repo guy, like this other guy calling this other guy, their job is to get the person on the phone. And if you are owed money, most people have some sense of honor, some sense of integrity, that if I owe this money, I feel bad because I've not paid it. 99% of the people walking around that aren't psychopaths have a sense of I owe this money and a little bit of shame that I haven't paid it. And their job is to use that and get you emotional. Now they have two possible emotions they can evoke from you, fear or anger. If they can get you doing either one, your brain, your critical thinking skills in your brain quit working because you're pissed off or you're afraid. You're in fight or flight and your brain coats and you go into lizard brain mode. And then you will move them from their correct position of priority in your budget and you'll move them ahead of your children's food. You A logical person will, with good critical thinking skills, would never deny their family food or lights or water while paying the repo man. It's not logical. The only way you get there is if you become afraid because they're going to sue me. Oh, no. No, they're not. They're lying. You can tell they're. You can tell they're lying. If their mouth is moving, they're lying. They're lying. They make up stuff. They can sue you, but they never do. Because if they sue you, they have a 98% probability you're going to file chapter seven. They're going to get zero. No. What they're going to do is harass you to God's green earth to the end of it. They're going to harass you and harass you to make you angry or afraid so that they can reprioritize your budget and put you at the front. It's so absurd that they even use bizarre names. I had a lady call me. Her name was Mrs. Savage. That was not her name.

[Jade Washall]

That's not real.

[Dave Ramsey]

That's not her name. Another one called me. Call me. Her name was Mrs. Baskerville. As in the Hounds of Baskerville. I mean, they make up cr. It's unbelievable. And they sit around in their little cubicle land laughing about all of this like it's some kind of bad movie. And. And meanwhile, I got a guy trying to feed two kids that's working construction over here who's worried more about the repo man than he is the fact that he's behind on his light bill. The only way that happens is you become emotional. So I'm trying to teach you right now. Once I got this, I'll tell you when it happened. American Express called, owed him $1164. It was 40 years ago, and I still remember the amount. Here's why I remembered. The guy calls me. He pissed me off. I hung up on it. My wife calls about two hours later and she's crying. My wife never cries. I mean, she's got the constitution of a Navy seal. She does not cry. So hillbilly woman, if she cries, somebody died. I mean, you know, it doesn't. She's not a crier. She's crying and she goes, he said. He said. He said, why would I stay with a man that wouldn't pay his bills? And I was kind of thinking the same thing.

[Jade Washall]

Well, you weren't laughing then.

[Dave Ramsey]

Oh, I got so pissed you weren't laughing. The guy was in Jacksonville, Florida. I called him. I threatened to Drive down there and whip his butt. And I got so mad I couldn't breathe. And I paid him. Who won? He did. Except the fact that now, 40 years later, I have trashed American Express regularly on the air for 40 years. So maybe he didn't win after all. At least that company didn't win for having people like that working there. Because they have one of the worst, most egregious collections departments of anybody. If you do business with American Express, God help you. That's awful. You're asking for it. They're a pitiful company. I still believe that. Not just because of that one event, but I've dealt with them so many times over the years since then on behalf of clients, and they're horrible. But that's just one example. There's many, many examples. But I figured it out then. And then I went, oh, wait, this is a game and I'm losing the game. And so I just started turning it back on them. Yeah, when they would call, I would just, I would just start laughing at them and just start messing with them and go, dude, I'm like, Mrs. Baskerville. You're like a well read collector. Who knew that? I mean, you like read books and stuff. You can do sentences that string together. That's pretty amazing. I'm so proud of you.

[Jade Washall]

Yeah.

[Dave Ramsey]

So here's what you're going to get, Mrs. Baskerville. Nothing. Nothing, honey.

[Jade Washall]

Nothing, honey.

[Dave Ramsey]

Honey, you get nothing. Good try, though. Call back someday. Hang up.

[Jade Washall]

Yeah.

[Dave Ramsey]

And just. You just start having fun with it because you realize it's a game. For them, it's. And for you, it's life or death. And you can't let them make it life or death or you're going to lose the game.

[Jade Washall]

Listen, I've had, I've had some choice words for one, 800, pay me. I'm not, I'm not proud of it, but I've had. I've had them.

[Dave Ramsey]

Yeah, well, they got you mad.

[Jade Washall]

Yeah, they did.

[Dave Ramsey]

They get you mad. They get you upset. They get you because you're trying. You're trying to be honorable. You're trying to have integrity. You're trying to do the right thing. You got no money. The guy, no money, okay? He's broke. A car got repo. Your car does not get repoed if you're rich. Okay? It's a pretty simple formula here. And they will settle car repo deficits for somewhere around a quarter on a dollar all day long, every day. Lump sum, no payments. Never pay a collector payments, ever. That's how they get the most out of you. Pay them a lump sum, settle it for a dime a quarter on the dollar and get it in writing that that's a settlement in full. Or don't give them any money. And do not, for God's sakes, give them electronic access to your checking account because again, they lie. They will clean you out. So there's your credit sharks in suits. We used to have a lesson in financial Peace University a thousand years ago.

[Jade Washall]

I remember that.

[Dave Ramsey]

Credit sharks and suits, that was the lesson. And there was a lot of stuff in that little rant there that was in that lesson. But it's what we used to do. I mean, I used to sit personally when I was doing financial counseling, call these people on behalf of the clients and rip them to shreds and get the deals done. But we, you know, now we teach you how to do it and that's fine too. So that way you'll never have to do it again and you never have to do business with companies like American Express again. I've never even accidentally done business with with American Express ever again, ever, ever again. This is the Ramsey Show. You want to know more about something you heard? All right, Dave, you have some strong opinions? Possibly? Yeah, I think so. Okay. Because you really prefer credit unions over big banks? Well, credit unions, for one thing, are non profit, which means that the members, the customers own the credit union. So any profits that the credit union makes goes back into customer pricing. So you get better interest rate on savings, cheaper checking and so on, that kind of thing. And what's more important than that though is the fact that the customer is the owner, changes the spirit on the credit union. So I find very few credit unions that aren't very customer centric. Well, and I think we have found one that is incredible and that's fair winds. They are an incredible credit union that is really out with the heart to help the customer. They're the right kind of people with the right kind of values and they've done a really, really good job with customer service and the deals that they're offering. The Ramsey Tribe is incredible. Yeah, absolutely. And I love that the things that we teach they so line up with. And you're right, their customer service is unbelievable. Winston and I just signed up and we got an account. Yeah. And I'm not kidding, it took less than five minutes. It was so user friendly. Like the step by step approach was unbelievable. And then the next day my phone rings and it says Fairwinds on my phone. So I answered it and talked to someone there and they said, yeah, they give calls to every new customer. And so again, they just really care about your experience and I, I so, so appreciate that.

[Jade Washall]

Plus anything that you can do at.

[Dave Ramsey]

A traditional branch you can do with [e-mail] or on their app and you'll have free access to over thousand ATMs. You guys know how much I hate banks in general and so for me to do this is a big deal. Talk to our friends at Fair Winds and check out the combined checking and savings bundle that they created just for the Ramsey tribe. You guys, it's incredible. Yeah, you guys, it's so easy to join Fairwinds no matter where you live. So go to fairwinds.org Ramsey live from the headquarters of Ramsey Solutions, it's the Ramsey show where we help people build wells, do work that they love and create actual amazing relationships. Jade Washall, number one best selling author Ramsey personality is my co host. Today Hannah's in Los Angeles. Hi Hannah, how are you?

[Jamie]

I'm doing fine. I'm glad I'm giving some advice on this subject that we are sad to be into but it happened 2016 went through your university program and in 2017 we became debt free and was purchase our mobile home debt free completely and but since then we have obtained three major personal loans and 13 credit cards which has put us into a hole of $46,000. Yesterday we did talk to a loan officer that has helped us, has got us into. We didn't pay for it, we haven't bought it yet but we were able to obtain a loan of $29,000 that will put us into a debt relief loan and that's why I'm calling. I'm going to give advice about it. And granted what concerns me is that every loan, every loan and credit card, we have had 100% in our paying the bills on time. I don't know how we've done it.

[Dave Ramsey]

Why, why did you go, why did you go into debt after you were out of debt?

[Jamie]

Because we like paying off the credit cards. To pay off the credit cards. To pay off the credit card.

[Dave Ramsey]

I thought you said you were debt free 100% earlier.

[Jamie]

We were.

[Dave Ramsey]

Why did you even have a credit card?

[Jamie]

Because of certain emergencies that came up.

[Dave Ramsey]

You had an emergency fund?

[Jamie]

We did, but then we had to go into, we had medical bills and things like that. It came up and we granted, we went to the university but we didn't have.

[Dave Ramsey]

Yeah. What's your household income?

[Jamie]

Well, right Now I make $1,600 a month. My husband makes $1,500 a month in test only Social Security. And that's all income.

[Dave Ramsey]

So you have Social Security income. How old are you guys?

[Jamie]

I am 69. My husband is 71. I just turned 72. Excuse me.

[Dave Ramsey]

So you have a $3,100 income and you have a mobile home in Los Angeles?

[Jamie]

Actually, we're in Hemet. The Los Angeles. We go there a lot to see my grandkids. That's where they live. So we're constantly traveling.

[Jade Washall]

How were you paying for the travel?

[Jamie]

Through gas. I mean, my husband is like a handyman for a friend of ours, and my husband's constantly getting paid to do it. He does odd jobs, so that's kind of what we do, what he does. So he does get paid a little bit every month, which isn't a lot, but it does help with a lot of our bills, which is not a lot of bills, but we do have them.

[Dave Ramsey]

And you have $46,000 in debt and you have a paid for mobile home?

[Jamie]

Yes.

[Dave Ramsey]

You live in the mobile home still?

[Jamie]

Yes.

[Dave Ramsey]

Okay. Do you own the land under the mobile home?

[Jamie]

Yes. Yes.

[Dave Ramsey]

What is all of that worth?

[Jamie]

We paid $70,000 for the mobile home at the time.

[Dave Ramsey]

What is it all worth today, the land and the mobile home?

[Jamie]

175.

[Dave Ramsey]

Okay.

[Jamie]

135,000.

[Dave Ramsey]

Okay. And I'm still confused. This is not in Los Angeles. It's where.

[Jamie]

It's in Riverside County.

[Dave Ramsey]

Wow. Okay.

[Jamie]

Yeah. We live 100 miles from my family, but we're. But that's where everybody lives. And so we're constant. Our church in LA county is. But we wash it a lot. Most of the time online, but.

[Dave Ramsey]

Okay. And you ran up $46,000 in credit card debt.

[Jamie]

Yes. Yeah.

[Dave Ramsey]

And someone's offered you a $19,000 loan?

[Jamie]

29.

[Dave Ramsey]

A $29,000 loan. Okay. They want the. They want the trailer as collateral.

[Jamie]

No. No collateral. I. I'm just a debt relief.

[Dave Ramsey]

Oh, it's debt relief.

[Jade Washall]

Yeah.

[Dave Ramsey]

No, it's not a loan.

[Jade Washall]

Where I'm. Where I'm worried about you, Hannah, is you're still. You're. You're still looking to debt as the solution for this. I don't. You haven't learned your lesson that debt is the issue. And Financial Peace University didn't get it through to you, and you're still. No, no, no.

[Dave Ramsey]

You're still borrowing money.

[Jade Washall]

You're still borrowing money.

[Dave Ramsey]

Call me about borrowing $29,000.

[Jade Washall]

And so. So even if we said to you today, even if. Even if we. Even if we said to you today, hey, sell this land and mobile home and take 46, 000, pay everything off and then take the little bit and get yourself a modest. Put it as a down payment on your next thing we. You'd get yourself in the same trouble again. And so there's something that's got to change in your mind in order to make this right.

[Dave Ramsey]

You have to have a new commitment to have an income that's large enough that you live on less than it.

[Jade Washall]

That's right.

[Dave Ramsey]

And you've got 4, 3, 100 and. But you can't even pay the payments on what you've got 3100 and eat and buy gas to run back and forth, see grandkids that you're describing. So I don't know what your husband's making on top of the 3100 as a handyman, but he needs to be making at least double that. I mean, living in LA county on 3000 bucks is pretty tough.

[Jade Washall]

And I don't know how long they've been retired from not working job jobs. You know what I'm saying?

[Dave Ramsey]

69, 71. But yeah, I don't know. I don't know. But Hannah, the situation is. You don't. What we keep hearing, what Jade's saying is we don't have math that is sustainable here because the pattern keeps you spending more than you have coming in. And that's not a pattern. That's sustainable.

[Jade Washall]

And you're telling yourself. You're telling yourself a lie, which is you're telling yourself we always made payments, we always did it on time. We all. You're still.

[Dave Ramsey]

I don't know how we did. Like it's a miracle. You know, that's not a miracle. It's just you paid the stinking credit cards before you do anything else, and that's how you did it. And then you barely ate and then you barely bottle of gas money and your husband swung a hammer enough to get it done.

[Jade Washall]

Yeah.

[Dave Ramsey]

Or turned a wrench or whatever he was doing. But still, I mean, that's so. Yeah, I think what we need to do is consider the trailer and the land. I don't know if that's sustainable. I don't know what the cost is on all of that. Where you're living is one of the most expensive areas in America to live. And it's near your grandbabies. I heard that part. I get that. But you got. You cannot borrow your way out of debt. So no, do not take the $29,000 loan. Yes. Increase your income, get on a detailed budget where every dollar has a name before the month begins. And the two of you find enough work to do on top of your Social Security to get this 46,000 cleaned up. So an example would be if you did $2,000 a month, you would be done in 23 months towards the debt.

[Jade Washall]

Yeah, that's right.

[Dave Ramsey]

And that's an example. You, if you did twice that, you'd be done in 10 months. So, you know, that's the kind of thing I'm looking at. What kind of a sprint can I do with odd jobs, part time jobs, full time jobs, whatever, for a short period of time to get this in the rear view mirror. And then you've got to keep this in your rear view mirror. And you can't say, well, we had an emergency. You have an emergency. You got to figure out what to pay for it because you can't borrow money. No more credit cards. You have to stop it because you're going to wake up at 81 in the same situation and then 91 in the same situation. Because the math you keep and the, and the excuses that you're using to get into debt, those are not sustainable. That's exactly what Jade's pointing out to you. So you can still do it, but you got some tough choices ahead of you, kiddo. This is the Ramsey Show. Hey, you guys. Health insurance costs are only moving one way and that way isn't down. And if higher costs, costs aren't enough, the wait times to see your doctor are longer. And it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's a better way to take care of healthcare costs. CHM programs start as low as $98 a month. So learn more today and [e-mail] budget. That's chministries.org budget. What if one night could change your future? You don't have to stay trapped in the same old patterns that have left you stuck in your money, relationships and your life. You can break the cycles that have kept you from moving forward. Dr. John DeLoney and I will show you how live the Money and Relationships tour is starting this week. Join us in Louisville, Durham, Atlanta, Phoenix, Fort Worth or Kansas City. It's down to the wire so grab your [e-mail] tour that's ramseysolutions.com tour folks. If you didn't know, we have the Ramsey Network app that you can download and watch and listen to all of our shows that the Ramsey Network puts on for free. It's completely free. And the third episode of the daily show that we do here is only on the app or on talk radio. So you can do, you can get that always by listening and watching on the Ramsey app and a lot of other things that are available there. You can search different, different questions there and you can leave us a question. Today's Ramsey Network app question is from Richard.

[Jade Washall]

Yeah, he says my ex wife and our 21 year old daughter want me to co sign a 4, 500 student loan. My ex has already co signed $75,000 for our daughter's tuition. I offered to give her 2,000 and have her pay the rest to give her some skin in the game, but that was quickly dismissed. My daughter doesn't associate tuition with actual cash and she's amassed all this debt without a degree. She drops classes on a whim and having to use her own money might make her more responsible. I'm buying my dream car today with cash and I feel a bit like a schmuck. Good word. Am I right to make and take this stance with my daughter? Okay, so I, I wish I had you on the phone because I want to know more. But part of me thinks I like the idea. Yeah, I do think that students should have some skin in the game, whatever that means, whether it's they're spending their time getting scholarships, whether they're working part time, whatever that is. I do think that that's really health healthy. Second part of that is, yeah, during the baby steps there is a step devoted for saving money for college. We never say how much that is. We never say that parents have to pay all of tuition that's not required. So on that note, Richard, you were not required to pay for all of your daughter's tuition. I like the fact that you're trying to come up with ways where she pays part and you pay part, but I think that you're feeling like a schmuck. I'm not saying you are a schmuck. But I think you're feeling like that because you're like hey, I'm about to buy my dream car. I don't know what it costs, but dream cars, it's probably at least 30 or 40000 is my guess. @ least. And you're probably thinking you could have maybe done more in the past is what I'm thinking. And that would be true. But you're here today. I also think there's like four angles on this. I also think that your daughter and your ex, you can't control them and they're going to do what they're going to do. And that's also a really tough position. Yeah.

[Dave Ramsey]

So honey, your mom and I aren't married for a reason because your mom's not a very smart woman and I'm not gonna participate in her stupidity. And so I would love to teach you a better way to live and a better way to get your education. And I'll be happy to put some money towards your education. Really as much as you need, as long as you're doing it in a way that is wise. When you're borrowing money and dropping classes on a whim, none that is wise and I'm not going to participate in that. And if you feel like a schmuck because your ex wife is a travel agent for guilt trips, she doesn't get a vote anymore. That's why we call her the ex.

[Jade Washall]

I think he feels like a schmuck because it's a shoulda coulda, woulda like. It sounds like he's.

[Dave Ramsey]

Well, he doesn't like telling his little daughter no.

[Jade Washall]

I don't know, it sounds like he was fine too. Cuz he was like I'm not giving you this 4,500.

[Dave Ramsey]

No, he said he's not sign. Co signing.

[Jade Washall]

No, he's not co signing. But he also didn't offer to give her the cash. The 4,500 cash.

[Dave Ramsey]

Yeah. Cuz she's not. Not wise.

[Jade Washall]

She's under the.

[Dave Ramsey]

She's under the direction of a not a very smart woman known as her mother.

[Jade Washall]

Yeah.

[Dave Ramsey]

So yeah, I mean it's. No, I don't. I have no idea why the guy feels like a schmuck. There's a lot of possibilities.

[Jade Washall]

I'd also love to know how worried about your daughter's been in school.

[Dave Ramsey]

Your ex wife doesn't get a vote. And as long as your, your daughter is like a little puppet hand puppet for your ex wife and her, she's opening her mouth and your Ex wife is coming through your dog being channeled through your daughter's lips. She still does. She doesn't get a vote either then. And so if I can sit down with her and separate her from this stupidity and have a clean conversation as an adult, I'll help her. But I'm fine not helping this kid.

[Jade Washall]

I'd also.

[Dave Ramsey]

I don't feel like a schmuck at all. Just. No, I'm not gonna participate. You're doing cocaine. I'm not giving you the money for cocaine.

[Jade Washall]

She also might need some better counseling because it sounds like.

[Dave Ramsey]

Yeah, sounds like her mother's an idiot.

[Jade Washall]

Yeah. You guys didn't set her up. She doesn't know her options. College might not be first. If she's already taken out 75, 000. She's probably already been in college four years and she's still not doing anything.

[Dave Ramsey]

And she's not even, you know, without a degree.

[Jade Washall]

Without a degree.

[Dave Ramsey]

Run up all this data. Yeah, yeah. And she drops classes on them. Well. Does not associate tuition costs with cash. And this kid's a. You know. And that's why. That's why this woman's X. So X means you don't get a vote anymore.

[Jade Washall]

Yeah.

[Dave Ramsey]

You lost your vote.

[Jade Washall]

It's like.

[Dave Ramsey]

It's like a felon. You don't get to vote anymore. It's X. What do you call it?

[Jade Washall]

That. Yeah. I don't. I don't know enough about it, but I'm looking at this. It sounds like just looking at the daughter, forgetting about the ex for a minute. Sounds like school is not really the daughter's deal. She's been in, it sounds like at least four years.

[Dave Ramsey]

She's a party girl.

[Jade Washall]

Yeah.

[Dave Ramsey]

She's over there drinking. She didn't worry about class.

[Jade Washall]

Yeah.

[Dave Ramsey]

She's gonna beer pong. Beer pong and dates. That's what she's doing. Am I wrong?

[Jade Washall]

No, you're not wrong. No, you just said beer pong. Like, you know, like I know what it is a bit about.

[Dave Ramsey]

Wasn't invented back then. I've. I've come into that knowledge since. But. But. Since college. But. Oh, my gosh. Yeah.

[Jade Washall]

Yeah.

[Dave Ramsey]

All right. Randy's with us. Randy's gonna help us, I hope. Randy's in Springfield, Missouri. Hey, Randy. What's up?

[Jamie]

Dave?

[Dave Ramsey]

Jay, thank you for taking my call real quick. I was recently listening to your show on the way to a networking event at College of the Ozarks, and on.

[Jamie]

The walk in from the parking lot.

[Dave Ramsey]

Was telling my co worker all about.

[Jamie]

Your show and lo and behold, I.

[Dave Ramsey]

Walk inside and there's three giant Dave Ramsey posters up on the wall. And I said, hey, that's the guy. Wow. So now he's a. He's a listener too. Wow. But I spoke there one time a few years back. That's a wonderful place.

[Jamie]

Yes, it is.

[Dave Ramsey]

My question is, my wife and I recently got out of debt everything but the house. And I'm wondering if employee stock purchasing program is a good vehicle to fund things like emergency fund and sinking funds. No single stock. Because single stocks are too volatile for those things. There's no single stock on the planet I would put my emergency fund in.

[Jade Washall]

I agree.

[Dave Ramsey]

Okay. So even if you sell it right after it's purchased, the math doesn't work out. No, very seldom. Here's the deal. Because what happens if you pull up your company stock? They give you a 15% discount. That's regulation, right?

[Jade Washall]

Right.

[Dave Ramsey]

Yeah, that's standard. Everybody gets that. So if you pull up the company stock and look at the 52 week high and 52 week low, it generally is greater than a 15% swing back and forth. So you could lose the money as easily as you could make money on it. It's just not. It's too volatile. It's not a game I want to play. And if you find a stock that goes up every single week for 52 weeks, you found a very unusual stock that you happen to work for. So. But the 15% discount is not enough for the volatility for the risk that you get. If you had a 50%, yeah, you probably make some money on that and you could roll in and out of it in 90 days or 30 days or whatever the window is. You have a certain hold time on it when you get it. You can't just sell it the next instant. But most of the time anyway. But so yeah, no, I just don't play with a single stock game. I don't play the single stock game even if it's the company you work for.

[Jade Washall]

I agree.

[Dave Ramsey]

Too much risk. Too much risk. Particularly for your emergency fund or sinking funds particularly. Those ought to be just high yield savings account. Kelsey's in Amarillo, Texas. Hi Kelsey, how are you?

[Jamie]

Hey, Dave. I am blessed. How are you?

[Dave Ramsey]

Better than I deserve. How can I help?

[Jamie]

Hey, so long story short, we live next door to my in laws. I have a handicapped brother in law that will end up being living with my husband and I after his parents are unable to take care of him and we need a bigger house because of our situation, we can't move Too far away. But a house across the street is available and we can afford it. But my question is, should we do it or am I making a decision that's from the heart or is it logical? Does that make sense?

[Dave Ramsey]

Yeah. You need a bigger housewife. Why?

[Jamie]

Well, because we already have two kids and if we end up having to. His parents are in their late 60s, early 70s, and if we need to take my brother in law in, we'll need a bigger house because right now we only.

[Dave Ramsey]

That would be like a decade from now.

[Jade Washall]

That's what I was going to ask. Do you see a reason that that's going to happen really soon?

[Jamie]

Well, my husband's parents. Parents died in their 70s, early 70s. We're just trying to be prepared.

[Jade Washall]

Are these people sick? Are they sick?

[Jamie]

No.

[Jade Washall]

I don't know.

[Jamie]

Not that we know of.

[Jade Washall]

I think you're jumping the gun and I think you see an opportunity because there's a for sale sign in the house next door across the street. Across the street? Yeah. And you're thinking, oh, here's our chance. It feels very premature to me. I'm not gonna lie.

[Dave Ramsey]

If you want a bigger house at baby steps 4, 5 and 6 and it's still 15 of your take home pay or 25 of your take home pay on a 15 year fixed and you still have a game plan to get it paid off, that's fine. But I don't think you use the reason that you were using to go get a bigger house. Because you don't really need a bigger house today. But if you want one that's different, you could go do it mathematically and it still would be inside the baby steps. But the fact that you might get another person in the next 10 years. No, we don't need a bigger house for that.

[Jade Washall]

Foreign. Hey guys, what's up? It's Jade Warshaw. And look, if there's anybody who knows about student loan debt, it's me. My husband and I had $280,000 of it, but we were able to dig ourselves out. And you can too. If your student loan payment and interest rate are burying you, refinancing could be the solution. Now, I'm. I recommend contacting my friends at Laurel Road today through their online application. You can get an initial rate quote in less than five minutes. And if you have a more complex situation, you can schedule 30 minutes to talk to an actual human being. Thank goodness Laurel Road makes it simple. There are no fees involved and you could save thousands over the life of your loan. Remember, you should only Refinance if it makes sense in your situation. So if you're looking for a low rate or a shorter term so that you can pay off these student loans fast, talk to my friends at Laurel Road about their competitive interest rates and how you could actually get a lower rate by signing up for autopay. Listen, nobody's coming to save you from your student loan debt. If you want it gone, you can't mess around. Go to LaurelRoad.com Ramsey to find out more about student loan refinancing. Again, that's LaurelRoad.com Ramsey Hey, George Camel here. So you're thinking about buying or selling your home? It's exciting, but there's a lot to think about and all those decisions can feel overwhelming.

[Dave Ramsey]

Well, here's the good news.

[Jade Washall]

You don't have to tackle the process alone.

[Dave Ramsey]

Ramsey's real estate home base is the.

[Jade Washall]

Place to find all of your free tools and resources for help to get.

[Dave Ramsey]

Prepared to buy or sell your home with confidence.

[Jade Washall]

You'll find calculators, start to finish guides.

[Dave Ramsey]

A podcast, and even an in depth.

[Jade Washall]

Video course hosted by yours truly.

[Dave Ramsey]

What's not to love? So if you're ready to take the.

[Jade Washall]

Next steps toward your home goals, go to ramseysolutions.com realestate that's ramseysolutions.com realestate.

[Jamie]

Jade.

[Dave Ramsey]

Wash off Ramsey personality is my co host today. Raquel is with us in Los Angeles. Hi Raquel, how are you?

[Jade Washall]

Hi folks, I'm great. Thank you.

[Dave Ramsey]

Thank you guys for taking my call.

[Jamie]

How are you guys?

[Dave Ramsey]

Better than we deserve. What's up?

[Jamie]

Amen. So the question I have for you is my husband and I are 33 and we are possibly considering buying our first home. We would like to put an offer in but we have the possibility of.

[Jade Washall]

Borrowing 110,000 from my in laws in.

[Jamie]

Order to not touch our last nest.

[Jade Washall]

Egg, which would be a bitcoin that hopefully will increase in value in the next few years.

[Jamie]

We can use that bitcoin, but we.

[Jade Washall]

Are wondering whether or not it would be wise and we would like your advice.

[Dave Ramsey]

So you're brand new to the show.

[Jamie]

Brand new. Okay, well, not brand new today.

[Jade Washall]

Ramsey, I know that you're not a big bitcoin.

[Jamie]

I've been listening to you on and.

[Jade Washall]

Off my whole life, since, you know, my mother.

[Dave Ramsey]

So you kind of expect me to tell you to sell the bitcoin?

[Jade Washall]

Yeah, we kind of.

[Dave Ramsey]

We kind of be. That'd be fairly predictable if you've been listening at all. Yeah. Okay.

[Jade Washall]

For different reasons though, I Mean, first off, yeah, bitcoin's not a great investment. We would never suggest it.

[Dave Ramsey]

It's like it's, you know, speculation at best. It's not an investment.

[Jade Washall]

And the second reason is if you have the money, use your money. Why take, why take a loan and risk a relationship being tainted by this right from the in laws, especially when you've got the money today.

[Dave Ramsey]

Let's reframe it for a second. Raquel, here's an interesting way to look at it.

[Jamie]

It.

[Dave Ramsey]

If you didn't have a bitcoin, would you go and borrow 110,000 from your in laws to buy a bitcoin?

[Jade Washall]

No.

[Jamie]

For sure. No.

[Dave Ramsey]

That's what you're doing.

[Jamie]

Okay.

[Dave Ramsey]

By not selling it and instead borrowing to do the other thing is the exact same movement. You just skipped a step and acted like it didn't happen. But in essence, you have borrowed the money to buy the bitcoin since you could have sold it and not borrowed the money. You see what I'm saying? Yeah, from a decision framework perspective. And so, yeah, that reveals how much risk is involved here. So a couple things we've discovered is there's a difference between investing and speculating. Investing is when you have a five year or ten year time horizon with an investment that has a track record, a history of 10 years or so or 30 years or whatever. For instance, if you're buying a rental property, you would say, okay, I can look at properties in that general area and say over the last 20 years or 30 years, they've done this. And I have a holding period of 5 or 10 or 20 years on a rental property that's an investment, a mutual fund that's been open 10 or 15, 20 years and you say the track record is X. And based on that, I'm gonna buy it not for a short hold, but for a long hold. When you buy something for a short hold to flip it, that's called speculation. It's not called investing and it's not called domestic. And so you're giving the wrong names to these things. And that tells us that you put the wrong weight on it. And the fact that the only money that you have is a high risk speculative investment. See, I almost did it. A high risk speculative item is very dangerous for you. That's point number one. Point number two is the borrower is slave to the lender. When you borrow money from someone, you by nature change the quality and the texture of the relationship with them. Your Thanksgiving dinner tastes different when you owe your in laws 110 grand.

[Jade Washall]

Right.

[Dave Ramsey]

They look at you going on a cruise differently when you owe them 110 grand than if you don't owe them 110 grand. And even if they don't say anything, you can feel the eyes bearing into the back of your soul. You know what I'm talking about? Right. And so don't change the quality of that relationship. Number one, like Jade said. Number two, don't have your nest egg in something that's built for speculation. If you want to speculate on bitcoin, it would be a small percentage of your portfolio because you're trying to make quick money on it. It's not a long term investment. Hor. And that doesn't make. So if you want to speculate on it, I'm not going to yell about it, but where I get upset about bitcoin is when you've got everything you own in it.

[Jamie]

Right.

[Dave Ramsey]

And you're counting on that. And if you go back and look at what short track record we do have on bitcoin, it's extremely volatile.

[Jade Washall]

Right.

[Dave Ramsey]

So I mean, you like went to Vegas with your nest egg.

[Jamie]

Well, this would be like the last.

[Jade Washall]

Thing we have our assets and our savings in mostly other things.

[Jamie]

But this bitcoin is the last thing we're.

[Jade Washall]

Oh, we could keep it because it's speculation.

[Dave Ramsey]

Okay, so how much, how much do you have in your real nest egg? You called that real?

[Jade Washall]

Yeah, in our real like savings, which would be cashing out most of our.

[Jamie]

Like gold and silver.

[Jade Washall]

And like that's mostly where our money.

[Jamie]

Is, is gonna, is 250,000.

[Jade Washall]

Do you have 250,000 in gold and silver? Yes, we do.

[Dave Ramsey]

And how much is the bit in the bitcoins? 100.

[Jamie]

Yes. And then the bitcoin is just like a hundred.

[Jade Washall]

And that's why.

[Dave Ramsey]

So you could, you could put, you could cash all this and have like 300,000 towards the property for the.

[Jade Washall]

Yes, for the down payment.

[Dave Ramsey]

That would be a really good move.

[Jade Washall]

Do you have anything in just like mutual funds or just like, you know.

[Jamie]

We'Re, we're not, we're newer to mutual funds, but.

[Jade Washall]

And we know, we listen to the Ram show, but we haven't.

[Jamie]

We mostly are like the tactile, like gold and silver.

[Jade Washall]

What bothers you about them? What, what, what spooks you about mutual funds? I'm just curious.

[Jamie]

Nothing's. Nothing spooks us.

[Jade Washall]

Just don't think that like, my husband's the administrator. I don't think he's just like gotten.

[Jamie]

To the point where he's like, okay.

[Jade Washall]

Let'S sit down and like, actually, you know, like invest in them and buy them. Because we've just done everything else.

[Dave Ramsey]

Like, you know, you've done, you've done ultra high risk things that are extremely volatile in all three categories compared to more standard investments. And the tortoise wins the race every time. I read the book, the tortoise and the hare. And you've got everything over in hair, hair, hair bucket instead of in the tortoise bucket. And the people that build wealth are not the ones that take as much risk as you all are taking. So if I could talk you into it, and I doubt I can because I've got the wrong person on the phone and the other guy's the one doing it. But if I could talk you into it, Jade and I both instantly said, sell it all.

[Jade Washall]

Yeah, that's right.

[Dave Ramsey]

And pay a huge down payment on this house and get you something that's stable. I mean, owning a home in Los Angeles, freaking great investment. A great investment. And that's the direction we would go if we woke up in your shoes. I don't know if I can get you there in one phone call.

[Jade Washall]

Yeah, well, yeah, she didn't seem like she had any aversion to it. It sounded like the spouse was kind of the one.

[Dave Ramsey]

Yeah, he's the administrator. Yeah. And so that's. Yeah, he, he's the one that's doing all this stuff, so he's not going to let go of it as quick as she did.

[Jade Washall]

But I have a, a thought. And I don't know if I'm. I mean, they're 33. They're trying to buy their first house. House. And my guess is they're trying to make a lot of money fast. It's get rich quick 100.

[Dave Ramsey]

Yeah.

[Jade Washall]

And they've been lucky so far. But that is the word.

[Dave Ramsey]

Yeah.

[Jade Washall]

Look.

[Dave Ramsey]

Yeah. Because again, if you chart gold, silver and bitcoin and you look at the peaks and the valleys that, that, that jump up and jump down, that represents risk. And you put an overlay on that. Like with real estate. Real estate would look seriously boring if you put an overlay on that with a good growth stock mutual fund. Compared to the peaks and the valleys, you just see these huge mountains and huge valleys on bitcoin, gold and silver. And you would see mutual funds going just real steady over like a 10 year period of time. And you'd be dizzy with the craziness of gold and the craziness of bitcoin. And so it's just a high risk speculative thing. It's not a good investment for that reason. If you want to play roulette, if you want to play Texas hold'em, if you want to speculate, if you want to do house flips, if you want to do day trading of single stocks, those are all things that fall under the heading of speculation, which speculation is not gambling, but it's more akin to gambling than it is investing. You know, we use the Vegas metaphor, but it is closer to a Vegas roulette wheel deal than in terms of risk profile, of course, than standard investing. And, and that's why we would always take you there. So it's a, it's an interesting call. Thank you. Rock L. Yeah, and, and thanks for clarifying with us where you were. But yeah, we. I don't own any bitcoin. I don't own any gold. Except one watch. That's it. I. And I'm, you know, I own real estate that's worth probably 600, $700 million worth. Worth. And I don't buy gold and I don't buy bitcoin and I don't speculate. I don't day trade stocks and I don't do, I don't do quick flips. I'm just a long term boring tortoise. And it's worked really, really well. This is the Ramsey Show.

[Jade Washall]

People ask me all the time, george, what's your number one money saving hack? Glad you asked. Nothing makes me happier than helping another frugal friend. So here's the hack. Get on a budget.

[Dave Ramsey]

Seriously, how are you supposed to save.

[Jade Washall]

Money if you don't know how much.

[Dave Ramsey]

You'Re spending in the first place?

[Jade Washall]

And that's what makes the EveryDollar budgeting app a game changer. With EveryDollar, you'll get a clear picture of your spending. And from there, it's easy to see where you can get more intentional cut.

[Dave Ramsey]

Back and save more money.

[Jade Washall]

So how much money are we talking here? Well, the average EveryDollar budgeter frees up $395 in their first budget.

[Dave Ramsey]

That's the hack.

[Jade Washall]

And if you ask me, I think you're way above average and you'll save even more. So what are you doing still listening to me? Go download the EveryDollar app for free.

[Dave Ramsey]

And start saving more money right now. Our question of the day is brought to you by. Why refi if you've got defaulted student loans that don't let you gain any momentum? We get it. No judgment. But also, nobody's going to compel you out. So take charge. If you've got a defaulted private student loan, get in touch with the people at Y Refi. They offer refinancing at a low fixed rate, help you get current and then get out of debt. That's the letter Y, R, E, F, y dot com. Ramsey might not be in all states.

[Jade Washall]

All right, today's question comes from Meredith in New Mexico. She says does the suggested four different mutual funds strategy apply when a couple is older? My parents are 75 and 72 and have $1.5 million in investments plus a paid off house and no debt. Their monthly income between Social Security and pensions is 7, 500 and they're also withdrawing monthly RMDs from their investments. They have no debt and a paid off home. So just to catch people up to speed on the four investment types, Dave, that's the teaching around here. You invest across four Growth, growth and income, aggressive growth and international. And so that's what we've been saying for years here. In this case, you know, I want to know more about the 7, 500. Is that enough for them to live off of? What's their lifestyle like? Are they traveling a lot? Basically, Are they looking to invest more? It sounds like they're really only living off interest, like they're not touching the actual nest egg. So, Dave, I don't know that I would tell them that they have to continue to invest. I suppose if they wanted to, they could still to use that strategy. But the biggest thing that I'm thinking about is are they putting this money, let's see, they can't put it into a Roth because it's not.

[Dave Ramsey]

Well, I don't know that she's asking about investing. Does the suggested four different mutual fund strategy apply? When a couple's older, she wants to maybe put it in something else. The million and a half, Is that.

[Jade Washall]

What you drew from that?

[Dave Ramsey]

That's what I get from that, yeah. Instead of not, you know, because of course the asset allocation model says that as you get older you should move towards bonds and money markets, which I disagree with the asset allocation mod. I think it's a bad theory. So here's the reality, Meredith. These people are not really running this million and a half investment portfolio for themselves. They're running it for the next generation.

[Jade Washall]

That's right.

[Dave Ramsey]

They're never going to touch it. Except for the RMDs that they have the required minimum distributions that they're taking off. They're living on that and on the 7500. And so they've been, they're actually at 75 and 72, investing it for the next generation. So they have a long investment horizon for you. She said it's her grandparents or. No, her parents.

[Jade Washall]

Your parents.

[Dave Ramsey]

Yeah. They're investing it for you. And so I'm 64. I will not move anything out of those four before I die. I'll be in those four categories all the way to death because I likely will never touch it. And so I'm actually investing it for Righteous Rachel, Denise and Daniel, my kids. And so they will get that upon my death or upon mine and Sharon's death anyway. So, you know, that's what that million and a half is doing. So it's going to grow better across those four than if you start dumbing it down using this stupid asset allocation thing. And that's what she's heard about, I'm sure, is to change the mix of the portfolio.

[Jade Washall]

Interesting. I'm wondering also about how much of the 1.5 million is just in traditional.

[Dave Ramsey]

IRAs versus says Investments. I don't know.

[Jade Washall]

Yeah.

[Dave Ramsey]

Yeah. I don't know.

[Jade Washall]

I feel like that'd be the thing I'd be wondering most about.

[Dave Ramsey]

I would have it. I'd have that 1.5 across the Foreign Mutual Funds. I do have that 1.5 across the foreign mutual funds and I'm slightly younger than them by about 10 years. But still same, same theories apply in that situation because they're not going to draw this all out in the next five years. I promise you. They're not going to draw it all out in the next five years. They're multi millionaires. They're in great shape. They can do anything they want to do without even touching it. I mean they already have a hundred $150,000 a year income and so they're fine. They're fine. And that's what I would do. But that, I think that's the essence of the question. I could be wrong. So. Good question. Thank you for writing that in. Luke is in Harrisburg, Pennsylvania. Hi Luke, how are you?

[Jamie]

Hi Dave.

[Dave Ramsey]

I'm good. Thanks for taking my call.

[Jamie]

Sure.

[Dave Ramsey]

What's up?

[Jamie]

I own and operate a small construction business. My wife is a stay at home mama and we got two kids and.

[Dave Ramsey]

Got some bad treads going on.

[Jamie]

I think past couple years I've acquired a serious, pretty serious amount of debt and we ate through all our savings.

[Dave Ramsey]

Why you're not making money?

[Jamie]

Not enough, I guess.

[Dave Ramsey]

And what are you spending it on?

[Jamie]

I have, I have quite a bit of. Well, I had last Year I had quite a bit of business expenses that were, you know, fairly irresponsible, and it kind of, you know, drove me down. And also, the business doesn't have a real clear plan at this point, which.

[Dave Ramsey]

I think is hurting my productivity a lot. So I don't.

[Jamie]

You know, my hours aren't.

[Dave Ramsey]

What do you build? Just general remodel construction. I do a lot of. I do some of my own jobs, and I do. What did you buy? Just tools.

[Jamie]

Yeah, tools. And I brought a truck for the business. I already had one, but I upgraded it, and that was a pretty big expense.

[Dave Ramsey]

Yeah. What'd you buy? What kind of truck?

[Jamie]

It's a Chevy Silverado. 2500.

[Dave Ramsey]

Brand new.

[Jamie]

No, it's a 20.

[Dave Ramsey]

So 60 grand?

[Jamie]

Yeah.

[Dave Ramsey]

Okay. Sell it.

[Jamie]

Okay.

[Dave Ramsey]

The guys in the construction business that make real money drive $5,000 trucks.

[Jamie]

Yeah.

[Dave Ramsey]

They don't prove their construction ability with the truck they drive. They prove it with a hammer. They swing. Yeah, right. The guys that have been doing business for years. You know the one I'm talking about? Their grizzle. Yep. Their hands are gnarled. They can build anything. They can see stuff in their head that nobody else can see, and then they can make it come to life. You know those guys? Oh, yeah, yeah. I do, too. I grew up in the business, and they're. They're incredible human beings, but they drive all junk trucks because they don't give a crap what you think about your truck.

[Jamie]

Yeah, right, right.

[Dave Ramsey]

You get rid of the truck. What else did you buy?

[Jamie]

Well, I bought an investment property last year. Okay.

[Dave Ramsey]

You're broke. You don't need investment property. Yep. I'm feeling so much lighter already. I was heavy for a minute, but now you're getting lighter.

[Jamie]

I have one question with that investment property. I have a renter in there that got it. That I have a lease sign. Should I wait until that lease is up next January?

[Dave Ramsey]

No, if you can sell it. If you can sell it to another investor. Sell it. What do you owe on it? I owe 110.

[Jamie]

It's worth 150.

[Dave Ramsey]

Okay. See if you can get somebody to buy it. Maybe somebody wants a renter till next January.

[Jamie]

Gotcha.

[Dave Ramsey]

Or you could pay the renter to leave if you put 60 grand in your pocket or 40 grand in your pocket.

[Jamie]

Yep.

[Dave Ramsey]

And pay the rent. Pay the renter 5,000 bucks to go away. Yep. I do that because you. Man, you've been buying crap instead of working. Working.

[Jamie]

Yeah. And that, you know, on that note, do you.

[Dave Ramsey]

Do you think I should reach you.

[Jamie]

Know, start from scratch with my business, try to specialize in something to get my hours up. Or do you think I should kind of take a hit to my pride and just get a full time job and scale the business back to like.

[Dave Ramsey]

A part time job? I would give, I would give yourself six months of new zeal and enthusiasm to learn how to run a business. And during that six months, if I can't get my act together on running the business properly, then I'm going to go to work for somebody that knows how to run one. Because I know several people doing what you're doing that have a net taxable income of in excess of 300,000 a year. You have the ability to make a lot of money, but you've got to learn how to run the business.

[Jamie]

Yeah.

[Dave Ramsey]

And that involves like you're estimating has to be on your times, how long is it going to take to do the job? And you're estimating on the cost to do the job. The cost of the materials, the cost of the labor to do the job has got to get so dialed in that it's almost perfect. Then you're delivering the job to the customer on time and on budget and they're going to love you and they're going to send you so much business you won't be able to beat people off with a stick and you'll make so much money. But you need to learn to run what's called a job cost, which is a P and L on each job, a profit and loss on each job that you learn your estimates and where you're off on your other estimate and then you can correct and get your estimates dialed in. If you could push, push that button for six months, I think you could get this moving. If you can't, then it's okay to go to work for somebody. There's no shame in that. And go watch them learn and learn from them on how to do it and do it, you know, do this on the side. But yeah, you've been, you went in business and then you went and bought a bunch of stuff and you need to sell all that stuff to get your life back.

[Jade Washall]

Right on.

[Dave Ramsey]

There we go. This is the Ramsey Show. No matter what you want to do with.

[Jade Washall]

Hey, what are you still doing here?

[Dave Ramsey]

You know the rest of the show's.

[Jade Washall]

Happening on the Ramsey Network app, right? So you got to jump over there to continue watching. You can download it for free. Just go to your app store, type in Ramsey Network, it's completely free and I'll drop a link in the show notes to make it easy for you.

[Dave Ramsey]

So if you're watching on the app, you're in luck.

[Jade Washall]

But if you're watching anywhere else, this.

[Dave Ramsey]

Show is over for you.

[Jade Washall]

So jump onto the app and let the fun continue.

[Dave Ramsey]

All right, go on now.

[Jade Washall]

Don't make it weird. Okay, I got nowhere to go, so you need to go.

[Dave Ramsey]

Okay, bye. Bye, now. All right, this is getting weird over there, guys.

[Jamie]

What do we do?