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- [00:05]
Dave Ramsey
Brought to you by the EveryDollar app. Start budgeting for free today. 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. I'm Dave Ramsey, your host, Dr. John DeLoney. Ramsey personality number one best selling author, Ph.D. in counseling and host of the Dr. John DeLoney Show, a big hit on the Ramsey network. He's my co host. Open phones at 888-825-5225. Danny is in Orange County. Hey Danny, what's up?
- [00:47]
Caller
Hey Dave. Big fan, first and foremost, big fan of. No, thank you. I just have a quick question here. So I've been married with my wife for about 10 years at this point. It's going to be an October 10 years milestone. Really happy about that. But I don't think we're on the same page on finances. And so recently we had this hard conversation where I told her I want to get, you know, a different account so that I can manage the money a little better. She's been, she's been managing the finances for the amount that we've been married but at this point we're earning a lot more than what we did when we first started. You know, when we first.
- [01:36]
Dave Ramsey
So how did the conversation go after you told your wife? She sucks at this.
- [01:43]
Caller
She didn't really say much. I just hope you don't take this. Yeah, she, she, I said I hope you don't take this into, you know, with any offense. But I think. Yeah, right. And she just stood quiet and we kind of went on with it. And so I said I'm gonna look into it. And I just, I've been looking for which would be the best bank to open a new account with but I haven't really done it. And yesterday I, you know, going through the different credit cards that we have and coming to find out that whenever credit card sits back, you know, into the debt. So I guess to give you a little bit more context, we tried doing the second baby step, the snowball effect. And we were doing well.
- [02:32]
Dave Ramsey
No we weren't. You were. And she was doing whatever she wanted.
- [02:37]
Caller
That's true.
- [02:38]
Dave Ramsey
Yeah.
- [02:39]
Caller
I'll say.
- [02:40]
Dr. John DeLoney
What is, what is she so bad at? That brought you to a point where you sat down and said I need to, I feel so unsafe with our family finances. I need to get our, my own account.
- [02:54]
Caller
So I'm earning now six figures. Which you know, she's been a great, a big part of. You know, she supported me and Now I'm earning 110k on a yearly basis.
- [03:07]
Dr. John DeLoney
I would, I would. I'm tempted to stop you right there and just say y' all are earning six figures.
- [03:12]
Caller
Okay, yeah, that is correct. We are earning 110. And she has a part time, so she brings in about 20, 20k a year with a little part time that she has. And so we're doing a lot better than what we used to. And we're still kind of living paycheck to paycheck, even with, you know, our rent.
- [03:34]
Dr. John DeLoney
I know, but here's what I'm asking. What is. What does she do now that y' all are making 130 grand a year together? What has she done that has. Has told you you need to protect this family by getting money away from her and handling it all yourself?
- [03:56]
Caller
Like I said, so I trusted that the finances would go, I guess, good, but she's even had to use a credit card to pay our rent.
- [04:08]
Dr. John DeLoney
It tells me I don't have a budget, dude. Like, it tells me you'll have good ideas, but y' all aren't sitting down on the same. When you stay on the same page. Like, you'll sit down at the beginning of every month and decide, here's what's important to us, here's what we have to do, and then here's the debts we're going to pay off, and in this order. And if y' all aren't having that conversation, it like, we hear from people all the time who make way, way, way more money than you, but they're still in a mess financially. So it's not fair to say or it's not honest to say, quote, unquote, we're doing better, you're making more money. But if y' all are still spending like, like wild. It doesn't. You're not doing any better.
- [04:40]
Dave Ramsey
You're fixing the problem with the wrong tool. Honey, the tool of opening a separate account is not going to fix the problem. It's going to make it worse. So here's what we need to do instead. Okay? You called to ask, so we'll tell you because we love you. All right? 83% of the millionaires that we have surveyed. This is actual data. Say that they work hand in hand as teamwork with a cooperative spouse towards our dreams. Less than 50% of the general public say that, and they're not millionaires as a result. So what we know is, is that couples that work together on their finances in detail, one of them being more nerdy, one of them being more of a Free spirit. One of them being a saver, one of them being a spender. But they have an agreement on the goal, an agreement before the month begins on the steps we're going to take with our money this month. Towards that goal, those couples that are aligned end up with two things. Longer, happier marriages and a higher probability of building wealth. Separate accounts works against that, not with that. And so you're harming your future relationship and you're harming your probability to build wealth if you go the route you're asking about. So I'm going to beg you not to do that for your sake. Now what do we do instead? Instead we're going to put you on the every dollar budget and you're going to go and apologize to your wife for insulting her after she's been doing the bills for 10 years. And now you woke up because you're making a little bit more money and decided you didn't like the way she's doing it. Before that she was fine, she was on her own and you know, no, that's not okay. So I'm sorry I insulted you. You were doing the best you could and I was trying to do something else and I was wrong where I was going. So instead I. Honey, what we're doing is we're going to sit down and we're going to do this together. We're going to put in the EveryDollar app every dollar of our income before the month begins. There will be no more credit cards, there will be no more debt and we are going to use this wonderful income that we have to build a wonderful life and a wonderful future. And so we're going to sit down together. Every dollar is going to have an assignment before the month begins and then we're going to stick to that. Both of us are gonna pinky swear, spit shake. We have a marital contract that that's our game and we are going to do that. Both of you have a vote and both of you have an agreement. And both of you are grown ups. No fit throwing, no 4 year olds. I work so hard, everybody works hard. Please call me the wambulance instead. Get together, work on this stuff together and you will see a change. John.
- [07:14]
Dr. John DeLoney
Yeah, that's it. And the only other thing I would add is you can't put rent on the credit card if y' all have gone that extra step and cut up all the credit cards. If you have a backup plan in this situation, you're going to use it every time. And so you got to take that ability. Y' all proven to yourselves. You can't get there if that's an off. If you have this off ramp. So you got to get rid of the off ramp. You got to cut up the credit cards.
- [07:34]
Dave Ramsey
Yeah. Lobsters are the only things that survive going backwards. That's it.
- [07:38]
Dr. John DeLoney
So we're going to cut them up and then we're going to. That's going to force us every month to sit at the table and figure this thing out.
- [07:43]
Dave Ramsey
Yeah, that's the deal, man. Well, maybe shrimp. Yeah, maybe crawdads. But crawdads, crustaceans.
- [07:49]
Dr. John DeLoney
But let me say this right. And Dave said this the best, man. It's easy when you've been struggling financially. When you cross that magic number, whether it's 75 grand or six figures or 500,000, it's to suddenly think you're better than you're not. And you said it when you started the call. She's been a great support staff for you. So con, be conscious of your language. This is yalls money, this is yalls debt. And this needs to plan out of this mess. And again, Dave, I don't know another way that it works.
- [08:21]
Dave Ramsey
No, you have to be together working this, not separate accounts. It doesn't work. I mean, everybody thinks that's some kind of individuality or something. If you want individuality, don't get married, okay? Geez, you're a horrible spouse when you do that. Not you, but everybody that does it. So hang on. We're going to sign you up for every dollar. Advanced version for free. We'll pay for it, help you guys get on the right track. You can do this. Danny.
- [09:02]
George Kimmel
Dave, we got a lot of calls on this show where life happens. One day someone's healthy, they're working, providing for their family, and then a curveball hits.
- [09:10]
Dave Ramsey
You know, we hear it all the time. A car accident, a cancer diagnosis, a heart attack. And suddenly everything changes. Yeah.
- [09:18]
George Kimmel
And that's why you've always said that having term life insurance from Xander is essential because it protects your family if the worst happens.
- [09:24]
Dave Ramsey
Yeah, that's right. You need 10 to 12 times your income in coverage. No gimmicks, no whole life junk, just straightforward term life protection. But there's another piece that people often overlook, and that's long term disability insurance.
- [09:41]
George Kimmel
Yeah, it's important to understand the difference between them. Life insurance steps in when you die. Disability insurance steps in while you're alive, but can't work. So it replaces a large part of your income so the bills still get paid while you get back on your feet now.
- [09:55]
Dave Ramsey
If your employer gives you free disability insurance, great, take it. If it's discounted there at a better price, take it. But if not, Zander can help you find the right plan. Whether you're single or married, it's not optional. If you're going to be out of work for a while, then you need to make sure the money's still showing up.
- [10:12]
George Kimmel
And that's why Zander is our go to. They make it super simple to get the right coverage at the best price. No pressure, no upselling.
- [10:19]
Dave Ramsey
I've trusted Jeff Zander and Zander insurance for over 25 years and so is my family.
- [10:25]
George Kimmel
So don't wait. It's fast, it's easy, and it could make all the difference. Go to zander.com or call 800-356-4282.
- [10:34]
Dave Ramsey
Protect yourself, protect your income, protect your family. Karen is in Raleigh, North Carolina. Hi Karen, how are you?
- [10:55]
Caller
I am doing well. Thank you Dave and John for taking my call.
- [10:59]
Dave Ramsey
Sure. What's up?
- [11:02]
Caller
Okay.
- [11:02]
I have been unemployed since February and I was in the process of doing baby step two and I still have not gained employment.
- [11:13]
Dave Ramsey
Why?
- [11:14]
Caller
Once I'm employed, I haven't gained employment because the sector that was really affected had reduced funding. So it's been very hard to be or get back into that.
- [11:29]
Dave Ramsey
So leave the sector, go to something else. In February.
- [11:34]
Caller
Yeah, and I have been trying even for customer service.
- [11:38]
Dave Ramsey
How you been eating since February?
- [11:41]
Caller
Well, when I was unemployed, I had 12 weeks of unemployment and my daughter got Social Security. Her father passed and adoption and I had an adoption assistant. So after that 12 weeks, my parents have been helping me tremendously. And I don't think that. I don't think without my parents assistance that I would have gotten this far.
- [12:08]
Dave Ramsey
Wow. Well, it's sweet that they're there. And what, what were you doing before you lost your job?
- [12:15]
Caller
I was a project coordinator and clinical research industry.
- [12:20]
Dave Ramsey
Okay. If you. Do you have project management skills?
- [12:24]
Caller
I do. I supported project managers and I am studying to get my project management certification.
- [12:34]
Thankfully I got a scholarship so that I could be get the training and pay for my exam. So that has been a blessing.
- [12:41]
Dave Ramsey
When will that be?
- [12:44]
Caller
September 6th.
- [12:45]
Dave Ramsey
Oh good. Next week.
- [12:46]
Caller
Okay, good. Yeah, September 6th.
- [12:50]
Dave Ramsey
Okay. So listen, I want you going crazy looking for a project manager job starting today. And in the meantime, I want you doing 42 things at the local mall. Working retail, customer service from home, Walmart, Target, anybody that'll put you in there. And believe me, Target will put you in there if you're Breathing. So yeah, go get something at $20 an hour, get some money coming in to get the fear out of the back of your voice. Because that fear in the back of your voice, I don't want it there. When you're interviewing for these project manager jobs.
- [13:24]
Caller
Of course. And like I said, I was doing the baby steps and I had a thousand dollars in my, in the emergency fund. And I felt like that, that I.
- [13:36]
Wasn'T even prepared for layoff.
- [13:38]
Dave Ramsey
Of course you weren't. You were in debt and broke. Yeah, when you're in debt and broke, you're not prepared for a layoff. Of course you weren't. And we don't. But we don't spend our lives staying in debt, getting ready for a layoff either. So you were doing the right thing. The only thing that. The only thing I would, you know, question is, I gotta tell you, I'm back to work in about 48 hours. After I leave a job, I'm gonna go crazy because it scares me to death. Not working and not making money. I can't handle it. The idea that the unemployment might be all I had, that would scare me to the point I'd be willing to do almost anything that was legal and moral immediately. So I want some, I want a lot of fire under you, girl. Go get something today. I want you earning some money right this second. And then I want you to go get this project manager job and I'm going to send you some of Ken Coleman's materials to help you do that. But here's what happens when you get laid off. Sometimes it steals some of your confidence, some of your swaggers.
- [14:41]
Dr. John DeLoney
Steals a ton of it.
- [14:42]
Dave Ramsey
Yeah, it makes you think it has something to do with you and it didn't have anything to do with you. It wasn't your fault. And then the second thing is while people are recovering, grieving that as if there was a death, because there kind of is. It's easy to get paralyzed and drag this out and have tunnel vision and think, I've got to go back doing the same kind of job. Exactly. That I did before. You need a new one. And as you said, that sector is sick, so get out of that sector.
- [15:12]
Dr. John DeLoney
Yeah. I love the idea of professional identity being about who you help, knowing that how and who you help is going to change over time. But I'm a person who helps. And so that might be at Burger King for a season, that might be at Home Depot for a season, and that might be a full time psychologist for like, it doesn't matter. Like if that core identity. So finding out you're a person who helps people solve problems, that might be a TDJ max and that might be as a project manager for a high.
- [15:39]
Dave Ramsey
Flow gluten Research making 100 grand.
- [15:41]
Dr. John DeLoney
Right. But it's when our ego gets trapped in the job title, man, then you can stay unemployed for a long, long time.
- [15:47]
Dave Ramsey
You can't stay unemployed 10 more minutes, girl. You got to go get it.
- [15:49]
Dr. John DeLoney
That's right. And you said something real important. And I don't know how this works. I don't know the biology or physiology of this. But a hiring manager, whenever I hired people, I could always tell who felt like I would be lucky to have them and who desperately needed me to have them. And it just, it impacted how I hired. There's a swagger you walk in when are applying for a job. It's like, hey, I want to be here. And you'd be really lucky to have me. Versus please, please, please, please, please, please, please hire me. And when you are able to eat and when you're able, when you've got another job in your back pocket, you can have a more honest, direct conversation. Then I'll take whatever you got. Please just. There's a desperation that just is in the air.
- [16:30]
Dave Ramsey
It's in the air. It's in your body language, it's in your voice tone, it's in the pauses in your sentences. It's in everything. And people can read it even if they don't know they're reading it. Kelly pickup. Let's get her on. Find the work you're wired to do. Principle. And then I want you, Karen, to go to his website@kencolman.com and download all the forms. They're free to write the resume finders. Get right in somebody's face and go get some positions. Right now that is the answer to the equation is income. And looking in the mirror and saying, Karen's awesome. There's nothing wrong with Karen. It's a thing that happened. Now Karen's going to get it. Get it. Courtney's in California. Hi, Courtney, how are you?
- [17:12]
Caller
Hey, I'm doing well.
- [17:13]
How are you?
- [17:13]
Dave Ramsey
Better than I deserve. How can I help?
- [17:16]
Caller
Hey, so really very recently my husband came to me and told me that we had a significant amount of debt. Consumer debt. How much consumer debt? Credit cards. It was about 50,000 that I didn't know about. So we had some equity in our home. I took out a HELOC loan to just get rid of it. It was high interest credit cards and we have The HELOC loan now. And that's. Those are all paid down or. They're paid down. And then through the HELOC loan, they canceled them all. I thought we were kind of through the storm of it. He came to me last night or just the other day and told me there's an additional 27,000 SoFi loan that he took out to pay off the credit cards a year ago and then racked them back up.
- [18:09]
Dr. John DeLoney
So, Courtney, what's he spending money on the first time?
- [18:13]
Caller
Well, I asked for statements.
- [18:14]
I was going through some statements. It's mostly food. I only have statements from this year. He hasn't sent me the statements from last couple years. I. Partially my fault. I should have been more involved with finances. I had some complicated pregnancies, and so I just. I asked him to handle it for the last few years because it's. The pregnancy isn't just getting some stuff off of my plate. I worked a hike.
- [18:40]
Dave Ramsey
Are you guys not making your ends meet? And his is the way he's covering it and he didn't want to burden you with it because you asked him to handle it.
- [18:47]
Caller
Yes, that was what's happened.
- [18:49]
Dr. John DeLoney
Are you confident?
- [18:50]
Caller
Yeah.
- [18:51]
Dr. John DeLoney
It's rare that somebody runs up $75,000 and there's not something else they're hiding.
- [18:56]
Caller
Yeah.
- [18:57]
So I don't. I don't know yet.
- [18:58]
He.
- [18:59]
I'm still waiting on statements.
- [19:01]
Dr. John DeLoney
I wouldn't wait another 24 hours. I wouldn't wait another 24 hours. It's all electronic. You can log in right away. Any pause on his account is hiding stuff.
- [19:12]
Caller
Okay.
- [19:12]
Dr. John DeLoney
Okay.
- [19:13]
Dave Ramsey
Yeah.
- [19:13]
Caller
That's scary.
- [19:14]
Dr. John DeLoney
It should be.
- [19:15]
Dave Ramsey
Yeah. Let's get. Let's get to the bottom of it. And then there's two possible options. There's something really scary going on that you still don't know about that's really bad. Or it's simply. He's ashamed that he wasn't able to handle everything for you during a time that you were hurting and he didn't want to tell you. Okay. And that's the. That's the most innocuous of all, and that one's easy to fix. It's now time for you to be a big girl and get involved. The two of you together, handle money together for the rest of your lives. I don't care who's going through a tough season. Both of you are grownups, for richer, for poor, in sickness and in health. We're doing this together, and we both have full disclosure. None of us is being cared for unless there's an extreme illness of some kind that is ongoing and chronic, in which case you accept the consequences of not knowing what's going on.
- [20:08]
Dr. John DeLoney
I would pull both credit reports tonight on both of you from the three credit reporting agencies so you get a clear picture. We're going to log into the accounts tonight and go through them together. And then y' all are going to be you're going to put a freeze on your credit report so y' all can't take out any more loans without the other person knowing.
- [20:25]
Dave Ramsey
And a promise that we're not going to do that anymore. And I promise you're going to be involved and we're going to work on this together from this point forward. If you were gone tomorrow, would your family know where your important stuff is? That's where Knockbox comes in. The things you've done to protect your family, like term life insurance, a will and a security system, aren't much help if your loved ones can't access them. Knockbox, N o K as in next of kin box, is a simple physical system that holds all your important documents, account info, passwords, policies and plans in one place so your family isn't left digging for them. Knockbox helps your family breathe in the middle of heartbreak and say, okay, we know what to do next. Love your family well by leaving them clarity, not chaos. Go to knockbox.com Ramsey to get started. That's n o k box.com Ramsey well, you gotta have a month for everything. I guess. August is make a will month. Gross. Okay, that's all right. It's not gross to make a will though. It's kind of a grown up thing to do because it's the admission that the people in your life you love are going to have a plan because you're going to be a grown up and leave them a plan. And that's called a will. Grown ups leave a will, period. If you're 18 years old or older, you need a will. I don't care if you have any assets. I don't care. You don't want the government deciding what happens to your pets or your kids. Not necessarily in that order either. So the deal is, you want a will, you need a will. It's grown up things to do. What is it that millennials called it a few years ago? Adulting. As if that was a verb. Okay. Procrastination. 43% of adults without a will say they just hadn't gotten around to it. Yeah, perfectionism. I have to make some big decisions. I don't want to make well then let's just put it off till you die. That'll work. Nope. I think I need a certain amount of assets. I covered that. A belief that everything will automatically go to family. It doesn't. It goes to the lawyers. That's who gets it. If you don't do this uncertainty about the process. Well, you got to figure out where to start. Go to ramseysolutions.com willquiz It's a free quiz and we'll help you walk through this. You need to get your will done. Ramseysolutions.com willsquiz It's a grown up thing and we've done detailed research. You're going to die. No one gets out of this alive 100%. And there is no correlation between doing a will and the probability of death. You're going to die anyway, so you might as well. And if you want to piss people off with your will, do it while you're alive. John is here. John's in Amarillo, Texas. Hey John. How are you?
- [23:39]
Caller
I'm good. How are you, Dave?
- [23:40]
Dave Ramsey
Better than I deserve. What's up?
- [23:43]
Caller
Hey, I was just calling. I'm. I'm 20 years old and I'm full time student and full time working outside of school.
- [23:52]
Dave Ramsey
And what are you studying?
- [23:55]
Caller
Business.
- [23:56]
Dave Ramsey
Good. Okay.
- [23:57]
Dr. John DeLoney
Are you out there at wt?
- [23:59]
Caller
Yes.
- [24:00]
Dr. John DeLoney
Good for you.
- [24:01]
Caller
And then I was curious. So I'm in the farm and ranch industry and I'm about. Oh, I was about a hundred thousand dollars in debt on vehicle loans and then I just recently took out a hundred thousand dollars to like start a cattle business.
- [24:20]
Dave Ramsey
Are you punking me? Who gave a 20 year old a hundred thousand dollar cow loan?
- [24:25]
Caller
I know who. I don't know.
- [24:28]
Dave Ramsey
No. Yeah, you know, if you. Did you really do it or not? Are you punking us?
- [24:32]
Caller
Yes, I did. No, I really did it.
- [24:33]
Dave Ramsey
You're kidding me. Who made the loan? What's the company's name? I want to make sure all of America hears who's stupid out there.
- [24:41]
Caller
It's a local bank here.
- [24:43]
Dave Ramsey
What's the name of the local stupid bank? The name of the bank?
- [24:49]
Caller
Education.
- [24:52]
Dave Ramsey
Education is the name of a bank?
- [24:54]
Caller
Yeah. Education Credit.
- [24:55]
Dave Ramsey
Education. Credit Education. They gave a 20 year old $100,000 loan to buy cattle?
- [25:04]
Caller
Yes, and I have a CD also.
- [25:06]
Dave Ramsey
How big is your CD?
- [25:08]
Caller
A hundred thousand.
- [25:10]
Dave Ramsey
Oh, so they didn't give you a loan? You borrowed your own money?
- [25:13]
Caller
Pretty much, yes sir.
- [25:14]
Dave Ramsey
Where'd you get a hundred thousand dollars in a cd?
- [25:17]
Caller
It was a partnership between me and a family member on some cattle that We've had for about 10 years and only sold those.
- [25:27]
Dave Ramsey
So you made a profit and now you pledge the whole profit into another herd?
- [25:32]
Caller
Yes.
- [25:33]
Dave Ramsey
All right. What.
- [25:34]
Dr. John DeLoney
What size cows currently? What size cat? What size?
- [25:38]
Caller
What size?
- [25:39]
Dave Ramsey
How many head?
- [25:41]
Caller
I got 25 head.
- [25:43]
Dr. John DeLoney
And then how big are they?
- [25:45]
Caller
They are three to six years old and they're gonna be having calves in about two to three months.
- [25:52]
Dr. John DeLoney
Do you know how to calve babies?
- [25:56]
Caller
Yes.
- [25:57]
Dave Ramsey
He's grew up on. He grew up in it. The family member was his father probably. All right, honey, you called the wrong show. I'm sorry. How can we try to help you?
- [26:08]
Caller
I'm just trying to figure out really, like what I can do and if I'd like, made a good decision on trying to like take this loan out to.
- [26:15]
Dave Ramsey
How long have you listened to the show? Huh?
- [26:20]
Caller
About two years, probably.
- [26:21]
Dave Ramsey
Have you ever heard me tell anyone to borrow money for any. I haven't ever.
- [26:27]
Caller
No, sir.
- [26:28]
Dave Ramsey
Okay.
- [26:28]
Dr. John DeLoney
And here's what. Here's what I'm afraid.
- [26:29]
Dave Ramsey
So you kind of know you walked into the lion's den, right?
- [26:34]
Caller
Yes. Well.
- [26:34]
Dr. John DeLoney
And here's what I'm afraid you're about to do. Those cows right now, beef is at an all time high because there's been drought, right?
- [26:42]
Caller
Yes.
- [26:42]
Dr. John DeLoney
And you're going to have babies and you might, maybe you might be able to get away with this one. And then you're gonna go do it again and you're gonna. You're gonna put more down on it and you're gonna take out a bigger loan. And then in 18 months or 24 months when everyone's got back into new cows because there's been some rain, the beef prices are gonna plummet and you're gonna be up a creek. You're gonna have lost at all.
- [27:10]
Dave Ramsey
Your CD is what you lost. The bank hasn't risk.
- [27:13]
Dr. John DeLoney
Well, I'm taking it back. He's gonna make.
- [27:15]
Dave Ramsey
The bank's not stupid at all. They're begging for you to not pay this. They're just gonna scarf your cd.
- [27:19]
Dr. John DeLoney
He's. I think you're gonna make your money on this one. I think you're gonna. It's a. It's the $250,000 loan you take after this one.
- [27:26]
Caller
I think based on my math and everything, the market looks like it's going to stay where it's at for at least two years. And I'm planning on being able to pay this note off the third year.
- [27:39]
Dr. John DeLoney
I think there's no chance as long.
- [27:40]
Caller
As the market doesn't go 50% less than what it is right now. I should be able to get it done in three years.
- [27:47]
Dave Ramsey
Okay?
- [27:48]
Dr. John DeLoney
I would get it down in one year, and here's why.
- [27:50]
Dave Ramsey
The.
- [27:50]
Dr. John DeLoney
The only reason Dave and I have a job is because people like you say if this is. If this scheme I'm running just hangs on for three more years, I'm gonna be all right. And it doesn't.
- [28:01]
Caller
Right?
- [28:02]
Dr. John DeLoney
That's the problem.
- [28:03]
Dave Ramsey
All right, so would you have done this if you just cashed out your CD and used your money?
- [28:14]
Caller
Yes, I believe so.
- [28:16]
Dave Ramsey
Okay. If you're gonna play, make a play like this, you should do it with real money, not borrowed money. Okay. Number one. Number two, what year in business school are you? First, second, third, fourth?
- [28:26]
Caller
I will be a. I'm between my sophomore and junior.
- [28:30]
Dave Ramsey
Okay. I want you to start doing some reading on commodities because beef is a commodity, okay? And there's one thing that drives beef prices. Supply and demand. That's all. And if there's a shortage of beef, prices run up. If there's an oversupply versus the demand, the prices go down. So your math was a wild guess. That's what your math was. See, anybody that's playing commodities, a hundred percent of the time, you're guessing about what the future is going to do. The track record, the history of it. On beef, like a lot of commodities has gone up. But another commodity that you could study the volatility of. If you want to test my. My basic theory of economics here is oil. Look at the barrel of oil and see what it's done. Okay? It's up and down, up and down, up and down. Best based on guess what? Whether the Middle east turns the spigot on or off. Whether the local domestic policy for drill baby drill turns the spigot on or off. If the spigots are off, oil prices go through the roof. And then so does the gas pump. After that, if the spigots are wide open, oil prices drop through the floor. Okay? Has nothing to do with the inherent value of oil. It's the shortage or the oversupply versus demand. And that's the game you're playing. Meaning that from a business perspective or a investment perspective, you are gambling. You are rolling the dice because you are in the world of beef because you grew up in it, because you know something about the actual cattle. You have talked yourself into believing that you can predict a commodity's price. That is unbelievably dangerous. And it will end in your failure eventually if you keep doing this. So the next time you get Ready to make a gamble. And you're gonna put a hundred thousand dollars on red or a hundred thousand dollars on black. Make sure it's your money so when you lose it, at least it's just your money that's gone. If it goes up, it was your money that went up. If you're gonna play this game, play it with cash, son. But I wouldn't play it. I wouldn't play it at the level you're playing it. I wouldn't do it at 20 years old, period.
- [31:38]
Rachel Cruze
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- [32:46]
Dr. John DeLoney
Fairwinds.org Ramsey Fairwinds.org Ramsey FairWinds is federally insured by the NCUA.
- [33:11]
Dave Ramsey
Gang. If you like what you hear, we could use your help. You are our best marketing plan. You're probably close to our only one, but yeah. Click the subscribe button, the follow button. It helps with the algorithm big time. And it causes the show to be pushed out over the various platforms in front of people who didn't know we were here previous because you liked it or you subscribed it, or you followed it, or you better than that, you shared it. Tell people about us. Click the Share button or cut the link and send it to somebody. Or just tell people about us. Either one. We appreciate you. Thank you for that. The listenership viewership of this Ramsey show thing has exploded in the Past five years. The numbers are crazy. Thank you so much. We appreciate you. Steve is with us in Greensboro, North Carolina. Hi Steve, welcome to the show.
- [34:01]
Caller
Thank you, Dave. Thank you for taking my call.
- [34:03]
Dave Ramsey
Sure.
- [34:04]
Caller
I am 78 years old, retired, divorced and have no debt. I have 300,000 and a Roth IRA only mutual fund, 100,000 in a traditional IRA on mutual funds, 1.2 million in an inherited IRA in individual stocks, 3.7 million and a brokerage account in individual stocks, about 100,000 in cash, giving me a net worth of about 5.4 million.
- [34:34]
Dave Ramsey
Way to go.
- [34:35]
Caller
Issue today is that in that brokerage, the taxable brokerage account, I have stock in one company with a value of 1.8 million, which represents 34% of my net worth. It's continuing to grow and outlook is good. My tax basis on that stock is $58,000, which means we all subject to capital gains and absolutely hate capital gains.
- [35:01]
Dave Ramsey
I don't blame you.
- [35:02]
Caller
What would you do?
- [35:04]
Dave Ramsey
Wow. Did you inherit any of that? You said inherited IRA was 1.2. You have the rest of it other than that now.
- [35:14]
Caller
I inherited 250,000 in cash, put it in stocks. I've taken 450 in RMDs and it's still worth 1.2.
- [35:26]
Dave Ramsey
Yeah. Wow.
- [35:28]
Caller
The rest of it were just investments throughout.
- [35:30]
Dave Ramsey
You've done amazing, Steve. No one can question.
- [35:32]
Caller
I've been extremely lucky.
- [35:35]
Dave Ramsey
Well, yeah, you were lucky. You were blessed and you were smart and you were working and you were saving money while everybody was suspending it. So I'm proud of you. Good work. Well, I think your analysis and I don't know what your background is, but it's excellent. Your analysis is excellent. One third of your net worth is tied up in one single company. And as it goes, so goes your net worth. That's scary. Yeah, that's standing on one leg and somebody's kicking at your knee.
- [36:02]
Caller
I can add that. I had some of that same stock in my inherited ra, about a half million and sold that because of the percentage getting up. But everything is he not taxable now?
- [36:14]
Dave Ramsey
So here's the thing. You're going to trade some taxes for some safety. Diversification equals safety. Or you're going to take the risk because you don't pay the taxes. It's a simple formula. There's no way around it. You're going to pay the taxes. If you liquidate this because there's nothing. It's not in any kind of a protected account. There's nothing you can do. A roll on it there's nothing like that. You just are just going to take the hit. You know, I would not do where the. I would not do enough where the taxes activate me above 15 had come. Your income may already be over 400k, though. Is it?
- [36:55]
Caller
No, no, it's actually not. My taxable income this year is basically going to be RMD from that. And, you know, I'm expecting about 160,000 taxable income this year.
- [37:07]
Dave Ramsey
Okay. All right. Well, if I remember correctly, and I'm trying to pull up a cheat sheet because I can't. I don't have it. The. The max on the capital gains is 400 or somewhere right around there. If they had moved it up, it was 400 before you get kicked. Have you looked that up yet?
- [37:25]
Caller
I plugged in just arbitrarily about $600,000 capital gain in that, and it came out to about 25% federal and state tax. I would pay.
- [37:40]
Dave Ramsey
That. Well, okay. Because if you go above 400, it goes from 15 to 20 on federal. And I don't know what your state has, but it must be five, apparently.
- [37:50]
Caller
I'm not sure.
- [37:51]
Dave Ramsey
So if you keep it under 400 and you rolled 400 inside of. Keep your total income under 400 or whatever the number is. I'm not a tax guy, obviously, but I'm going to move at up to the 400 mark. The 340,000 or whatever I can move, or 240,000, whatever I can move to not get above 400. And I'm gonna start gradually moving this at 15% because I don't like the risk of the lack of diversification. It's painful to rebalance your accounts, but you're gonna take the risk if you don't. And you're looking at that company going, I'm really, really like you. If I. Because I'm. I'm gonna. I'm gonna be over there eating in their lunchroom, seeing how people are doing.
- [38:43]
Caller
I've heard you ask before if someone would. If their life would change, if maybe they lost certain amount of money or whatever.
- [38:50]
Dave Ramsey
Yeah.
- [38:51]
Caller
And if.
- [38:54]
Dave Ramsey
Yeah, if you lost. If you lost 1.8 million, you would feel that. Yeah. So I don't think you're gonna lose at all. I just could go in half.
- [39:05]
Dr. John DeLoney
Steve. I got. I just get itchy because I grew up in Houston when Enron went away and I had friends and family that worked at Enron. And it. Man, that just makes me nervous. Or just thinking about what Tesla was a year ago versus what it is right now. Everyone can it's just so easy to think this one's got a good upside to it. And man, my, my lived experiences, sometimes these things are just a vapor, you know.
- [39:26]
Caller
I understand. I know nothing's assured. I don't know what they do you any good to know the company that I've.
- [39:32]
Dave Ramsey
No, no, because it doesn't matter. It sounds like I'm trashing just that individual company and I'm not. I'm trashing the last. Diversification. Yeah. And so yeah.
- [39:44]
Caller
Okay, yeah.
- [39:45]
Dave Ramsey
I'm gonna start systematically moving out of this. I'm not gonna panic and pay the over 20%. See. Are you married, filing jointly or single? You said single, didn't you?
- [39:57]
Caller
Single. Divorce, Single.
- [39:58]
Dave Ramsey
Okay. You got. I just pulled it up while we were talking because I didn't know it's. It's up to 566,000 now. Okay. That you can move. And so if you've got 160, that leaves you 400 that you could move a year and still not be at accept at 15%.
- [40:15]
Caller
Yeah.
- [40:16]
Dave Ramsey
Because you got a $58,000 basis. So it's pure gain, basically. So, yeah, I'm going to start moving about 400,000 a year over and paying the 15%. And the 15% is not just tax, it's the cost of safety due to diversification versus lack of diversification. And that's the way I'm going to look at it. I don't want to be that deep into one company and so. Good question though. Wow, congratulations. Still, I mean you've done a lot of obviously very smart things and at 78 you're calling to ask that question. That's a pretty technical, ticky, tacky question and it shows you really know what the flip you're doing. Congratulations. Very neat. Very neat.
- [40:58]
Dr. John DeLoney
That also shows to all the 26 year old George calls them the Instagram Bros. It's just dedicated time. It's his time. Small amount over time.
- [41:09]
Dave Ramsey
Yeah.
- [41:09]
Dr. John DeLoney
Bought that at 56k and it's at 1.8 million. That is just getting in early and just set it and forget it. Just go slow.
- [41:16]
Dave Ramsey
Yeah. I mean there's not a. I can't think of a publicly traded company that's a household name. Well, I don't know when he bought it at 58. That's the other thing. It would give you that in a short period of time. Right. It's not going to go to 1.8 in a short period of time. I know there's not one on the big board on the New York Stock Exchange. There's not one.
- [41:32]
Dr. John DeLoney
Unless you had a friend who worked at Nvidia the day of or something.
- [41:36]
Dave Ramsey
Yeah, I don't know if you could.
- [41:37]
Dr. John DeLoney
Get in on that one.
- [41:37]
Dave Ramsey
You know, your wife was in congress or something.
- [41:39]
Dr. John DeLoney
There you go.
- [41:40]
Dave Ramsey
That'd be helpful. But yeah, that kind of stuff. But you know the, that's the only way you're gonna, I don't know, but I don't know if a stock has done that. I don't buy single stocks folks. And lack of diversification is one of the reasons all of the data, even though Steve has done incredibly well and I do congratulate him, all the data for the rest of us says we buy mutual funds because there's 90 to 200 different stocks in the average mutual fund. If you had 1.8 million and 92 hundred stocks, you'd be perfectly safe compared to you've bet 34% of a 5 million dollar net worth on one singular company's behaviors. They can make the decision to do anything stupid and suddenly you could have.
- [42:22]
Caller
A Bud Light moment in half.
- [42:24]
Dave Ramsey
Yeah, I mean it could be a.
- [42:26]
Dr. John DeLoney
Tesla moment or any cracker barrel moment. Right now like any of them, you.
- [42:29]
Dave Ramsey
Can see the stock just nosedive. Yeah, yeah, you can have all that. And I don't, I don't, I don't want that. I don't have control over that. So I'm not putting my money in that. Hold on folks, don't panic. Buying a home in today's market doesn't have to be complicated. But it does take more than hope and a quick Internet search to get the right home. One that will be a blessing and not a burden. You need a trusted mortgage partner who will listen and serve you, not push more debt. You need the professionals at Churchill Mortgage. I've personally recommended Churchill for over 30 years and they're the only mortgage company that's Ramsey trusted. Churchill stands out because they operate the Ramsey way with transparency, integrity and a commitment to doing what's right for the customer, not what's profitable for themselves themselves. Churchill aligns with Ramsey's values by focusing on education, responsible mortgage lending and helping people make smart long term decisions that enable them to build lasting wealth. Go to ChurchillMortgage.com today to begin a better mortgage experience. Churchill Mortgage.com this is a paid advertisement in MLS.
- [43:56]
Dr. John DeLoney
Id 1591 in MLSConsumerAccess.org equal housing lender.
- [44:01]
Caller
Foreign.
- [44:21]
Dave Ramsey
Welcome back to The Ramsey Show. Dr. John DeLoney, number one best selling author is my co host today. Anna is with us in Utah. Hi, Anna. How are you?
- [44:31]
Caller
Good. How are you doing, Nick?
- [44:32]
Dave Ramsey
Better than I deserve. What's up?
- [44:36]
Caller
Yeah, so my husband, I were 35 years old. We both have master's degrees. I work part time. We've got littles and we're in our second home that we've owned. And I've found a lot in my dream area to build on. But it's very pricey and not, not where we'd want for a mortgage. It'd make it a high mortgage and I wondered if there's, there's any time it'd be appropriate. We both make good money to. My parents have offered to help us out with about 100,000 to make it more of an affordable mortgage. Anytime that that'd be appropriate to take that kind of money or how. Yeah, my husband, I mean just my husband disagrees and doesn't think that we should do that. So does that make sense?
- [45:21]
Dave Ramsey
My question, that you should not take the gift from your parents or you should not buy the lot?
- [45:27]
Caller
I mean, both. It would require taking the gifts for my parents to buy the lot.
- [45:30]
Dave Ramsey
But he doesn't want to buy the lot.
- [45:32]
Caller
He doesn't want to take the money from my parents. So therefore not do the lot. But I think.
- [45:38]
Dave Ramsey
What's the lot cost?
- [45:40]
Caller
425 really expensive lot. It's in a really nice area. So I, I think it's a good opportunity. I don't want to lose it and my parents. It wouldn't be alone, but I think that, we think.
- [45:53]
Dave Ramsey
You told me three times indirectly you can't afford it.
- [45:58]
Caller
Yes.
- [45:58]
Dave Ramsey
The words you're using say it's I can't chew this amount of food if I put it all in my mouth.
- [46:06]
Caller
Yeah. I mean if we did do it, it'd be about it, you know, close to 50% of our income for the mortgage.
- [46:12]
So.
- [46:13]
Dave Ramsey
You got lot fever, girl. You need to take a cold shower.
- [46:17]
Dr. John DeLoney
You also have not wanting to be in the life you live in right now. Fever.
- [46:22]
Dave Ramsey
Yeah.
- [46:23]
Dr. John DeLoney
Tell me about that.
- [46:23]
Dave Ramsey
You cannot afford to live in that place. You don't make enough money.
- [46:30]
Dr. John DeLoney
What's a hundred thousand dollar loan from your parents or a gift, whatever you want to call it. What's that going to actually cost you?
- [46:38]
Caller
Like emotionally or.
- [46:40]
Dave Ramsey
Yeah, yeah.
- [46:40]
Dr. John DeLoney
What kind of strings you're attached?
- [46:41]
Caller
Yeah.
- [46:42]
Dr. John DeLoney
I have no problem somebody getting a big gift from their parents. I think it's amazing and I hope I can do that with my kids. But. But I'm gonna have to make sure in my spirit there's no strings attached to It. When I give it.
- [46:52]
Caller
Yeah. I think that's my husband's concern that it'd be.
- [46:55]
Dave Ramsey
And it's based on the track record. He didn't just dream this concern up.
- [46:59]
Dr. John DeLoney
Right. So I'm asking you, what. What are the strings?
- [47:04]
Caller
Not a lot of strings, but I mean, just. Yeah, I think he'd just feel uncomfortable and just normal.
- [47:11]
Dave Ramsey
Are you an only child?
- [47:14]
Caller
No.
- [47:14]
Dave Ramsey
Are you the oldest daughter? Are you the only daughter?
- [47:17]
Caller
Youngest.
- [47:17]
Dr. John DeLoney
The youngest.
- [47:18]
Dave Ramsey
The youngest daughter. Are you the only daughter?
- [47:21]
Caller
No.
- [47:22]
Dave Ramsey
Because I'm confused about why your parents want to participate in helping you be broke. To live this. To live your little dream. To live your dream that you can't afford. Because you told me six times you can't afford this. I mean, indirectly, you know, in your heart, your brain is. Your brain is telling you you can't afford it. It.
- [47:41]
Caller
Yeah. I'm more interested in as times change.
- [47:45]
Dr. John DeLoney
Yeah.
- [47:45]
Caller
And that kind of mortgage wouldn't be as crazy in a few years.
- [47:48]
Dave Ramsey
Well, then get it then. We'll talk about it then. But right now it's cray cray.
- [47:52]
Dr. John DeLoney
I'm worried about what it is about your life.
- [47:54]
Caller
You.
- [47:54]
Dr. John DeLoney
You both got the schooling that you wanted. You have. You have the family that you wanted. What is it about that life that you're not at peace with?
- [48:03]
Caller
We're currently.
- [48:04]
The home we're in is in a dream area. Wonderful area. It's the same place the lot is at, but it's an older home. And it's given us a lot of problems, including term termites, which has been kind of traumatic for me. We've gotten those taken care of. I just don't want to deal with situations like that. So I don't know if that's a. Yeah.
- [48:20]
Dave Ramsey
So what is your home? What is your homework?
- [48:22]
Caller
Termites have been a.
- [48:24]
Currently.
- [48:24]
We think we could make 600 off it.
- [48:26]
Dave Ramsey
You could make 600 off of it. Okay. And the lot is 425.
- [48:31]
Caller
Sorry, that wouldn't be make.
- [48:32]
Dave Ramsey
I'm sorry.
- [48:32]
Caller
425. That's without the build, so.
- [48:35]
Dave Ramsey
I know, I know. And the. And. And the hundredth gift. And you're. You have 600 equity or the price would be 600.
- [48:43]
Caller
The price.
- [48:45]
Okay.
- [48:45]
Dave Ramsey
How is a house in the same neighborhood as a $425,000 lot only selling for 600,000? It'll be a me.
- [48:53]
Caller
That's. Maybe we could get more. That's just. It's.
- [48:57]
Dave Ramsey
Where did you get six area?
- [48:58]
Caller
The area has. No. That was not appraised, but that's kind of what Comparisons to around the area have been.
- [49:07]
Dave Ramsey
Okay, all right. Because if you buy a lot, let me tell you, if you buy a lot for 400, the rule of thumb and is, is the lot should be around 20% of the total when you're done.
- [49:19]
Caller
Okay.
- [49:20]
Dave Ramsey
All right. And so that means you're building a two million dollar house and you don't have that kind of money, do you? What do you. What's your income?
- [49:32]
Caller
About 200.
- [49:33]
Dave Ramsey
Yeah, you know, that kind of money.
- [49:36]
Caller
And I could work full time.
- [49:41]
What I want to do with Littles right now.
- [49:42]
Dave Ramsey
Oh, I don't want.
- [49:43]
Dr. John DeLoney
It's not worth it.
- [49:44]
Dave Ramsey
It's not worth it. I mean, you could kill termites. You can't kill a big mortgage.
- [49:47]
Dr. John DeLoney
That's why I keep. I don't think this is the house. I think this is something about you not being in the skin you're in.
- [49:53]
Caller
Yeah, well, it's the scarcity. I mean, it's on the mountain. There's no more lots around here. Everything's built out here. You have to go out west if you want to.
- [50:00]
Dr. John DeLoney
Yeah, but somebody's gonna buy that lot and build on it and then their, their nest egg's gonna need to move somewhere. They're gonna have grandkids and they're gonna. The house will come up on the market. But there's a fever inside of you.
- [50:14]
Dave Ramsey
Listen, there's plenty of lots and there's plenty of mountains and there's the rest of your life to figure that out.
- [50:24]
Dr. John DeLoney
Dave, I hear this.
- [50:25]
Dave Ramsey
Listen, I am a spender and I love real estate. And I'm running through my head the number of times I have sounded like her.
- [50:31]
Dr. John DeLoney
I'm telling you, man, she's about to do something.
- [50:33]
Dave Ramsey
I have gotten. I get the fever for something and I get like a dog on a bone. And I'm just like chasing a rabbit, running through the forest, looking. I'm going to run this thing down. And I can hear that because I do it. I have to catch myself and go, wait a minute, this is stupid. I mean, I can point to you a lot down by our lake house that I chased like this. And it is a very unique property. It's on a peninsula. And you own the whole peninsula. Yeah, and it would have been very. It's like she's talking about. And I chased that thing and chased that thing and then a guy bought it and built a house on it and I actually tried to buy the house. And we were sitting in the front porch of that house and there's 9 million boats going by. And I felt like I was in the middle of the interstate and I went, thank you, God, for protecting me from me and not letting me get this. Because I don't want to be out here in the middle of this, this hell of a highway on the lake. And so I, you know, I, I, that's a, that's a 10 year story I just did right there. Yeah, but I, I had to, I had the jones for that stupid lot.
- [51:33]
Dr. John DeLoney
Yeah.
- [51:33]
Dave Ramsey
It's like, I, I can do, I can totally relate to you. Take a cold shower. Don't buy the lot. You can't afford it. And there's something wrong about the way you're approaching this. John's hearing it in your voice and your words. I am too. And you're willing to sacrifice even dealing with your parents to get it. That's how bad you want the child.
- [51:53]
Dr. John DeLoney
Or even you've done the math. Like, okay, what if I gave up a core value, which is staying home with my kids, and I gave up that for this, like, piece of dirt? Yeah, there's something on the, on the grass is greener in your spirit right now.
- [52:05]
Dave Ramsey
Godliness with contentment is great gain. And when I have violated that, and I have. I just told you a story. When I was doing, I didn't end up with a lot, but I swear to, I think God just literally kept me from getting.
- [52:17]
Dr. John DeLoney
Hey, I walked out with my hands in my pockets.
- [52:21]
Dave Ramsey
Stupidity. Yeah.
- [52:22]
Dr. John DeLoney
I didn't have good spirit. That's right.
- [52:23]
Dave Ramsey
Yeah. And I just, man, it's like going to an auction, man. Keep flicking your ears, touching your nose. It's bad, y'.
- [52:35]
Caller
All.
- [52:36]
Dave Ramsey
Oh, we all got it. You know we do. I've seen people do everything possible to get out of debt. Selling stuff, starting side hustles, canceling subscriptions, giving up eating at restaurants, even turning off the air conditioner in the summer and sweating through it. But most of them don't know they're overpaying for their phone plan. With Boost Mobile, you get unlimited talk text and Data for just $25 a month. That's it. And that $25 never goes up. No contracts, no junk fees, and no tricks. So do the math. It's not that hard. And go to boostmobile.com Ramsey restrictions apply. See boostmobile.com Ramsey for Blake is in Arizona. Hey, Blake. How are you?
- [54:03]
Caller
Great, thanks.
- [54:04]
Dave Ramsey
How can we help?
- [54:07]
Caller
So, background is I'm 62. My wife is 51. We do not currently have any debt. Our home is paid for. I recently retired and started taking Social Security after I Was let go from my job after 34 years. And we have, I still have my 401k just sitting less with my former employer. I have about 1.1 million in that and another 100,000 in a Roth. We have approximately $500,000 in a high yield money market earning about 3.5%. We want to know. It's really not, you know, it's safe, but it's not returning the kind of money that we really need to really don't. We're living on pretty much below our means. My Social Security. And then I also picked up a part time job working at a local golf course. Just, just for, for something more to do that covers our expenses. We're looking, we're wondering what would be best to do with that approximately $500,000 for us, for the future. And then also we'd like to start putting. We have a new baby grandchild and we'd like to start saving for them. What would you recommend?
- [55:34]
Dave Ramsey
Well, what'd you used to earn at your other position?
- [55:39]
Caller
I varied in income. At the last, when I was let go, I made a little over $100,000.
- [55:47]
Dave Ramsey
Okay. All right. The 1.1 million is in Traditional or Roth.
- [55:52]
Caller
It's in Traditional. It's in a Fidelity like a Target date fund.
- [55:58]
Dave Ramsey
Okay. All right. I would have you sit down with a SmartVestor Pro and there's a couple of things in this portfolio I want to work on and I'll give you the background on what and why. Okay. A SmartVestor Pro is a network of people that are in the business. We don't do investing at Ramsey, but we endorse these folks. We implement, embrace them and they are aligned with the teaching that we give. So you're gonna hear things that sound a lot like Ramsey when you sit down with one of them. The first thing is you never invest anything without understanding it yourself. You've done a very good job getting to this point. Congratulations. You're almost multi millionaires and you're definitely millionaires and it's pretty incredible. Well, you are multimillionaires because your house is worth enough to get you over the 2 million mark. So net worth wise, so good. Congratulations. You're in really, really, really. I got two things here. One, we want to get the 500 invested, which is your question. The second thing is I want to begin to think about how to move that 1.1 gradually to Roth and pay some taxes on it because at 72, you're going to be facing which is going to be here In a heartbeat. Only 11 years, you're going to be facing what's called RMDs, required minimum distributions on that. And I want to keep that from happening. And if you die with the whole thing intact, the entire account, of course, is taxable in an inherited IRA for your kits. And by then it'll be $3 million.
- [57:29]
Caller
Okay?
- [57:30]
Dave Ramsey
Because you're not going to die anytime soon. And it'll double and double again. Double again might be five or six million dollars even. And so if it's in a Roth, if we can get it into a Roth gradually in the next 11 years before you get to RMDs, A, you don't have RMDs, B, your kids will never pay taxes on it. C, you'll never pay taxes on it if you decide to use some of it for something. So if it is invested, and I would probably reset the investments inside of there today from target date into some quality long track record growth stock, mutual funds. I invest inside my retirement and I've recommended for 30 years, people do that in growth, growth and income, aggressive growth and international. I do not do target because I don't believe, because I'm 64. I'm getting ready to be 65, a touch older than you and I. The data tells us that at your age and my age, if we're in good shape, healthy, which you are right now, I guess, and I am too. You didn't tell me otherwise. That we have a high likelihood of making it into our 90s statistically. And so that's still 30 years. You've got to outpace inflation. And that target date is going to dumb down your returns as you get a little bit older. And there's no need to do that because you don't need. You can handle the little bit of risk that a good quality investment portfolio represents. So I'm going to move you away from target date. I'm going to move you towards roth with the 1,100,000. That's two things. All of this as you understand it, don't do it, because I said do it. But I'm really happy right now that all of my retirement accounts are Roth. For those reasons, I don't have rmd. I won't ever have any taxes on it. Neither will my kids. As an inherited ira, how are you.
- [59:10]
Caller
Am I able to convert the traditional.
- [59:13]
Dave Ramsey
You're going to pay taxes. When you do, you pay taxes on the amount you convert every year. That's why you're going to want to do it in stages to keep Bracket creep from hitting you so hard because all ordinary income, there's no capital gains available. Now moving on to the 500, which was your original question. Which is a good question too. You've done a great job. I just want to say it over and over. These are minor tweaks, but they'll help you to the tune of millions of dollars over the next two decades. The 500.
- [59:38]
Caller
That's what we're looking for.
- [59:39]
Dave Ramsey
Yeah, the 500. The 500. Obviously you do need to get that invested sitting there in stupid high yields. Craz needs to get. You lost 50 grand last year or 60 grand by it sitting there. And that would have been nice to have around.
- [59:53]
Caller
Yeah, don't tell my wife that.
- [59:54]
Dave Ramsey
Yeah, it's missed what the market did versus what you did. You know, that's what you're missing. Opportunity cost. So what you're going to do there is look for what's called a low turnover mutual fund. Inside the mutual fund there's 90 to 200 stocks. If they sell almost none of them, low turnover of the stocks, it does not activate any taxable gain or very little taxable gain unless you sell it. An example of that is an s and P 500. They typically have a 3 or 4% turnover ratio, meaning 97% of the stocks sit there and grow but create no taxes. It's like buying a single share of Home Depot for 50 bucks and it goes to 70. You don't pay any taxes on the 20 until you sell it. That's capital gains. Great growth. Okay, okay. So it's like buying a rental house for 500 grand. It goes to 700 grand. You don't pay in gain. Capital gains tax. You don't pay any tax on that 200 growth till you sell the house. Same thing's true in a low turnover mutual fund. So you're not going to have taxes. That's great for now. When you do have taxes and do decide to pay them, they're going to be a capital gains rate which is 15% instead of 37%. So that's wonderful. So low turnover gross stock mutual fund. So I use s and P500s for a lot of that. You can use other stuff too. I've got another couple of million in a different one. That's not an S and P that I'm letting sit the S and P. I use it for saving up to buy real estate. But the. Anyway, so you're looking to learn about the low turnover mutual fund because it grows with no taxation unless you pull it out okay. And you're going to get marketplace growth because s and P500 is going to be, you know, traditionally it's been 11, 12% a year has been the rate of returns. So in the last two years, there's over 20%. And it's not going to be that forever. That's not offbeat thing. But so low turnover, mutual funds, that keeps you from paying taxes on it as it grows unless you pull it out. If you leave it alone a year and you do pull it out, it's only going to be at capital gains rate, not at ordinary income rate. So smart. All of this to say learn all that again, because you don't want to learn it from some guy on the dadgum podcast. You want to sit down and learn about this yourself. It's millions of dollars and it matters. So you're smart to ask the questions. The smartvestor pro's job is not to do it for you, not to tell you what to do. Their job is to teach you what is possible, and then you choose among the things that are possible and that'll get you there. But that little, those two little tweaks right there in the next two decades are probably $4 million, maybe more more in what happens to your stuff versus target regular investments versus target date Roth versus traditional and low turnover versus high yield and those rates of return and that amount of money. That's what it's going to do. And a good thing to keep in mind if you're looking at this stuff, folks, is it's fun to do the math real quick. Okay, he's sitting on basically $2 million. If it's growing at 10% every seven years, it's going to die double. He's 61. At 68, he's gonna have 4 million. At 75, he's gonna have 8 million. At 82, he's gonna have 16 million. And he's very likely to get there statistically from an actuarial table, which is the death rate table thing, okay, for life insurance policies. So once you make it up to into your 60s and you're healthy, you're not gonna die at 70. 76. Usually 76 is your average male death rate, but that includes infant mortality, teenage death and so on. So you can't run your numbers based on that anymore. Once you get to be old like me and him, with the lowest prices of any national grocery store, shoppers save big at Aldi. Aldi believes in making shopping straightforward and, and stress free. Whether you're firing up the grill for A family dinner or hosting a backyard barbecue. Aldi is there to help. They've got a great selection of fresh USDA choice meats and organic produce at prices that won't bust your budget. And no messing around with apps, coupons, loyalty cards or membership fees to get low prices on award winning products every day. So stop overpaying and start shopping at Aldi. Find a store near you today@aldi us. That's a L D I dot us savings.
- [64:35]
Dr. John DeLoney
Based on regional analysis of Aldi versus select competitors. Prices may vary by location, product availability in the market.
- [65:04]
Dave Ramsey
Dr. John Deloney has had three number one bestsellers. Two of them big, hairy, nice hardback books, John. None of them are as pretty as this.
- [65:17]
Dr. John DeLoney
They're not as pretty or. And none of them are as personally important to a guy that struggles with being on time as the 2026 Ramsey goal planner.
- [65:27]
Dave Ramsey
Yeah, you have a goal and a planner, maybe you can be on time.
- [65:30]
Dr. John DeLoney
But if you write I didn't see.
- [65:31]
Dave Ramsey
The thing you did on Instagram, that's pretty fun.
- [65:32]
Dr. John DeLoney
If you co write a book with Rachel Cruz and Jade Warshaw, it's gonna. The, the beauty will win out over whatever madness I was trying.
- [65:41]
Dave Ramsey
I gotta tell you, the. The Ramsey team, they're unbelievable. The design team. Yeah. The Ramsey gold planter is a big deal. Everybody gets them every year and they always sell out. We only do about 10,000 of them, but they sell out like immediately here in the fall. So this is 2026. It's gorgeous. The creatives, we kind of turn the creatives loose and go have fun.
- [66:04]
Dr. John DeLoney
Right?
- [66:04]
Dave Ramsey
This is like their sandbox.
- [66:05]
Dr. John DeLoney
And usually I'm like, I want to see it. And they say, you're not allowed to see this one.
- [66:09]
Dave Ramsey
Yeah. And you're not allowed to touch this, John.
- [66:11]
Dr. John DeLoney
Nope.
- [66:11]
Dave Ramsey
Dave, you can't even say anything about how much it costs because it costs a lot to produce the thing. Everything. It's a beautiful piece though. A full calendar, of course, and a full process for applying the calendar, setting goals, and it's absolutely amazing.
- [66:23]
Dr. John DeLoney
And let me shout out the weird.
- [66:25]
Dave Ramsey
Thing is we did cut the price.
- [66:26]
Dr. John DeLoney
We do, we sell it early and we do cut the price significantly. And I want to shout out everybody who's fighting the system and still writes things down with pen and paper. I love it. I love it.
- [66:37]
Dave Ramsey
My wife and I in the morning is one of the things she says, let's do calendars. Which is one of the. We stay aligned on our money. We stay aligned on our time.
- [66:45]
Dr. John DeLoney
Oh, that's romance talk in my house.
- [66:47]
Dave Ramsey
And we stay aligned. Yeah. So yeah, we, we. This morning she said let's do calendars. Let me tell you what she gets out. Old school.
- [66:54]
Dr. John DeLoney
That's what my wife does.
- [66:55]
Dave Ramsey
Little black thing with a little flip on it and flips it open. It's got, she's. It's all written down. And you know what, it doesn't get deleted.
- [67:02]
Caller
Nope.
- [67:02]
Dave Ramsey
Unless you mark through it.
- [67:03]
Dr. John DeLoney
There's no AI bot going through it.
- [67:06]
Dave Ramsey
35.97 if you want to pre order. It's the best deal you're going to get because that we paid a lot to produce these. So. Yeah, we did. Jade, Rachel and Deloney. Monthly content from them as you go through your months and planning. If you grab it before labor day, it's just 35.97 the lowest price. Even Black Friday pricing won't beat this. Ramseysolutions.com store. If you're watching on YouTube or podcast, you can click the link in the description. I gotta tell you, we put out a lot of nice products. I'm really, really proud of this product. Product. The people that get it always love it. It's a lot. And you got it. It's all there. It walks you through lessons from Rachel, from Jade and from Dr. DeLoney as you're going through. And you can lay out your spiritual year, you can lay out your physical year, you can lay out your time. It's all in there. And it is an incredible, incredibly well designed tool. And again, it's a beautiful, beautiful piece of work. So all the way around. Eric is in Cleveland, Ohio. Hi Eric, what's up?
- [68:09]
Caller
Hi.
- [68:09]
Good afternoon everyone. So I am a third year medical student and I've talked to a lot of physicians who have advised me not to worry about loans because they'll easily be paid off. When you're earning a physician salary down.
- [68:21]
Dr. John DeLoney
The line, sure, easily. The med students never call.
- [68:25]
Caller
That's a long ways away.
- [68:28]
Dr. John DeLoney
New residents never call into the show. Eric ever panicking.
- [68:31]
Dave Ramsey
So you're nothing. Go ahead. Go ahead, Eric.
- [68:37]
Caller
So I also recently got married about eight, nine months ago and I want to know the best way for my wife and I to be proactive about our loans starting now and manage slash know how much we should be putting aside for savings for our house, investing in our Roths at this time.
- [68:53]
Dave Ramsey
I love your question. It's a very wise question to say I'm getting ready to come into some money. What is the smart thing to do with it? I've worked really, really hard to get to this point. What is how Can I be the smartest and get the most traction with all this work I put in? Because you've worked your tail off to get here. Congratulations, sir. So very good question. All right, all. All snarkiness aside, I'm still going to tell you the truth. The first rule is this. I live in Nashville, okay? And so I know the country music folk. I grew up in Nashville. I know the country music folk, okay? And I know all of them that almost made it, too. And I also speak to NFL rookie camps and explain to the young guys the NFL stands for. Not for long. The average NFL career is 3.8 years, and they think they're rich, okay? So there's only one thing dumber than a country music artist who's getting ready to lose everything because of bad financial advice or a new NFL star that's getting ready to lose everything, and that's your fellow doctors giving you financial advice. They are the world's worst with money. 35 years I've been doing this, I am constantly amazed at how the typical MD is absolutely stupid with money. It blows my mind. Now, there's exceptions. There's exceptions. So that's rule number one. Don't listen to these guys that have advice. Now, rule number two, you're very smart to ask advice and to learn things from several different sources. And you use that wonderful brain God has given you because dumb people don't get this far in medical school, even though I just made fun of them for their financial stuff. But they're not dumb, okay? But you don't get that far. And so use that brain of yours to learn. Do not put money in stuff you don't understand. And keep asking a thousand questions like the one you just asked for the next 10 years, and you will become very, very wealthy. So you are on the right track. In the multitude of counsel, there is safety, the Bible says. And so you keep gathering and learning and learning and don't do everything. Dave Ramsey says you go learn about it for yourself. Now, having said that, also having coached some docs who did a great job becoming very wealthy very quickly, one of the things we coach them to do is to avoid what we call doc itis when you come out of med school. So you have a. You're in the top 1% of the population in emotional maturity. One measure of emotional maturity is the ability to delay pleasure. You have while all of your friends from high school have been out playing beer pong, you've been going to class and reading books. And for a decade longer than they have to get to where you are. And so you've been holding your breath much longer than the typical person walking around listening to this conversation right now. You've been delaying pleasure to get to a greater good. So you know how to accept pain to get to a greater good. You know how to pay a price to win. Otherwise you wouldn't be where you are. You don't graduate med school unless you get that concept from a psychological, emotional standpoint. Does that make sense? Yes, that's a huge compliment.
- [72:09]
Caller
Life doesn't necessarily have that, which sometimes can create a clash. But I agree. Yes, I understand that.
- [72:15]
Dave Ramsey
Yeah. So when you get out, the typical doc has been holding their breath for a decade longer than everybody else. And when they exhale, it looks like this. A new house, an investment account and a BMW and the student loans are just sitting there looking at them because they've been waiting so long to enjoy this income that the first thing they do is go enjoy it. And I'm going to beg you to do one thing, and that's continue to hold your breath for 18 more months after you get out and get your. You pass your bars, you take the big job, you take the signing bonus, and you clear the 200k as fast as you possibly can. Keep living like a broke resident for a short period of time and clear the debt because then you've got $200,000 to $800,000 a year or whatever your income is going to be for the rest of your life with no monkey on your back. And you can go, you can become wealthy so quickly, but if you kick the can down the road on this 200k like those docs are suggesting, you're going to be in debt the rest of your life and you're going to suck at money and you're going to struggle. So I would live like a resident, like you were broke and clear this up as fast as you can.
- [73:21]
Dr. John DeLoney
And with your marriage income, brother, I would invest. Not in Roth, not in real estate, I would invest in you right now. Can you and your new wife, can you all get through the rest of this year and next year before you start getting paid? Can you get through the tuition? Can you all cash flow that.
- [73:41]
Caller
So she makes. She was making around 80k as a registered nurse. And then we were able to chip about 40,000 off.
- [73:51]
Dr. John DeLoney
Amazing.
- [73:52]
Caller
Yeah. So we got.
- [73:53]
Dave Ramsey
First goal is no more debt, though. First goal is no. First goal is no more debt. Second goal is chip away.
- [74:02]
Caller
So the problem was she went back to nurse practitioner school as well in.
- [74:06]
Dr. John DeLoney
January oh, so how much is she gonna owe?
- [74:10]
Caller
So she doesn't owe anything. Her father had a 529 for her, so we don't have any loans on her part.
- [74:15]
Dr. John DeLoney
Excellent. Excellent.
- [74:16]
Dave Ramsey
Okay, you guys are gonna be making 600 grand.
- [74:18]
Dr. John DeLoney
Yeah. Y' all are going to be doing well.
- [74:20]
Dave Ramsey
This is so great. Please pay off the debt as fast as you can.
- [74:24]
Dr. John DeLoney
As fast as.
- [74:25]
Dave Ramsey
No investments. No. No purchases. Live like broke college students till all the debt is clear.
- [74:29]
Dr. John DeLoney
18 more months, dude.
- [74:30]
Dave Ramsey
Both of you pass your bars. Don't suffer from docitis. Today's Ramsey show question of the day is brought to you by. Why refi if you've been turned down for refinancing your defaulted private student loans? Well, you're not alone and you're not out of luck. Why refi exists to give people just like you another shot. Go to yrefi.com Ramsay Ramsey. That's the letter Y, R, E F Y.com Ramsey. Not in all states.
- [75:24]
Dr. John DeLoney
All right, today's question comes from Felix in Pennsylvania. Felix writes, I'm a. I am a millennial, and multiple families that I know who have children are selling their houses to live in RVs because they want to get out of debt. They are basically homeless. What is going on with my generation? I don't think we can cover that in this podcast. We don't have enough time. I know debt is to be avoided, but is this trend healthy, or is gazelle intensity going too far? It's a good question.
- [75:59]
Dave Ramsey
I don't think that's gazelle intensity. I think that is. Gazelle intensity is being very intense and sacrificing to get to a future goal. I've done this show for 35 years. I've never told someone to sell their home and live in an rv.
- [76:19]
Dr. John DeLoney
I think that's a part of our. The hack virus that we live in as a culture.
- [76:24]
Dave Ramsey
Yeah, but that's not you and I. I mean, it's not Ramsey advice, and Ramsey advice is gazelle intensity. So I invented that phrase. So no one used that phrase before me. Right. So that's. But is this. Is this a segment of. Of a generation that feels hopeless and stuck, and so they resort to extreme measures that are over the pale to try to get unstuck? Yeah, that would be true. Yeah.
- [76:51]
Dr. John DeLoney
Or people have bought way too much house, way too much car, and they're just hitting control, alt, delete on their life, or they're. They grew up playing video games and they're just hitting reset on the Nintendo and starting over. But, yeah, I. I I think it's one of those not an either or question here.
- [77:07]
Dave Ramsey
It's not the right move. Right, Agreed.
- [77:09]
Dr. John DeLoney
But getting out of debt is very important.
- [77:11]
Dave Ramsey
Yeah. Now, selling your home, moving in an apartment, that might work.
- [77:14]
Dr. John DeLoney
Absolutely.
- [77:15]
Dave Ramsey
I've done that.
- [77:16]
Dr. John DeLoney
I sold my house and moved into a dorm, for crying out loud. Yeah, we've been there. I've been there.
- [77:20]
Dave Ramsey
I. But I. You know, I always answer questions the way I would answer them, the way, you know, what would I do if I was in the shoes. And there's never a moment in my life that I would live in an ordinary RV because I want my wife to live with me, and she wouldn't live there. So it's not. It's not something. It's not a dream of ours at all. It's more like a nightmare. And we would be like Cousin Eddie. And so, no, we don't. We don't need to do that. The Ramses don't. So I don't tell other people they need to do it. I have had people do some wild things. I remember about. Gosh, it's a long time ago. A couple decades ago, a guy in Birmingham sold his home, and he called me up and told me he bought a trailer. And I'm like, oh, God, why'd you buy something going down in value? He goes, Dave paid $1,000 for it. You moved into a $1,000 mobile home. You might be a redneck if my godson, really. And he's like, yeah. And he was making, like, serious money. And he goes, but in two years, I'm gonna pay cash for a house, and that's the price we're gonna pay. And we're willing to do that. I'm like, okay, you're willing to do that? Something I'm not willing to do. So I. I can. I can admire you for that, but I can't make that the program. Sure. It's not what I teach.
- [78:35]
Dr. John DeLoney
Yes.
- [78:35]
Dave Ramsey
And so. And he did. He. He saved up, like, 300,000 bucks or something in the first. In two years and went. Bought a house for cash.
- [78:42]
Dr. John DeLoney
It's amazing.
- [78:43]
Dave Ramsey
And. But I. I don't. I don't see you moving Sheila into a single wide.
- [78:48]
Dr. John DeLoney
Nope. No.
- [78:49]
Dave Ramsey
So here's the thing.
- [78:50]
Dr. John DeLoney
When he asked a question. What's going on with my generation? There is a challenge. You can call it resilience. You can be whatever. Discipline over time, doing a hard thing with repetition, whether it's diet, whether it is working on relationships, whether it is getting out of debt. I would say there is a Generic allergy in our culture to discomfort over 24 to 36 months. People don't mind doing something painful right this second and, but, but they don't want to stick to a hard thing over time. And we've been told you don't have to. And actually we're a little sliver of history where there is some hacks around some stuff. And so everyone's looking for a way to do the craziest thing as pain free as possible. And I, so I think if you ask me that question, your culture doesn't want to live within their means and, and take what that means, which is, okay, we can't live in Manhattan doing this edit editor job that we saw on Instagram. We're gonna have to live in Kans, Kansas or in Nebraska where we can afford to live and do a job that maybe isn't our quote unquote passion job. Or if you found yourself way, way in debt to sell the cars and put two kids in, in car seats in a Corolla, which is uncomfortable, but it's doable and take three years to work with intensity, focus intensity over time and be uncomfortable for that long. That to me is the biggest allergy I think we have culturally.
- [80:16]
Dave Ramsey
Yeah, I remember distinctly Millie Ramsey driving a Chevy when she's 19 years old driving a Chevy 2, which is like the first version of a Chevette kind of thing. It had two doors, it had a small little four cylinder in it. Gas was 12 cents a gallon. And you could get to the top of the road above the gas station and run out of gas and coast down to the gas station. And we did. And I would say, mom, when are we getting an air conditioner for the car? And she said, we have a 240 air conditioner. Roll down two windows, we're going 40. And so they paid a price. That generation paid a price to live. They lived like that for a long time before they saw prosperity. And then I saw that. But I was telling somebody the other day, they were asking me about Gen Z's because we've got so many Gen Z's here, Ramsey and millennials. I would say out of our 1100, those two generations represent probably 700 people, maybe 600, something like that. The vast majority of people work in this building, fall in that. And I think they're the two best generations I've run into in a long time for wealth building and for a lot of things. And the reason is they grew up with a magic wand in their hand. And the magic wand says if you push a button, stuff shows up on your porch. If you push a button, you can get the answer to any question. If you push a button, it'll track all of your medical desires and things you wonder about if you push a button. And so they have an abundance mentality because to them everything's possible. Because if they push a button, anything happens. And it's a natural built in in their DNA and abundance mentality. They're not scarcity driven, they're abundance driven. And that's a wonderful thing. And so they think like anything's possible because to them anything's possible. Right. And so that is a wonderful trait of this generation. What they don't have is zero patience.
- [82:15]
Dr. John DeLoney
Right. Or tethered to a, when you push.
- [82:18]
Dave Ramsey
A button, crap shows up on your porch that day.
- [82:21]
Dr. John DeLoney
That day.
- [82:21]
Dave Ramsey
I mean, you know, you didn't have to walk uphill both ways in the snow to go buy some toilet paper.
- [82:26]
Dr. John DeLoney
That's right.
- [82:26]
Dave Ramsey
It shows up on your porch, you know, and so there's no patience. I'm not going to wait for anything, I'm not going to struggle for anything. I want it right now. It's a microwave, not a crock pot. Don't talk to me about cooking something over the whole weekend. Hand you don't cook stuff overnight. You cook it and we eat it right now. Right. And if they have a fallacy, it's that. And it relates to this question.
- [82:49]
Dr. John DeLoney
Yes, exactly. And so I, I would tell you, yes, get out of debt. And I, well, I think with. When it comes to pushing a button, I think the friction between what I want and what I can get is, is been so intentionally dissolved that it is untethered us from reality.
- [83:04]
Dave Ramsey
Exactly.
- [83:04]
Dr. John DeLoney
That water comes from somewhere. That cow came from some farm somewhere, somewhere.
- [83:07]
Dave Ramsey
It's just magic.
- [83:08]
Dr. John DeLoney
It's magic. And if the longer you live in magic land, the more divorce from reality you get. And that's what companies want, Right. They don't want you tethered to reality.
- [83:16]
Dave Ramsey
I'm gonna hold an eleven hundred dollar magic wand in my hand and criticalize, criticize capitalism.
- [83:21]
Dr. John DeLoney
I'm gonna give one to, I'm gonna give it an 11, 000, I mean 1100 computer to a six year old. Right? Because you quote unquote need one. That's Matt. It's madness. But we're untethered from reality and there's.
- [83:35]
Dave Ramsey
Good parts to it.
- [83:36]
Dr. John DeLoney
There's amazing parts to it.
- [83:37]
Dave Ramsey
I think the possibility thinking, to quote A guy from three generations ago, Dr. Robert Shuler, right, Possibility thinking. This generation Thinks anything's possible. And when you're sitting in meetings with them, dreaming up the next thing to do in business, that's about as positive a trait as you can have. Rather than some sour faced boomer sitting in there going, well, it won't work, can't be done. That'll never work. Like Eeyore is in the meeting with you. Right?
- [84:03]
Dr. John DeLoney
Weird juxtaposition of yes, we can do that, but I need to work. Life balance, right?
- [84:08]
Dave Ramsey
It's like, but I want to work from home.
- [84:10]
Dr. John DeLoney
It's like the boomer's like, that ain't gonna work. And I'm gonna spend the next 80 years trying to tinker it away until it finally does work.
- [84:16]
Dave Ramsey
Yeah, I'm gonna keep messing with this and keep messing with this and keep messing with this. Perseverance.
- [84:20]
Dr. John DeLoney
So the allergy is like discipline over time, perseverance. It's gonna down slow, stuck for a long period of time. And we're going to be stunned at how much we got done and how strong we are at the end of this thing.
- [84:32]
Dave Ramsey
Start it with the possibility, thinking and then stir in a little patience and some stir in some discipline and perseverance.
- [84:37]
Caller
And you got a real.
- [84:38]
Dave Ramsey
These two generations are going to be the best generations that we've ever seen on the planet. It's way too easy to put off making a will. And believe me, I've heard every excuse in the book. But not having the time is one excuse we can kick to the curb right now. Because these days most folks can make a legally binding will on their laptop between loads of laundry. If you're wondering if you can make your will online or if you need a lawyer, we have a quiz to help you figure that out in less than five minutes. Just go to ramseysolutions.com willsquiz ramseysolutions.com wills quiz. Welcome back to the Ramsey Show. Dr. John DeLoney, Ramsey personality and host of the Dr. John DeLoney show is my co host today. The Phone number is, call-8825-5225. Mike's in St. Louis. Hey Mike, how are you? I'm good.
- [85:53]
Caller
How are you guys?
- [85:54]
Dave Ramsey
Better than I deserve. What's up?
- [85:57]
Dr. John DeLoney
Just wanted to ask, is it a.
- [85:59]
Caller
Good idea to sell our house in order to get out of our consumer debt and fast forward the baby steps.
- [86:07]
Dave Ramsey
Okay. How much consumer debt do you have?
- [86:10]
Caller
About 36,024. Credit card, 12,000 and a car.
- [86:15]
Dave Ramsey
Okay. And what's your household income, sir?
- [86:22]
Caller
Household income Right now I just picked up another job, but currently I'd Say our household income is about 4,000 or 4,500 after taxes right now, but that should bump by about $3,000 here in the next few months.
- [86:37]
Dave Ramsey
So you're going to be making $7,000 a month in the next few months.
- [86:45]
Caller
I'm sorry, I'm being a little exaggerated, I guess. So let's, let's, let's back that down to $6,400. $6,500 a month.
- [86:55]
Dave Ramsey
Okay, so you're making $6,000 a month. How much is your house payment?
- [87:00]
Caller
Twelve hundred.
- [87:01]
Dave Ramsey
Okay. All right. Do you hate your house?
- [87:07]
Caller
No, I don't hate it. It's your wife hate it very small. So we do not hate it. No.
- [87:11]
Dave Ramsey
Okay. All right. No, you should not sell your house. Your house is not the problem and it's not the solution. Okay, so you make six thousand dollars a month. You have a twelve hundred dollar house payment. At some point you'll make six. You don't today. I understand we're talking about a couple months out, right? Okay, 1200. So that leaves me, you know, $4,500 to buy food and reduce 10 debt. Okay, you owe 36,000. So if you put $2,000 a month on the debt, you're out in 18 months. If you put $3,000 a month, you're out in one year. So somewhere between one year and 18 months, depending on whether your 6,000 or your 7,000 is correct. One of those two. But somewhere between one year and 18 months, you should be out of debt then. No, you don't sell your house for that reason. Instead you live on beans and rice. Rice and beans for one year to 18 months. Don't go out to eat. Don't go on vacation. Roll up your sleeves, the two of you. Sit down and make your budget scream. Make your broke friends think you've joined a cult. Get really, really serious about leaning into this debt and chop up the credit cards tonight, light a candle and have a plastic surgery ceremony. And then let's just tear into these cards and this debt. You guys have not been living on a plan and you've just increased your income substantially in the last year or so. And that's concluded by this next raise, right?
- [88:49]
Caller
Correct.
- [88:49]
Dave Ramsey
Yeah.
- [88:51]
Dr. John DeLoney
Here's the way I like to think of it, dude. If there was a marathon in your tax town, you could take an Uber to the last mile and run the last mile. They'll give you a ribbon, they will congratulate you and everybody will cheer for you as you cross the finish line. You could do that and you'd still have crossed that finish line. If you train for that thing and you run that thing and you get all the blisters, all the pain, all the. All the stuff that comes with running it, when you cross that finish line, a, you're a different person. Y' all will be a different married couple together, and you're going to be way stronger, way better shape than the person who just took the Uber to the last mile. And so selling your house right now is a hack, and it might clear it up, but y' all will still be y'.
- [89:39]
Caller
All.
- [89:40]
Dr. John DeLoney
And so the chances you'll fall back into something is 100%. And so I love the idea that y' all are going to scratch and claw for a year, 18 months, and the sweetness of cross, and that finish line will be such a different, different feeling, and you'll have a different level of strength than if you just got dropped off.
- [89:57]
Dave Ramsey
Darrel. The two of you locking arms to set a goal and attack this goal with a vengeance is huge for a young marriage. And the deeper you cut, the faster you get out. The more you work, the more you make, the faster you get out. And so just look at this and say, how much work can I do? How little can I spend? And look at your spouse and go, how much work can we do? How little can we spend? And then we'll be out that much faster. And John's right. You'll never look at a credit card the same after this. You know, it's kind of like once you get food poisoning on something, you never want to eat it again.
- [90:36]
Dr. John DeLoney
I need nothing again.
- [90:36]
Caller
Yep.
- [90:37]
Dave Ramsey
Ever. Like, 40 years later, it still turns your stomach. You know, it's like, I am never just smelling it. It's just. It's the same. That's the way I feel about it.
- [90:47]
Caller
Debt.
- [90:47]
Dave Ramsey
And once you fight through this, you'll feel that way about it. John's right. So, no, you mathematically, relationally, psychologically, spiritually, do not need to sell your house. Nothing in this call says you need to sell your house. And if you needed to, I'd tell you because I love you and I want you to win, and I think you're going to win. And I just. I can hear. It's funny, John doing this all these years. I can hear in their voice sometimes that they're getting ready to do it, that they're done. This guy's. He's got that thing in his voice like, I'm gonna. I've had it. Yeah, so he's had it so bad, he's willing to sell his house.
- [91:22]
Dr. John DeLoney
I'll sell everything.
- [91:23]
Dave Ramsey
Yeah. I'll do whatever. Whatever. I've had it. The great Les Brown, the great motivator back in the Zig Ziglar days, used to do a whole talk on that. He was like, when you get sick and tired of being sick and tired, you know, and you finally look around, you say, I had it. That's when you're about to change your life. And you can hear that in people's voice and their sentence structure and their tone when they're talking to us. And so many years of being able to just listen to them and not see their body language, but hear it in their voice. He's got that thing. I think I predict Mike and his sweet wife are going to be multimillionaires. And it started today.
- [92:02]
Dr. John DeLoney
Today 1.
- [92:03]
Dave Ramsey
It started three days ago when they started talking about this. And we gave it a little boost today. One of the two. Something like that. Like that. But, yeah, when you're willing to do whatever, there is nothing that can stop you.
- [92:14]
Dr. John DeLoney
Yeah, I, I, I have recently become obsessed is probably too dramatic of a word, but pretty close to the idea of what is the hardest way I can do something great or do something well versus what I think I've spent the last 20 years. What's the easiest way I can get through this thing?
- [92:35]
Caller
Thing.
- [92:35]
Dr. John DeLoney
The, the neuroscience keeps coming back that when your body doesn't want to do a thing and you go do that thing anyway, it. The cascade of benefits is so beyond the accomplishment of that thing. And at the same time, we live in a culture where Dave, I was looking up, I was trying to find a part for the mower. Hank and I were working on a mower and a riding mower that I got. And right when we got it all fixed up, the belt broke. I just opened chat GBT and said, what is the belt product number for this? And it gave it to me. There's no friction at all anywhere for anything anymore. And it's like, do you want to order it here? And I now want to.
- [93:11]
Dave Ramsey
That doesn't disturb me when iRobot shows up and puts the belt on for you. Now I'm getting pissed. I'm just right.
- [93:17]
Dr. John DeLoney
Here's the thing. Like, I like the idea of sitting down with my son and going to tractor supply and looking through it. And it took. Takes so much longer. And man, when that thing took off across the yard, watching him cheer, watching me cheers year like, we did a thing together, it was hard. And the benefits were beyond just replacing that belt. And so I, I like the idea of taking, okay, 18, 18 months. I bet we can do it in 13. And we're gonna figure this thing out. And you will have a different kind of marriage on the other side of this, beyond just being out of debt, it's everything all at once. And it's amazing.
- [93:49]
Dave Ramsey
Yeah, when people do that stuff, they sell the knife collection, you sell everything.
- [93:54]
Dr. John DeLoney
They sell the gun and they lose 30 pounds.
- [93:56]
Dave Ramsey
It's weird.
- [93:57]
Dr. John DeLoney
And they don't talk bad about each other at the water cooler anymore. It just changes everything.
- [94:00]
Dave Ramsey
Yeah, they, they like each other because we're working together. Don't you mess with my wife. Don't you mess with my husband. All of a sudden we're a team. Now we're locked foreign.
- [94:25]
Jonathan
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- [95:17]
Dave Ramsey
Abby is with us in Virginia. Hey Abby, what's up?
- [95:21]
Caller
Hi. How are you guys?
- [95:22]
Dave Ramsey
Better than I deserve. How can I help?
- [95:25]
Caller
So I am an applying medical student this year and my family has an exchange student and my mother informed me that they're going to be using my529 to pay for our exchange students education here in America. And I'm worried about how much debt I'm going to be collecting from medical school.
- [95:50]
Dave Ramsey
Okay, so there's a 529 account that you thought you were going to get to use for school. How much is in it?
- [95:56]
Caller
Yes sir, that I don't know. My mom has never disclosed it to me. But she's the one who put in majority of the money and my father didn't really put in much of his income into it because he was in the army.
- [96:14]
Dave Ramsey
Okay.
- [96:15]
Caller
I currently am receiving benefits from the VA to go to a university.
- [96:21]
Dave Ramsey
Okay. And that's for undergrad or for med school?
- [96:24]
Caller
Undergraduate. So it'll stop at the end of the four years that I just did.
- [96:30]
Dave Ramsey
All right, and what, and then you're going to go to med school to become an md?
- [96:37]
Caller
Yes sir, that's, that's the hope.
- [96:38]
Dave Ramsey
When will you finish your four old year. Years.
- [96:41]
Caller
I'll finish this year in 2026.
- [96:44]
Dave Ramsey
Okay, but as far as you know, there's enough for the exchange students and. Exchange student and your medical. You don't know how much is in there.
- [96:54]
Caller
I don't know how much is in there. My mother said ballpark is over 400k, but she doesn't know. She knows, but she won't just tell me the actual number itself.
- [97:05]
Dave Ramsey
Okay. Okay. All right. So I get to learn something on this show. I've been doing this show for 30 years, and I get to learn something brutally every so often when I screw up an answer on the air. And about three weeks ago, I screwed up an answer on a 529, and I've gotten trashed for screwing up the answer. So I've thoroughly learned about 529 is what I didn't know in the last three weeks or so. So here's the correct answer because. And I screwed it up before, and I'm not going to this time. You don't own the account, Abby. She does. She can do with it what she wants to do with it.
- [97:40]
Caller
Yes, sir. So would I take out loans for medical school?
- [97:47]
Dave Ramsey
I don't know what planet. She can't help an exchange student and still have enough left for you to go to medical school out of $400,000? Yeah. Why are you whining about this?
- [97:59]
Dr. John DeLoney
There's, like, a bigger conversation to be had.
- [98:00]
Caller
Bad.
- [98:01]
Dave Ramsey
Why. Why is it that your mother. Why are you and your mother at odds?
- [98:06]
Caller
Because my mother believes that I should take out loans for medical school like she did for her graduate program.
- [98:14]
Dave Ramsey
So she doesn't want. She doesn't want to use the 529 for you to go to medical school regardless of the exchange student?
- [98:21]
Caller
Yes, sir. But she then told me she's going to use it for the exchange student instead of for me. And that's, like, where some of the tension lies.
- [98:30]
Dave Ramsey
Not really. The tension just is that she doesn't want to give it to you for med school, period.
- [98:36]
Dr. John DeLoney
She did pour salt in the wound and say, but I am going to give it to this other kid.
- [98:40]
Dave Ramsey
That's not even. You know, it's not even.
- [98:42]
Dr. John DeLoney
It's not.
- [98:42]
Dave Ramsey
Family member.
- [98:42]
Dr. John DeLoney
It's not you.
- [98:43]
Dave Ramsey
Yeah, I'm not even sure she can do that, by the way, without getting penalized. But that. I don't know the answer to that. And I'm not going to answer something else. I don't know the answer to it, so. But the. Yeah, maybe she can. I've never read that you can give it to an exchange student, only siblings and people in the family. You could give it to your. She could give it to your husband, you give it to your wife, you give it to your parents. You could give it to your kids now. But I've never heard exchange student. Maybe you can though. Maybe you can. It doesn't matter though. That's not the core issue. The core issue. She's not gonna give it to you anyway.
- [99:15]
Caller
Yeah, I understand that, sir.
- [99:17]
Dave Ramsey
Yeah.
- [99:18]
Dr. John DeLoney
What's her reason happening? It's like. It sounds like an old, like, frat bro. Like I got hazed. So you get haze. Like she should be the one saying how ruthless it was trying to pay back student loans and be a new mom and all that kind of stuff. So I have almost a half a million dollars in an account. I'm gonna. I'm gonna take care of you.
- [99:38]
Caller
Oh.
- [99:39]
I have paid for all of my medical school applications. I'm paying for all of my flights to and from interviews at other.
- [99:46]
Dave Ramsey
Are you a senior?
- [99:48]
Caller
Yes, sir.
- [99:49]
Dave Ramsey
Okay. Wow.
- [99:51]
Caller
So I am paying for everything. I pay for my rent. I. Yeah, I do pretty much everything. I have a job.
- [99:59]
Dave Ramsey
Okay. There's something.
- [99:59]
Dr. John DeLoney
There's something deeper here.
- [100:00]
Caller
What.
- [100:01]
Dr. John DeLoney
What's the. What's the tension with you and your mom?
- [100:04]
Caller
This exchange student has lived with us for four years trying to get an associate's degree and has not yet completed it.
- [100:10]
Dr. John DeLoney
I know. Let's take.
- [100:12]
Dave Ramsey
The exchange student is a symptom. They're not the problem.
- [100:15]
Dr. John DeLoney
What is it?
- [100:15]
Dave Ramsey
The problem is your mother and you. Yeah.
- [100:17]
Dr. John DeLoney
What is going on?
- [100:19]
Caller
I honestly don't know. I appreciate my mom.
- [100:22]
Dr. John DeLoney
Really? You don't know? Really?
- [100:24]
Caller
I. I genuinely don't know. I have a feeling it's because she went through this whole process without any help from her parents and expects me to do the same.
- [100:33]
Dr. John DeLoney
Well, I can tell you I went through some things all by myself without my parents help. And I'm making dang sure that my son doesn't do that. And there's some things that I had to do that were really hard that I'm making sure he does because it. Cuz it's appropriate, but.
- [100:46]
Dave Ramsey
Okay. Okay. Number one, let's sabi. Let's set this aside. The exchange student is not causing you to go to med school with student loans. Your mother is. She has the money to do both. So take the exchange student out of the conversation completely. And then if I were in your shoes, you're not going to like this, but I simply wouldn't go to med school. I don't think you can afford to go.
- [101:13]
Caller
Go.
- [101:14]
Dave Ramsey
She's not willing to help you. And I'm not going to tell you to go $250,000 in debt to go be an MD not in the current medical climate. I think that's financial suicide. I know it's your dream and it's your A game. It's what you've been wanting to do your whole life. And. Yeah, yeah, yeah, yeah, yeah, yeah. And you're going to do it no matter what I say. I know that. But I'm not going to leave this call without telling you the truth. And the truth is you should not do this. And then you should call your mom up and say, based on the fact I've got to go into student loans, dad, I've decided not to go.
- [101:41]
Dr. John DeLoney
Yeah, I agree with Dave and. But I also think it's worth sitting down at a table and asking your mom what happened?
- [101:46]
Dave Ramsey
What in the world is wrong?
- [101:48]
Dr. John DeLoney
Yeah. What did I do? I had this amazing opportunity ahead of me.
- [101:52]
Dave Ramsey
Did you go at her after the divorce with your dad and she never got over the fact that you got out, you know, you took his side or. I mean, what happened?
- [102:01]
Dr. John DeLoney
Yeah, I'm pretty gnarly.
- [102:02]
Dave Ramsey
Or this woman's just wounded from something else and she's taking it out on her kid. I don't know. Know. But this is a game of cat and mouse. I don't want to be in.
- [102:10]
Dr. John DeLoney
I would opt out of the game. Yeah, that's exactly right.
- [102:12]
Dave Ramsey
I'd step out.
- [102:13]
Dr. John DeLoney
And Dave's right. Even at the. At the. At the highest case scenario, she could put 100 grand towards this other student's tuition and still have $300,000 for your.
- [102:22]
Dave Ramsey
And you can still go to school.
- [102:23]
Dr. John DeLoney
So it's not about her.
- [102:24]
Dave Ramsey
Choose a school you can afford. If you've got $250,000 in cash land there. Choose a school that's 250. Or don't go. Right. Find one that. Because you can find it in med school and get through for that. It's.
- [102:35]
Dr. John DeLoney
But if she's making.
- [102:35]
Dave Ramsey
And no one asks the doctor where they went to school ever. Her. Yeah.
- [102:39]
Dr. John DeLoney
If she's making you pay for flights. If she's got 400k and she's not paying for tuition your senior year, helping you with rent. There's other. There's something underneath all of this that is borderline pathological. Or mom just thinks she's toughening up her daughter and then you have to live in that mathematical reality. I simply don't have the money to go to med school right now. And I'm like, Dave, I know too many medical doctors whose kids are going to school and they're still paying on their student loans. And so I just, I can't in good faith tell you today, do that right now.
- [103:11]
Dave Ramsey
And John has a PhD in higher education. So he does know actually what this.
- [103:15]
Dr. John DeLoney
Tough, man. It's tough, tough, tough, tough, tough. Yeah, I'm sorry, I hate it for you.
- [103:20]
Dave Ramsey
That's, you know, there's a thing where you teach your kids to do hard things and then there's a thing where you're just being a jerk. Right.
- [103:32]
Dr. John DeLoney
Or it's like I'm gonna, I'm gonna box my kid around the ears because I know the world's tough and they're going to get boxed around the ears a lot. And what you end up doing, doing is beating your kid down so much before they even get into the world. And there's something about teaching your kids strength and discipline and resilience. And then there's something about kicking your kids knees out from under before they leave the house. And so if. Yeah. To this mother. Congratulations. You win. You're going to have 400 grand in an account and you have what sounds like a pretty hardworking, amazing young woman who's going to have her dreams diverted. Either she's going to go into catastrophic debt debt trying to prove herself or she's going to have to go do something else. Robbing a generation of potentially a great young doctor because you want to be right. So congratulations on being right and altering everything here.
- [104:22]
Dave Ramsey
Yeah, that's just. But you're a tough old br. You proved.
- [104:25]
Dr. John DeLoney
You showed her. Congratulations. You showed her.
- [104:27]
Dave Ramsey
Give me a break.
- [104:34]
Caller
Sam.
- [105:01]
Rachel Cruze
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- [105:54]
Dave Ramsey
In the lobby of Ramsay Solutions on the debt free stage. Jonathan and Sashiya are with us. Hey guys. How are you?
- [106:02]
Jonathan
Hi.
- [106:03]
Dave Ramsey
Good.
- [106:03]
Caller
How are you?
- [106:04]
Dave Ramsey
Better than I deserve. Welcome. Where do y' all live?
- [106:07]
Sashiya
Savannah, Georgia.
- [106:08]
Dave Ramsey
Fine. And how much debt have you two paid off?
- [106:12]
Sashiya
373,346.
- [106:15]
Dr. John DeLoney
Way to go.
- [106:17]
Dave Ramsey
How long did that take?
- [106:18]
Sashiya
16 months.
- [106:19]
Dave Ramsey
Good for you. Whoa. And your ranger of income during that.
- [106:23]
Sashiya
Time started out 90,000 and ended up 530,000.
- [106:28]
Dave Ramsey
Okay. That's bizarre.
- [106:30]
Jonathan
Yes.
- [106:31]
Dave Ramsey
Who got a job? What in the world?
- [106:34]
Jonathan
So that's me.
- [106:35]
Dave Ramsey
That would be you.
- [106:36]
Jonathan
Yes, sir.
- [106:36]
Dave Ramsey
Okay. So I'm guessing you must have come out of med school, huh?
- [106:40]
Jonathan
Yes.
- [106:41]
Dave Ramsey
Okay. And so you went from making Nothing to making 400.
- [106:45]
Jonathan
Yes.
- [106:46]
Dave Ramsey
Or something.
- [106:46]
Jonathan
Yes, sir.
- [106:47]
Dave Ramsey
Way to go. What specialization is you in?
- [106:49]
Jonathan
So obgyn.
- [106:50]
Dave Ramsey
Oh, wow. Good for you.
- [106:52]
Jonathan
Thank you.
- [106:53]
Dave Ramsey
That's the most fun kind of doctor. Babies. Babies. Babies.
- [106:57]
Jonathan
Yes.
- [106:57]
Dave Ramsey
It's the only time people are happy to be in the hospital.
- [106:59]
Jonathan
Yes. You know, Absolutely.
- [107:02]
Dave Ramsey
Very cool. Good for you. That's so 400k from nothing. So 373 is not a house. That was med school.
- [107:08]
Jonathan
All student loans.
- [107:09]
Dave Ramsey
Wow. And you just said, we're making. We're making. We're gonna pretend like we're not making any money. We're gonna pay off the loans in 16 months.
- [107:15]
Jonathan
That's exactly what we did, Dave.
- [107:17]
Dr. John DeLoney
So you heard us telling somebody in an earlier segment.
- [107:19]
Jonathan
I said, yes. That was the seed that was planted for our story.
- [107:23]
Dr. John DeLoney
Okay, tell us about this adventure.
- [107:25]
Jonathan
So the journey really started in 2019, whenever I graduated medical school, staring at six figures of debt, and it was smothering. It was hard to breathe. So we went through residency not making much. Our goal then was just less than not make that number larger. Right. So we lived well beneath our means and had twins. Yes. So we went through all of that.
- [107:50]
Dr. John DeLoney
I like how you play her like it was her fault.
- [107:53]
Dave Ramsey
When she got pregnant, she had twins. Yeah.
- [107:57]
Jonathan
We have a teen. So we got her through school, and we were like, let's just keep this number steady. And then when I graduated training, it was like, let's live well below our mean live like a resident, literally, and pay everything onto this debt.
- [108:11]
Dave Ramsey
You did it just exactly like we described. That's incredible.
- [108:15]
Jonathan
Yes.
- [108:15]
Dave Ramsey
So when did you get connected to the Ramsey stuff?
- [108:17]
Jonathan
So I heard about you in medical school, just from students talking about it. We were all wondering, how are we going to pay off these loans? And some people really wanted loan forgiveness, and some people talked about Dave Ramsey. And I said, well, the loan forgiveness doesn't sound very, very good. So let me look into that. And so you were simmering for a long time before we could press play.
- [108:38]
Dave Ramsey
Wow. Okay.
- [108:39]
Jonathan
Yes, sir.
- [108:40]
Dave Ramsey
So you. You had it all lined up, and then just soon as you get out.
- [108:42]
Jonathan
Yes.
- [108:43]
Dave Ramsey
Boom. We're hitting this. Hit that end domino and go.
- [108:45]
Jonathan
Yes. Yes. Residency was tough because we wanted to, but we just didn't have the means.
- [108:50]
Dave Ramsey
Yeah, you didn't have enough margin then.
- [108:51]
Dr. John DeLoney
But even, even having the courage and the grit to hold the line.
- [108:56]
Jonathan
Yeah.
- [108:56]
Dr. John DeLoney
Okay. We've dug this big of a whole hole. That's a tough order with what, three kids?
- [109:01]
Dave Ramsey
Yes.
- [109:02]
Dr. John DeLoney
And you in residency, which means you're working 900 hours a week.
- [109:06]
Jonathan
Yes.
- [109:06]
Dr. John DeLoney
And you're holding down everything.
- [109:09]
Sashiya
Yes, sir.
- [109:10]
Dr. John DeLoney
Still does to just say we're holding the line, that's really tough. That's like doing bench press and instead of like pushing all the way up, it's just holding it.
- [109:17]
Jonathan
Yes.
- [109:18]
Dr. John DeLoney
That's hard, man. That's really tough.
- [109:20]
Jonathan
Yes, absolutely.
- [109:21]
Dave Ramsey
Congratulations.
- [109:22]
Jonathan
Yeah, thank you.
- [109:23]
Dr. John DeLoney
Amazing.
- [109:24]
Dave Ramsey
The great news is, is now. Woohoo.
- [109:26]
Jonathan
Yes.
- [109:27]
Caller
Wow.
- [109:27]
Dave Ramsey
You're gonna be able to do amazing stuff.
- [109:30]
Jonathan
Yes.
- [109:30]
Dave Ramsey
Do you have a mortgage?
- [109:31]
Jonathan
We just bought a house.
- [109:34]
Sashiya
We just bought it last month.
- [109:36]
Dave Ramsey
Good. Yeah. Right after this. Okay. And now turn around. Get it paid off.
- [109:39]
Jonathan
Exactly.
- [109:40]
Dave Ramsey
All right. What do you owe on it?
- [109:44]
Sashiya
585.
- [109:45]
Dave Ramsey
Okay.
- [109:48]
Jonathan
We got our first mortgage payment.
- [109:49]
Dave Ramsey
So what is your, what is your plan on? On it.
- [109:52]
Jonathan
So we're on a 15 year fix. Shout out to Amy Jo with Churchill Mortgage. She was amazing. But our plan is to get that paid off hopefully in five years.
- [110:00]
Dave Ramsey
Yeah. Good. That's perfect.
- [110:01]
Dr. John DeLoney
And the fact that y' all didn't go out and buy a seven million.
- [110:04]
Jonathan
Dollar home, it was tempting.
- [110:05]
Dr. John DeLoney
I bet it was. I bet they said you qualify for any home you want.
- [110:09]
Sashiya
Yes, we qualify for 2 million.
- [110:11]
Jonathan
It was crazy.
- [110:12]
Sashiya
And we didn't. We said no, that we, we don't need a two million dollar house.
- [110:15]
Dr. John DeLoney
Amazing.
- [110:16]
Dave Ramsey
No, you will someday.
- [110:17]
Jonathan
Yeah.
- [110:18]
Dave Ramsey
But not now. Yeah. It won't be long. Oh, y', all.
- [110:22]
Jonathan
Thank you.
- [110:22]
Dave Ramsey
Way to go. I'm so proud. How's it feel?
- [110:25]
Jonathan
It feels good.
- [110:26]
Sashiya
The excitement part for me was every time we made that payment, it's like you make it. Let's keep going. Let's keep going. Let's keep going. And that was the, that was. That's. Once we made the last payment, it was like, this is it. Yeah, we're done. Yes, we are done with this.
- [110:42]
Dave Ramsey
How'd that feel when you hit that last button?
- [110:44]
Jonathan
It was amazing. It was amazing.
- [110:46]
Dave Ramsey
How much dancing around the living room was there that champagne cork going off?
- [110:53]
Jonathan
Yes, for sure.
- [110:54]
Dave Ramsey
That's great. Submit no more student loans. Done, baby.
- [110:58]
Jonathan
That's it.
- [110:58]
Dave Ramsey
Mic drop.
- [110:59]
Dr. John DeLoney
Okay. How many of your classmates that you graduated with are debt free? Debt free right now, 16 months later minimum 001%.
- [111:08]
Jonathan
0% 0. I work in a large practice and nobody who got out of residency, it was a primary goal for them and it was hard. You mentioned Doc. Itis, you know, I had a lot of colleagues, a lot of classmates with brand new cars, new homes, vacationing, and we're just, you know, thrift shopping and living below our means and pushing through. But, but now they're like, man, you did it right. You know, so I'm inspiring them even now. Hopefully, hopefully to try to make those changes and hopefully this story will help those people in medical school or graduating residency. You know, it can be done. It's hard. It's so hard, but it can be done.
- [111:47]
Dave Ramsey
373,016 months.
- [111:49]
Dr. John DeLoney
Yeah, that's just not messing around.
- [111:51]
Dave Ramsey
That's pretty studly. That's pretty studly right there.
- [111:53]
Dr. John DeLoney
Jonathan, what was it like keeping everything duct taped and bailing wired together over those many years?
- [111:59]
Sashiya
It was hard. It was hard because I, you know, we had the older, older daughter and then the, the two twins. It was, it was a lot to keep up with. I, I would probably say the good thing for me is I like everything to be on the schedule. So once everything was on the schedule, it made a little bit easier. But the hardest thing is just not being able to see her. And I, I've got to give a shout out to her. She worked extremely, extremely hard.
- [112:27]
Dave Ramsey
Hard.
- [112:28]
Sashiya
I mean I can't, I can't say enough, you know, if she, she dug and dug and dug. There was a lot of nights we, you know, we didn't see each other, didn't hardly talk. We may have text a little bit, but I've got to give her a lot of credit on that. And you know, I knew that there was, it was hard but I could see the light at the end of the tunnel. I said I know it's coming, I know it's coming. Just, you know, we just got to dig in there and just keep going.
- [112:53]
Dr. John DeLoney
I can't wait for a few years from now when that older teenager comes home and sees the clothes these young twins are wearing and says, hey, wait a minute, we're goodwilling it when I was that age and now we're, it's amazing.
- [113:07]
Jonathan
But she's seeing the grit and she's, you know, she's in college week, second week this week.
- [113:12]
Dr. John DeLoney
Oh, you've changed her life.
- [113:13]
Jonathan
Changed her life.
- [113:13]
Dr. John DeLoney
Changed her life.
- [113:14]
Jonathan
Yes. Able to cash flow her college and.
- [113:17]
Dr. John DeLoney
But she has no excuses. She wants your mom. Mom and her dad just be gangsters. She has no. She. She has no excuses, man. But not from words. She got to watch you guys do it, which is the most powerful lesson a parent can give. It's amazing.
- [113:30]
Dave Ramsey
And you're not going to put her in student loan debt to teach her a lesson either? No, no, man. So she can learn grit.
- [113:39]
Dr. John DeLoney
So cool.
- [113:40]
Dave Ramsey
We've had those calls today. It's crazy. Absolutely crazy. Wow. So proud of y'. All.
- [113:45]
Jonathan
Thank you.
- [113:46]
Dave Ramsey
How does it feel?
- [113:47]
Jonathan
It feels amazing, you know, to be able to just work, earn money and you keep it all, you know, you put it towards things that are going to build your future. A home. Our first home ever. We're able to now start and save for retirement.
- [114:03]
Dave Ramsey
How long y' all been married?
- [114:04]
Jonathan
Seven years.
- [114:05]
Sashiya
Seven years.
- [114:06]
Dave Ramsey
Yeah. So what's the. You bought the house. That's a good first thing to do. What's the next. The next second thing you're going to do? Just to celebrate and enjoy something. Some of this.
- [114:15]
Sashiya
I want a truck.
- [114:16]
Jonathan
Yes.
- [114:16]
Dave Ramsey
There you go.
- [114:17]
Jonathan
He needs a truck.
- [114:18]
Sashiya
I need a truck.
- [114:20]
Dave Ramsey
You do need a truck. What are we going to get? What are we going to get?
- [114:23]
Sashiya
I want a Denali Chevrolet or GMC Denali.
- [114:27]
Dave Ramsey
Yeah. That's a nice truck.
- [114:28]
Sashiya
Funny, on the way, on the drive up here, my battery went dead on the side of the road.
- [114:33]
Dave Ramsey
No way. It did. Yeah.
- [114:35]
Sashiya
I replaced it in the parking lot of AutoZone with Jasper, Tennessee.
- [114:39]
Dr. John DeLoney
All right, let's get on it. We're about to. We're about to run out of time. Let's count them down.
- [114:42]
Dave Ramsey
$500,000 a year. I'm changing the battery in the auto zone. I like it. I like it. Count it. All right. 373,000 paid off at 16 months, making 90 to 530. Count it down. Let's hear a debt free scream.
- [114:56]
Jonathan
Three, two, one.
- [114:58]
Dave Ramsey
We're debt free. Yeah. I love it. Get the man a Denali. Sam. Our scripture of the day. Proverbs 16, 9. In their hearts, humans plan their course, but the Lord establishes their steps. Milton Friedman said, if you put the federal government in charge of the Sahara desert in five years, there'd be a shortage of sand. Yep, that'll work. If you're tired of living paycheck to paycheck and feeling like you can't get ahead, join one of our free every dollar trainings. There are new trainings every month this week, and they're all hosted by one of the Ramsey personalities. We're going to show you how to stick to a budget and even find Thousands of dollars worth of margin. Using every dollar you get out of debt, you build wealth. And you can ask us any question during the live Q and A. You're going to love that. So Rachel Cruz, Jade Washall and George Kimmel are doing these live in person webinars on how to build your budget out and how to become wealthy and how to get out of of debt so that you can become wealthy. Ramsey Solutions.com sign up for free ramseysolutions.com webinar be sure and check that out. Nick is in Knoxville. Hi, Nick, how are you?
- [117:03]
Caller
Hey, Mr. Ramsey, thanks for having me today. I really appreciate it and doctor you as well.
- [117:08]
Dave Ramsey
Thank you.
- [117:10]
Caller
I got a. I'm very fortunate in my life. I inherited a pretty good chunk of money from my grandfather, my grandpop, their estate when they passed away. My wife and I have no children. We're very conservative. We live conservatively. We live below our means. We already are doubling up on our payments on our home. We currently owe about 212,000 on it. And the money that I have is I've completed phase one. Basically, it happened in 2022 when my grandfather passed away. He was with a longtime financial advisor and I had to break the ties with him because it was all invested in like one chunk of the company that he worked for. So I had to diversify it, which was very difficult. So I went with a good family friend of ours with a large Primerica financial institution, which you're familiar with, Mr. Ramsey. And it was all diversified. And so I've kind of got over that now. And I'm like, do I pay the home off?
- [118:18]
Dave Ramsey
How much, how much is in the.
- [118:19]
Caller
Account count right now? 1.639. And not all that is my grandparents. I've saved up a whole lot during my career.
- [118:29]
Dave Ramsey
Why would you not care house before now? Why would you not just do that automatically? It's a, it's an irrelevant amount of money if you got 100, a million six.
- [118:39]
Caller
Yes, sir. So the reason being is because my, you know, a financial advisor friend of mine and then the financial advisor through Primerica also was like, well, you're making money on this money and you're fixed at a 2, 2 and a half percent interest rate with your mortgage and you can make 10%.
- [118:57]
Dave Ramsey
So based on that, these idiots would tell you to go buy a mate, borrow a million dollars on your house because you can make a spread on it.
- [119:05]
Caller
Well, that's why I'm calling you.
- [119:06]
Dave Ramsey
No, I mean that's what these idiots are telling you. It's the same dadgum stupid thing. Yeah, but they don't make any money when you pay off your mortgage. They only make money when you buy stock from mutual funds from them. Their commission is not based debt reduction. It's based on how much you keep with him under management.
- [119:23]
Caller
Yeah, yeah, yeah.
- [119:27]
Dave Ramsey
Yeah.
- [119:27]
Dr. John DeLoney
They're ripping you off.
- [119:28]
Dave Ramsey
Pisses me off. Yeah. And then they drop my name to boot.
- [119:34]
Caller
So.
- [119:36]
Dave Ramsey
Yeah, pay off your house today, man.
- [119:38]
Dr. John DeLoney
Yeah, paid off today.
- [119:39]
Dave Ramsey
And change financial advisors again. And get one. Get one that has some dadgum sense.
- [119:44]
Caller
Yeah.
- [119:44]
Dr. John DeLoney
They're lying to you, right, brother?
- [119:46]
Dave Ramsey
Telling you to stay in debt when you got a million six in your account. You only owe $200,000 on your mortgage. That's just asinine. Yeah. Has nothing to do with Dave Ramsey. I can tell you that.
- [119:59]
Caller
Or go.
- [120:00]
Dave Ramsey
Go back my name and then give that advice.
- [120:02]
Dr. John DeLoney
Just ask. What would it be like to sit at a table with your grandfather who's seen a few things?
- [120:08]
Dave Ramsey
What would your grandpa do?
- [120:09]
Dr. John DeLoney
He'd say, if you have kicking your.
- [120:11]
Dave Ramsey
Butt more than I am to own.
- [120:13]
Dr. John DeLoney
Your house outright, do it right now. Don't make these other men rich off gambling off of your. Off your spread.
- [120:19]
Dave Ramsey
Yeah. Nope.
- [120:20]
Dr. John DeLoney
Dave, that makes me so mad. I don't. It makes me irrationally angry. I'm glad you got angry for both of us, but geez, I got.
- [120:29]
Dave Ramsey
I got two dips, one bad advice, and one drop in my name to give the bad advice. I double dipped on the anger, but yeah. No, no, no, no, no, no. Yeah. And Nick, another thing I do, number one, I use common sense sense when I'm applying these things. And I've never had anyone in 40 years of doing this show, it's approaching 40 now, tell me that I gave them bad advice when I told them to pay off their house. I've never had a single person send me hate mail that said I paid off my house and I hate you. You're awful. And if you pay off your house and you hate it, you can go get you a new mortgage. They'll give you another one. So if you hate being debt free, I've never had that experience, ever. And all the data tells us, among the millionaires that we've studied, not broke financial people selling you mutual fund funds, but real millionaires, that the paid off house is one of the key elements of becoming a multimillionaire because it sets you free. You don't have anything to think about anymore. I promise you. The grass feels different under your feet when you walk out in the backyard with no Shoes on and no mortgage. My grass. Shut up. Because there's risk involved. We've done detailed research and 100% of the foreclosures occur on a home with a mortgage mortgage. So, yeah, go to ramseysolutions.com and click on Smartvestor Pro and find a Ramsey Smartvestor Pro in your area that will give you good advice instead of that clown show you're with. Yeah. All right. Katie's in New Hampshire. Hey, Katie, what's up?
- [121:59]
Caller
Hey guys, thanks for taking my call.
- [122:01]
Dave Ramsey
Sure. How can we help?
- [122:03]
Caller
So my husband and I are first time homebuyers and we've been paying extra to the mortgage, but we've been seeing how much interest we've been paying versus the amount that's actually going to the principal. And after talking to my in laws, they highly recommended heloc. As they said that it's just interest payments, which is not a lot compared to the interest that we're paying now.
- [122:26]
Dave Ramsey
Your in laws don't know how to do the math.
- [122:28]
Dr. John DeLoney
Yeah, they don't have a calculator.
- [122:30]
Dave Ramsey
It's not how it works. Okay, you have a convention, you have a conventional mortgage, right?
- [122:36]
Caller
Yeah, we do.
- [122:37]
Dave Ramsey
Okay. Your, your conventional mortgage is calculated exactly like a simple interest heloc. Exactly. Okay. You're not prepaying interest on the front end. You're paying interest based on the current interest rate of your mortgage and the outstanding balance as of this month. When you pay a principal balance, you slide forward in the amortization schedule. So if you put $10,000 extra on the principal balance, it's not next month on the AM schedule, it's $10,000 worth of principal reduction forward because that amount of interest is charged on that $10,000 less balance. So the amortization schedule is calculated as if it were perfectly done simple interest. And a HELOC is simple interest as well. So your in laws are under the mistaken impression. It's a fallacy that's believed out there. It's mythology that because you mainly what you pay on the front end mortgage is interest that you're prepaying the interest on the front of the mortgage. You're not. You're paying the exact amount of interest due. The reason it's so high is it's the highest your balance is ever going to be. As your balance goes down, the amount that goes to interest goes down and the amount that goes to principal goes up because you have a fixed payment all the way through. Okay. That's how the actual math works. So bless your in laws Heart, Honey, they don't. Don't take financial advice from their math challenge. And that's not how this works.
- [124:02]
Dr. John DeLoney
Gave you a good husband, and let's.
- [124:03]
Dave Ramsey
Just call it, yeah, they made a good husband, and he's a good boy, and we'll move on. She makes a good casserole, but we're not taking math from her. I'm just.
- [124:13]
Dr. John DeLoney
Okay, okay, Dave, help me with this. I know we're running out of time, and this segment's about to be brought to you by Preparation H because hemorrhoids are getting a little bit out of control with how frustrated I'm getting. Teach me about why that would. Even under this scenario, you. You drew their mistaken understanding. Why would taking out a loan against your house somehow be better?
- [124:34]
Dave Ramsey
Well, if you were prepaying the interest somehow, and you could avoid that by paying down the principal, then borrowing money at simple interest to do that would mathematically make sense, but there's no such thing. It's not how it works.
- [124:53]
Dr. John DeLoney
Would the bank come up with a loan and just cross their fingers and hope that nobody figured out that sophisticated response lot?
- [124:59]
Dave Ramsey
Well, there's been more than one hack on the Internet over the 30 years I've been doing, the 40 years I've been doing this. So there you go. Here we go. I'll always be in business, John. You always got a job.
- [125:09]
Dr. John DeLoney
We are always going to have work to do, my brother.
- [125:11]
Dave Ramsey
There's always work to do between financial planners and in laws. And in laws. There we go. That puts this hour of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daylight with the Prince of peace, Christ Jesus.
- [125:39]
George Kimmel
Up next, we are headed out to Chicago and Orlando for the Ramsey show live. Yep, you heard me right. We are taking this show to you. This is going to be everything you love about the Ramsey show, except you. You get to be a part of it.
- [125:51]
Dr. John DeLoney
Part of what, George?
- [125:53]
George Kimmel
The Ramsey show live.
- [125:54]
Dave Ramsey
Okay.
- [125:54]
Dr. John DeLoney
That's what I'm telling them about. Ramsey show live in here.
- [125:57]
Dave Ramsey
Nope.
- [125:57]
George Kimmel
We're doing it on the road. You're going to Chicago with me and Rachel Cruz. September 30th.
- [126:02]
Dr. John DeLoney
Are you free? The Windy City. I like it that time of year.
- [126:06]
Dave Ramsey
You know what else I like, George?
- [126:07]
Dr. John DeLoney
I like the deep dish.
- [126:09]
George Kimmel
Okay, maybe we'll have some deep dish. You mind if I finish the promo?
- [126:12]
Dr. John DeLoney
Is that okay with you?
- [126:13]
Dave Ramsey
Oh, yeah.
- [126:13]
Dr. John DeLoney
Okay.
- [126:13]
Dave Ramsey
Okay.
- [126:14]
Dr. John DeLoney
Appreciate it.
- [126:15]
Dave Ramsey
That.
- [126:16]
George Kimmel
Questions and answers, real conversations. And I'm sure a few surprises here and there.
- [126:20]
Jonathan
George, are you in here talking about TRS life?
- [126:22]
George Kimmel
I am, Jade. I'm trying to talk about it.
- [126:24]
Dave Ramsey
Nice.
- [126:24]
Jonathan
So that means it's actually happening, right?
- [126:26]
George Kimmel
It's happening. If I could tell the people, I think it could actually come to fruition.
- [126:29]
Dave Ramsey
Listen, just tell me when and where. You don't know. Okay.
- [126:32]
George Kimmel
We're going to Orlando. You're gonna join Dr. John Deloney and I. October 2nd.
- [126:37]
Dave Ramsey
Yes.
- [126:37]
Jonathan
Okay, great. I'm gonna go pack now.
- [126:39]
Dave Ramsey
Thanks.
- [126:39]
George Kimmel
Please, please do that. Go pack.
- [126:42]
Rachel Cruze
Hey, George, speaking of packing, is this like sweater weather or is it not that cold yet in Chicago?
- [126:49]
George Kimmel
What is happening?
- [126:50]
Dave Ramsey
Can I.
- [126:51]
George Kimmel
Can I please just get to how they buy the tickets?
- [126:53]
Dave Ramsey
Geez, I thought it was a good question.
- [126:55]
George Kimmel
Okay, this is not an arena tour. This is a one night only event in Chicago and Orlando. General admission is only 39 bucks. Plus there's a VIP experience if you're bougie like that. But here's the thing. There's only 3, 300 seats available, so get your tickets now@ramseysolutions.com events.
- [127:11]
Dr. John DeLoney
Hey, how come you get to go to both cities?
- [127:13]
George Kimmel
I. I just go where they tell me, man. Hey, have you been there the entire time?
- [127:18]
Dr. John DeLoney
Maybe.
- [127:19]
George Kimmel
Okay, and also, are you reading a children's book?
- [127:23]
Dr. John DeLoney
I'm expanding my mind, George.
- [127:25]
George Kimmel
That's how we got those PhDs.
- [127:27]
Dr. John DeLoney
Yeah, it's probably where you got that jacket.
- [127:30]
Dave Ramsey
Okay.
- [127:31]
George Kimmel
See you on the road, John.