Take Debt Off The Table For Good

Summary

The Ramsey Show – "Take Debt Off The Table For Good"

Date: July 8, 2026
Hosts: Dave Ramsey, George Kamel
Theme: Conquering Debt, Building Wealth, and Financial Freedom Through Proven Principles

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Main Theme & Purpose

This episode focuses on how to eliminate debt for good, manage and invest your money wisely, and avoid common financial traps. Dave Ramsey and co-host George Kamel answer live caller questions ranging from investing inherited college funds, paying off debt versus investing, buying a car when money is tight, to more advanced topics like planning for Social Security and maximizing large savings. The advice centers around understanding your money, making intentional decisions, and applying Ramsey’s trademark “common sense” approach to financial life.

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Key Discussion Points & Insights

1. Trusting and Understanding Your Financial Advisor

(00:45–08:24)

• Caller: Maddie, 23, with $500K+ in a 529 Plan
  • Maddie received a large 529 funded by Social Security after her father's passing. Her mom paid her tuition, so the 529 remains untouched. She questions her assigned family financial advisor's advice and motivations.
  • Key Advice:
    • Don’t invest in what you don’t understand.
    • Your advisor must have the "heart of a teacher”—if not, consider switching.
    • It’s crucial to grasp the rules (e.g., only $35K can move into a Roth IRA under current law, the rest may face taxes/penalties).
    • Overfunded 529s are rare but problematic; always use such dedicated funds first for their intended purpose.
    • Quote [02:21]: “The first rule of investing is you don’t put money in something you don’t understand or don’t know. That’s how you lose it.” – Dave Ramsey
    • Evaluate your relationship with your advisor and interview others for comparison.

2. Digitally & Physically Budgeting

(10:25–16:41)

• Caller: Raquel—Wants to Use the Envelope System in a Digital World
  • Automation complicates cash-based budgeting. Dave and George recommend using cash envelopes for a few key categories (e.g., groceries) and the EveryDollar app for everything else.
  • Quote [14:33]: “You will take some stuff out of that cart.” – George Kamel, on the discipline enforced by using cash envelopes.

3. Debt Payoff vs. Holding Cash

(17:14–19:29)

• Caller: Blake—Pay Off Truck with Savings?
  • Debates with fiancé about whether to clear off a $15K truck loan using house down payment savings.
  • Key Advice: Pay the truck off. “Would you borrow on your truck to make a house down payment? No? Then do the same thing.” – Dave Ramsey [18:25]
  • Only use your own money before marriage to pay debts; never combine finances before the wedding.

4. Using Retirement Savings to Pay Off Debt

(32:39–36:56), (76:30–82:20)

• Caller: Michelle—Should I Use 401(k) to Clear $16K in Student Loans?

  • No—the penalties and taxes make this a poor decision (lose ~35-40% to penalties).
  • Solution: Pause 401(k) contributions temporarily, focus on debt, then resume investing.

• Caller: Sarah—Should I Use 401(k) to Pay Off Fiancé's Debt Pre-Marriage?

  • Absolutely not—never pay someone else's debts before marriage; penalties are also steep.
  • Focus on increasing household income and get married as soon as your faith allows.

5. Avoiding Credit Score Myths

(36:56–41:56)

• Caller: Military spouse—Do we need a credit score to rent?
  • No; landlords value steady military income and debt-free status more than a credit score. May need higher deposit, but not a barrier.
  • Quote [37:15]: “That is absolute bull crap. …You do not need a credit score to rent a freaking house when you’re in the military.” – Dave Ramsey

6. Buying Cars with Limited Funds (and Avoiding Predatory Lending)

(43:44–52:35, 54:11–61:06)

• Caller: Ashley—Needs a Car, Has No Savings
  • Don’t take out a car loan; instead, make necessary repairs to existing car (even barely functional “beaters” are preferable).
  • Avoid payday lenders, rent-to-own, and other high-interest traps.

7. Marriage, Debt, and Cash Registries

(96:21–101:12)

• Caller: Sydney—Is a Wedding Cash Fund Tacky?
  • Use a registry site with a cash or travel/home fund option; some guests will like it, others won’t.
  • Blend practicality with etiquette, and consider your audience.

8. Stop Retirement Contributions to Pay Off Consumer Debt

(103:05–105:13)

• Caller: Tessa—Should We Pause 401(k) to Pay Down Home Equity/Truck Debt?
  • Yes, stop contributing temporarily to free up cash and rapidly pay down debts.

9. Investing for a Home Down Payment

(118:20–126:44)

• Caller: Aaron—Keep House Savings in Market or Move Elsewhere?
  • If buying within a year, move money to a high yield savings account—don’t risk a down payment to market volatility.
  • Never hold house-down-payment funds in highly volatile single stocks or bonds.

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Notable Quotes & Memorable Moments

• [02:21] Dave Ramsey: “The first rule of investing is you don’t put money in something you don’t understand or don’t know. That’s how you lose it.”
• [03:32] Dave Ramsey: “If you don’t feel good about someone that’s managing your money, they shouldn’t be managing your money, period.”
• [14:33] George Kamel: “You will take some stuff out of that cart.” (on spending less with cash)
• [18:25] Dave Ramsey: “If your truck was paid for, would you borrow on it to put a down payment on your house? No. Same thing.”
• [37:15] Dave Ramsey: “That is absolute bull crap. …You do not need a credit score to rent a freaking house when you’re in the military.”
• [60:25] Dave Ramsey: “The way out is the truth. … The poor need a line a credit is the last thing you need when you’re broke. It’s gonna keep you freaking broke.”
• [72:42] Dave Ramsey: “When you got no house payment, you know how fast that old house payment turns into a million dollars when it’s invested? I did that.”
• [109:59] George Kamel: “If this was a credit card that said, ‘hey, if you spend $50,000, we’ll give you this many points,’ we’d say that’s crazy. Don’t do that.”

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Segment Timestamps

| Segment/Event | Timestamp | |-------------------------------------------------------------|----------------| | Maddie’s 529 Overfund (advisor trust, investing basics) | 00:45–08:24 | | Envelope System & Digital Budgeting | 10:25–16:41 | | Lump-sum vs. Payments: Truck Payoff | 17:14–19:29 | | Paying Off Student Loans from Retirement | 32:39–36:56 | | The Military & Renting Without a Credit Score | 36:56–41:56 | | Buying a Car When Broke; The Dangers of Bad Debt | 43:44–61:06 | | Using Registries for Cash Gifts at Weddings | 96:21–101:12 | | Stopping Retirement to Focus on Debt | 103:05–105:13 | | Investing Home Savings: Market or Safe? | 118:20–126:44 |

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Advice Recap & Actionable Takeaways

• Never invest in things you do not understand—always ask questions until you have clarity, or find an advisor who teaches, not just manages for you.
• Do not raid retirement accounts to pay off debts; you take a huge penalty/tax hit. Instead, temporarily pause contributions if necessary and attack debt with intensity.
• If your gut says you don’t trust a financial advisor, move on, regardless of family connection.
• For tight budgets, use a blend of digital (EveryDollar app) and cash envelopes for key spending categories to reinforce discipline.
• Cash funds and registries for gifts are fine—be tactful and provide guests both options.
• Never, ever pay a fiancé’s debts—wait until marriage to combine finances.
• If you’re buying a house within a year, keep your down payment in a low-risk (high yield savings) account, not the stock market.

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Tone & Style

Authentic, practical, sometimes blunt, always focused on the caller’s personal responsibility and freedom. Dave and George use a mix of personal stories, humor (“Old Blue” the beater car), and real talk to cut through financial myths and encourage listeners to own their choices and future.

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For listeners who missed this episode:
You’ll walk away with clarity on the importance of informed investing, the danger of debt (especially bad debt), and a deep understanding that good intentions must be paired with real knowledge and discipline. Whether you’re just starting out, facing a crisis, or aiming toward wealth, Ramsey’s steps are logical, intentional, and designed to move you off the hamster wheel of consumer debt for good.

Transcript

[Dave Ramsey]

Brought to you by the EveryDollar app. Start budgeting for free today. Normal is broke and common sense is weird. So we're here to help you transform your life. From the Ramsey Network and the Fair Winds credit union studio, this is the Ramsey show. I'm Dave Ramsey, your host. George Camel Ramsey, personality, number one best selling author, co host, smart money happy hour on the Ramsey Network. He's my co host today. The phone Number here is 888-25-5225. Maddie is in Sacramento. Hi, Maddie, how are you?

[Caller Male]

Hi.

[Caller Female]

I'm good. Thank you for taking my call.

[Dave Ramsey]

Sure. What's up?

[Caller Female]

Okay. I am 23 years old and I have over half a million in a 529 that was funded from Social Security money given to me after the death of my d until age 18. My mom ended up paying for all of my tuition because she had the means, which is why all that money is sitting. I also have 50k in the S&P 500 and I max out my Roth, which is funded from that 529. My financial advisor, he told me not to get. Not to open a 401k. He is into credit cards and points and that whole game, which is kind of making me question if he's investing my money. Well, specifically, specifically the 529.

[Dave Ramsey]

Okay, so your question is what my

[Caller Female]

question is, is he investing my money?

[Caller Male]

Well, and in the 529?

[Dave Ramsey]

I don't know what's, what's in, what's it invested in?

[Caller Female]

I have no clue. He just told me it's in. In a 529.

[George Kamel]

Do you have access to the account?

[Caller Female]

I do.

[George Kamel]

Okay. You can go in there and see exactly what the investments are and that'll help you figure out are you looking for a high return and you're not getting it. What's. What's the thing you're worried about?

[Caller Female]

I'm just worried that it can be sitting somewhere else and growing at a better rate for my future.

[Dave Ramsey]

Okay. All right. Well, the first rule of investing is you don't put money in something you don't understand or don't know. That's how you lose it.

[Caller Male]

Okay.

[Dave Ramsey]

The second rule of investing goes with the first rule, and that is you don't hire someone that does things for you that you don't know what's going on. Instead, you hire someone that helps you decide because they teach you. So your financial advisor should have the heart of a teacher, meaning they should have this desire for you to understand what you're investing in. Yours apparently does not have that desire. How long have you used this person to manage your money?

[Caller Female]

So he's actually the financial advisor for the family business, so I kind of just automatically adopted him.

[Caller Male]

Mm.

[George Kamel]

It sounds like you guys have different financial values, the way you're talking about this.

[Dave Ramsey]

Well, I mean, the credit card points thing is absurd.

[George Kamel]

And then not opening a 401k, that's my only thing is he's gone. Well, I can't manage that. Therefore, I can't make money from that. Therefore I don't want her to open one.

[Dave Ramsey]

Yeah.

[George Kamel]

Which would be.

[Dave Ramsey]

If you don't feel good about someone that's managing your money, they shouldn't be managing your money, period. Regardless of the reason. Even if they're a perfectly legitimate person and you just don't, you know, you just want to hit it off with them.

[George Kamel]

You don't vibe.

[Dave Ramsey]

You don't vibe. If you're not vibing, you should go somewhere else. I mean, really. So, you know, the credit card thing scares you. You don't know what this is in. You've kind of fallen into all of this off of your parents. How old are you?

[Caller Female]

I'm 23.

[Dave Ramsey]

Okay.

[Caller Male]

All right.

[Dave Ramsey]

Well, if you want to try to stay with him because he's a family friend and has been with you forever, that's fine. You need to sit down and get with him and go have a meeting and say, okay, I'm now actually a standalone adult, and here's what I require in a financial advisor. I require that you teach me what is going on with this and that I understand it or we don't do it. Okay? You don't do any trades without my authorization, and I have to understand what you're suggesting to me. And so let's go through the portfolio. If you want to do that, if you don't want to do that, if you want to just. If you want me to just do what I'm supposed to do and do what you tell me to do, then I need a different financial advisor, because I'm not going to do what you tell me to do. You're going to do what I tell you to do. That's how this is going to work. You work for me, not the other way around. And honestly, there's a percentage of people in the financial advising world who function off of arrogance because they're very, very good at math, and they think they're supposed to be taking care of the little people, which is actually bull crap. Okay? Instead, their job is to not be an arrogant jerk. But Instead, teach you. That's their job. And if they're not teaching you, they're failing at their job. That's why the smartvestor pros and the Rams that we vet, they don't work for us. But we won't send you to someone unless they have that heart of a teacher. And so, you know, what would I do if I was 23 in your shoes? I would go sit down with your existing guy. Talk to him that way, because he probably still looks at you as if you're five. And that needs to stop this week because you. Not five. I'm 500,000 is what I am. I'm not five. And so. And that's a big account. And so he needs to treat you with that kind of respect. And then I also would sit down with a smartvestor pro and interview them. And then after you've had both discussions, you, as a woman of 23 years old and a good brain, decide where you want your money to be now. So that's first thing, and that's a big deal. Does that sound right to you? Does that feel comfortable?

[Caller Female]

Yeah, definitely.

[Dave Ramsey]

Okay, then once you've done that, I also want you. Once you select someone, I want you guys to figure out what the flip you're going to do with $500,000 stuck in a 529. Because you're gonna get hammered with taxes on that at some point. There is a provision to move some of it at age 30, before age 30, into or maybe after age 30. Which is it, George? It's before, before age 30, into a Roth. But the rules on it are very strenuous. So I want you to learn about beginning to move that into a Roth IRA as you can.

[George Kamel]

And it's up to 35,000 is the new Secure Act 2.0. So I assume that's what he's doing.

[Dave Ramsey]

And so the other four, you can

[George Kamel]

do it up to the MA.

[Dave Ramsey]

465 is screwed.

[George Kamel]

Yeah, I mean, there's not. You can change the beneficiary. So if Maddie, you know, has kids of her own one day, or brothers

[Dave Ramsey]

or sisters or anybody else, you want to pay for college, it becomes like a legacy. You're going to pay a 10% penalty on the growth and your taxes on

[George Kamel]

the growth if it's not used for education.

[Dave Ramsey]

So, yeah. And you're not going to use half a million dollars for education. She's graduated and her mother paid for it.

[George Kamel]

That's over.

[Dave Ramsey]

So somebody didn't think this through very well. Should have used the stinking 529. And given you the money she was going to use to pay for the education and at least gotten it out from under that 529.

[George Kamel]

Yeah, you've talked about that before.

[Dave Ramsey]

I love 529s, but I very seldom run into them being overfunded. And this is a case where they were overfunded.

[George Kamel]

That's tough.

[Dave Ramsey]

Yeah. Up to a couple of hundred grand, and then it's used for education is fine, but no more than that in a 529. And so I don't. And it can't just sit there forever and grow. It gets worse. The problem gets worse and worse and worse. So, yeah, you're right, George. There's not a lot she can do, I don't guess.

[George Kamel]

Yeah, but that's why you got to know. I mean, she learned this years ago because he actually taught her what he was doing and why he was doing it. She could have understood some of this, but she just. You know, there's. There's two parties at fault here. The one that didn't teach and the one that never asked.

[Dave Ramsey]

Well, and this is the same guy told her mother not to use the 529. And she's telling her not to do a 401k, which doesn't make any sense at all. You need to be doing your 401k.

[George Kamel]

Should have used the 529 money first and then moved on to her own.

[Dave Ramsey]

Exactly. Exactly. For sure. Let me tell you something I see happen way too often. People fall behind on their bills and they wait. They hope it will work itself out. It won't. That's why I recommend Guardian Litigation Group. Here's the deal. If you've missed payments, collectors are calling, or if you're getting letters threatening legal action, that's not something to ignore. That's the moment to deal with it. Because when you do nothing, it escalates. They can take you to court, and if you don't respond, they can win by default. And that gets expensive fast. Guardian Litigation isn't a call center. They're an actual law firm. From day one, you're assigned an attorney to represent you. So if things do escalate, you're not scrambling and you're not hit with surprise legal fees. Guardian Litigation only gets paid when the debt is negotiated and you accept the settlement offer. This isn't about shortcuts. It's about dealing with the problem before it gets worse. Go to guardianlit.com Ramsey today. That's guardianlit.com Ramsey today.

[George Kamel]

Attorney Advertising results may vary and no specific outcome is guaranteed.

[Dave Ramsey]

Raquel is with us in St. Louis. Hi, Raquel, how are you?

[Caller Female]

I'm doing good. My question is, I am wanting to know how is it that I can do the envelope system? I'm trying to save, you know, the first thousand, but everything is direct auto pay and direct deposit. And I feel like, do I go withdraw everything and then put in envelopes and then put it back in the bank? I'm really struggling with that. And just when I get the money saved, a major thing happens, like, you know, recently. But how do I do that?

[Dave Ramsey]

Okay, the envelopes for the $1,000 emergency fund or envelopes for other categories.

[Caller Female]

For other categories. For the first to get my 1000 and then to do the other category.

[Dave Ramsey]

Okay, well, the 1000 could simply be transferred into a savings account. It doesn't have to be in cash. The other categories. Most people are doing the envelopes for just a couple of categories these days in the digital world.

[George Kamel]

Mainly groceries.

[Dave Ramsey]

Groceries and maybe eating out and a couple of things like that.

[George Kamel]

But your light bill, you don't need to take out cash to go pay that.

[Dave Ramsey]

You don't need an envelope for very many things. If you do need, if you want to fund your grocery category in cash into an envelope and write food on the outside of that envelope and then only buy your groceries out of that envelope, that's the system we've. We taught years and years ago for a whole bunch of things. Now, mainly people do it for food and a couple of other things. If you want to do that, you could just take the money out of atm. Okay, I just go up to the teller window. Go up to the teller window and make a withdrawal on your account for that much cash.

[Caller Female]

But how do I budget? Okay, I'm trying to get on a budget. How do I get on a budget? Divide it up and then say, okay, this is what I have to put in, and this is what's in this for each amount.

[Dave Ramsey]

Oh, I see. Okay. The EveryDollar app is the easiest way to do that. It's the budgeting app that we invented years ago, and it has grown into actually the full Ramsey plan, where it holds your hand and helps you decide what to do with each of the categories so that you're following the baby steps. But download the EveryDollar app at Apple Store or Google Play, it's free, and you can set up your budget on it. It won't take but about 20 minutes to set it up, and they'll guide

[George Kamel]

you through the whole Process.

[Dave Ramsey]

It's very hand to mouth, easy to even. I can do it.

[Caller Female]

Okay. And then I can just leave all the money in the account and work with that.

[Dave Ramsey]

Exactly. Or if you wanted to say I'm going to do the grocery envelope, I'm going to do cash for groceries, then you could withdraw that portion, whatever you write in every dollar and say my grocery budget is $700. Okay, whatever, I don't care what it is. Okay. Then you would go to the teller window and take out $700 or you go to the ATM and take out $700 cash, put that in an envelope,

[George Kamel]

write, and that transaction will show up in your bank account which now you can track in every dollar. So you track your 700 against the 700 planned. Now you have nothing left to spend because it's all in cash in the envelope. When the envelope's out, it's out. So that's the goal is to sort of force the discipline with the envelope.

[Dave Ramsey]

The trick of the envelope, the old envelope system that your grandmother used, your great grandmother used. And I've got, people have sent me antique ones from the 20s. Oh wow, I got one from 1913 even. And it's a little, little, you know, little card file, little envelope system. And you write, you know, you write a category on the outside and when you, if you write $200 for clothing on there for the month and the shirt is on sale for 225, you can't buy it because you don't have 225, you've only got 200 cash in your clothing envelope. But you can spend up to $200 on clothing completely guilt free because it's allocated to that. Now you can have that same expense, same experience digitally. But man, I tell you what, when you are doing it physically with those Uncle Benjamin's in the account, they're laying right there looking at you, Uncle Ben is looking at you. You will spend less.

[George Kamel]

You will take some stuff out of that cart.

[Dave Ramsey]

Yeah, you will go to, you will not go, oh well, I'll fix it later. You know, I'll move money. You don't lie to yourself when there's real money staring at you. So I do miss the old days of the Gen Z bringing you see

[George Kamel]

this TikTok trend called cash stuffing. Gen Z claims they've invented this new method of cash stuffing.

[Dave Ramsey]

It's the envelope system.

[George Kamel]

Yeah, but I didn't want to say that they ripped it off you.

[Dave Ramsey]

Well they didn't rip it off me. I ripped it off your great grandmother.

[George Kamel]

You weren't around in 1913.

[Dave Ramsey]

But hey, think about it. In the old days, what happened was on Friday was payday and the boss counted out money and you walked out with money in your hand. And when you got home, I'm talking 1930s, 40s, 50s. Okay. When you got home, you counted the money out on the kitchen table and you went that one for you, one for me, one for you, one for me. This goes in the grocery envelope. This goes in the clothing envelope. This goes for kids activities. This is for gasoline. And you know, and the envelope system worked perfect because the whole thing was cash based.

[George Kamel]

Now you're shopping online. It's much harder to use the envelope system for everything like you could back in the day.

[Dave Ramsey]

Yeah, you just. Every dollar has to be the only thing that holds you accountable digitally. Back to that. I'll tell you the other side not. That's just interesting. If we brought this back, there would be a revolution. People would burn Washington D.C. down. If the tax person from the IRS had to stand in the lobby of your company and you got paid in cash and you had to take your cash and hand it to the tax collector and count it out every time you got paid. And people would realize how much money your government, how big a tick on your butt the government is, how big a parasite the government is. And they would, I'm telling you, there'd be pitchforks and torches. Oh, yeah. If you actually saw and physically had to take possession of the money and then give it back in cash to the government take you got paid, people would, their faces would melt off.

[George Kamel]

Just the amount of $100 bills you're just giving to the IRS for doing nothing that, that hurts. It would be a tea party. Round two.

[Dave Ramsey]

Yeah. So it was, it was a really brilliant idea to do income tax withholding.

[George Kamel]

Just make it all behind the scenes.

[Dave Ramsey]

Brilliant psychological trick. It's like the worst magician end up with Matthew the tax collector, who was hated even in Jesus day. Hello. So that's what you end up with. Of course they were crooked. Oh, wait a minute. Yeah, well, that's completely different. Yeah. Yeah.

[George Kamel]

Ouch.

[Dave Ramsey]

Blake's in Orlando. Hey, Blake, how are you?

[Caller Male]

Hey, Dave. How's it going?

[Dave Ramsey]

Better than I deserve. How can I help?

[Caller Male]

All right, so I have a truck loan that is about $15,000. And I was having a discussion with my fiance the other day. She thinks that I should make a lump sum payment and just pay it off out of my savings that I've been holding on to for a down payment on a house. And I Think that I should continue making payments over time, continually, you know, making the minimum payments, but, you know, building on top of the principle.

[Dave Ramsey]

You know, it's good that you get used to her being right early before you're married.

[George Kamel]

The training is complete.

[Dave Ramsey]

When are you getting married, Blake?

[Caller Male]

October.

[Dave Ramsey]

Congratulations. That's awesome. You got a good one, I think. Yeah, I've been at this 40 something years. 44 years. Years. And I'm still working on being wrong. It's hard for me. Oh, man. Yeah, she completely got you. Here's the thing. You. If your truck was paid for, would you borrow on it to put a down payment on your house?

[Caller Male]

No.

[Dave Ramsey]

Same thing.

[Caller Male]

Okay.

[Dave Ramsey]

You follow that? You follow that logic, right? Yeah.

[George Kamel]

Do you have any other debt?

[Dave Ramsey]

Pay your truck off today?

[Caller Male]

No, that's. That's the only debt between the two of us.

[George Kamel]

Amazing. What does that leave you in savings?

[Caller Male]

I think using hers, that puts us.

[Dave Ramsey]

No, no, we're not putting her money on your truck. You're not married.

[Caller Male]

No, no. I'm just saying, you know, by the time that we are married, combined savings after the truck is paid off. Oh, we'd probably have about. Let me do math here. About 80 grand.

[Dave Ramsey]

Oh, you're fine.

[George Kamel]

And you'll build it back up real quick?

[Dave Ramsey]

Yeah, that's good.

[George Kamel]

Without a car payment. What's the truck payment?

[Caller Male]

It's the monthly payment. I'm paying 500 right now. That's like 30 extra dollars on top of the minimum.

[George Kamel]

Nice.

[Dave Ramsey]

I would pay it off, I'll tell you. Here's the interesting thing, Blake. Your truck will drive different when it doesn't drag a payment book around.

[George Kamel]

Feels lighter.

[Dave Ramsey]

Yeah, Gets better gas mileage.

[George Kamel]

That would be incredible. Fuel efficiency increases when there's no payment.

[Dave Ramsey]

Yeah. Just get used to being wrong, brother, and you'll be all right. Sam.

[Caller Male]

Foreign.

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[George Kamel]

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[Dave Ramsey]

For most people, the largest transaction you make is your home. Buying or selling a home. And it's a little bit complicated and, you know, not everybody knows how to do it. But the problem is it's actually easy to pass a real estate test. I passed my real estate test. I was 18 years old. It was 1978. I took the test in 27 minutes and I got a 97. And I'm not a savant. It was that stinking easy. Okay? And that means I was eligible at 18 years old to sell a house and I sold one three weeks later. That should scare you people.

[George Kamel]

The ease in which an 18 year old can complete that transaction.

[Dave Ramsey]

That should scare you, right? So if you're going to list your house, don't list it with 18 year old Dave, okay? Three weeks after he got his real estate test.

[George Kamel]

They must have really trusted you. You were a good salesman as a

[Dave Ramsey]

guy I went to high school with, bless his heart. And he. The transaction went fine.

[George Kamel]

He didn't screw it up.

[Dave Ramsey]

Yeah, he.

[Caller Male]

Yeah.

[Dave Ramsey]

Anyway, if you're gonna buy a house, get a pro in your corner. If you're gonna sell a house, get a pro in your corner. A pro is someone who's actually done a lot of transactions, like 50 or 100 this year kind of thing. Okay. This is not somebody who, you know, I've done. How many houses have you sold?

[Caller Female]

4.

[Dave Ramsey]

That's not. Who sells your house. Okay? That's not what you do.

[George Kamel]

You don't want a side hustler.

[Dave Ramsey]

No. Or I just. I always dreamed of being. No, I don't care. Not selling my house. Okay? This is a $500,000, $600,000, $200,000 asset here. All right, so how do you find someone you can trust that's high octane? We vet them. They're called Ramsey trusted agents. You can find a Ramsey trusted agent for [e-mail] agent or you can click the link in the description. If you're listening on YouTube or podcast, we'll take you Straight there. Julie is in Greenville, South Carolina. Hi, Julie. What's up?

[Caller Female]

Hey, Dave. Hey, George. My question today is about taking a dream vacation to Hawaii. My husband and I have been dreaming about taking ourselves to Hawaii, and now we have three kids. So we would love a family vacation to Hawaii. We've wanted this for about 12 years now and started saving on the bad side of things. We started saving only $100 a month for almost the last 12 years. Where we failed is thinking that would get us somewhere in the ballpark of 10 to maybe $15,000, and that would be enough to take five people to Hawaii for a week or two. We failed to think for inflation.

[Dave Ramsey]

No, you failed to save enough money. Inflation didn't have anything to do with it.

[Caller Male]

It.

[Dave Ramsey]

You just don't save enough money. So you, you truly were dreaming. You weren't working a plan.

[Caller Female]

So the question then is now we only have $14,000, and every time we try to run the flight.

[Dave Ramsey]

What's your household income?

[Caller Female]

70,000 between the two of us.

[Dave Ramsey]

So what does it need to be for? How much do you need to spend on this vacation for you to get to go, actually go, not just pretend?

[Caller Female]

15 to 20.

[Dave Ramsey]

Okay, 15 to 20. You've got 14.

[Caller Female]

Yep, exactly.

[Dave Ramsey]

So put some stuff on Facebook, Marketplace and buy the tickets.

[Caller Female]

That's the question is, do we just say, you know what, let's take it, We've always dreamed of this. Let's do it, let's find the money, let's pull it out, because we're not putting anything on debt. So let's just work harder.

[Dave Ramsey]

Wait a minute, wait a minute, wait a minute. You're not putting anything on debt? You have debt?

[Caller Female]

No, no, none. We refuse.

[George Kamel]

You're saying you want to do this?

[Dave Ramsey]

Oh, you mean you're not going to borrow the money for the vacation?

[Caller Female]

Yes.

[George Kamel]

How long is the trip? How many days or nights we.

[Caller Female]

Right now we want to go seven nights.

[George Kamel]

Okay. I was just wondering what the levers we can pull because if you go six nights, well, all of a sudden you can afford it. So have you done the research to actually see who has the best price?

[Caller Female]

I've been researching for two years, consistently thinking we had enough for two years, and we just keep pushing it off. And so my thought is, let's push it off another year or let's just go to a lesser quality hotel.

[George Kamel]

Everyone's tired of hearing about this trip. I think you just need to go ahead and go.

[Dave Ramsey]

You're tired.

[George Kamel]

We can't wait another year. I mean, I just so this is just for fun, Julie. I like Costco travel. I jumped on there, found a Maui package, five travelers, two rooms, eleven grand, including flights from Greenville. So I'm just saying if we did

[Dave Ramsey]

that while we were talking, Julie, that's.

[George Kamel]

It's 60 seconds of research.

[Caller Female]

The goal is spring break only because children summer sports, Julie. So we're just thinking through all the options.

[Dave Ramsey]

Did you not hear what he just said?

[Caller Female]

Yes.

[Dave Ramsey]

And he went on Costco.com this is the trip while you were August 4th.

[George Kamel]

We're talking like a month from now and it's a week long trip. So I'm just saying we need to look at some options here and not kick the can down the road because the kids are free this summer, aren't they?

[Dave Ramsey]

So here's the problem you're gonna have overall. You need to go on the trip and you need to pay cash for it. And you need to figure out a way to do it between now and spring break and stack up whatever cash between now and then to add to this. So you get to do close to the trip as you want to go. But the problem is you have put too much psychological bull crap on this trip. Your expectations are so stinking high. I don't care where you stay. You're gonna be disappointed because you've been dreaming of this for 12 years. And I've been researching. Not well, but you've been researching. George beat you in 30 seconds.

[George Kamel]

I might go.

[Dave Ramsey]

I'm excited about George. George about to book a trip right now. Whitney, here comes George. We're going to Hawaii. I seriously think you're going to be. You've got this thing built up to being some kind of nirvana. It's nice. I've been to Hawaii a couple times. I'm not mad about Hawaii, but it's not actually my favorite place to go. If I was going to spend that kind of money, there's probably a different island I would go to, honestly. But you go, it's going to be nice. You're going to enjoy it. It's. You ought to go see Diamond Head and you ought to go see Hanauma Bay and you know, run over to Maui. Go see the big island if you can with the active volcano. There's some great diving there if you guys know how to do diving. And I mean, you know, it's a good. It's a good trip. It's a good trip, but there is no piece of travel. It's like owning an item as soon as you buy the car. Stupid thing breaks as soon as you buy the house, the hot water heater goes out, and all the little shine and all the little gloss on this dream goes away.

[George Kamel]

90% of the excitement was the fantasy of it happening.

[Dave Ramsey]

Exactly. The anticipation and the actual event is gonna be a letdown because you've got this thing up so high in your brain.

[George Kamel]

It's gonna rain, someone's gonna get sick. The kids are on their phones.

[Dave Ramsey]

Every afternoon it rains, and they call it a blessing, a Hawaiian blessing. Nice way of saying it's freaking raining again. Okay. Like, what are we in Seattle? I mean, it's crazy.

[George Kamel]

It's not like the pictures. They don't show that on the brochure,

[Dave Ramsey]

the famous website of the hotel. Right. It's like, where is this hotel? Not the one I'm staying in. But yeah. But yeah, I want you to go and I want you to have a good time. But let's be more. Let's have reasonable expectations as to what this trip represents and what this trip is. It'll be a fun thing to do. Your family has saved gradually to be able to do it for a long time. You finally gotten to where it looks like you're gonna be able to do it. But maybe not the Ritz Carlton version. Instead, the Motel 6 version or whatever it is. I don't know. Where were you staying on your little Costco flight?

[George Kamel]

You know, they only choose quality hotel, so I trust them with my whole heart. Yeah, and you can upgrade, you know.

[Dave Ramsey]

Oh, really? I mean, I have caskets.

[George Kamel]

I did two trips, I did Cabo and I did Cancun for.

[Dave Ramsey]

They don't tell you the hotel.

[George Kamel]

They will if I keep going in the process.

[Dave Ramsey]

You gotta buy it.

[George Kamel]

Yeah, I gotta keep going. I'm in airfare right now. You know, it's a whole process, Dave. I can't book.

[Dave Ramsey]

It's hotel. What's in the package?

[George Kamel]

There we go. Continue to hotel. Here we go. This is very exciting for me. I feel like I'm getting 90% of the thrill of booking the vacation.

[Dave Ramsey]

Yeah. Costco owes us big time for this freaking endorsement.

[Caller Male]

Yeah.

[George Kamel]

I don't think they even do market. Here we go. These are, you know, three and a half star hotel.

[Dave Ramsey]

What is it?

[George Kamel]

It's the Aston con poly shores. 3 1/2 stars.

[Dave Ramsey]

Okay.

[George Kamel]

It's not a bad room.

[Dave Ramsey]

Three and a half.

[George Kamel]

That's not good enough for Dave, apparently, guys. But, you know, it's almost a four star.

[Dave Ramsey]

Yeah, yeah, you're. Yeah, you're right. It's. It's almost a three.

[George Kamel]

You want a luxury but you can actually choose different hotels, which is nice.

[Dave Ramsey]

You can go down here and you can upgrade that.

[George Kamel]

Here you go. Waldorf Astoria. Four and a half. That's gonna cost you a pretty penny.

[Dave Ramsey]

Oh, that goes up that double the trip.

[Caller Female]

The.

[George Kamel]

Double the cost of the trip.

[Dave Ramsey]

Okay, now we're. Now we're up to where Sharon Ramsey wants to go.

[George Kamel]

That's the live like no one else package right there.

[Dave Ramsey]

Okay. All right.

[George Kamel]

But hey, go on the Ramsey cruise. That's. That's less than half the price of Hawaii. There we go. Think about it.

[Dave Ramsey]

Could be.

[George Kamel]

Get back to me.

[Dave Ramsey]

Three kids.

[George Kamel]

Yeah. That's a lot.

[Dave Ramsey]

I don't know.

[Caller Male]

I don't know.

[Dave Ramsey]

It could be. How many? How do we stack them in those cruise rooms?

[George Kamel]

Yeah, three bunks. Stack top.

[Dave Ramsey]

Let me tell you what I get asked all the time. When. When should I get term life insurance? How much do I need? Is it affordable? Those are the right questions to be asking. So let's take a quick review. The fact is, term life isn't a baby step. So if anyone is dependent on your income, you need to have 10 to 12 times your income in life insurance now. And most people are surprised by how affordable term life really is, even if you're not in perfect health. Look, I understand the hesitation since most insurance companies make it more of a hassle than it needs to be. Not at Zander Insurance. They're not an insurance company. They're a broker that works for you. That means they'll shop and compare the top term life companies to find the most competitive options on the coverage for your family. For almost 30 years, I've recommended Zander for straight answers, competitive rates and coverage that actually protects your family. Call 800-356-4282 or go to zander.com for a quick and easy quote. That's Xander.com. Michelle is in New Haven, Connecticut. Hi, Michelle. How are you?

[Caller Female]

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

[Dave Ramsey]

Better than I deserve. What's up?

[Caller Female]

So I was actually calling to find out if I should use my 401k to pay off my student loan debt.

[Dave Ramsey]

No.

[Caller Female]

Okay.

[Dave Ramsey]

You know why?

[Caller Female]

I do know why. I think. Pretty sure I know what you're going to say.

[Dave Ramsey]

Okay, what am I going to say?

[Caller Female]

Well, the tax penalty and then also the tax for your income bracket would reduce what you get significantly.

[Dave Ramsey]

Yeah. So you're going to pay a 10% penalty plus your tax rate on whatever you withdraw, which is going to be like 35 or 40% when we're done. And so it's like saying, Dave, I want to borrow money at 30% interest and pay off my student loan, then that wouldn't make sense. So how much do you have on your student loan?

[Caller Female]

I have 16,000.

[Dave Ramsey]

Okay, that's not bad. Good, that's good news. What other debts have you got?

[Caller Female]

Honestly? Basically an orthodontic debt of 4800.

[Dave Ramsey]

How old are you?

[Caller Female]

A mortgage? I'm 41. Okay, you're single, recently divorced. Yeah.

[Dave Ramsey]

Okay. And you have a mortgage. What's your mortgage balance?

[Caller Female]

Well, the mortgage, it's, it's. The balance is 205,000, but it's a three family. I live on the first floor and the tenants cover the mortgage. So I actually have a positive of around $440 a month.

[Dave Ramsey]

When the tenants pay, they cover the mortgage. That's good.

[Caller Female]

Okay.

[George Kamel]

What made you feel hopeless enough to go to your 401k to pay this off?

[Caller Female]

I think the divorce kind of put. Put some things in perspective, especially since I started now having to pay child support and also now paying for childcare just because I wanted my son to have more time with peers and other people besides family.

[George Kamel]

So the budget got tighter and you went. Well, I don't know if I'm ever going to be able to pay this off.

[Dave Ramsey]

What is your income?

[Caller Female]

My income, my salary is 101,000 a year, but my take home ends up being around 56, 51amonth.

[Dave Ramsey]

And effectively after the renters pay, assuming they do, you don't have a house payment because they're paying enough rent to cover it. And so why can you not knock this 16 out pretty quick?

[Caller Female]

So that is what I've actually been working numbers. And I was part of the problem, I think, is I was putting 12% of my 401k. I've knocked that down to 4% to take advantage of my company's match.

[Dave Ramsey]

Yeah. What I would do is just stop your 401.

[Sponsor Voice 1]

Okay.

[Dave Ramsey]

Until you're out of debt.

[Caller Female]

Okay.

[George Kamel]

You're about to unplug the whole thing anyways, so pausing is way bigger if we're going to look at the consequences here. And you'll be back to investing. And the other thing you got to think about is all the growth that was unplugged. If you were to do that, if you put that in an investment calculator of what that amount would have grown to, it'll make you stop real quick.

[Dave Ramsey]

But yeah, let's just stop the 401k temporarily. Get on beans and rice, rice and beans and knock out the 4800. You need 20,000 bucks, and you're like, you get your life back.

[Caller Female]

Right, right, right.

[Dave Ramsey]

At least that portion of your life. I mean, you've still gone through a divorce. You've still got the other heartache and the things from what you've been through. But if you got 20,000 bucks out of 100,000, you should be debt free in well under a year.

[George Kamel]

Yeah, a year would be about a little over 1700. A month would knock it out. Six months. If you could get intense and do 3400 bucks a month, you're done in six months. By Christmas, this thing's over.

[Dave Ramsey]

And then re. Then finish your emergency fund of three to six months of expenses. We're working right up the baby steps. That's BAB. And then restart your 401k at 15%. Not 12, not 4. Going into your 401k, make sure it's a Roth. And make sure you're invested in good growth stock mutual funds. And then you're going to be wealthy. And then long term, I want you to decide if you want to live next door to your tenants or not or in the same abode with your tenants. The good news is you're right beside your tenants. The bad news is you're right beside your tenants. And that can be a sticky wicket. Footsteps away can be a sticky wicket. All right. Sarah's in Waco, Texas. Hi, Sarah.

[Caller Male]

How are you doing?

[Caller Female]

Well, Dave, thank you so much for taking my call.

[Dave Ramsey]

Sure. What's up?

[Caller Female]

I am a military spouse, and me and my husband rely on. We currently rely on our credit score so that we can easily rent a house when we move every three to four years.

[Dave Ramsey]

That is absolute bull crap. Well, that is just not true. You do not need a credit score to rent a freaking house when you're in the military.

[Caller Female]

I'd like to. That's what I want your advice on. How can we prepare to rent when we, in a year and a half, pay off all of our debts? What do we need to do to kind of prepare so that we can rent easily?

[Dave Ramsey]

If you're going to go rent a home, your. Your husband's in the military. Military. And what is his rank?

[Caller Female]

He's a staff sergeant.

[Dave Ramsey]

Great. You walk up to the landlord, you meet them at the property, and you say, my name is staff sergeant and you're in a military neighborhood. He knows exactly what that means. Your landlord will. I promise you, okay? He knows exactly what that means. It means that you're always going to get that amount of money every Single month. Your husband's income is what's known as secure. Your landlord is going to love the fact that your husband is not going to lose his job or get laid off because some tech tycoon decides to cut stock price. Okay, so your husband has what's known as the ultimate steady job, a predictable environment. And he's a staff sergeant, so he's a leader. He's going to pay his bills. And Mr. Land Landlord Staff Sergeant so and so is also going to smile and say, we are privileged to be 100% debt free, which means it's going to be very easy for us to pay this rent. It also means that when you check our credit, you're not going to see much of a credit score because we don't believe in borrowing money. And I know you're going to like that as a landlord. That's all you got to say. And the landlord will sign you up.

[Caller Female]

I guess the other side. My husband does have to have a travel card with the army and that is in his own credit score. Is there any way that you know of that we can get rid of that?

[Dave Ramsey]

He's stuck with that.

[Caller Female]

Have a terrible credit score.

[Dave Ramsey]

Okay, he's stuck with that.

[Caller Female]

Okay, so we'll just kind of have to make the case. Yes, you're going to see this score. It's because of the army and the travel card.

[Dave Ramsey]

It should be a low thing we've got. Well, it could be. Could be because there's very little activity on it.

[George Kamel]

It's not going to tank it.

[Dave Ramsey]

Yeah, it shouldn't.

[George Kamel]

You know, it shouldn't stop you from getting a house.

[Dave Ramsey]

If you're in corporate America, I'd have some ideas, but in the military, you're stuck with that. There's not a lot you can do with it, but. But the big thing is, is you just have to get the landlord to look at the actual benefit. Why would you want to be out of debt? So it's easier for me to have money to pay bills. And the landlord's gonna like that. I would love to see somebody that comes up and I have a bunch of houses we rent out. And if somebody walks in and goes, I'm in the military, which I instantly I know is guaranteed income. Oh, I'm staff sergeant, I know what that income level is going to be. Put that out there and oh, okay, I got guaranteed income. Oh, and they don't have any debt. It's gonna be fairly easy to pay this rent instead of like, oh, we have six car payments. But a high credit Score. Or we got a student loan, a car payment, a boat payment and four wheeler payment, and a payment, and a payment and a payment. But I got an 800 credit score. Yeah, but how are you gonna pay the rent with all these stinking payments? That's what the landlord's thinking. Now if you're dealing with some idiot that's a corporate employee at some corporate department and they go, well, we have to look credit score though, then you're not going to get that one. But if you're dealing with a single family residence and you can't, can't make the case that you guys are the best possible renter on the planet as a staff sergeant with zero debt. Oh, you can make that case for sure. This idea, I have to have a credit score in order for us to rent because we're in the military. Don't ever say that out loud again.

[George Kamel]

When I've played this out, we actually on my YouTube channel and on my podcast, the Fine Print, I called multiple apartment complexes and single family homes across the country.

[Dave Ramsey]

How many?

[George Kamel]

At least seven or eight.

[Dave Ramsey]

Okay, okay.

[George Kamel]

And so every single one said, well, yeah, if you don't have a credit score, we just do a background check, make sure you're not a criminal. Do you have steady income? And you might have to pay a slightly higher security deposit, which you'll get

[Dave Ramsey]

back in some cases. Some cases they didn't get.

[George Kamel]

In some cases they don't even at apartment complexes that were corporate. I explained my situation. I don't have a score. Can I still rent with you guys? And they went, yeah, we should have slightly higher security deposit. Okay, big whoop. If you follow our plan, did you

[Dave Ramsey]

have anyone out of seven or eight that said no?

[George Kamel]

No, There was one in New York that had more stringent laws, but they still said, yeah, if you come in, we can take a look and, and see if we can make this happen for you.

[Dave Ramsey]

Okay, so. But no one. Absolutely not. It's impossible to rent a house without a no credit score. What they're looking for, that's just a bunch of. Because what people don't understand believe stuff out there that is not true.

[George Kamel]

They're looking for bad, dumb things. They're looking for misbehavior. They're looking, looking for terrible scores. Not a no score. That's way less of an issue.

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[Dave Ramsey]

Welcome back to the Ramsey show in the Fair Winds Credit Union studio. George Camel, Ramsey personality, is my co host today. Ashley is in Green Bay, Wisconsin. Hi, Ashley, how are you?

[Caller Female]

Hey, good. Dave, how are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller Female]

Hi. So it's kind of a long story, but I'm going to try to condense it. I'm 24. I've been living on my own. Bad family situation I had to get away from. I've been kind of working odd jobs here and there. Currently make about 30 to 35 a year if I'm lucky. My car that I was fortunate to get recently broke down. It's not worth fixing just because it's not worth the amount of money that it would take to fix it. I'm just wondering, if I have no money in the bank, no savings, how would you recommend getting a different car without taking on debt?

[Dave Ramsey]

What's wrong with your car? Who said it's not worth fixing?

[Caller Female]

So it's had a lot of suspension issues and it has like 222,000 miles on it. It's 2011, you know, I wouldn't be able to get that much out of it. And the suspension issues, they quoted me like three, three thousand dollars. And then is the car.

[Dave Ramsey]

Can you drive the car? What's wrong with the suspension engine?

[Caller Female]

Yeah, it's. It's a lot of like, different, like, like the, the wheel bearing. Like there's just a lot of things that I couldn't afford to fix.

[Dave Ramsey]

That wasn't what I asked. I asked if you could drive the car. Is it rolling?

[Caller Female]

No.

[Dave Ramsey]

Why? What's broken that keeps it from rolling? Because Suspension issues don't keep it from rolling.

[Caller Female]

The brakes are creating, like a lot of heat. That is for something.

[Dave Ramsey]

Brakes are different than suspension. Okay.

[Caller Female]

Well, yeah, I mean, it's a lot of things is what I'm trying to say.

[George Kamel]

Have you gotten multiple quotes on this?

[Dave Ramsey]

So let me stop you for a second, okay? I'm sorry, George, just second. I'll let you come back to that. Here's why I'm asking that, okay? I drove junk cars for a lot of my life and turned a wrench on them old redneck style, all that stuff, right? And I don't want you to have to drive a piece of crap car the rest of your life. I want you to not have. Have to. And I'm trying to get you up and moving again. But I would say close to 100% of the cars with 250,000 miles have suspension issues. The suspension is merely what causes the car to feel like it isn't riding well. If you hit a pothole, it feels like it runs up through your back and jars your brains out and that kind of stuff. That's a suspension issue. Or when you go into a corner, it feels like it moves like four times as you go around the corners instead of once. That's a suspension issue. None of those things keep you from driving that car to work. And almost all worn out cars have a worn out suspension. I've got a 1960 Corvette that has been renovated. Frame up. The suspension in the thing absolutely sucks.

[Caller Female]

Yeah, okay.

[Dave Ramsey]

So the suspension doesn't bother me. The brakes you gotta have fixed. But brakes are different than suspension and different than wheel bearings. And I think some more. Someone has just looked at your car and said, oh, this is gonna take more than to put this car back the way I would do it because I'm a mechanic, is gonna cost more than this car is worth. Yeah, well, we're not trying to do that. We're trying to put a band aid on this sucker so this girl can get to work. That's different.

[Caller Female]

Sure. Yeah. So they said in the dealership.

[Dave Ramsey]

Oh, dealership. There's your other problem. The most expensive place to get a car worked on. The most expensive place to get a car worked on is in the dealership.

[Caller Female]

Dealership, yes, I'm aware of that.

[Dave Ramsey]

Then why did you go there?

[Caller Female]

I also. If you would let me explain, I will explain it to you.

[Dave Ramsey]

Okay, try.

[Caller Female]

I. I took it. I took it to another friend after I was done at the dealership, and he also told me the same thing. It's going to Cost, you know, even. Even though he was able to do it for slightly cheaper, the parts themselves were really expensive with everything that needed to be done.

[Dave Ramsey]

So I still don't think everything needs to be done. Okay, I disagree.

[Caller Female]

Okay.

[Dave Ramsey]

I think your friend is wanting to fix your whole car, and I don't think he understands all we need to get the brakes on this thing. Can you get some brakes on it for me so I can get to work? And when I get to work, then I'm gonna start stacking cash, and I'm gonna sell this piece of crap to a junkyard for $2,000 for 1,500 bucks. I'm gonna put 1500 bucks with it, and I'm gonna go buy a car that's twice as good as this one, which ain't much. Still.

[Caller Male]

Still.

[Dave Ramsey]

But we're going to move up in car a little bit. You've got no money. I'm trying to get you off your feet.

[Caller Female]

Yeah. Yep.

[Dave Ramsey]

And that's what I'm trying to do. And the dealer is not even going to come close to helping you. 100% of dealers are going to tell you, oh, you need a new car. Here's three easy payments. Asking a dealer to fix your cars, like asking a dog if it's hungry. Of course they're going to tell you it's broken, you know, and your friend is probably looking at it going, yeah, I'm a good mechanic, and I know how to fix all this stuff, and it's not worth screwing with. But he hadn't thought about the fact that you got no money to go buy a car with.

[Caller Male]

Yeah.

[Caller Female]

I mean, my friend doesn't have a financial incentive to tell me anything, though.

[Dave Ramsey]

I didn't think that either. I think he's a good mechanic and he wants to do it. He wants to fix everything. And I wouldn't fix everything on this car. I drove cars just like this when I was broke, too.

[George Kamel]

Can you go back to them and say, hey, I just want to get from A to B. I don't need to do everything. What do I need to do? Rolling again.

[Dave Ramsey]

And then you go take six shifts at whatever it is you're doing and pick up four side hustles and go put your little money together and let's get this thing up and running for four months. Okay. I had a guy loan me a car with 400,000 miles on it when we went bankrupt. 400,000. This car was an absolute piece of crap. When I drove it into a good neighborhood, the cops followed me. They thought I Was gonna steal something. This car should not be in this neighborhood. It was that bad. I drove that car for three months and it was the worst experience of my life. I used to tell people I drove that car for 10 years. One three month period, period. But you know what I did during that three months? I worked like a maniac and I bought a fifteen hundred dollar car which was way.

[George Kamel]

That's a huge upgrade.

[Dave Ramsey]

Better than the blessing my friend had loaned me.

[George Kamel]

That's the blessing of a beater.

[Dave Ramsey]

When the guy loaned it to me, I swear to God. We jumped. We got the jumper cables, jumped it off and I drove it up out of the weeds. You might be a redneck. It. This is the loaner I was driving. The vinyl roof was torn loose across the front, so when you drove it, it filled up with air. It looked like a rolling parachute. When you come to a stoplight, your stop would settle.

[Caller Female]

Oh, man.

[Dave Ramsey]

For three months. I'm emotionally scarred. This was 35 years ago. Emotionally scarred from this.

[George Kamel]

You're still angry at this car?

[Dave Ramsey]

I'm old blue. Old blue.

[George Kamel]

Take this thing out to the farm and shoot it, Dave. Is it still around somewhere?

[Dave Ramsey]

It needed bullets put in it.

[George Kamel]

It's in a junkyard somewhere.

[Dave Ramsey]

Like an old horse need to be put out of its middle. Oh, wait a minute. That's your.

[George Kamel]

That's my territory.

[Dave Ramsey]

Anyway. The. Yeah, that. So what I want for you actually is I want you to get out of the mindset that you're going to go take out a car payment. You're 24. You make no money. You're on your own. You got away from a toxic family situation and the last thing you need is a car payment. In the meantime, what you desperately need is some semi horrible transportation for a short period of time for you to work like a crazy girl and pile up cash and no happy hours and no eating out and no nothing. No partying, no fun. Pile up cash and get you a little better car. And then pile up cash and get you a little better car. And then you'll start to be in something that's reliable, but you're not going to do it with car payments. If you, if you sign up for car payments, girl, you're going to be stuck right where you is for the next five years.

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[Dave Ramsey]

Guys, I want to loop back for a second. If you find yourself with a low income and no money, the way out of the situation is not borrowing money to buy things that will nail your feet to the floor and you will not be able to move. It's a trap. And that's why payday lenders pawn shops rent to own and tote the note lots are in the poor end of town. They're not in the rich end of town because they oppress, they take advantage of of people with low incomes who feel trapped and desperate. I have been broke. I've never been poor. Poor is a state of mind. Poor is I'm trapped and there's no way out. So I'm forced to rent my washer and dryer at the Rent all place. I'm forced to buy a car and pay three times too much for it at an interest rate that can't even be calculated on the tote, the note lot or I'm going to borrow money at 800% interest. That's actually what it is. It's not an exaggeration at a payday lender because it feels like I'm trapped and I'm reaching for, I'm grabbing for anything that I can get a hold of to get out of this trap. And when you do that, someone will hand you a concrete block and you will sink. They will not hand you a life preserver and so that includes going to a car dealer when you make $25,000 a year and you're 24 years old to get your thousand dollar car worked on in the repair shop. That's 100% of the time not going to go well. They are not set up to serve that clientele. They're not set up for it. They don't even know how. Their brains don't even work that way. And so you can be angry about it if you want. That's not a bad thing.

[Caller Male]

Thing.

[Dave Ramsey]

But the way out is not to borrow your way off of the bottom rung of the income ladder. The way out is to cut your lifestyle to nothing and work like a maniac and get your income up. Get your income up, get your income up, get your income up. You do not, when you're in a situation like that, and I have been there, you do not have, have any time or margin for any kind of relaxation or luxury in a country that is full of relaxation and luxury. Every Instagram feed is some bull crap thing that you don't need to be messing with. You don't need to look at any kind of social media when you're in that situation. All you need to do is work. My grandmother used to say there's a great place to go when you're broke to work, work. And it's the only way off the bottom. But it will get you off the bottom, it'll get you out. You're not stuck. You live in the greatest country the world has ever known. And if you simply get up and go work six jobs today you can make $20 an hour at Target and FedEx. Throwing boxes today. Today you can make serious. You do not have to have a master's degree in finance to make a really good living today. And you can, once you get your income where you can go buy a $3,000 car for cash now things start to loosen up a little bit. And then you can go buy a $6,000 car for cash. Because the good news is the $3,000 car in one year does not go down in value. It's pretty well done. So you can take your 3,000, 4,000, add to that, get a 7,000. This is how Sharon and I got out. After we went bankrupt and lost everything and, and had two little babies. We did a borrowed car to $1,000, $1,500 car to a $3,500 car. Those are the real numbers. I remember distinctly when I bought the first $10,000 car after bankruptcy. It was several years later wow. It wasn't 20 minutes later. And I wasn't trying to rebuild my credit because credit had not served me well. I was done with credit. And so I went to. All the way to the bottom, lost

[George Kamel]

everything,

[Dave Ramsey]

started in the hole because I still owed the irs. My net worth was not. Not zero. It was negative. I owed the IRS money because you can't bankrupt those buttholes. And so I still got the irs. I've still got this and that. I've still got these things, and I've still got two babies to feed, and I've still got to keep the lights on.

[Caller Male]

On.

[Dave Ramsey]

And I was so scared, I couldn't breathe. I didn't know what to do. And so if you're in that situation, I've been there. And I'm not going to sit here and tell you what you want to hear. And if that pisses you off, that's awesome, because that's my job, is to piss you off. So you don't stay where you are. If I can upset you and make you move off your little butt, then I did my job. Job, because that's what people did with me. They didn't look at me and go, oh, Dave, you need a government program. They said, you need to go make some lemons out of all lemonade. Out of all this freaking lemons. You got. You got cases of lemons, boy, you need to go do something with it. These are my friends, my family. There's zero mercy. Actually, it was really great mercy because it was the truth.

[George Kamel]

It's the kindest thing you can do for somebody.

[Dave Ramsey]

The way out is the truth. Not say, oh, well, you know, you just need. The poor need a line of credit. That's the last thing you need. When you're broke, it's gonna keep you freaking broke. So the last thing you need is a car payment because you got a car problem. And I just. My job here is to love you so well, I remember how that feels. And I am not gonna tolerate the narrative of lies that are gonna be thrown at you. I'm a consumer advocate. Advocate. We're here. George and I are here to help you, not anything else. You're not our entertainment value. We were entertained long before we got to these microphones.

[George Kamel]

Doesn't take much.

[Dave Ramsey]

This is what you've walked into. If you walk into the Ramsey show, Don't expect anything else. Steve is with us in San Antonio, Texas. Hey, Steve, what's up?

[Caller Male]

Hey, guys. Thank you so much for taking my call.

[Dave Ramsey]

Sure.

[Caller Female]

You hear me?

[Dave Ramsey]

Yes, sir. How can we Help.

[Caller Male]

Okay, so I'm gonna, I'm gonna ask the question and I'm gonna describe the situation. My question is when should I file for Social Security with IRMAA in mind? You are familiar with Irma, right?

[Dave Ramsey]

Huh. Okay, give me the rest of the story. I'm so confused.

[Caller Male]

Okay, so I'm, I turn 65 in March. I'm a school teacher. I got part A covered. I found for part A of Medicare. The rest because I'm still with the school district, I'm taking care of. I've got Social Security coming to me when I do retire. Not much, but some next March I will meet with in Texas called the, what's it called? I forgot what it's called. But when you hit the certain age and the years of service, you get full benefit tickets. All right, so I'll get that in March. The third source of income that I'm going to have when I retire is, and I'm blessed. I won a scratch off ticket for $500,000 and that turned out to be $380, $280,000 after the taxes were taken out. So my question is, with Irma in mind, I know in two years time I will be taxed heavily because of that sudden growth in income. My question is, when should, what was your, your advice for filing for Social Security? Do I wait till after that two year grace period or should I file for Social Security next year when I retire?

[Dave Ramsey]

I would wait. Given that you're going to take the hit on the, the lottery, the lottery income is going to come in. Let that, let that purge be the rat and the snake all the way through your taxes and then do your Social Security after that and then you won't have to deal with Irma. It's not a problem because Irma is not affected by net worth, it's affected by income. And so yeah, that's what I. Yeah. And by the way, what they withheld on that is not necessarily your tax rate. Your tax rate is they will withhold 24% on lottery winnings. But you may or may not be taxed that you may be taxed more or less. So you need to get some good tax advice as well. Go to ramseysolutions.com and click on taxes. When I started, I had great ideas and I knew how to serve people, but I didn't have systems in place yet. At that time I sold books out of the trunk of my car. It was a lot harder to start a business back then. Shopify makes it easier. Shopify is the business platform powering millions of businesses and about 10% of all E commerce in the United States. If you've got a product or even just an idea, Shopify makes it simple to get moving. You can build a storefront, write product descriptions, and even improve your product photos all in one place. You don't need 10 different systems duct taped together. Shopify handles everything you need to make sales, from payments to marketing and analytics. Plus, that Purple Shop pay button is one of the best converting checkouts on the planet for fewer abandoned carts. And if you get stuck, Shopify offers 24. 7 support. So if you've been sitting on the sidelines, it's time to turn those ideas into Sign up for your $1 per month trial at shopify.com Ramsey that's shopify.com Ramsey shopify.com Ramsey. Well, we wish we could get to every call and question here on the show. If you got a money question you want an answer for your situation, head over the website, use Ask Ramsey. Ask Ramsey is our free AI tool that's built and trained only on proven Ramsey principles. About three years worth of this show. We dropped it into it and we dropped all the books we've written into it. We dropped all the articles which there's thousands of that we have on our website on different subjects into it. And so it's pure Ramsey. No Reddit, no TikTok, no crap, just what Ramsey says. And if you don't want to know what Ramsey says, then you wouldn't certainly use Ask Ramsey. But if you do want to know what Ramsey says, you could Ask Ramsey and you will only get a Ramsey fied answer. As a matter of fact, it's getting increasingly smart alec. It's starting to sound like me. It's to starting so bad. But hey, ask your question today at RamseySolutions.com, completely free ask Ramsey. Or click the link in the description if you're listening on podcast or YouTube. Abigail is in Vermont hi Abigail, how are you?

[Caller Female]

I'm doing well. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller Female]

So my husband and I, we've been married for five years now. We bought a house right before we got married and before we got together I lived at home with my mom and I ended up buying my own house on my own. Kind of spiraled into we had a good nest egg built up. So now five years into marriage we have no debt except for our mortgage. And during that time when I was living at home before we were together, I didn't have any bills or anything. So I dumped a lot of money into my retirement account. I did it. It's a 403 Roth. So I have about 143,000 in my retirement account.

[Dave Ramsey]

Good.

[Caller Female]

Our current debate that we have is my husband really wants to take a chunk of and pay off our mortgage. We have about 54,000 in investments, including an emergency fund. Our yearly income is about 110,000. But in our investments and our retirement, we definitely have enough that we could wipe out our mortgage. But I wasn't sure if taking that 10% penalty, because it did go in Roth, if that would be worth paying the mortgage off early. That way we are every month, except for June and July, we have an extra 1600 that we are able to throw into our investments and our mortgage.

[Dave Ramsey]

What's your mortgage balance?

[Caller Female]

About 125,000.

[Dave Ramsey]

Did you keep the house you paid off?

[Caller Female]

So the first house that I bought, we sold it and we used that money to renovate our current house. Our house was a fixer upper, so we did all of our renovations without getting any.

[Dave Ramsey]

So you only own the one house?

[Caller Female]

Correct? Yep.

[Dave Ramsey]

And you have $54,000 in what? And you have 112 owed. And a hundred thousand. And 100. And what was your income? One hundred and what?

[Caller Female]

So 110,000 in income. Our mortgage is 125,000.

[Dave Ramsey]

Okay.

[Caller Female]

We have 140. Yeah. 54 in investments and emergency funds.

[Dave Ramsey]

You got 140? Yeah. Your husband's wrong. There's no possible way I would pull money out of a Roth and pay off a mortgage. I want your mortgage paid off worse than he does. It's gonna do amazing things for you guys, but I don't want to be stupid in paying it off. And the hit you're gonna take on this account is not worth it to pay it off. You're gonna get there. You're fat on your emergency fund. You don't need 54,000 in there. So I'd take 25 of that and throw it on there. Then you got a hundred to go. And you're doing. You're doing about 18,000 thousand a year right now. 1500amonth. Right?

[Caller Female]

Roughly, yeah. I. I work per diem. So when I say our yearly income is about 110. I'm per diem. I'm a nurse, but I have a lot of, like, medical conditions that kind of inhibit me from working more. And we have.

[Caller Male]

You work.

[Dave Ramsey]

Do you make 110 or don't you?

[Caller Female]

We do. We. Some years we are able to make a little more Than that.

[Dave Ramsey]

Well, when you make a little more, put a little more on it. But if you don't make a little more than, you're still okay. You're fine. I mean, you put $20,000 a year on 100,000, it's gone in five years. And you're how old?

[Caller Female]

I'm 28. He's 34.

[Dave Ramsey]

Yeah. And so you're going to be not even 40. And you have a paid for house. The house is worth what today?

[Caller Female]

About 220.

[Dave Ramsey]

Good, good. You're going to be in great shape. Y' all are doing so good.

[George Kamel]

I want to reset the conversation with them tonight. Go. Hey, I know you want to pay off this mortgage. Let's make a plan that doesn't involve decimating our nest egg. To, to get there.

[Caller Male]

Yeah.

[George Kamel]

Let's use future income, a little bit of our savings. Let's have a plan. Spit shake. Three years, four years, five years, this thing's gone.

[Dave Ramsey]

Yeah. And your 403B, make sure it's invested in good mutual funds, because a lot of them aren't in 403bs. They get into insurance products. Be careful with those. Let's just get in some good mutual funds. Good growth stock mutual funds. You should be earning 10, 12% average on your money. And if you are, you're going to double that money every seven years. Years. And so about the time this house is paid off, you guys are going to be millionaires.

[Caller Female]

That's one way to look at it. Now, as far as paying this off, would you recommend rice and beans or just continue on the path that we've been doing?

[Dave Ramsey]

I'll continue on the path that you're doing. But I would just say every time I look at anytime we have, quote, found money, I get a bonus. I get some unexpected overtime, I get whatever. Anytime we've got some found money that the budget didn't need. Need and that, you know, we can still have a good life while we're doing it. I'm just going to throw all found money at it, you know. You know, your rich uncle passes away and leaves you 5,000 bucks. That's found money. Right. You just throw it at it. Something happens. You get $10,000 somewhere, just throw it at it. What's going to end up happening? You're probably going to pay the house off in about four years without doing rice and beans.

[Caller Female]

Sounds about right. Yeah.

[Dave Ramsey]

Yeah.

[Caller Female]

I think that's where we're kind of.

[Dave Ramsey]

Yeah, I think. I mean, that's more than $20,000 a year. But you're Going to have some found money. You're going to pick up your per. Different things are going to happen. And you can still have a good life while you're doing that and still go on vacation.

[George Kamel]

Go on a date.

[Dave Ramsey]

Yeah. Yeah.

[George Kamel]

Don't punish yourselves for no reason.

[Dave Ramsey]

And that when you're in baby steps 4, 5, and 6, which is where you all are. We are intentional, not intense. One, two, and three is intense, which is beans and rice. Rice and beans. You don't see the inside of a restaurant unless you're working there. And you don't go on vacation. Do you get your butt out of debt and have an emergency fund, then when you move to where you guys are. Abigail. We go four or five and six, and that's intentional. And that's when we have a life. But we also have goals, and we're, you know, found money goes towards the goal. And your husband's got a great goal of having a house paid for. Because, guys, when you got no house payment, you know how fast that old house payment turns into a million dollars when it's invested? I did that. I took my old house. But when I finally paid off the house, it was a. It was about 1900 bucks back in the day. And I. I rounded it up, 2500, and I put that automatic draft into a mutual fund just to see and left it on. Never put anything else in it. How fast that one mutual fund became a million dollars was absolutely mindboggling.

[George Kamel]

Yeah. That's the compound growth on that.

[Dave Ramsey]

You're used to paying a stupid house payment. When you pay yourself a house payment.

[George Kamel]

Oh, and it's invested. My goodness. Instead of paying interest to the bank, you're paying yourself some interest.

[Dave Ramsey]

Interest. Ding, ding, ding.

[George Kamel]

That's. And once you. You cross that threshold under a hundred thousand, you're like, game on. We got this.

[Dave Ramsey]

Oh, yeah, you can smell it now. Anthony's in Chicago. Hey, Anthony. What's up?

[Caller Female]

Hey, Dave.

[Caller Male]

Thanks for taking my call.

[Dave Ramsey]

Sure. How can we help?

[Caller Female]

So I've been.

[Caller Male]

Recently. I graduated two years ago. I've accumulated or accumulated a lot of debt in those four years. Plus the new car I bought that you probably won't like. But currently I sit at roughly. I was just trying to get, like, some tips. And, like, I feel like I'm doing a good job repaying it back. And I was wondering if you can provide any more helpful tips to keep going on that aggressive edge that I've started.

[George Kamel]

What's the total

[Caller Male]

debt after, like, the

[George Kamel]

start or balance right now?

[Dave Ramsey]

Today.

[Caller Male]

Today is about 50,000 ish.

[George Kamel]

What's your income?

[Caller Male]

It's about 66,000, but I have overtime, so 76 last year.

[George Kamel]

Good.

[Dave Ramsey]

What's the ish? 50,000 on?

[Caller Male]

So we got 33,000 in a private bank, student loan. We got 17,000 in a. In federal loans. And then my car is above equity value, above my loan value.

[Caller Female]

You.

[Dave Ramsey]

I don't care. What do you owe on your car?

[Caller Male]

15,000.

[Dave Ramsey]

Okay, so you don't have 55. You don't have 50,000. You have 65,000 in debt,

[Caller Male]

correct? Technically. Okay. All right.

[George Kamel]

That's almost 100% debt to income ratio. So you need to get this. This income up. We might want to sell the car if you want to speed this process up, but that's the only way to do it. Spend less. Less. Make more. Throw the difference at the debt. Debt snowball at smallest and largest balance. And hopefully you'll be out of this thing in two years. Hey, guys. George Camel here. Two things you should know about me. I love a good movie, and I hate overpaying for things. An angel just checked both boxes. They've got a new movie called Young Washington, the story of George Washington's early life as a soldier before he became a founding father. And whether you're a history buff or an not, this was a gripping, entertaining thrill ride of a prequel to the guy on the dollar bill. I was on the edge of my seat the whole time. Now, here's where the math gets fun. A premium Angel Guild membership is normally 20 bucks a month, but as a Ramsey fan, you get 25% off. So it's just 15 bucks a month. And that membership gets you two tickets to Young Washington in theaters, along with tickets to future angel theatrical releases and access to their family friendly streaming library. Two free movie tickets, and every month. I ran the numbers. The membership basically pays for itself before you even touch the popcorn. So get the deal and go see Young Washington in theaters this Fourth of July to celebrate America's 250th birthday. Sign [e-mail] Ramsey. That's angel.com Ramsey.

[Dave Ramsey]

Sarah is with us in Oklahoma City. Hi, Sarah. How are you?

[Caller Female]

Hey. Doing well. Thanks for taking my call.

[Dave Ramsey]

Sure. What's up?

[Caller Female]

The gist is, I'm wondering. There's a lot more context, but I'm wondering if I should take money out of my 401k so that my fiance can kind of get prepared and pay off some of his debt before we get married.

[Dave Ramsey]

I'm sorry, what? What would you do with the 401k money.

[Caller Female]

So I am staying at home right now with our eight month old baby. So I haven't been working since like 38 weeks pregnant. And so I don't have my own income. So he's covering everything. Very grateful for that. But I also hear you.

[Dave Ramsey]

What does he make

[Caller Female]

total? About 35,000 a year. So it's pretty low.

[Dave Ramsey]

So we're going back to work I take it?

[Caller Female]

Yes, at some point soon, but that's not on the table right now.

[Dave Ramsey]

Why?

[Caller Female]

And we get married in six months.

[Dave Ramsey]

Why are you waiting six months? You have a baby, get married tomorrow.

[Caller Female]

Well, so that's where the nuance comes in. We're Catholic and we have to be kind of in a marriage prep before we can get married and church. So we have it set up. We've tried to keep our lives fairly separate. We wouldn't be living together if we didn't have a baby. But this is where we found ourselves and you know, we made certain decisions so that I could stay home with our son. I was in an in between. I had left my career a few years ago, so I was just working part time.

[Dave Ramsey]

You're looking for a magic switch to make an impossible set of math work. And the magic switch is not your 401.

[Caller Female]

So

[Dave Ramsey]

the box that you guys have built for yourselves that you're trying to live in doesn't fit. And the 401k is not going to make it fit. So how much debt does he have?

[Caller Female]

He has about 28,000 and I have zero. So that's also part of it.

[Dave Ramsey]

Yeah, well, number one, you know, I'm fairly aware of the detailed pre marriage process that a good Catholic goes through. And it's also, by the way, for those of you that aren't Catholic, I'm not, but I'm aware of this part. The statistics of the folks that go through the prayer premarriage system that the Catholics use are very good for staying married. So the pre marriage process that you're talking about is very thorough and very good. I'm a believer in what you're doing. I'm not aware of how they treat a child out of wedlock in that process. That's a little surprising to me that the priest would say, wait, you've had a baby, but we're still going to act like you didn't and go through all of this detailed pre marriage counseling as if you guys weren't sleeping together. That's weird.

[Caller Female]

Yeah, it surprises too. So in our area, they actually don't even start marriage prep until After a child is born. So even though we've been together for a couple of years just to allow, I guess like freedom with the sacrament and make sure that it's not.

[George Kamel]

That makes no sense.

[Dave Ramsey]

Okay. I don't know, I don't, I don't.

[Caller Female]

That, I don't know.

[Dave Ramsey]

That's confusing to me, but I don't, I don't know how to speak into that.

[George Kamel]

What were you doing before and how much were you making?

[Caller Female]

So immediately before he was born, I was just working at a brewery and like substitute teaching. The 401k is from when I was a teacher, a public school teacher a

[Caller Male]

couple of years ago. Yeah.

[Dave Ramsey]

Okay.

[George Kamel]

And what's he doing? 35.

[Dave Ramsey]

How much is in the 401k?

[Caller Female]

Only about 13 grand. Okay.

[Dave Ramsey]

All right. If you take it out, it's 6,000, not 13. By the time they take the penalties and taxes out of it, might be seven. Might be seven. Okay. And so it's not going to. But my point earlier is it's not going to fix your problem. Your problem is an income problem and a marriage problem. And you need to solve both of those as soon as possible. His income going up temporarily, working six side hustles, your income going up, picking up a side hustle and planning to go back to work. And you do not pay bills for someone you're not married to, Period. And I don't know how to solve the part that is tied to Catholicism because I don't know enough about it to speak intelligently. But I do know if I were in your shoes, I would sit down and talk to a priest and figure out some process by which we got married sooner rather than later. And so if you're going to be married and you're going to have a child and you already have a child together, then the sooner you get that together, the faster, faster your all's lives are going to be knit together, the faster you're going to be able to get the debt cleared and build wealth and so on. But cashing out this 401k doesn't fix. It's like spitting in the wind. You got 60 and $70,000 problems. You don't have a $6,000 problem. And by that I mean your all's incomes suck. And so, you know, the debt payments

[George Kamel]

alone are probably eating up half the take home pay.

[Dave Ramsey]

Yeah. And it's, it doesn't fix it. It doesn't fix it. It's like it's a glancing blow at best. Okay, so. Yeah, yeah, interesting. So if you cash out your 401k early, you get a 10% penalty plus your tax rate. So it's typically going to be a 25% tax rate plus about a 10% penalty. So about a 35% hit. So roughly one third of your money. It's like saying, I want to borrow money at 35% interest to pay my fiance's bills. Okay, number one, we don't ever pay our fiance's bills under any circumstances. You're not married to them. Do not pay someone else's bills. It's your roommate, and legally, that's where you stand. And if he decides, he's just going to say, yeah, I don't really care about priests and I don't really care care about babies and I don't really care about you. I'm just gonna leave. And then you paid his bills. Now that's the other call we get on the air here.

[George Kamel]

I paid the bills, I paid his debts, and then we broke up. What now?

[Dave Ramsey]

Because I thought we were gonna get married. I thought we were in love and I thought we had a baby together. Oh, wait, that last part you did do. But yeah, this is where you get yourself in a pinch. Boy and girls. Girls, yeah. This is a problem. It's a serious problem. All right, not aimed at her, but just because I can't get out of my system right now. There's several pieces of research on what's called the success sequence. If you first graduate from high school and only then do you get a full time job, and only then do you get married, and only then do you have children. If you do those things in sequence, if you are a millennial, you have a 97% probability of not being at the poverty level. If you get them out of order and have babies before kids and high school and jobs and grown up stuff and you get them out of order, then you have a much higher probability of being at the poverty poverty level. And that's exactly what I'm talking about. That's what I'm fumbling around on here. And so after the cow's already out of the barn, now what do you do? Well, all I can do is try to help you from where you are at that point. And that's to return you as quickly as I can to the success sequence, which is, okay, we got the baby thing out of order here. Well, let's get married as soon as possible because otherwise you end up, you know, I make really good money and I paid off all his debts and then he just left because he really didn't want a baby. And even though. Yeah. And this, you know. Oh, when he took the car I bought for him, that's in my name and he's not paying the bill and my credit score is getting messed up. I'm going to get repoed. What do I do now, Dave? These are the calls George and I get every week. And so I can't. I just want to grab all of you that are 18 to 26 years old by the shoulders and yell in your face, don't shack up. Period. There's no data that says this works. None. There's lots of research says you're going to get your face pounded in. You're not. Your net worth is going to be 1/13 of what it should be. If you're shacking up in your 35 versus your friends that are married in their 35. 1 13th. That's more than 10x that you screwed yourself up. This stuff matters. Get it in order. Molly is in San Antonio, Texas. Hey, Molly. How are you?

[Caller Female]

I'm good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller Female]

Well, my husband and I are trying to come to an agreement on. On pausing, investing to cash, buy our next house and wanted to get your opinion on that. Okay, I'll give you a little background. We are 33 and 34. We bought our house at 26 and paid it off in five years.

[Dave Ramsey]

Way to go.

[Caller Female]

No debt.

[Caller Male]

Wow.

[Caller Female]

We have two kids, so we have our retirement and 529s just, you know, outgrowing our house. We want more land. We would like to build. We're just kind of.

[Dave Ramsey]

I love it. Way to go.

[Caller Female]

Figuring out.

[Dave Ramsey]

So what's the current home worth?

[Caller Female]

About 400,000.

[Dave Ramsey]

Okay. And what would your target be for the move? How much?

[Caller Female]

Looking to be about 700 with the land.

[Dave Ramsey]

Okay, so we need three. 300.

[Caller Female]

Yes.

[Dave Ramsey]

Okay, I got that. And do you have any investments or savings beyond emergency fund that are not retirement money?

[Caller Female]

Yes, we have a brokerage for the house. That's about 125.

[Dave Ramsey]

Okay, so you're almost halfway there.

[Caller Female]

Yes.

[Dave Ramsey]

Okay, and what's your household income?

[Caller Female]

Last year we grossed 190.

[Dave Ramsey]

Good for you. Well done. Okay, and how much is in your retirement account? Accounts?

[Caller Female]

Retirement with 529.

[Dave Ramsey]

No retirement accounts.

[Caller Female]

Oh, just retirement. 160.

[Dave Ramsey]

Okay. And how much is in the five?

[Caller Female]

29, 60.

[Dave Ramsey]

Okay. And how old are the babies?

[Caller Female]

About to be 7 and 2.

[Dave Ramsey]

And you're 34, you said?

[Caller Female]

Yes, 33 and 34.

[Dave Ramsey]

Okay. And so the argument is, do we stop retirement and 529 temporarily to get the other 175,000 that we need to finish this deal.

[Caller Female]

Correct.

[Dave Ramsey]

And you make 190. So is that a two year plan?

[Caller Female]

Yeah, my husband works overtime and has the option to make more. So if we, I think if we did this, we would probably really crunch

[Dave Ramsey]

down and I mean, if you did 175, you would need to save $85,000 a year right. Out of 190 to do it in two years.

[Caller Female]

Yeah, we can do that.

[Dave Ramsey]

Yeah. So it's a two year plan. So if we don't stop saving for retirement, instead of two years, how long does it take us? Three.

[Caller Female]

Yes.

[Dave Ramsey]

So we're arguing about a year year.

[Caller Female]

That's correct.

[Dave Ramsey]

Okay. It always helps me to kind of boil it down when Sharon and I are looking at this because it's not really philosophically some big, oh, we're not going to save for retirement. It's like one year difference if we do right or if we don't. So we're really arguing about a year's worth of retirement savings or two years worth of retirement savings. One. One year on the. When we purchased the house. So would we give up two years worth of additional savings in my 30s making 190? What would you do, George? That's kind of interesting. I like that.

[George Kamel]

I mean, I was in this exact argument, Molly, when we paid off our first house.

[Dave Ramsey]

And what'd you do?

[George Kamel]

And we wanted to cash flow. The second one, I kept investing. I kept investing at that 15% rate, but not more. Because, you know, once you're in baby step seven, you can invest 20%, 30%, but we kept it at 15%. And the rest, rest of it we stacked away to make.

[Dave Ramsey]

And how long did it take you to save them, do your move up?

[Caller Male]

Two years.

[George Kamel]

That was. Yeah, that was a couple years. Probably three years.

[Dave Ramsey]

Probably three.

[George Kamel]

So I think you guys need to decide the urgency of the house move. Does it need to be 700 to 650 work? Because you're talking. If you're investing 15% right now, that's about 28 grand of your gross income. That's what you're actually talking about. So does the 28 grand, is it worth waiting a year? Is it worth investing for that year?

[Dave Ramsey]

It's more like six months now, once you talk about that one.

[George Kamel]

Yeah. If you guys actually crunch the numbers, I'm curious what the actual numbers would be based on how much you're investing now. What pausing would get you what that next house will actually Cost. Because the other part is buying a new home is just the starting point is that 700 number. And then you've got the furniture and the moving costs and all the extra things that you want to do. And so it just gets cash flow that, yeah, making 190, you guys will

[Dave Ramsey]

be fine because they don't have a house payment. Nowhere in this scenario is there a house payment.

[George Kamel]

What's your emergency fund payments?

[Caller Female]

Emergency fund is 45.

[George Kamel]

Okay.

[Dave Ramsey]

You guys, I gotta tell you, you're like poster children. Amazing. Very, very well done.

[Caller Female]

When we did pay off at new babies. And I mean, y' all are.

[Dave Ramsey]

Y'. All. Y' all really got this nailed. You're gonna be. No matter which of these choices you take, you're gonna be very wealthy because you're doing several things. You're very intentional. You both are having a vote. You both talk about it. We even argue about it sometimes. And we both detailed goals, but neither one of us are budging on the stuff. Like, I'm not going to go into debt. Neither one of us are doing stupid stuff. You're both just deciding, you know, which type of investing we want to do. Do we want to do single family real estate that we're going to live in, or do we want to, you know, put this money in the mutual funds for there. So. So George said, okay, so really, it's 28,000 a year. So it's two years of. That's 50,000 bucks. 60,000 if you pause for two years.

[George Kamel]

Are you guys investing 15%? Molly, I'm just throwing a number out there. I have no idea.

[Caller Female]

I did the math, and I think it might be like, 16 or 17%. We could back off a little.

[Dave Ramsey]

Yeah, you could back off a little. But I mean. Yeah, so it's $28,000 a year. If that's the case.

[Caller Female]

Yeah.

[Dave Ramsey]

It slows your savings rate by that.

[George Kamel]

I like the personal challenge of going, can we do it without pausing? Investing, that's just a fun challenge for me, personally. I'm just a super nerd. So I would go, can we increase our income by 28,000 temporarily? That could be an interesting challenge, too.

[Dave Ramsey]

And then you're still done in two years.

[George Kamel]

Can we cut our expenses by 14 and make an extra 14? Boom.

[Dave Ramsey]

You just got to make a game out of it. But, yeah, because both are excellent go goals. Okay, so there's neither one of these things. Put your face in the stupid column. You know what I'm saying? You guys are just doing so good. I'm so proud of you.

[George Kamel]

It's almost like you're reverting to baby step 3B for a time. That's kind of how I see it. Which in baby step 3B, there's not

[Dave Ramsey]

a wrong answer to the argument.

[George Kamel]

Yeah. We say 0 to 50.

[Dave Ramsey]

I can't just say, you know, molly, you win, your husband loses, or husband, you win, Molly loses. I can't just. There's not a wrong answer because both of these things are very smart. And you follow the baby steps properly, you're not going back into debt to move up, which I would yell at you for all of that. Everything about this conversation is so healthy and positive. I think you two are going to figure it out. And also, by the way, there's even a weirder scenario. Mathematically, halfway in between. Between, oh, we shut down investing for one year and then we start, we take on the overtime and we cut over here, and then where do we end up? How much? You know, and then we're talking even about six months or eight months. We're now talking about, you know, just a few months difference and then it's irrelevant.

[George Kamel]

Yeah.

[Dave Ramsey]

So that being surrounded in the middle. Yeah, just hit in the middle and go.

[George Kamel]

I like to fast forward and go, okay, when we're 65, do we want to have 11.3 million or 11 million? That's really what you're like, all right, we're going to be okay. It's not worth the brain calories at this point.

[Dave Ramsey]

That's true. That's exactly what it's going to end up to.

[George Kamel]

Going to be good problems to have.

[Dave Ramsey]

Funny. Oh, Molly, it's so refreshing to talk to you today. Thank you for calling. Hey, guys, Dave Ramsey here. Every day on this show, we help people work through real money problems and figure out what to do next. Now, you can get that same kind of help anytime with Ask Ramsey. Ask your money question and get answers built on Ramsey principles we use on the show. Whether you're making a decision or just want something explained, Ask Ramsey is here to help. It's fast, simple, and free to use. Go to ramseysolutions.com and try Ask Ramsey today. That's ramseysolutions.com. Sydney is in Lancaster, Pennsylvania. Hi, Sydney. How are you?

[Caller Male]

I'm good.

[Caller Female]

How about you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller Female]

Oh, my gosh. Sorry. First of all, just so happy to be on the phone with you.

[Caller Male]

Oh, my gosh.

[Caller Female]

I, like, grew up listening to you. So, like, this is just wild to be on the phone with you.

[Dave Ramsey]

Well, we're honored. How can we help?

[Caller Female]

So my fiance and I are getting married in January and we both already are living outside of our parents house. And so we're trying to figure out what to put on our registry. And a lot of people have been telling me, oh, don't do a cash fund because people want to give you things and if you don't tell them what you want, they'll just give you crap. But both of us really just would prefer money for the future. Like how do we go about doing that? Or should we just like upgrade the stuff that we have?

[Caller Male]

Wow.

[Dave Ramsey]

Well, what occurs to me is that you might ask people to give you money, but certain ones won't. They're just not going to like. My wife is old school, southern, redneck, hillbilly, whatever you want to call it. Right. And the chance that she's giving you money for a wedding, for her, that would be tacky. Yeah, it's outside of, of her value system to do that. She couldn't do it. She's also the one that sends flowers to funerals. When they say don't send flowers, she doesn't care. And she cares, but she doesn't care because she's going to do what her upbringing taught her to do, which is to bless the bride and groom with a silver platter that they will never use. Of course it's a very southern thing to do do or genteel thing to do or whatever you want to call it. But I don't understand. I would take the money, but I'm with you, George. You got married how many years ago?

[George Kamel]

That was 2018. And we used a registry site. I'm sure you're using a similar one, Sydney. We use one called I think Zola, which is a popular one. And on there we had all the registry stuff, right? All the Target and Amazon crap. But we also had like a home down payment fund listed on there with little cute, you know, picture and a few people gave to that you could do a honeymoon fund and that's just a cash gift that people can give through that.

[Dave Ramsey]

And can you write a little paragraph at the top saying we prefer this?

[George Kamel]

Yeah, you can say, and I, you could place it. I place mine right at the top. I want everyone to see that first. And then the invite.

[Dave Ramsey]

Go fund George.

[George Kamel]

Exactly. And so the invite is a little trickier. You don't want to be like, here's the invite. Also cash gifts preferred. You could.

[Caller Female]

Yeah, yeah.

[Dave Ramsey]

People start to be a little tacky here. Yeah, yeah. So put it on the registry. George says, yeah, if it's on there as the link.

[George Kamel]

And you can, you can have.

[Dave Ramsey]

The more practical among us will give you money and then the ones that. The ones that were with proper upbringing, like my wife, will give you something you can't use.

[George Kamel]

So do you guys have a specific goal in mind for this money or is just. We'd rather have money.

[Caller Female]

So, yeah, that's the other thing we're trying to figure out. So we both ultimately want to do overseas missional work, like relief work, also like through church organizations. So we would love to, like, it would be so much easier if it was for a house because people would be like, oh, we could see that goal in mind, but we just don't really have any.

[Dave Ramsey]

It depends on the audience. I mean, if it's. If your friends and relatives are believers and they want to support your working for the Lord, then that might be more motivating than buying you a house.

[George Kamel]

I'd feel more convicted over getting a cupcake platter to go. You know what? I should probably support the missions they're so passionate about.

[Dave Ramsey]

Cupcakes are cheap. Jesus. Yeah, you pick.

[George Kamel]

Okay, but you can put that on the registry site. You can put a little blurb of, hey, here's. Here's our heart. Here's what we'd love.

[Dave Ramsey]

Now, no matter what you collect money to go on a missions trip, you cannot spend it on your house. That would be unethical.

[Caller Female]

Oh, definitely not.

[George Kamel]

And also, Sydney, here's the fun part. You have the addresses of all these people. Now I might just do a follow up later with a separate missional ask versus trying to combine it into the wedding.

[Caller Female]

Okay.

[George Kamel]

Okay, that feels better to do a support letter six months after. After you're married. Hey, thanks for the gift.

[Dave Ramsey]

Also, thanks for the cupcake platter. Jesus.

[George Kamel]

Yeah, so I might separate it out just so it doesn't feel like you're kind of mixing two. Two wonderful things at the same time.

[Dave Ramsey]

That's fun. But, you know, that's a fun question.

[George Kamel]

If people are going to think you're tacky, they. They'll think you're tacky. Rachel thought I was tacky because I had a QR code to give to my daughter's 529 at her birthday party. Instead of gifts, I went, I don't want more toys and crap for a one year old.

[Dave Ramsey]

I don't know if it's tacky.

[George Kamel]

It's just strange.

[Dave Ramsey]

Yeah, it's pretty nerdy.

[George Kamel]

Yeah, I just got a QR code

[Dave Ramsey]

for how old was your daughter?

[George Kamel]

It was her one Year old birthday

[Dave Ramsey]

for her one year old birthday party. You put a QR code on your kid?

[George Kamel]

It was not on her person.

[Dave Ramsey]

Yeah, well, same thing. She put a tattoo on her forehead. It's like sponsor the one year old. Gosh.

[George Kamel]

Well, now I know Dave wouldn't support my daughter's 529.

[Dave Ramsey]

No, I didn't. I wasn't invited, but yeah. Oh, that's funny. I'm kind of with Rachel. I don't know if tacky is the right word.

[George Kamel]

This is close family.

[Dave Ramsey]

It's just classic nerd. George.

[George Kamel]

I wasn't soliciting money from strangers.

[Dave Ramsey]

If they know you, they don't think it's tacky. They just think it's.

[George Kamel]

George, can I tell you, nobody gave to the 529. So dead gum.

[Dave Ramsey]

QR codes just don't work.

[George Kamel]

Backfired.

[Dave Ramsey]

Not a one.

[George Kamel]

It backfired.

[Dave Ramsey]

Not a dollar.

[George Kamel]

My parents, they. They give every year to her 529.

[Dave Ramsey]

I know, but not through the QR code. Even know how to do the qr.

[George Kamel]

You know how long it took me to figure that out?

[Dave Ramsey]

Oh, that is so classic.

[George Kamel]

Now I'm upset.

[Dave Ramsey]

That is. That answers the question.

[George Kamel]

This is a. Don't try this at home.

[Caller Male]

Wow.

[Dave Ramsey]

Don't DIY this puppy. Oh, my gosh, George. That's funny. All right, I got the wrong number. Here we go. Here we go. Here we go. Tessa's in Chicago. Hey, Tessa, what's up?

[Caller Female]

Hey. Thank you so much for taking my call.

[Dave Ramsey]

Sure. How can we help?

[Caller Female]

So I want to start off by saying that my husband and I have gone over this and I have very strict instructions on what I'm supposed to tell you. I am the problem. I acknowledge it. I do. I'm trying to have gazelle like intensity. I listen to Total Money Makeover every single day as a little piece of motivation for my day. I'm trying to get better. But he works really hard and he lets me stay home. I homeschool our kids. I'm just. I don't want to be careless with his hard earned money. And we got ourselves into a position when we bought my parents my childhood home. We decided to buy it and renovate it. We started off doing FP when we got married and we the only debt we have, our mortgage, the home equity, which is the problem. And then we do have a truck payment, but his company gives him an allowance for that.

[Dave Ramsey]

They give him an allowance whether you have a payment or not.

[Caller Female]

They do not. That's not true. It's got to be like so Many years new.

[Dave Ramsey]

No, they, yes they do. They give you an allowance whether you have a payment or not. It has to be a certain age. But it could be a paid for truck.

[Caller Female]

Yes.

[Dave Ramsey]

Okay. So that you don't have to keep the payment to keep the allowance. So don't, don't, don't say that again. Okay?

[Caller Female]

Yeah, so that's kind of unclear for me. He had told me how it works, but I still don't quite understand that.

[Dave Ramsey]

But he gets an allowance for a truck, but it has to be a service age. It does not require, it has debt on it. It's that simple.

[Caller Female]

So we are suffocating and we're dwindling our savings. We do have our thousand dollar emergency fund, but that's pretty much it. Everything else dwindles and I don't know

[Dave Ramsey]

if it dwindled to.

[Caller Female]

So we are paying, our mortgage is 1195amonth. Our. We pay $1,000 on the home equity every month.

[Dave Ramsey]

What does that, does he make?

[Caller Female]

He makes 98,5 a year.

[Dave Ramsey]

And you're at home full time with a baby?

[Caller Female]

I, I am a photographer, so I make a little bit, but it's like eight, $9,000 a year.

[George Kamel]

What's the truck payment?

[Caller Male]

Did he get the truck payment?

[Caller Female]

810. And he gets just under that, like 760 or 770, something like that. Yeah. Okay.

[Dave Ramsey]

All right. Well the truck has to get paid off and that'll give you your margin back for one thing.

[Caller Female]

You do that before pushing more at the home equity.

[Dave Ramsey]

Whichever one's the Highest balance is second.

[Caller Female]

Yeah. Okay.

[Dave Ramsey]

And have you stopped your 401ks?

[Caller Female]

So that was our main question. We are. He's currently contributing 11%.

[Dave Ramsey]

If you're listening to 401. If you listen to total money makeover, you already know you're supposed to stop your 401k.

[Caller Male]

Right?

[Caller Female]

That was what I just passed that chapter. So. Yes, that's what prompted the phone call.

[Dave Ramsey]

Yeah, yeah, you definitely stop it. It's a temporary stop until you get these debts cleaned up, the mess you made. And then you, then you got margin and you can do this, but you can't do everything at once because everything at once isn't working. That's why you called.

[George Kamel]

You're gonna get almost a thousand bucks back in every single month if he stops his 401k. And then we clean up the HELOC, sell the truck, get a cash one and you're set.

[Dave Ramsey]

Yeah.

[George Kamel]

That's your margin back.

[Dave Ramsey]

You gotta have got a truck. Has to be a certain age to get the eight or to get the 700 bucks. And so then you start to wonder if that's actually worth it or not. It might not be worth it it because you might be keeping a truck that's expensive that you're wearing out. You got to look at the math on that truck. But anyway, yeah, stop the 401k temporarily. And beans and rice. Rice and beans. Get on the every dollar budget, both of you. No more eating out and no more vacations until these debts are cleaned up. You bought a house and a truck you can't afford.

[Caller Female]

Foreign.

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[Dave Ramsey]

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[George Kamel]

Today's question comes from Amanda in Utah. I vacation on the same cruise line twice a year. Each cruise is 14 days long. If I buy a hundred shares of their stock, I will receive $250 in onboard credit per sailing, which equates to 500 bucks a year. Even without growth, I would get my investment back in about five and a half. I know you don't recommend investing in single stocks, but under these circumstances, do you think it's worth it for me? Oh boy.

[Dave Ramsey]

Get your investment back. How do you get your investment back

[George Kamel]

with her onboard credit of 500 bucks a year?

[Dave Ramsey]

Oh, so not just one time. If you're a stockholder, one time of 100 shares. Anytime you sell, I guess you buy 100 shares, you buy 100 shares. But anytime you sell you get 250.

[George Kamel]

And on board credit. It's one of those that the juice ain't worth the squeeze here. Especially with five and a half years to make the money back. Yeah, that's not for onboard credit that you may or may not.

[Dave Ramsey]

Yeah, onboard credit, which is marked up crap.

[George Kamel]

Use it in a gift shop, a massage.

[Dave Ramsey]

Were you on here the other day when the guy called about the million dollar in onboard art?

[George Kamel]

Oh, no. But that one went viral. I saw that.

[Dave Ramsey]

That was wild.

[George Kamel]

He said it, mom.

[Dave Ramsey]

His mom had suckered into these cruises and she's buying on board cruise art and had dropped a million bucks in it over the series of years.

[George Kamel]

She had the money, clearly.

[Dave Ramsey]

Well, yeah, but now she doesn't. She completely broke now because it's all invested in onboard art, which I didn't even know was. I mean, I knew they had. I've been on cruises, I've seen the onboard art. I didn't.

[George Kamel]

It can't be great.

[Dave Ramsey]

I don't invest in.

[George Kamel]

Was she three sheets to the wind? How do you do that?

[Dave Ramsey]

I mean, she had been like a lot of three feet to the wind. That's like she did this over a period of years. But yeah. So anyway, what do you buy on board a cruise? I mean, it's like going to Disney. They sell $9 raincoats that they. Because it rains every afternoon because they control the weather and it rains every afternoon at Disney. And they sell you a $9 raincoat with a mickey on it that they paid 49 cents for in China. And that's what you're buying on cruise ships.

[George Kamel]

Yeah, it just take your money.

[Dave Ramsey]

It's not like it's, you know, like you're getting mink coats or something on there, I mean, or whatever.

[George Kamel]

Well, she's saying five and a half years. So this must mean at 500 a year she's getting talking. She's going to spend almost six grand to buy these hundred shares. Yeah, that's crazy.

[Dave Ramsey]

Overall, the answer would be no. Put that six grand, your onboard credit is going to stuff that's marked up at least double. And so now we're not at five and a half years, we're at 10, 11 years. And it's stuff you might not have purchased anyway. And so buying something on sale that you don't need is not a good buy.

[George Kamel]

And think about it this way. If this was a credit card that said, hey, if you spend $50,000, we'll give you this many points, we'd say that's crazy. Don't do that. Don't spend money to Try to do that.

[Dave Ramsey]

So we're going to say it about this. That's crazy. Don't do that. Okay. There we go. Ethan's in Jacksonville, Florida. Hi, Ethan. How are you?

[Caller Male]

Hey, Dave. How are you?

[Dave Ramsey]

Better than I deserve. How can we help?

[Caller Male]

Hey, so my question is, do I leave my current job, I've been here for about two years, and do I go work with my dad for his H Vac company and potentially take it over whenever he's ready to hand it up?

[Dave Ramsey]

Okay, well, what do you make now, and what would you make? Make there.

[Caller Male]

So me and my wife right now.

[Dave Ramsey]

No. What do you make at your job now that you're going to give up?

[Caller Male]

Yes. 65.

[Dave Ramsey]

And what would you make fixing H Vac for your dad?

[Caller Male]

He would start me out at the same.

[Dave Ramsey]

So that's what an H Vac tech makes in Jacksonville. 65.

[Caller Male]

Roughly. It is. I mean, he's being generous. I'll say. I don't know exactly what a H Vac tech would mean make, but what do you.

[Dave Ramsey]

You're not an H Vac tech now?

[Caller Male]

No, no, not. I'm not. I'm not, like, you know, experience.

[Dave Ramsey]

How many employees does he have?

[Caller Male]

He only has two right now.

[Dave Ramsey]

And how old are you?

[Caller Male]

I'm 23.

[Dave Ramsey]

And how old is he?

[Caller Male]

46, 47.

[Dave Ramsey]

Okay, so he retires at 65, 20 years from now, and you're 43. Meanwhile, you've been an H vac tech for 20 years, working for your dad, and then you get a company of whatever size it is at that point. 20 years from today.

[Caller Male]

Correct?

[Dave Ramsey]

Yeah. Let's pretend this wasn't your dad. Somebody offered you a job making the same amount of money you make now. And in 20 years, you could have the opportunity to buy the company or be given the company 20 years from now. Would you do that?

[Caller Male]

That's a hard one, Dave.

[Dave Ramsey]

I don't think you would.

[George Kamel]

I think you could start your own H Vac business and have more than two employees 20 years from now.

[Caller Male]

Yeah.

[Dave Ramsey]

So, you know what I might do is this. I guess. I guess. Do you want to. I mean, does he need the help and you want to help him? Do you want to work together? Does. What's your. I kind of feel like there's, like, love involved here. Like you're trying to love your dad.

[Caller Male]

Well, yeah. Like, I mean, he's so. He's my stepdad, so he's been nothing but a dad to in. You know, and I want to help him out. I want to, you know, I want to do whatever I can to help him. And. And I love the trade. The trade is just. I mean, it's. It's a good trade. I worked with him when I was. Throughout school. So, I mean, I love it.

[Dave Ramsey]

It is. What do you do now?

[Caller Male]

I work for Anheuser.

[Dave Ramsey]

Okay.

[Caller Male]

So I work swing shift. And it. I'm young, but I feel old. I ain't going to life.

[Dave Ramsey]

You're young, but what?

[Caller Male]

I'm young, but I feel old because of the swing shift.

[Dave Ramsey]

Oh. Oh, yeah, yeah. Graveyard. Yeah. That'll get you. Okay.

[Caller Male]

My wife, she's. She. She.

[Dave Ramsey]

So getting on day. Getting on days. Sounds from. Sounds fun.

[George Kamel]

Better. Quality of life.

[Caller Male]

Yeah.

[Dave Ramsey]

Yeah, I'm going with that.

[Caller Female]

Okay.

[Dave Ramsey]

So here. Here's what I would do if I did go forward with this. Let's continue the conversation before you make a. A decision. Number one, you said you're held 23?

[Caller Male]

Yes, sir. Yeah.

[Dave Ramsey]

So I would want a written game plan for clarity so that everyone, him and you and your mom and your wife all know what you're signing up for. Okay.

[Caller Male]

Okay.

[Dave Ramsey]

And that's called a partnership agreement, or we can call it whatever. And I want you guys to really spend some time detailing this out because this way, when this is over, you'll still be friends.

[Caller Male]

Okay.

[Dave Ramsey]

And if you don't do this, you probably kill each other. You know what I'm saying? Right?

[Caller Male]

Yes.

[Dave Ramsey]

So it worked out when you were a teenager, but you're not a teenager anymore. You're like a grown man and stuff now. So you guys going to have opinions. So I want him to progressively hand you ownership over the years.

[Caller Male]

Okay. So you kind of move into ownership. Ownership position and not.

[Dave Ramsey]

Not suddenly one 20 years from now when he's 65, but instead, after you've been there five years, he's going to give you 25%. After you've been there another five years, he's going to Give you another 20%. And now he's still a major owner and you're 33 and he's in his 50s. Okay. Kind of think that through, how that's going to feel for him and for you. But I want him to begin to hand you ownership in this. And then based on that ownership, you're going to get paid for the job you do, plus the percentage of ownership you have of the profits. And so if the thing makes a profit after you're paid your salary, and he's paid his salary for working there, or his income, if it makes $100,000 and you have 25%, you get an additional $25,000. Follow me.

[Caller Male]

Okay.

[Dave Ramsey]

Then lastly, you have to cover all the. All the Ds. What happens in the event of death? Divorce, drug use, disinterest. I don't want to do this anymore. What happens in the event of D's disability? Somebody gets hurt, they're in a wheelchair. What happens? How's that going to take? How's that going to shake out? What happens to the ownership? What happens to the income? Write all of that stuff down or don't do this.

[George Kamel]

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[Dave Ramsey]

Our scripture of the day, Isaiah 32:8 Generous people plan to do what is generous and they stand firm in their generosity. Charles Buxton said, in life, as in chess, forethought wins. I gotta tell you, I love hearing all these results from the people using everydollar. We've got tens of millions of people now using this budgeting app and it's following the Ramsey steps exactly. It's giving you a personalized plan and it helps you get out of debt and into wealth faster than anything else out there. It's the shortest distance, Dave. Just being able to use every dollar and see the extra we have every single month was super motivating. We have thousands of dollars every extra and just throw it on the mortgage. Hey, that's pretty cool. I love it. So you get to pick when you do it on purpose. I like this. Start every dollar for free in the App Store or Google Play. Aaron is in Anaheim, California. Hi, Aaron. How are you?

[Caller Male]

Good, Dave. Thanks for having me on the show.

[Dave Ramsey]

Sure. What's up?

[Caller Male]

Well, got married a little over a year and a half ago and wife and I have done pretty well and we're trying to buy a house. We live in Ornament county specifically and it's super pricey to live here. As you probably know, our goal is to buy a home. We've been smart. Our parents have raised us right. My dad Put me in touch with all your stuff. And I've been hooked to the show ever since, so it's been a pleasure and a blessing in my life and my wife's. Yeah. So we've been smart with our money and we feel like we've done well with it, but I'm kind of reaching a point as we get maybe a little bit closer to figure out how we should move it around from here, I guess. It's currently invested in the stock market.

[Dave Ramsey]

In. What's that mean?

[Caller Male]

In the stock market?

[Dave Ramsey]

I know. In what?

[Caller Male]

In the stock market, 80% is in equity investments, and then 20% is in bonds and fixed incomes.

[Dave Ramsey]

Equity investments. What's that mean? You got it in single stocks?

[Caller Male]

No. Well, yeah, it's kind of spread out across multiple different stocks. And the advisor that's helping me is put it in the market.

[Dave Ramsey]

Okay, all right. Well, that's not what we teach, you know, that.

[Caller Male]

Yeah, that's. That's one thing that's very risky. Yeah, it is. And it's done.

[Dave Ramsey]

Yeah. The bonds are risky, too. Yeah. Okay.

[Caller Male]

So that's where we have it right now. I mean, we've done well with it, but the market, you know, we're concerned that it's going to come down, and when it comes down, how far is that going to set up us back? And I think it's time that we maybe reconsider where we have our money right now.

[Dave Ramsey]

Okay.

[Caller Male]

Yeah.

[Dave Ramsey]

I don't time the market either, so I don't know. I would not do it based on what I think the market's going to do, because most people don't have any idea.

[George Kamel]

No one could have guessed the market was going to be up as high as it was three years in a row these last couple years.

[Dave Ramsey]

Yeah, in the last five years, it's doubled. And nobody could have guessed that.

[Caller Male]

Sure.

[Dave Ramsey]

Now, that's not in the portfolio you've got, but the portfolio that I've got has doubled. Yours may or may not have done that because those stupid bonds probably were an anchor on yours dragging it down. Anyway. How much is in there and when will you be buying the house?

[Caller Male]

I've got about 250,000 in it right now, not counting, like, my emergency fund and other savings that we have. And our. Our goal is, I mean, we're renting for really cheap from family right now, a house from our. One of our family members that they own.

[Dave Ramsey]

And why with 250,000, why have you not bought yet?

[Caller Male]

It's so expensive, like, for a single family home in Our area, it's not

[Dave Ramsey]

going to go down.

[Caller Male]

I know, but for our area, it's between 1.1 to 1.3.

[Dave Ramsey]

But it's not going to go down. And you have 250,000.

[Caller Male]

I'm in a sales role and it's, it's commission based. Heavily commission based. So it's been kind of my goal to throw down as much as I can at a home. And since my rent is so cheap and I'm not really pushed up against a wall to move out. I mean, my wife and I have the goal of moving out.

[Caller Female]

Right.

[Caller Male]

We don't want to take advantage of it, but.

[Dave Ramsey]

Okay. So are you willing to trade the volatility of the portfolio that you have and the returns it has for zero volatility and moving 250,000 into a high yield savings account?

[Caller Male]

No, that's. That was what I was kind of questioning. Is it better to have it in a high yield savings savings or if

[Dave Ramsey]

you're gonna buy within 12 or 14 months. Yes.

[Caller Male]

Okay.

[George Kamel]

Because your heart's gonna sink when 12 months from now your money's down.

[Dave Ramsey]

You know, if the market dropped 10%, that would be like one of the worst drops in a year. In history. In history. And that would be $25,000, which would not keep you from buying a house.

[Caller Male]

Right.

[Dave Ramsey]

So it's not that big a deal. But I don't know know what kind of mesh your portfolio is and how volatility you've got, how much volatility you've gotten yourself signed up for. But if you were just told me you're like in an s and P500 index fund and you're just sitting there writing the actual market. I mean, it's up 10% for the year right now, today, year to date. So you have any idea what your portfolio's up this year?

[Caller Male]

I'm up 8%. A little over 8% this year.

[Dave Ramsey]

So you're not even keeping up with the basic S and P5,500.

[Caller Male]

Yeah, probably. Because those bonds and fixed incomes are, are keeping it back. Right there.

[Dave Ramsey]

Almost like what I said earlier. Yeah. You got to anchor on this. And you know what bond values do when interest rates go up, right?

[Caller Male]

To go down. Yeah.

[Dave Ramsey]

They're an inverse relationship. Exactly. So that's going to be bad.

[Caller Male]

We were thinking, I mean, waiting isn't

[Dave Ramsey]

much, you know, I guess quit. Let me quit. Malvin. Around the edges of this. What would I do if I woke up and your shoes. I would move it all to an hsa or I would move half of it or an high yield savings account and or I would move half of it there and the other half into just an S&P 500.

[George Kamel]

Now we get the best of both worlds.

[Dave Ramsey]

Yeah, you got a little mix. Whatever the market does you're going to get but you get that gets rid of The S&P 500 is probably half as volatile as what you've got right now. I wouldn't be in what you've got right now for anything. I don't have a dime in a portfolio that looks like that. Not one. I don't play single stocks and I for sure as crud don't play bonds.

[George Kamel]

And I would have an end goal, an end date instead of just vibing going well maybe a couple years from now just go hey 12 months from

[Dave Ramsey]

now our amount of money, you know, when I get to 400k we're going or when I get to 300k we're going or whatever the number is. Have a name, have a name on it and then let's go down do it. Because the sense of I'm in sales and I'm scared of volatility is never going to go away that you're going to have that as long as you're in sales. And so that's not going to change based on the expense of the real estate or based on the interest rate environment. It's not going to change based on any of that. And so yeah, that's, that's what I would do. I would take all the money out of that right now. I would put either all or half of it in a high yield savings and not worry about it anymore. If I put half of it in, I'd put the other half in. The most volatile thing would be an S&P 500. And I use personally an S&P 500 to park money in while I'm saving up to buy my next real estate project which is some of my favorite investing. And so I'll let it sit there. And so I've made 10% on my money this year. Year, you know, that's been sitting there year to date and I'm fine with that. And if it went down 4% or 5% I'm not going to kill me be fine with not desperate but. And I don't have to sit there and make you know, high yield savings rates which is what, three or four right now?

[George Kamel]

Yeah, three and a half about. Yeah, somewhere in there.

[Dave Ramsey]

So that, that's the thing. So

[George Kamel]

it's a good call out that this is. We're talking non retirement account accounts here.

[Dave Ramsey]

Yes, yes, absolutely. And retirement accounts. We suggest putting money across four types of mutual funds.

[George Kamel]

Yeah, you're going to have your aggressive growth. Growth growth and income. And international. So that's kind of like large cap, mid cap, small cap. And we're talking about, you know, the huge companies. Those are the safer bets. These like the cruise ships, it's going to be hard for them to. To move much. And then as you get down to the small cap and these aggressive growth, it's like a jet ski. These things are moving. And sometimes it's great, sometimes there's low lows, but you're riding that wave to capture it over a long period of time. And then international, we saw this happen. International actually went up as the US market went down. So it's a good hedge against the market here stateside. So all of that helps you just sleep better at night.

[Dave Ramsey]

So what's crypto? A pirate boat.

[George Kamel]

Oh, gosh. At this point I'm not sure who the pirates are and who's taking them down. I think they're taking themselves.

[Dave Ramsey]

They're sinking. I know that.

[George Kamel]

It's like 56% down from its.

[Dave Ramsey]

What happened to you? Crypto bros bragging about yourself and you're off 5, 6%. 56, baby. Lost half your money.

[George Kamel]

They get real quiet when it's.

[Dave Ramsey]

Crypto bros get real quiet when it's not.

[George Kamel]

They took their ball and they went home.

[Dave Ramsey]

Yeah, they just go hide in the corner of Tick Tock over there. In the deep corners of recesses of Tick Tock. They go backwards where they came from.

[George Kamel]

When an investment's not based on anything and it's just hype as soon as everyone jumps off the boat.

[Dave Ramsey]

Yeah, I hadn't noticed anybody bragging about gold lately either. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace. Christ Jesus.