When Life Hits Hard, Stay Focused on What You Can Control

Summary

The Ramsey Show – May 13, 2026

Episode Title: When Life Hits Hard, Stay Focused on What You Can Control
Hosts: Dave Ramsey & Jade Washaw

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Episode Overview

This episode of The Ramsey Show dives into the theme of regaining control during financial and personal crises. Dave Ramsey and Jade Washaw take calls from listeners wrestling with everything from real estate strategies and workplace dilemmas to catastrophic medical events, marriage and financial division, business tax schemes, career transitions, and deeper emotional issues with money. The overarching message: focus on what you can control and take pragmatic steps, no matter how tough life gets. The hosts deliver their advice with their trademark mix of tough love, empathy, and practical financial steps—always advocating honesty, responsibility, and hope.

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Key Discussion Points & Insights

1. Caller Brad – Real Estate, Debt, and Building Wealth

[00:58–08:01]

• Brad, a high-earning tech worker ($500k/year), sought advice on aligning his aggressive real estate investing with Ramsey principles.
• He owns 7 properties (including his primary), $1.7 million in debt, $5 million total value, and has recently cleaned up credit card debt and other consumer liabilities.
• Dave and Jade commend Brad for self-correcting but urge him to continue backfilling his emergency fund, restart retirement contributions, and deploy his strong income to pay down rental debt—ideally using a “debt snowball” approach.
• On whether to sell properties to get debt-free, Dave says only sell those with poor cash flow or emotional baggage; systematic paydown is also valid.
• Memorable Quote (Dave): “More debt equals more risk. Less debt equals less risk... there’s still a knot in your stomach and you still look over your shoulder.” [08:01]
• Jade’s take: Focus on the peace that comes from being debt-free, not just the math.

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2. Caller Steven – Unpaid Work and Setting Boundaries

[10:56–15:34]

• Steven, a retail worker, feels taken advantage of after volunteering hours off-the-clock but wants to know if he should ask for retroactive pay.
• Dave and Jade make it clear: Volunteered, unrequested work doesn’t obligate an employer. “If you expected to be paid, you would have clocked in or spoken up.” [12:16]
• They urge Steven to change his behavior going forward instead of seeking retroactive compensation.
• Key insight: Don’t let good intentions turn into resentment; communicate early, and always clarify compensation.

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3. Caller Leslie – 1031 Exchange and Building a Home

[16:30–20:18]

• Leslie wants to use a 1031 real estate exchange but plans to build a personal residence, not an investment property.
• Dave clarifies IRS rules: 1031 exchanges only allow investment-to-investment property swaps; cannot roll into a personal home.
• Shares personal story of running into similar IRS rules.
• Key tip: Always double-check with a tax advisor for complex transactions.

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4. Caller Daniel – Financial Chaos & Marital Division

[22:31–31:46]

• Daniel describes a stressful situation: $150k household income, car just repo'd, significant outstanding debts (collections, personal loans, solar panel contract, etc.), but he and his wife keep money separate and can’t agree on finances.
• Dave and Jade emphasize the need for a clear, written listing of debts (from smallest to largest), prioritization of basic expenses (food, shelter, transportation, utilities), and urgent spousal cooperation.
• Bold Quote (Dave): “You have no semblance of an attack plan. The brain can handle bad news. It can’t handle not knowing.” [30:09]
• Suggested action: Stop the chaos, inventory all debts together, prioritize basics, and attack debts stepwise—together.

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5. Caller Chad – Motocross Career Transition

[33:01–41:48]

• Chad, 44, a pro motocross stuntman, is winding down his physically risky career and is looking to transition to working in the trades (electrician) while being in Baby Step 2.
• Dave urges making a practical plan: don’t leap, but “get the boat close to the dock” (gradually build up alternative income before quitting motocross).
• Suggests Chad could leverage his expertise in motocross into coaching, promoting, or running events (“You are the 1%; you know everybody in the business”).
• Memorable advice: "Your brain is already checked out, which makes you dangerous. I want you off that bike within 24 months." [40:47]

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6. Caller Carla – Catastrophic Illness and Financial Rebuilding

[44:25–51:20]

• Carla, 53, faced stage 4 cancer with no health insurance, exhausting her $100k savings on treatment.
• Medicaid now covers her medical needs; her husband is returning part-time to their trucking business.
• Dave’s advice: Focus on health first, live simply on $6,000/month (her disability + husband's income). Rebuild later; sell inherited property rather than struggle with its $60k mortgage and squatters.
• Jade’s sobering reminder: “You need insurance—health, life, will. You move the risk off you onto somebody else.”
• Dave: “The #1 cause of bankruptcy is medical bills, not credit cards.” [52:13]

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7. Caller Annabelle – Gaining Control, Finding Hope

[54:21–59:44]

• Annabelle, a dog trainer in Alaska, shares her relief at finally making a budget, adding up debts, and regaining hope.
• Jade highlights the emotional power of having clarity (“You'd be surprised how much fear goes away when you just actually add up all the numbers.” [55:16]).
• Dave: “Hope in personal finance is the sauce, baby. … It’ll make you do all kinds of mature, grown up stuff.” [59:44]
• Key message: Even before you get out of debt, simply having a plan restores confidence and a sense of control.

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8. Caller Joe – “Tax Shelter” Business Schemes

[86:49–95:14]

• Joe, a high-earner ($1.1 million/year), is pitched a scheme to take on $550k debt and invest $85,000 for “huge” tax write-offs.
• Dave exposes this as a “terrible deal”: never go into debt for a write-off; only use business investments that make sense before tax benefits.
• Classic Ramsey principle: “Never do a deal that doesn't make economic sense and only makes tax saving sense because it's always gonna bite you in the butt.” [93:42]

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9. Debt-Free Scream – Arnie & Randy from Minnesota

[106:48–114:48]

• Married couple paid off $193,000 (including their house!) in 4 years, 9 months.
• Income grew from $98,000 to $161,000 during payoff.
• Major sacrifice: Sold their beloved “fish house” (a specialty ice-fishing camper) to finish their mortgage.
• Secret to success? “The budget. We had never done a zero-based budget. We were the ‘can we afford this payment?’ people. You gotta keep your eye on the prize.”
• Dave: “Proud of you. You’ve changed your whole family tree.”

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10. Other Noteworthy Calls & Moments

• Financial boundaries in marriage: Multiple calls reveal that financial division leads to waste, risk, and stress (e.g. Daniel, Jay).
• Car payments as a wealth killer: “Dumbest thing I ever did was get a car loan. When did you stop? Right before I became a millionaire.” (Ramsey Research) [101:08]
• Follow-up with “$20 Million Man”: Brian, a prior caller, updated on telling his fiancée about his net worth and prenup; story featured on Instagram and covered (with humor and warmth) on this episode. His fiancée’s calm reaction (“Oh, okay.”) reassured Brian of her character.

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Notable Quotes & Timestamps

• “Debt equals risk. More debt equals more risk. Less debt equals less risk.”
  — Dave Ramsey, [08:01]
• “If you expected to be paid, you would have clocked in.”
  — Dave Ramsey, on working off the clock, [12:16]
• “The brain can handle bad news. It can’t handle not knowing.”
  — Dave Ramsey, [30:09]
• “Your brain is already checked out, which makes you dangerous. I want you off that bike within 24 months.”
  — Dave Ramsey to Chad, [40:47]
• “You need insurance—health, life, will. You move the risk off you onto somebody else.”
  — Jade Washaw, [51:20]
• “Hope in personal finance is the sauce, baby. … It’ll make you do all kinds of mature, grown up stuff.”
  — Dave Ramsey, [59:44]
• “Never do a deal that doesn't make economic sense and only makes tax saving sense because it's always gonna bite you in the butt.”
  — Dave Ramsey, [93:42]
• “Proud of you. You’ve changed your whole family tree.”
  — Dave Ramsey to Arnie & Randy, [114:34]

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Takeaways & Actionable Advice

• Face your finances honestly: Making a plan (even if painful) is always better than staying in the dark.
• Don’t let short-term fear justify risky or complicated financial “quick fixes.”
• When life hits hard, double down on what you can directly control: budgeting, communication, and honest priorities.
• Marital unity in finances is crucial—teamwork, not secrecy, breaks the cycle of debt and blame.
• Practical hope (not wishful thinking) is built by seeing real numbers and incremental progress.
• Stay out of unnecessary debt, especially for things like cars or ill-conceived tax schemes.
• Use pain, setbacks, or windfalls as motivation to reset habits and build a legacy.

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Emotional Tone

• Direct, practical, sometimes tough—but always empathetic.
• Frequent encouragement (“you can do this,” “be proud,” “hope is real”) and the recurring message that nobody is beyond help if they choose to act.

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Overall Message

No matter what life throws at you—medical crises, career shifts, marriage woes, money mistakes—you always have control over your next step. That step starts with clarity, honesty, and deciding to act. Replace shame with hope, and risk with wisdom. That’s the Ramsey way.

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Listeners can always call in live (weekdays, 2–5 p.m. ET), find more resources, and enter the monthly cash giveaway at ramseysolutions.com.

Transcript

[Caller]

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[Dave Ramsey]

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[Caller]

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[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 life. From the Ramsey Network and the Fair Winds Credit Union studio, this is the Ramsey Show. Jade Washall Ramsey personality number one best selling author is my co host today. The phone number is 888-255-2225. The call is free and some say the advice is worth exactly what you pay for it. Brad is starting us off in Denver, Colorado. Hey Brad, how can we help?

[Caller]

Hey Dave, thanks for having me. I love your show.

[Dave Ramsey]

Well, thank you sir. How can we help?

[Caller]

So yeah, so I've been listening. I'm actually a new listener. I've been listening for about a month now. Got hooked on YouTube. You just have such good financial advice and personal advice. I'm like, it's hard not to listen to you. But I started listening and I realized I thought I was being successful. But everything I'm doing is almost opposite of what you're saying. So I had to do a little self reflection and I have some questions on like how I go forward in the future on this. But essentially what's going on is I make a decent amount of money W2 in software and my entire financial mantra is to be to build rental real estate. And the reason for that has been I want residual income. So I want to have an amount of money where inflation doesn't matter. Everyone right now is worried about inflation. I could care less. I want it to last forever because I don't know how long I'm going to live. No one does. And so those two things to me are my safety net. But to do that, I've drained 401ks. I live paycheck to paycheck. I have credit card debt, car debt, the whole nine yards. It's worked out now that I'm 47 and a little bit older now, but my whole thing is can I just keep those properties and enjoy life? And if I can, that's finance success for me. But now as I move forward, I'm listening to you and coworkers, they're all telling me some different things. So I'm just wondering if you have Some advice on how I might shift this to. To work with your program and my program.

[Dave Ramsey]

That's interesting. Nice call. Thank you.

[Jade Washall Ramsey]

I love that.

[Dave Ramsey]

And so you said W2 software income. What's your income?

[Caller]

500k a year. About. I'm commissioned as well, but it's pretty consistent around 500.

[Dave Ramsey]

Good for you, man. You're killing it. That's amazing. And do you still have the drained 401k and all the credit card debt and the car debt?

[Caller]

No.

So I got rid of the credit card debt like a couple years ago. We lease a car that's expensive, but I paid off my other car, so my actual. And then we bought an rv. But actual, like debt, as far as that goes, I would say is overall pretty low.

[Dave Ramsey]

So your debt consists of right now an RV and a leased car other than your home and your rental properties.

[Caller]

And rental, they're all not paid off, but they're all low balances. But that's right. I have 1.7 million total liabilities.

[Jade Washall Ramsey]

How many are there between the overall. The 1.7. How many properties?

[Caller]

There's seven, including my primary.

[Dave Ramsey]

Oh, okay. It's not bad. All right. And you said the 1.7 million is the debt on them or the value of them?

[Caller]

The debt.

[Dave Ramsey]

Oh, I see. And the value of the seven properties

[Caller]

would be what is 5 million?

[Dave Ramsey]

Okay, very good. Excellent, Excellent. Okay, so the negative things that you mentioned, you've almost done away with, and that's the drained 401k and the, you know, the use of consumer debt while you were running up these rental properties, because those things are obviously destabilizing your original plan.

[Caller]

Right.

[Dave Ramsey]

And you realized that without ever having heard of Ramsey. It sounds like. And it sounds like you were already moving away from that and that. So that's wisdom. So I don't know why you couldn't work our baby steps from this point forward. Clear up the RV and the car lease quickly and make sure you have a good emergency fund. And then make sure you're starting to fund your 401k aggressively. And meanwhile, I'm going to start using $500,000 a year to pay down these rental properties. I'd probably work me a little rental property baby or debt snowball up in. Up in baby step six.

[Jade Washall Ramsey]

Yes. I love that idea.

[Caller]

Would you sell some to get rid of debt just to be debt free, or are you okay with having some of that debt?

[Dave Ramsey]

I would, but I wouldn't prescribe it for you as your first step unless

[Jade Washall Ramsey]

there's one that you know is not flowing well.

[Dave Ramsey]

Yeah, there's one you don't like that's got some equity in it. I'm not fond of this property. Like I've got, I've probably got, I think I got 15 houses left and I've been moving everything over into commercial, into commercial properties. And I've definitely, out of those 15, I got a couple of them that I don't care if I ever sell them. And I got a couple of them if I could sell them today, it wouldn't make me mad. Right. And I'll roll Those with a 1031 over into the other. They're paid for, of course, but if you kind of pick out that way and you said, I'm going, okay, out of the seven, there's two I don't even like. And it kind of accelerates us. Get out of debt, plan to dump them and roll the equities into these, paying down debt on the others. Yeah, I'd probably do that. But if you love all seven of them, they're solid and you want to just systematically work through them, you could be debt free in about five or six years.

[Jade Washall Ramsey]

Yeah. So to be. And I'm going to ask this question on your behalf because I think a lot of people wonder about this because I think the, the, the response from most people is, oh, this is Dave Ramsey. He's going to say sell, sell the properties to pay off the debts on the other properties and get debt free tomorrow. What Dave, explain your mentality on why this is why this feels okay for you.

[Dave Ramsey]

Okay, that's a good question. I like that it feels okay for Brad because Brad came from the other side of the pendulum and he's swinging down towards the bottom now. And I'm not trying to, I don't want to take him and kick him up to the other side if up in his shoes. Having lived debt free and the wealth, I've been able to build debt by being debt free and had incredible cash flow because none of my properties have a single debt on them. I would sell enough of them to be debt free in about 30 minutes.

[Jade Washall Ramsey]

Right, right.

[Dave Ramsey]

But that's such a shock to Brad's system. Yeah, he's been, okay, if you do this a little bit slower, but mathematically and in congruence with what we teach, I do honestly believe, and I've proven it with my life and many others, that if you sold off enough of it to become debt free, in other words, if you had three debt free properties and you didn't have the total of 5 million you had a total of 3 or 2 and a half or whatever versus 5 leveraged. I think 10 years from now you're gonna be glad you did that financially, mathematically. But I'm not gonna try to get you there today. You're three YouTube videos in.

[Caller]

My wife's always wondering what I'm watching. I said, come over here and listen to me. It's good stuff. But she has a finance degree, so she agrees with you on a lot of this stuff. I kind of drive her nuts on a lot of things.

[Jade Washall Ramsey]

And I also think that you've latched onto a really important part of what we teach, which is day to day dealing with debt and consumer debt. Because my guess is after this, when your lease is up, you're probably not going to lease a car again. You're probably going to go, I could take some of my $500,000 income and I could buy something in cash and that's something that's mine and I never have to do the payment thing.

[Caller]

Yeah, or, you know, and this is another question, but do I get aggressive and keep trying to buy like another property and keep leasing and doing that stuff?

[Dave Ramsey]

But I would again, calm down a bit. It's a real simple thing. Debt equals risk. More debt equals more risk. Less debt equals less risk. It's a simple formula and that's 100% true. There's no exception to that. Proven property now. And so if you got it down to where you had $500,000 worth of debt and you had $4 million worth of properties, you know, you've got virtually no risk. But you do have more risk than me because I got no debt, you know, and the difference is there's still a tiny little knot in your stomach. They're still there, you still feel it, and you still look over your shoulder a little bit when somebody coughs and says, wear a mask, Sam. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind, scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of rip offs in the life insurance world, like that whole life crap posing as an investment opportunity. What you need is level life insurance, usually 10 to 12 times your income, which is the smartest, most affordable way to protect your family. The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options. And they've been around for over 95 years, so you know they'll be there when you need them. Zander is the real deal, and that's why they've handled all my personal insurance for over 25 years. I trust them and you can, too. Visit Zander.com for instant online quotes or for a more personal touch, give them a call at 800-356-4282. Steven's in Atlanta. Hi, Steven. Welcome to the Ramsey Show.

[Caller]

Hi. Thank you for taking my call.

[Dave Ramsey]

Sure. What's up?

[Caller]

Okay, so I just need some advice on how to approach my employer about something. I've been with my job almost seven years, six and a half to be precise, and I've realized over the years, two to three hours at times of volunteer work turned into over 1,000 hours of unpaid work. And I'm an hourly employee. So I just don't know the right way to approach my employer because it's really taken a toll on me that I've worked all these years or all these hours unpaid, even though I technically chose to do it.

[Jade Washall Ramsey]

What. What do you mean by that? When you said a few hours of volunteer work turned into unpaid work. Explain that.

[Caller]

Okay, so I work in retail and I would clock out, but then I would see my coworkers get busy. Like, let's say I would leave it to 3 o' clock and they'd get busy and I would maybe say till 4, even 6 o'. Clock.

[Jade Washall Ramsey]

Did they ask you?

[Caller]

I would just help customers a couple times, but at times I just chose to.

[Dave Ramsey]

Then they don't owe you a thing. Yeah, you chose to do that. It was your choice. You clocked out. If you clocked back in, if you wanted to be paid, you would have clocked back in.

[Jade Washall Ramsey]

Or you would have checked with management and said, do you need me to stay?

[Dave Ramsey]

And then back in. Yeah, but you just stayed and didn't ask anybody, didn't get permission. They're not obligated to you morally or legally.

[Caller]

One time I tried to push back and then I got scolded.

[Dave Ramsey]

Well, that's okay.

[Jade Washall Ramsey]

That's just go home when your hours are over job.

[Dave Ramsey]

But I'm not, you know, if I get scolded for not getting paid for working, then we've got a different issue. Okay, but the scolding, or if you

[Jade Washall Ramsey]

get scolding for offering to help at

[Dave Ramsey]

that moment, I would have dealt with it and said, okay, I'm not going to be here unless I'm clocked in. Hello. That's not mean. You can be gentle about how you say that to your. Not be belligerent to your manager. But you know, if your managers are expecting you to work off the clock for free, that's something you should have dealt with in the moment.

[Jade Washall Ramsey]

I agree with that. Now it sounds like, and I want to say this to you, Steven, it sounds like you're a self starter. You're looking at the situation going well, Gosh, they need to be scheduling more people. This is my friend. I'm trying to be a team player. It sounds like that's probably your heart in the matter. But then you kind of looked up and went, man, this is a lot. I wonder if I can get them to pay me for this. But then the other part is you don't have a record of it even like, because there's no clock in, clock out. The only record you would have is a notepad, right.

[Dave Ramsey]

That, you know, some of it is

[Caller]

provable, but that's, you know, a different thing, I guess.

[Dave Ramsey]

What do you make an hour?

[Caller]

About 20, $21, something like that.

[Dave Ramsey]

Yeah. All right, so yeah, yeah, I don't think they owe you, man. Not morally or legally. Now, what I would do is change what I do going forward from today. And that is if I expect to be paid for the work, then I need to work that out with leadership and clock back in. Otherwise, I'm doing this out of the goodness of my heart and I'm going to harbor no bitterness towards the employer.

[Jade Washall Ramsey]

Right, right.

[Dave Ramsey]

And that's what you were doing. But then it kind of, when it piled up, you went, oh, crap, I kind of let myself get taken advantage of here. And you did. But I would stop that. I'm not suggesting you have to do this going forward, but either that or,

[Jade Washall Ramsey]

and I would have said this to him if you were still here. Something financial popped up and he realized, man, I could really use some extra money. Where can I get it from? You know, that'll cause you to look back and go, ah, yeah, but I

[Dave Ramsey]

mean, that's like, you can't, you can't

[Jade Washall Ramsey]

go, you can't do that.

[Dave Ramsey]

I was in a car wreck three years ago and now I need some money. So I think I'm gonna sue him for the car wreck. You know, I mean, you can't do that. I mean, that's not how this works. At the time, if you'd have dealt with It. You'd have dealt with it.

[Jade Washall Ramsey]

That's right.

[Dave Ramsey]

You can't just go, oh, I need some money, so I gotta look around, see. No where I've been taken advantage of.

[Jade Washall Ramsey]

That's what I'm saying. It might point to a deeper issue,

[Dave Ramsey]

but I appreciate your good heart and your team. I'm with Jade on that. I think she observed you correctly on that. I jump straight to, you get no money, but you get no money. But I do appreciate your heart, and I would say it is more than fair. And by the way, what you're describing is not that unusual, particularly in a retail setting.

[Jade Washall Ramsey]

Absolutely.

[Dave Ramsey]

It could be. I'll tell you, places in other places.

[Jade Washall Ramsey]

Restaurants.

[Dave Ramsey]

Not unusual restaurant. Yeah. They'll work you till midnight and not think nothing about it. Hey, stick around. Help me clean up off the clock. No, I don't think so. Happy to stick around. Or I'll do it once because you got, you know, we had. Okay. Four people were sick, didn't come in on shift. Yes, I'll help you.

[Jade Washall Ramsey]

Yeah.

[Dave Ramsey]

Okay. But I'm not gonna do this for six and a half years.

[Jade Washall Ramsey]

That's right.

[Dave Ramsey]

And then look back and go, I don't think I like this anymore. I would not like it after the third time.

[Jade Washall Ramsey]

Absolutely.

[Dave Ramsey]

You know, and then decide or decide it's part of my life and it's my gift to.

[Jade Washall Ramsey]

And it's just a matter of my

[Dave Ramsey]

friends and to my teamwork and to my organization.

[Jade Washall Ramsey]

Could do that.

[Dave Ramsey]

And you can do that if you want to. I don't recommend that because I don't think. I think that's gonna end up in a little bit of bitterness. It wouldn't me.

[Jade Washall Ramsey]

Yeah.

[Dave Ramsey]

Over time, I would be like him. Over time, I'd be going, I don't think this works.

[Jade Washall Ramsey]

Yeah, I agree with that.

[Dave Ramsey]

I agree with that. Good. Interesting question.

[Jade Washall Ramsey]

I think so.

[Dave Ramsey]

Very interesting question. Leslie's in Phoenix. Hi, Leslie. How are you?

[Caller]

Good. How are you?

[Dave Ramsey]

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

[Caller]

Hi. I have an interesting question that I really am not educated in. So I thought I'd come to the pro. So it has to do with whether to just do a 1031 or to pay taxes. So we bought some farm ground that we had planned to build our house back in 2021. We bought it for $90,000, and we are planning on selling it. We just went in escrow to sell it for 240. And so my question.

[Dave Ramsey]

You bought it for what again?

[Caller]

Sorry? We bought it for 90,000 and we're selling it for 240.

[Dave Ramsey]

Okay.

[Caller]

And it's paid for. And so we know that we'd be making about 150 capital gains, and we are planning on purchasing some more vacant property. That property would cost us 375,000. And so my question to you is, is it best to put it in a 1031 and put all of it towards the land, or do we just pay the taxes so that we have the cash on hand to potentially build a house with that cash later on?

[Dave Ramsey]

No, if I was going to build a house with the cash, I'd just sell the land. If you're. If you need the cash, it does know it, you're going to end up selling the other property, the second property, if you need the cash.

[Caller]

We were building our. Our home on the property that we're purchasing.

[Dave Ramsey]

Okay. You can't do a 1031 on it then, because it's not, it's not, it's not like kind. You can't do a 1031 on personal residence. You can only do it on, like, kind properties. So if you went vacant lot to vacant lot or rental property to rental property, income producing to income producing, you can do that, but you can't do it on personal residence. You can't roll your rental property into a personal residence on a 1031.

[Caller]

So.

So they're both vacant lands. They're both in cotton. And so they're both like.

[Dave Ramsey]

Yeah, but when you build a house on this piece of vacant land, you screw up the deal, the 1031 is going to be invalidated.

[Caller]

Okay. So you couldn't do it anyways, then.

[Dave Ramsey]

Right.

[Caller]

Okay.

[Dave Ramsey]

The second piece of property, the 375, is what you want to build on. Is that what you're telling me?

[Caller]

Correct.

[Dave Ramsey]

That's what I thought. Okay. Yeah. No, you can't do that. Double check with your tax advisor. I'm not a tax professional, but I'm right.

[Caller]

Great advice.

[Dave Ramsey]

Okay, thanks. Thanks for calling. I did this one time because I had a. I was buying a p. I bought my next door neighbor's house on the lake.

[Caller]

Wow.

[Dave Ramsey]

My lake house.

[Jade Washall Ramsey]

Yeah. Huh.

[Dave Ramsey]

And I was. I wanted him because I was giving him a great deal on it and he was gonna go buy another piece of property on the lake because prices were down back in.08. Okay. You know, prices were way down. It was a good deal for him because I paid him like full retail because I wanted the land to build a house on. Right.

[Jade Washall Ramsey]

Okay.

[Dave Ramsey]

And it wasn't for me on the 1031, but I suggested to him he 1031 his lake house into another lake house but he had no income. He produced on it. It was vacation property only and he couldn't do it.

[Jade Washall Ramsey]

Oh that's right.

[Dave Ramsey]

So that's when I got into the nuances of the.

[Jade Washall Ramsey]

It really has to be the same of the law.

[Dave Ramsey]

You can't do. Well, he had to have rented his lake house 181 days. If he did that then he had to it would be rental property, resort rental property. Right. And he could buy another piece of resort rental property that he rented. But you can't do it on vacation property to vacation property if it's not rented. So it has to be income producing or if it's a piece of raw ground. Raw ground to raw ground. Can't be personal residents involved and can't be non rented vacation property either. That's the only reason I knew that because I almost screwed it up for this guy. And we had, we actually got the tax advice because Dave was wrong.

[Jade Washall Ramsey]

And that's how I remembered forever.

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[Caller]

in MLS ID 1591 in MLS ConsumerAccess.org equal housing lender.

[Dave Ramsey]

Well, it's May and the Ramsey cash giveaway has begun. You can enter every day from May 1st to May 31st for one grand prize. Winner will get $10,000 and there'll be a $500 winner every week. No purchase necessary. No salesman will call. You can enter daily. To increase your chances of winning. Be sure to check out the sales that are going on and that includes books and assessments, all for just $12 right now. Ooh, goodies. @ramseysolutions.com giveaway right now. You can enter once a day. No big deal. No purchase necessary. I think I said that. Daniel's in Houston. Hey, Daniel. What's up?

[Caller]

Hello, sir. How are you doing?

[Dave Ramsey]

Better than I deserve. How can we help?

[Caller]

I don't even know where to start. I just feel I don't have control of any of my finances. And to make it worse, my wife and I were financially divided. You know, it's her money, her money. My money is my money kind of thing. And my car just got repoed. My employer there, they vet, you know, their employees every now and then. And that's another thing.

[Dave Ramsey]

They do what to the employees? Every now and then?

[Caller]

They. My employer. What they do is they make sure that we're financially good. You know, they look at our. If we want to keep the employment, our credit score, our credit. He needs to be, you know, at least good. You know, I mean, I need to make payments, arrangements.

[Dave Ramsey]

What do you do?

[Caller]

I work for the government.

[Dave Ramsey]

Oh, okay.

[Caller]

Yeah.

[Jade Washall Ramsey]

So you're concerned about that?

[Caller]

That's one. I'm concerned about my marriage, you know, so.

[Dave Ramsey]

What do you mean?

[Caller]

I'm sorry.

[Dave Ramsey]

How much do you make?

[Caller]

Right now I'm making about 75.

[Dave Ramsey]

And what does she make?

[Caller]

About the same.

[Dave Ramsey]

Maybe $150,000 coming in. And the crisis is where. How does your car get repo when you have $150,000 coming in?

[Caller]

So it goes back to years ago. Everything just started snowballing, you know, on deck. You know, one thing led to another, another, and then there was a series of events. A family member passed away. Two family members passed away. And then the government shutdown hit. And that. That was the most recent one. Not only that, also, you know, just bad decisions that I made. And I got a loan to cover the loan and everything, just.

[Dave Ramsey]

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

[Caller]

Honey, I have seven collections. I have, like, personal loans.

[Jade Washall Ramsey]

Tell us the amount. How much personal loans?

[Caller]

Just personal loans. I want to say about 8,000, 9,000.

[Jade Washall Ramsey]

Okay, and what about the collections? How much in collections?

[Caller]

In collections? So we're talking about maybe, I don't know, I think about 15 to 20.

[Jade Washall Ramsey]

So I'll tell you this. I'll tell you something briefly, and then we'll move on. That's really gonna help tonight. Pull it all out and look at it and calculate it up and list them smallest to largest. And that way it's not just this thing floating in Your head. You really know what the numbers are. You can see it. You can name it. Do that tonight. So 15 to 20 minutes.

[Dave Ramsey]

And have your spouse sit at the kitchen table with you doing that. And the kids are in bed.

[Caller]

Yeah, well, that's. You know, that's the thing. I mean, I've tried and I've tried to get my spouse.

[Dave Ramsey]

I didn't ask you to try. Ask you to do it.

[Jade Washall Ramsey]

Yeah.

[Dave Ramsey]

What would tonight.

[Jade Washall Ramsey]

What would cause her to say, no, I won't sit at the table with you, because that's very deep. If she says no, I refuse to sit at the table with you.

[Caller]

No, like, she'll say she'll sit with me.

[Dave Ramsey]

Then do it.

[Caller]

Whenever we talk about finances, everything just spirals.

[Dave Ramsey]

I don't want her to talk about. I just want her to sit there and watch you add up what you owe. That's all I want her to do. Don't talk to her about it.

[Caller]

One thing I want to mention, I just recently joined the Guardian litigation group.

[Jade Washall Ramsey]

Okay, good.

[Caller]

Yeah. And so they're the ones now handling my accounts that my employer are questioning.

[Jade Washall Ramsey]

Okay, so the ones in collections.

[Caller]

Yeah. Was in collections because I've been getting calls from different law firms and. And because they're trying to sue you.

[Jade Washall Ramsey]

Yeah. Okay, so for the sake of time, you've got the 20,000 in collections, you've got the personal loans. Tell us. List out all of it. Tell us, what else is there? Do you have cars? Do you have an rv? Tell us what else there is.

[Caller]

No, I have another repo that I had last year, which. About. Which is about $12,000. I also have under my name the solar panels, which was actually as. You guys. You know what? It's actually more than. More than 20,000 because just the solar panels itself was about 45,000, but we have an attorney for that which are handling that case, because apparently that company, the solar panel company, they went bankruptcy.

[Jade Washall Ramsey]

Okay.

[Caller]

And so we have an attorney.

[Jade Washall Ramsey]

Okay.

[Caller]

Because we have a lease on the. On the. On the roof. Whatever.

[Jade Washall Ramsey]

So solar panels on paper today, you owe 45, 000.

[Caller]

Yes.

[Jade Washall Ramsey]

Okay. Anything else? That's.

[Caller]

Other than that, it's just credit cards, personal loans?

[Jade Washall Ramsey]

Yeah. How much? How much? Credit cards?

[Caller]

Credit cards. Maybe, like, 600 bucks.

[Dave Ramsey]

Daniel.

[Caller]

Yeah.

[Dave Ramsey]

Daniel, you have $150,000 coming in. You're not paying any of these bills anyway. So mathematically, the question starts to pose, where's this money all going? Because you've not been paying any of these bills. You're not paying the solar panels. That sends A lawsuit. The rest of these things are in collection. You're not paying anything. The cars are being repoed, have been repoed, and so you're not paying those month to month. So where is all of your money going? What's your house payment?

[Caller]

So the house payment, it's about 1600.

[Jade Washall Ramsey]

Yeah.

[Dave Ramsey]

Dave is right.

[Jade Washall Ramsey]

Something's not right.

[Dave Ramsey]

$150,000 coming into the household. You have 75,000 of it. You are in control. You're in division. You're at odds with your spouse, which is normal when you've got this much stress. But the way you eat an elephant is a bite at a time. And so Jade is right. If you list these things out and you say, okay, there's the solar panels. The attorney's got that. There's the collections. Guardian Litigation's got that. The car repo, I'm going to turn that over to Guardian Litigation, let them handle it. And if they can't, then I'm going to start. But I'm not paying anything on it. So it's sitting over there. So the first thing we're going to buy with the money coming in is food.

[Jade Washall Ramsey]

Yes.

[Dave Ramsey]

The second thing we're going to buy is lights and water. And the third thing we're going to do is pay the house payment. And the fourth thing we're going to do is pay the car payment, put gas in the car, and go to work. Now we can breathe. The rest of this is a Monopoly game. Rest of it's a game, and you're behind. You hadn't passed go. Oh, wait a minute. You did pass go. You got more than $200. You got $150,000. That's right, because you keep passing go every month. And so. But what's happened is you've got. You walked into a nest of bees, and they're flying around your head, and you can't think that's right. And so what I want to do is get those bees to line up and fly in formation so I can knock them off one at a time and. But, you know, the numbers you're giving me don't match your attitude.

[Jade Washall Ramsey]

Yeah, I have a sense that what he's listing is his side of the equation. And there's probably a whole other quote, her side of the equation.

[Dave Ramsey]

It's possible.

[Jade Washall Ramsey]

I actually think that's the biggest part of this right now. It's very, very hard to move forward together when you're not on the same page.

[Dave Ramsey]

But if you make 75 to 150,000, you should not have A car repoed. And you should not have a house. You should not be behind on your house. You could be behind on a whole bunch of other things. But you don't pay stupid whatever and not pay your car payment. You don't pay stupid whatever and not pay your house payment. And so we take care of food, shelter, clothing, transportation, and utilities. Then we live to fight another day, right? And part of what is causing your lack of energy, your lack of hope in your voice is, is that you have no semblance of any kind of an attack plan. And we're giving you an attack plan. And the brain can handle bad news. It can't handle not knowing. So give it the bad news, load it up tonight, give her brain the bad news, Let her sit there and look at the mess tonight with you. And then you guys begin to attack this one thing at a time.

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[Dave Ramsey]

Chad is in Oklahoma City. Hey, Chad. What's up?

[Caller]

Hey, Dave. It's pleasure to be on this show.

[Dave Ramsey]

Certainly. How can we help?

[Caller]

All right, so I have a very dangerous career that I'm rapidly approaching the end of, which is freestyle motocross. And it's, you know, I've broken over 80 bones and been through all of it. Right. I'm in my 25th year of it. I love doing it, you know, performing in front of crowds, all of that is absolutely amazing. But in the middle of baby step two with the wife, everything's going smoothly. I've kind of got A side gig in the trades, trying to look at career options as far as the next path, because I'm only 44, but, you know, with our debts and everything, I'm trying to figure out how long I should hang on to this dangerous career while, you know, trying to still set the family up as far as, you know, freedom for later.

[Dave Ramsey]

Okay. I don't know that I've ever coached a professional motocross guy. What kind of money do you make?

[Caller]

So in the freestyle motocross world, it's all about how many shows or events you can do per year.

Right.

It's not contingent on winnings and stuff like racing, it's more.

[Dave Ramsey]

It's more exhibition stuff. Okay.

[Caller]

Yeah. Yes. Yes, sir. We're doing all kinds of stuff, like, all over the. All over the world, really.

[Jade Washall Ramsey]

So how much do you.

[Caller]

I really try to do a lot of ministry stuff.

[Dave Ramsey]

Cool. How much do you make?

[Caller]

I average. On a healthy year, I'm about 125, 130 on a good healthy year. You know, if you don't break any bones, obviously, on the side trade still, I'm pulling in about an extra 50. Okay.

[Dave Ramsey]

Okay. And the side trade is what?

[Caller]

Electric work.

[Dave Ramsey]

Okay, good, good. And so your plan, long term, it sounds like, is to become an electrician.

[Caller]

Yes. The area that we live in is more royal.

[Dave Ramsey]

What do you want to be when you're 55? That's what I'm asking, right?

[Caller]

Yeah, that's what I'm trying to ask myself.

[Jade Washall Ramsey]

You can't do motocross.

[Dave Ramsey]

No, I'm saying what is your plan to transition to?

[Caller]

That's. That's the ultimate question right there. I mean, right now I'm leaning towards the electrician thing.

[Dave Ramsey]

Okay, that's cool. The other thing that popped into my head immediately would be that you obviously are the top 1% of the people in your world. And it would seem to me that without ever getting on a bike again, you could lend tremendous value to the motocross world based on your experience and your name, for that matter. Because if you've been making this kind of money and breaking these kind of bones for this number of years, I would think you know, everybody and, you know, the inner workings of the whole stinking deal and how it runs, no pun intended. And, you know, and I would think. I would think you could get into that. Like, I've gotten a friend. I've got a friend that was an Olympic athlete in the skating world, and he doesn't skate for a living anymore, but he knows everyone in the business. Everyone in his. Everyone knows his name in the business. And he's able to add value to the skating world. Tremendous value. And makes probably more money than he's ever made in his life doing that. So that's a possible angle on your life. That just popped into my head. But if you don't want to do that, if you want to just turn your back on motocross, I don't blame you. If you got 44 broken bones, I can imagine not wanting to see it ever again wouldn't be bad. And if you want to be an electrician, that's fine, too. Then begin to. What I would suggest you do is get the boat closer to the dock. Don't jump towards the boat and hope you hit it, you know.

[Caller]

No, no, no. That's. That's definitely the plan.

[Dave Ramsey]

Yeah.

[Caller]

Get.

[Dave Ramsey]

Get your electrician income up and. And gradually take fewer and fewer motocross gigs, because it sounds like you could probably trim this back a little. And. And rather than just all or nothing, because there's electricians that make 120 a

[Caller]

year to do for sure.

[Dave Ramsey]

There's electricians that make 120 area.

[Caller]

There is. There is. Just not in my area. I'm kind of. I'm pretty much almost capped out on that.

[Dave Ramsey]

Okay, then. Then you can't be in your area.

[Jade Washall Ramsey]

You either have to be in a different area, or you need to maybe think about another path or combining paths. Is there something where you do electrician work and you do something in motocross

[Dave Ramsey]

world that's not riding?

[Caller]

Yeah, right. Yeah, that's. That's kind of what I'm hopeful for.

[Jade Washall Ramsey]

The question is, what's your. What's your timeline? In an ideal state, are you trying to make this transition in two years? Are you trying to make it in three? What's your timeline?

[Caller]

With our baby steps, I really think we can be debt free by the end of 27. Okay, no problem. And then that's house and everything. And then I was just honestly leaning on putting, you know, two years kind of after that, kind of really putting what we are already currently doing, but all, you know, hyper doing the investments.

[Dave Ramsey]

Yeah, but I think you could do that without being in motocross if your electrician income came up.

[Caller]

Yes. Well, we're. I mean, where we're at, I mean, we have our. Our. We live in the country, very close to a very, very small town. We have our dream home, dream life.

[Jade Washall Ramsey]

So again, I go back next door. I go back to what I said before, which is. Is if you're saying the market simply is not large enough in your area, then you do have two choices. You can either combine. Combine trades and say, I'm going to be an electrician and then I'm going to do something else to generate the income I need, or you would have to relocate, which it sounds like relocations off the table for you. So that now it's okay. What other things can I do? And I'm also wondering, does your wife work or is it really just. Is it just your income?

[Caller]

No, no, she does. She actually. We both work two jobs.

[Dave Ramsey]

Okay. So here's the thing. You do what Henry Cloud talks about. He just got a new book out this week. He was on here yesterday. What is your desired future? Okay. And you put a timeline on it and you say, okay, my desired future is I don't want to ride a motorbike more than two more years or whatever. You decide, and then you ask yourself what must be true for me to be able to do that that's not true today. And what we've been sitting here banging on is your income has to be up in the other stuff. And I don't know how you do that or what you have to give up to do that, but you're either going to be riding motocross or you're not going to be living there. You're either going to be riding motocross or you're going to get your dadgum electrician income up. I mean, if you want to stop one and start another, you've got to. You got to figure out what it is you're going to do, and then you got to say what must be true. How have I got to do that? Well, I can't do it with electrician. Okay. How can I do it? Well, I can't do with electrician and live here. Then I got to move or whatever it is.

[Jade Washall Ramsey]

Something's got to shake, whatever it is.

[Dave Ramsey]

But you can't just go, I'm suddenly going to live on half of what I've been making. I'm glad you didn't call me and say, I'm making 600,000 a year doing this and I've got to take a pay cut to 50.

[Jade Washall Ramsey]

That's right. That's tough.

[Dave Ramsey]

And I thought for a minute, the way you were talking, like, my life is in jeopardy, I'm breaking bones. And I thought you were making some unbelievable money. But 130 is replaceable.

[Jade Washall Ramsey]

It is. And honestly, I'd be working to do that really quick because I don't think it's worth tearing your body up for $130,000.

[Dave Ramsey]

Your brain is already checked out, which makes you dangerous. So I want you to get off that bike within 24 months.

[Jade Washall Ramsey]

We can definitely send you find the work you're wired to do. And inside of that, there's a career assessment. Inside you can take the assessment because I'll tell you what.

[Dave Ramsey]

And the wiring has nothing to do with electricity, by the way.

[Jade Washall Ramsey]

That's right. That's just unintended pun. But I will say when you go from a career that feels very driven by excitement and spotlight. Yes. When he said, I'm just gonna go be an electrician, I thought, are you gonna be okay like that? I really think if he can find something connected to that world like you said, that's gonna give him the spark he wants to keep going.

[Dave Ramsey]

I think you.

[Jade Washall Ramsey]

What do I know?

[Dave Ramsey]

I got a feeling you could make 200 a year promoting those events. Promoting and hiring the other talent to run the events and analyzing the talent from the perspective of someone who's actually done it. I think you can make me make more than you used to make riding a bike. But I don't know anything about it. I'm making that up.

[Jade Washall Ramsey]

Yeah, that's true.

[Dave Ramsey]

That was just. I just made that up. But I'm so freaking entrepreneurial that I always figure there's a business in there somewhere.

[Jade Washall Ramsey]

There's gotta be.

[Dave Ramsey]

There's a business in there somewhere because

[Jade Washall Ramsey]

he's already in a. He's already an expert in that area. So it's.

[Dave Ramsey]

You got. You and Sam did it. You were, you know, you were performers on cruise ships. And now you and Sam own one of the largest agencies in the world, putting talent on stages on cruise ships.

[Jade Washall Ramsey]

That's right.

[Dave Ramsey]

And you're not been talented on a stage on a cruise ship in a long time. Except when you went on the Ramsey cruise.

[Jade Washall Ramsey]

That's correct.

[Dave Ramsey]

But other than that, I mean, you know, so you took the, you know, the talent gig and knowledge from it and you turned it into a business. And that's. That's exactly what I'm talking about.

[Jade Washall Ramsey]

That's right. That's right.

[Dave Ramsey]

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[Caller]

Hi Dave. I'm good. How are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

So my husband and I, we had a catastrophic life changing event. November of last year, I was diagnosed with stage four bladder cancer.

[Dave Ramsey]

Whoa.

[Caller]

And yes, been a humbling experience to say the least. We own our own business. I thank the Lord that we had savings personally and business wise. But we have since lost everything. Everything has. Well, I say lost everything. All of our money is gone. So we're starting from ground zero again.

[Dave Ramsey]

How are you doing?

[Caller]

I'm doing better. Also with the blessing from God. I just got my latest PET scan and the cancer is diminishing. Oh, we're on the right track.

[Dave Ramsey]

Amen. That's what's important, money. Money comes and goes. But you gotta, you gotta, right? Wow. So you didn't have, you didn't have health insurance?

[Caller]

No, unfortunately I did not.

[Dave Ramsey]

Why?

[Caller]

Neither one of us had health insurance because we were in our minds and naive and just pretty healthy. Neither one of us ever gets sick.

[Jade Washall Ramsey]

How old are you?

[Caller]

And then I'm 53.

[Dave Ramsey]

So what did the, what do these bills amount to?

[Caller]

Oh, they amounted to were. Well, for $100,000, but.

[Dave Ramsey]

And how much did you have in savings?

[Caller]

We had about $100,000 combined personal and business. And that's.

[Dave Ramsey]

And the bills were about 100. You cleaned out your cash but you haven't lost the business?

[Caller]

No, that is correct.

[Jade Washall Ramsey]

How are you continuing to pay for your medical care at this point?

[Caller]

Right now I have because I cannot work. I have been approved for disability. I will get my first paycheck from disability June 3rd.

[Jade Washall Ramsey]

And how much is that?

[Caller]

$1,900 is what I've been approved for a month.

[Jade Washall Ramsey]

And in the meantime, I mean I go back to my first question, which is how are you paying for your care?

[Caller]

I'm on Medicaid now as well.

Okay.

[Dave Ramsey]

Okay, good.

[Caller]

We did have. We purchased in January healthcare policy, but that was costing US over almost $1,000 a month. Then in the midst of that, in February, I got approved, but then of course, the system didn't kick in until March. And so, yeah, here we are.

[Dave Ramsey]

Okay, so you fighting cancer, and you have a nineteen hundred dollar a month income. You've cleaned out your savings in. Your husband's running the business, I assume. What is he making?

[Caller]

He just. He is just now returning back to work.

[Dave Ramsey]

What is the business?

[Caller]

The business is truck driving.

[Dave Ramsey]

Okay.

[Jade Washall Ramsey]

All right.

[Dave Ramsey]

And so his income is going to

[Caller]

come back now partially because he still has to come back to me every week for my chemo treatment.

[Jade Washall Ramsey]

What will he make him part time?

[Caller]

He will be making approximately $1,000 a week is what we're hoping for him to be able to bring home.

[Dave Ramsey]

Okay. So we got. So now we got $6,000 a month to work with. And so this is devastating. I'm so sorry. You've been through this. So what I want to give you permission to do is to live on $6,000 a month, making sure that your health treatments continue.

[Caller]

Okay.

[Dave Ramsey]

Until. Until you get this beat. Yeah, when you get this beat, then you go back to work. He goes back to work, and we get in, we get our income back up, and then we rebuild with that.

[Caller]

Can I throw another wrench in the pile? My father just passed away also, so I just inherited his $60,000 worth of debt.

[Dave Ramsey]

Honey, you don't inherit that.

[Caller]

Well, it's a house.

[Dave Ramsey]

Or sell it.

[Caller]

Okay, sell it.

[Jade Washall Ramsey]

Yeah, yeah. What's it worth if you sold it?

[Caller]

I have no idea.

[Dave Ramsey]

More than 60,000.

[Jade Washall Ramsey]

It might end up being a blessing for you.

[Caller]

Okay. Right now I'm dealing with squatters in the house, trying to get them out.

[Dave Ramsey]

Well, a victim and get a. Get a good real estate agent. Get the squatters evicted, get the house sold. You're fighting chemo. You don't need to fight squatters in chemo. Let's just pick one. I'll pick the cancer. Let's beat that one and get a good real estate agent. Go to ramseysolutions.com and find one of our Ramsey trusted real estate pros and tell them you're struggling with cancer, your husband's on the road trying to make a living, and you got this house. You need to get flipped. And you got to get these people flipped out of it and have them run it down for you, and they can pay the attorney out of the proceeds of the house to do the eviction. On the squatters. Okay, how did this. If he just passed away, how come there's already squatters in it? That's weird.

[Caller]

I. He passed away in March 25th.

[Dave Ramsey]

Yeah, but I mean, what the hell? Were they lined up in the street ready to jump in the house?

[Jade Washall Ramsey]

I mean, was he just not in the house? Was he in the hospital for a long time?

[Caller]

He was in the hospital and he stayed with my aunt. Okay, sister. So it was empty a lot. And it looks like nobody lived there.

It.

The house has been in our family for four decades.

[Dave Ramsey]

It's not going to be anymore.

[Caller]

No, I. I know.

[Dave Ramsey]

You can't have it. You have enough on your plate. You don't need to evict squatters, renovate a four decade old property and be screwing around with all that. You need to fight cancer and win. Concentrate on what's important. This is a distraction, okay? Cut it loose. Make your life simple. I'm gonna laser focus chemo and beat cancer. Chemo, beat cancer. When that's done, we'll rebuild our savings. And part of what will help us do that is the sale of this house. And that's what you gotta do. Yeah. The problem is when all this stuff start coming at you folks from 14 different directions, you got to choose your battles. And, you know, you gotta pick out which thing you're gonna take on first and take on the most important thing. And that's called.

[Jade Washall Ramsey]

That's right. That's right. She's been. When it rains, it pours. And I mean, she's been through it. But for anybody listening right now, the, the takeaway from this is, oh my goodness, you need insurance, you gotta have it. You gotta have health insurance, you gotta have life insurance, term life insurance, you gotta have a will. All of these things are there because it's, it's a. You're. You're moving the risk off you onto somebody else because they're all there. Everybody wants to be healthy forever, Everybody wants to live forever. But that's not. Not the case. It's just not the case.

[Dave Ramsey]

There we go. That's it.

[Jade Washall Ramsey]

Oh, boy.

[Dave Ramsey]

So, yeah, you have to play defense. And here's the thing. The number one cause of bankruptcy is not credit card debt. It's medical bills. And it's not medical bills from people that had health insurance. Because if you got health insurance, you got a deductible. You meet and then you got 80, 20 or whatever. Right? And you can work your way through that if you got an income.

[Jade Washall Ramsey]

Yeah.

[Dave Ramsey]

But if you're sitting there with no Health insurance and you take $100,000 popping you're a truck driver. Yeah, you got that's getting your face knocked in.

[Jade Washall Ramsey]

And if you're looking, check out Health Trust Financial, they can help you find the right policy for you. If you're looking for term life, we're always going to recommend Xander Insurance. If you're looking to make a will, we're always going to recommend Mama Bear. Legal forms, they're there.

[Dave Ramsey]

We've got all of these advertisers we put in place to do the stuff we teach you to do.

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[Jade Washall Ramsey]

All.

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[Dave Ramsey]

Annabelle is with us in Anchorage. Hi Annabelle, how are you?

[Caller]

Hi. I'm doing great. How about you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Well, first, it's an honor to talk to you both. Jade, I'm in the middle of your book right now. And Dave, I'm in the middle of total money makeover as well.

[Jade Washall Ramsey]

Wow, very good.

[Dave Ramsey]

Caught in the middle.

[Caller]

Yeah. With that said, you guys have been working on me for about the last six months. I've been diving into the podcast and about the last week I committed to the program, I increased my income, I got a second full time job. And this morning I set up my every dollar budget.

[Dave Ramsey]

Wow, look at you.

[Jade Washall Ramsey]

So what do you think?

[Caller]

Ready to go? So I was, I was like relieved to the point of Crying.

[Jade Washall Ramsey]

Good. Because you have a plan and you're back in control.

[Caller]

So, Jade, and that was because of you. So in your book, I think you said that it's scary when you don't have eyes and you actually be surprised at how much fear goes away when you just actually add up all the numbers and see what it is.

[Jade Washall Ramsey]

That's right. That's right. You can actually get a handle on it.

[Caller]

Yeah. Sorry.

[Jade Washall Ramsey]

It's okay. What you're experiencing is. It's exactly right.

[Dave Ramsey]

It's called relief.

[Caller]

Yeah, yeah, yeah. All right. So. All right, let's collect ourselves. So I'm a local dog trainer. I've been self employed here in Alaska for the last seven years. And I've been afraid to do this because my income is so volatile. It's hit or miss with the economy. So I didn't want to make any more dumb butt decisions. So I went out like Dave said to do and I increased my income. I became a correctional officer. So now my base income is not zero.

[Jade Washall Ramsey]

Great.

[Caller]

Which is fantastic. But I had a question about the sinking funds. I am going to need winter tires in October. And while I am budgeting for that, is that considered a sinking fund or a budget item? And what's the difference for where you are?

[Jade Washall Ramsey]

I would consider that a sinking fund because generally a sinking fund is something that you cannot pay for in one month's cash flow. Right. It's something that's like I kind of have to save up a little bit for this. And my guess is that that's what this is for you. How much are the four tires going to cost you?

[Caller]

1200.

[Jade Washall Ramsey]

1200, exactly. And my guess is you can't cash flow that in a single month in October when you need them. Or can you? Maybe you can.

[Caller]

So I would have to take from my margin, which is currently all being poured into my debt, and so I could cash flow it.

[Jade Washall Ramsey]

How much margin do you have?

[Caller]

About $2,600 a month.

[Jade Washall Ramsey]

I mean, honestly, that's totally up to you. If you wanted to do it that way. If you feel like, you know what the margin.

[Dave Ramsey]

Either way.

[Jade Washall Ramsey]

Yeah.

[Dave Ramsey]

You're either going to take from it a little bit for three months or four months or you're going to take from it a lot in one month.

[Jade Washall Ramsey]

And the thing that would be. But what we're talking about is your motivation. Right. Because you're in the middle of paying off debt. So if you say, you know, I'm really. I feel like I'm making progress. I love seeing the number go down. Every single month. If that's where you are right now, then I would say hold it off until October, and then just do it in one shot. And that keeps you feeling motivated.

[Dave Ramsey]

And October's not a good debt reduction month, and it's the snow tire's fault, and that's okay.

[Jade Washall Ramsey]

Yeah.

[Caller]

Okay. Okay. I can do that.

[Jade Washall Ramsey]

Yeah. I like that. For you.

[Caller]

In October, there is a little buffer here in Alaska because we get the Alaska pfd, so that's an extra thousand dollars or more that we get from the state, every state resident.

[Dave Ramsey]

So now we got 3,600 that month in margin, minus 1,200.

[Jade Washall Ramsey]

So then you really won't feel it.

[Dave Ramsey]

You won't hardly notice it.

[Caller]

Okay. Yeah, that's perfect. I didn't even think about that.

[Dave Ramsey]

Alaska's gonna buy your tires.

[Caller]

Yes.

[Jade Washall Ramsey]

Finally, the taxes.

[Caller]

Yeah, I love that. All right, well, that was my question. Can I ask one more? How would I do that? Another thing that I went ahead and did was I signed up with Zander for life insurance.

[Dave Ramsey]

Good. That's a budget item.

[Caller]

Okay. That's a budget item.

[Dave Ramsey]

Monthly.

[Caller]

All right.

[Dave Ramsey]

That's a cost of being alive, is having life insurance.

[Caller]

All right.

[Jade Washall Ramsey]

Hey, we're proud of you, by the way.

[Dave Ramsey]

You're doing so good.

[Jade Washall Ramsey]

Yeah, you are.

[Caller]

Thank you so much.

[Dave Ramsey]

You're actually coachable. You're amazing.

[Caller]

Yeah. Well, I waited six months to call, so I made sure I was. Yes, well, I wanted to.

[Dave Ramsey]

You're our prize student of the day. You get an apple.

[Caller]

Yes. Well, thank you so much. You guys have a wonderful day.

[Dave Ramsey]

You, too. That was fun.

[Jade Washall Ramsey]

It's a great call.

[Dave Ramsey]

Yeah. The thing is, here's what's interesting and what I want. People that are out there on the edge and they haven't decided whether they're going to do this or not. The tears and the emotion comes from not being out of debt. Cause her life, mathematically has not changed a dime yet. Yet. But it's actually seeing a light at the end of the tunnel that is, for the first time in your life, is not an oncoming drain. You know, we actually are going. This is freaking. When you put the numbers down, the numbers look at you and say, this is gonna work. And you go, oh, my gosh. The numbers just told me this is gonna work. And this is called Hope.

[Jade Washall Ramsey]

Yes.

[Dave Ramsey]

And Hope in personal finance is the sauce, baby. Hope is the secret sauce. It'll make you work hard. Hope will make you sacrifice. It'll make you sell off your prized possession because you want to get to somewhere you're not there yet. Hope will make you do all kinds of mature, grown up stuff.

[Jade Washall Ramsey]

Yes, yes. That's why we tell you, that's why we're always giving people every dollar. Because the moment that you start plugging those numbers into every dollar and it happens just the way Dave said, you start to see, oh my gosh, number one, you see your income in one place for the first time and you realize, oh, I, I do make money.

[Dave Ramsey]

I make and I really have been wasting a lot of it.

[Jade Washall Ramsey]

Yes. And then you see the margin, or if some of us a lack of margin. And for the first time we see it for what it is in facts. Okay, I'm 400 over or I'm $700 over. And then when you see the first step in solving a problem, Dave is identifying that there is actually a problem. So when you actually see it, okay, I'm over budget, I'm in the red. Even though that doesn't feel nice, at least you can recognize the problem. And now you get get about the business of actually solving the problem.

[Dave Ramsey]

And if you have felt like a rat in a wheel for so long and you suddenly have hope, it will make you cry.

[Jade Washall Ramsey]

Yeah, it will.

[Dave Ramsey]

It makes me cry thinking about it because I've been there where you're under a rock and somebody standing on a stinking rock, hello. And when you realize, I don't have to stand, get off my rock, you know, I'm not going to live like this. And you go, there's a way to do this. And it changes everything. It's so powerful. See, the brain science tells us that bad news is not as bad as no news. Ambivalence is way more dangerous to your brain. Not knowing is way more dangerous to your brain than knowing exactly what I gotta do and what I gotta fight.

[Jade Washall Ramsey]

Right. Cause when you don't know, your brain fills in gaps with all sorts of stories and ideas and fears and all sorts of things.

[Dave Ramsey]

Yeah. We have a friend who's in the process right now beating cancer just knocked one of them out. He had two. He's collecting them and he's got one of them knocked down. He's working on the other one. And he will tell you that when the doc says you got cancer, but it's going to be a week before we can tell you how bad it is. That week is more hell than actually fighting the stinking thing. Once you know what it is, it's stage two. This is what we're going to do. Here's the treatment plan, here's the Prognosis, you've got a year of hell of you hair hell ahead of you and no hair ahead of you and you're going to live.

[Jade Washall Ramsey]

That's right.

[Dave Ramsey]

But it's going to be awful. Your brain can handle that news better than I've got cancer, but I don't know if I'm gonna die tomorrow from it or I don't know if it's stage four one. I don't know if I drove by it. I don't know what it is, the not knowing crap. That ambivalence is way harder from a brain science perspective for human beings to deal with than the actually knowing this is what we're dealing with. And if you look down and you go, God, that's a lot of debt, that's not nearly as bad as, I've got a lot of debt and I have no idea and I'm stuck. And I just. But when you write it down like you said, you get that. You'll have Annabelle's reaction. And you may not call us crying, but you will stand in the mirror and cry and go, oh, my gosh, I'm gonna be okay. It's gonna be tough. I might sell some stuff. I'm gonna take a job as a correction officer while I train dogs. But I can do this. And what must be true, that's not true today. And all of a sudden your brain starts adjusting for what must be true, that's not true today. To get this freaking mess cleaned up, you automatically do it. It's a human function. You can't keep yourself from doing it. You problem solve. Once you realize what the stinking problem is.

[George Camel]

George Camel. Here. Let me give you three signs. It's time to stop hoping your debt problem goes away and actually take action to fix it. If you've defaulted on a debt, if collectors are calling nonstop, or if you're facing a lawsuit or think one's coming, you don't just have a debt problem anymore. You've got a legal problem. And that's why I tell people about Guardian Litigation Group. Because here's the thing. If you're behind on your bills, doing more of the same is not going to fix it. You need a different plan. And Guardian Litigation isn't just another debt relief company making promises they can't keep. They're an actual law firm. And from day one, you get an attorney who represents you. So when collectors start pushing, you're not guessing. You've got someone in your corner who knows how to respond. When your debt problems escalate, into legal problems. So don't wait for it to get worse. Go to guardianlit.com Ramsey right away. That's guardianlit.com Ramsey Attorney Advertising Results may

[Dave Ramsey]

vary and no specific outcome is guaranteed. Are you worried about being able to afford a home? A lot of people are. A lot of people have believed everything they read on the Internet, which is a really bad idea because it can steal your hope and falsely steal your hope. So why don't you sit down with a good real estate agent and find out what you can actually afford or figure out what your home is actually worth and talk about putting it on the market if you're gonna sell. When you actually deal with facts instead of Internet mythology, your life will change. I promise you. The Ramsey trusted program is the only way to find a top agent you can trust that we trust and they'll make your home a blessing or buying of a home, not a burden. And be a blessing because you'll be dealing with reality, not Internet mythology. See, if there is a reason for you to be worried about something, I will tell you I believe in it. I'll tell you bad news. I don't mind. But I'm also not going to allow the hope stealers out there to steal your hope falsely. I mean, if you make $40,000 a year and you live in Los Angeles, you're not going to buy a home. That's the truth. You can't afford it.

[Jade Washall Ramsey]

That's right.

[Dave Ramsey]

Okay, that's the truth. You have an affordability problem. But most people aren't in that situation. Most people actually have just believed all the stuff that their bullcrap friends are telling them. So find a local Ramsey trusted real estate pro for free@ramsey solutions.com agent or click the link in the description. Our question of the day is brought to you by why Refi? When you fall behind on paying your private student loans, it can feel like your life is being held hostage. But why Refi helps borrowers explore a fresh start with a low fixed rate refinancing and a payment plan designed for your ability to pay.

[Caller]

Wow.

[Dave Ramsey]

Don't you wish you had that? For the other kind of student loans, visit yrefi.com Ramsey that's the letter y r e f y.com Ramsey might not be in all states.

[Jade Washall Ramsey]

Alrighty. Today's question comes from Paul in Ohio. He says, I'm debt free and almost have my emergency fund in place. Once that's done, I want to upgrade my vehicle and I'll pay cash. How do I handle a dealer that I know will be pushing financing even just for a short time so they can get a better profit margin. I'm determined to walk in with cash and take it home the same day. I love this question and I think it's great. You're going in there, you're paying with cash. And I think the first thing is you've already decided that you're paying with cash so there's no way you're getting into financing. So you've already drawn that line in the sand. And I'll tell you, for me, I think the best way to handle it is I don't and I've done it the wrong way before, but I don't tell them that I'm paying in cash until we've negotiated the price. Because once if you walk in and say, oh, I've got cash and this is all I've got, I got 30,000 and nothing more, they kind of lose interest in the deal in many ways. Especially if you've made it very clear that you're not financing because they don't. You're right, they're not making as much because financing, there's a kickback, there's add ons that they get. They earn more off people who buy, who finance the car. So I wait and I say let's just talk price and let's get the price to where we both agree and where I agree and then I can let loose. Hey, and by the way, I'm paying cash. And they usually don't like that very much. And they're gonna try to push for you. You know, even if you just finance this much, you could pay it off next month. They're going to do all those things and you're going to say no thank you. And then they're going to act like they need 10 people to approve your check and they don't. And it's just a lot of rigmarole that you just have to say this is, this is the way they're going to act. But this is the way I'm going to act. And like I said before, you even tell them that you're, you know, paying cash. That's the time where I'm trying to negotiate. Can you take the document fee off? Hey, can you? I don't want the extended warranty. I'm telling them everything up front. Front, we're locked down on the fee and then I slide the cash over and it's done and done.

[Dave Ramsey]

Dave, what do you think that will work? There's nothing wrong with that plan at all. The the more expensive the used car, the closer I would stick to that strategy. If you're buying a five or a ten thousand dollar used car, they're not making a lot on the financing.

[Caller]

Yeah.

[Dave Ramsey]

And I would just say, you know, I'm, I have $9,000 and you have a, you know, you got your asking 12 and here's 9 and if you want to take that, I'm leaving with a car. If you don't, I'm leaving with my cash. Do you want the car or do you want these Benjamins? I mean, it's that simple.

[Caller]

Right.

[Jade Washall Ramsey]

Put it close enough for them to smell them.

[Dave Ramsey]

Smell it right. It's right there. Open the briefcase and go, do you want this? You know I'm kidding. But not much, you know, and so that's that, that's a cheaper car. Right.

[Caller]

Now

[Dave Ramsey]

if you're buying a brand new car, that's not a specialty vehicle, it's a standard model. If you work it carefully, you can buy those for usually 500 over invoice and just go in and say, I'm looking at that car. Will you sell it to me at 500 over invoice? Just leave it at that and they will show you the invoice. Now after that, the reason they will do that is, or sometimes they'll sell it to you at invoice because they get manufacturer rebates that they put in their pockets. Okay. In that process. And then I just go, I'm going to wire you the money and that's that on that.

[Caller]

Yeah.

[Dave Ramsey]

Yep. Now if you're buying, you know something that is an, there's a shortage on that vehicle. It's more of a specialty high end vehicle of some kind. They may be marking up above MSRP on that. Like the Raptor that I drive, that Raptor R that thing. They only get a handful of those and they often sell for more than sticker.

[Jade Washall Ramsey]

Right.

[Dave Ramsey]

Because there's more demand because they can easily, they get two per dealership or something easily get that. But that's an expensive specialty, rare vehicle, very unusual deal. So there's a lot of different ways to approach this. But yeah, if you just say if you nail it down on invoice, you get the exact same treatment you're doing and you go, and no, we're not, I don't need them. I don't need the ceramic coating bull crap. I don't need the, all the bull crap, man. They can, they can shovel. A car dealership can shovel more bull than anybody I've ever seen in my Life. And a lot of. Got a lot of good friends that are car dealers and. And they laugh at me and we joke when we're hanging out together. Ramsey, you're the bane of my existence. But you know, because I can't. Nobody will lease a car because of you. That's because I'm doing my job better than you're doing yours. So there you go.

[Jade Washall Ramsey]

Shots fired.

[Dave Ramsey]

Jay is with me, with us in Los Angeles. Hi, Jay. How are you?

[Caller]

Good. How's it going?

[Dave Ramsey]

Better than we deserve. How can we help?

[Caller]

So the reason for my call is I am self employed. I'm a contractor and I make decent money. I've only been doing this for going on two years now, but I've been in this line of work for a long time. So we've picked up work pretty quickly. But I'm having trouble getting my wife on the same page. I would like to eventually buy a house and pay off debt, but we're. We've been arguing a lot lately.

[Dave Ramsey]

What are you arguing about as money?

[Caller]

Well, as money comes in, she has all these ideas of what she wants to spend on. And sometimes for the sake of not fighting, I'll kind of let it go. Ideas like what I've doing been bit.

[Dave Ramsey]

You mean. You mean she wants to buy food?

[Caller]

Well, she'll buy food. Like. Well, she eats out for every meal. And then like she's. We have. Our house looks like an Amazon warehouse. It's like tons.

[Jade Washall Ramsey]

Things. Stuff.

[Caller]

Yeah. And then I mean, it's like friends, birthday parties. Friends, kids, birthday parties. Let's get him this, let's get them that. It's my mom's friend's graduation.

[George Camel]

How long?

[Caller]

Like anything? 2 years as of last week.

[Dave Ramsey]

About the time you went in business and started making money?

[Caller]

Yeah.

[Dave Ramsey]

What does she do?

[Caller]

She's a stay at home mom. We have two kids together. Yeah. Okay.

[Dave Ramsey]

All right.

[Jade Washall Ramsey]

And what are you bringing in from the contractor deal?

[Dave Ramsey]

What's your. What's your net profit that you pay taxes on in a year?

[Caller]

So last year net profit was about 187. This year gross, I'm on track to make about 450, but we don't have anything. I made $30,000 gross in the last two weeks. I took home about 16 and we're down to about 2,000.

[Dave Ramsey]

Okay.

[Caller]

All right.

[Dave Ramsey]

Well, I mean, obviously you have a marriage problem. You don't have a financial problem. And so the two of you need to sit down together and say, honey, I can't live like this. You're killing me. We're going to have to get on the same page. Page. We're not in Congress. We can't spend like we are. And we're gonna have to. We're gonna have to get on the same page. And yes, you need to buy some things. But I am unwilling to make $400,000 a year and be broke. I'm not gonna live like this. And so if we can't sit down here at the kitchen table and work that out like two adults, then we're gonna have to sit down with a good mar. When you've worked hard to buy a car the right way, you paid cash with no payments hanging over your head. The last thing you want is to worry about it every time you drive it. That's why we trust Christian Brothers Automotive as the official auto repair partner of the Ramsey Show. See, most people don't stress about their car because it's older. They stress about it because they don't know what's happening under the hood or trust the people that are working on it. But Christian Brothers Automotive uses digital vehicle inspections. You can actually see what your technician sees and know what's urgent and what can wait. Plus, Christian Brothers stands behind their work with their nice difference warranty. Three years or 36,000 miles, whichever benefits you more. So if you want real peace of mind with the car you worked hard to own, go to cbac.com Ramsey use the promo code Ramsey and you'll save 10% off your visit, up to $250. Cbac.com Ramsey C store for details. So as we survey our audience, one of the things you guys always bring back to us is, hey, you remember that call, that weird thing that happened on the air? Whatever happened to that guy? And we always answer, we don't know because we have no idea what happened to him. But lately we've decided we're gonna fix that. And a time or two in the last few months, we've taken one of those call that when we posted it like on Instagram and had like 10 million people view and went, whoa, that's wild. And we go back to the person and go, okay, what happened? What did you do? So Jade and I took a call in November from a guy and well, I'll just let the clip explain it. We're going to play the thing we ended up posting on, on, on Instagram.

[Caller]

My fiance does not quite know what my net worth is. How do I tell her fully? And my lawyer says I pretty much have to have a prenup.

[Dave Ramsey]

Well, your lawyer's not in Charge of your life. Number one, lawyers give advice. They don't tell me what to do, and then I decide if, A, they don't want them to be my lawyer anymore, and B, if I'm going to take their advice, they don't get to tell me I have to do something. You're not the boss of me now. So how in the world do you get engaged and have never told her? You should have told her before you got engaged.

[Caller]

I agree. She knows I'm worth a decent amount. She just doesn't know the full amount.

[Jade Washall Ramsey]

What is the full amount?

[Caller]

Close to 20 million.

[Dave Ramsey]

Wow.

[Jade Washall Ramsey]

And you're telling me there's no signs that you're a 20 millionaire? There's signs when you're a 20 millionaire, Dave, come on.

[Dave Ramsey]

Well, there can be. I don't know. There's some of these people. They. They look like they. Yeah, no, there's not always a sign, but yeah. And then other times, there's a sign. So there we go. So we said, okay, the lawyer, even though he was a bit bossy about it, he probably do need a prenup. And we said, you probably need to sit down with your. Like, as soon as you hang up the phone with your fiance and have the conversation. And we wondered, how'd that conversation go? Yeah, I mean, if you're the fiance and you get here, suddenly, do you go, wow. Do you go, you liar. I mean, do you go, I mean, wow, that's crazy. So we got Brian on the phone, and Brian's in Minneapolis, and this is the guy we talked to just a little while ago. And the clip we just played, Brian, how are you?

[Caller]

I'm better than I deserve, as the saying goes.

[Dave Ramsey]

I've heard the rumor. So that's the first thing I do want to know. I'm very, very curious. So when. How quickly after that call did you sit down with her and tell her exactly you had 20 million bucks? And then what was her reaction?

[Caller]

Probably a couple weeks when I saw her in person, since we're not always together. And her reaction was what I honestly, fully expected it to be. Oh. So, okay. Oh. There was no. Nothing more, honestly, to the conversation.

[Jade Washall Ramsey]

And when you say got back together because she's. She's out of. Out of the country, right?

[Caller]

Yeah. We're sure. Yep. We are in two different countries. But I go back and forth.

[Jade Washall Ramsey]

Yeah, you're in the United States, she's in Canada.

[Caller]

Correct.

[Dave Ramsey]

No, I mean, she just looked at you and went, oh, okay.

[Caller]

Literally, that's what she said.

[Dave Ramsey]

20 million bucks. 20 million bucks, literally.

[Caller]

She mentioned coffee. Like I told you guys when I got to meet you after this, it was. I was the guy down there met you two.

[Jade Washall Ramsey]

Well, did she suspect it? I mean, because you're making 700,000 a year. Did she suspect that?

[Caller]

She knew. I said, did you have any idea? And she said, oh, I thought maybe a million or two was her honest response.

[Jade Washall Ramsey]

Okay.

[Caller]

And I said, okay, cool.

[Jade Washall Ramsey]

So things are good.

[Caller]

And she just said, no, nothing changed. Not a single thing.

[Dave Ramsey]

So I'm actually definitely did not accidentally stumble into a gold digger, huh?

[Caller]

No, I.

[Dave Ramsey]

Opposite. Opposite. She's bored with your 20 million.

[Caller]

She. It's not going to change our life now in any way.

[Dave Ramsey]

There's a big old Y, like, oh, okay.

[Jade Washall Ramsey]

Because, remember, you were worried about it because you said that in a previous relationship, somebody kind of took advantage of you for your money. And I remember that being a pain point for you.

[Caller]

Yeah, it was, for sure. And with her, it's. It's not.

[Jade Washall Ramsey]

Not that at all.

[Caller]

She. She's one of the hardest workers I've ever met. So.

[Dave Ramsey]

And so did you talk about a prenup then?

[Caller]

Yep, we did.

On it.

And she again said, yep, no problem whatsoever. Wow. So she. She's. She's wanted a million. She really is.

[Jade Washall Ramsey]

So did you guys set a date?

[Caller]

We were hoping for August, September, sometime in there. We're not going to throw a big old shindig. It's going to be this family and stuff like that, so hopefully sooner than later.

[Dave Ramsey]

Okay. So you kind of thought that this was going to be a big yawn for her and she was just going to go, yeah, whatever.

[Caller]

Whatever.

[Dave Ramsey]

You kind of thought that, didn't you?

[Caller]

Yeah.

[Dave Ramsey]

My gut told me some percentage of you, when you sat down, was a wee bit worried. What percentage?

[Caller]

I wouldn't say more than five.

[Dave Ramsey]

Okay. All right.

[Caller]

Honestly.

[Dave Ramsey]

So you know. You know her pretty good then.

[Caller]

I do.

I was a little worried because I don't want to say I hit it, but I never was forthcoming about it.

[Jade Washall Ramsey]

Yeah, that was the part.

[Caller]

Yeah. On it. But she. She reacted how I would have put

a lot of money on.

She would react. She just said, you did not. It doesn't change.

[Jade Washall Ramsey]

And you didn't tell us. But what was her financials? She takes good care of her money, right?

[Caller]

Yes, she. She. There's things, obviously I didn't say. She has a son. On it. I didn't think people really needed to know that, but I'll say it now. And he has autism, so she. He's going to be with us his whole life. But she, she is the best mother, the most caring person and she made sure that he has always provided for on it. And so she had some things that maybe weren't the smartest financial decisions ever, but she, you know, being a single mom's not the easiest thing in the world. No, not at all.

[Dave Ramsey]

Especially, especially plug a little autism into the equation. Yeah.

[Jade Washall Ramsey]

Wow.

[Dave Ramsey]

So I gotta tell you, this is the most normal reaction to a mo, to a really bizarre set of numbers.

[Caller]

Yeah, she, Dave, I, I, I would honestly how I feel, I would sign her, she could have it and I wouldn't be worried. She would take an rv.

[Jade Washall Ramsey]

Well, my guess is, you guys, life is not going to change. Like, you're not.

[Caller]

No, it's, it's not.

[Dave Ramsey]

And a little, a little strain will come off of her, but yeah, sure,

[Caller]

yeah, it's, you know, people, I, I, I might have looked over the Instagram and seen people saying cheap this and that. I, I, I value my money to be spent on experiences.

Yeah.

[Jade Washall Ramsey]

Yes.

[Caller]

That's so over materialistic things. So for us it's, it's not going to change how we live one bit.

[Dave Ramsey]

Oh, dude, we should have told you not to read the Instagram. Well, you know, reading Instagram comments, you understand why some species eat their young.

[Caller]

Yes, I do.

[Jade Washall Ramsey]

Well, saying this is a good problem to have and they are absolutely right. This is a good, There was a

[Dave Ramsey]

lot of funny comments like that. Like I wish I had this problem with my fiance. But, but yeah, those were funny comments. But yeah, I don't read the Instagram

[Caller]

comments, it's never going to bother me. Dave, not good.

[Jade Washall Ramsey]

You got thick skin.

[Dave Ramsey]

Honestly.

[Jade Washall Ramsey]

Yeah. Wow.

[Dave Ramsey]

Well, you, you guys are, you're devastatingly normal for some really weird numbers and some fabulously weird numbers. In a good way. And congratulations. I'm glad it all worked out. Thanks for giving us the update. I appreciate you coming back on.

[Caller]

Yeah. And, and we will actually see it. She wants to come next time I come to Tennessee. So, so we're gonna stop in.

[Dave Ramsey]

Oh, hey, great.

[Jade Washall Ramsey]

I'd love that.

[Caller]

Great.

[Dave Ramsey]

Come on in. We'll buy you a chocolate chip cookie and a cup of coffee. Yes.

[Jade Washall Ramsey]

Oh, I love the, I love the follow up. That's so cool. And by the way, if you are watching and you've called in and shared something and you want to follow up, give us a call, tell us, we

[Dave Ramsey]

want to know if you're interesting. We'll put you back on. But I mean, if you're, if it was just boring, we don't follow up with your boring call.

[Jade Washall Ramsey]

That's true. It needs to have 10 million views.

[Dave Ramsey]

20 million. Did have 10 million on your Instagram. Yeah, I don't even know what mine was. Oh my gosh. Wow. Crazy.

[Jade Washall Ramsey]

So it just goes to show, we give, you know, we give advice and sometimes it can make you feel a little out of your comfort zone. It can make you feel a little bit like, oh, I don't know if I want to do that, but there's a rainbow on the other side of this. Like if you follow the advice, it might feel a little uncomfortable for a moment, but usually it's a happy ending here.

[Dave Ramsey]

Well, now when it comes to finances with the person you're going to spend your whole life with, your spouse, your future spouse, 1000% transparency is the only possible equation. There's no other possible answer. Well, I don't tell them about that. That's lying. Okay. The target bags under the bed are not cute, Oprah. Okay? It's not cute. And so if you have to hide your target purchases, gentlemen, if you have to hide your latest firearm purchase in your business, P and L because you didn't want your wife to know what you spent on that gun. That's lying.

[Jade Washall Ramsey]

That is lying.

[Dave Ramsey]

Okay.

[Jade Washall Ramsey]

Yeah.

[Dave Ramsey]

Can you tell? I have discovered that a time or two coaching. I didn't do that. But I have witnessed guys, particularly guys that own their own businesses, they managed to get on through on the. Slide it under the bed. Slide the target bags under the bed and there you go. So yeah, just. It's the cleanliness of honesty, the cleanliness of integrity is it's essential to wealth building and it's essential to high quality relationships. And Brian sitting down with her and her going, huh, Okay, I kind of figured but I didn't think that much. But cool, whatever. Just. You gotta love the lady, man.

[Jade Washall Ramsey]

Yeah.

[Dave Ramsey]

What a wonderful lady.

[Caller]

Wow.

[Dave Ramsey]

Welcome back to the Ramsey show in the Fair Winds Credit Union Studios. I'm Dave Ramsey. Ramsey, your host, Jade Washaw Ramsey, personality number one best selling author, is my co host. Today Joe is with us in Orlando. Hi Joe, how are you?

[Caller]

Hey, Dave. I'm doing good, how are you?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Thank you for taking my call. I appreciate you and Jade.

[Dave Ramsey]

Sure.

[Jade Washall Ramsey]

Thank you.

[Dave Ramsey]

How can we help?

[Caller]

Thank you. So I have a financial dilemma and I have you can provide some direction on it. So my wife And I, both 38 years old, we're blessed. We make in last four years, every year we made around $1.1 million with our W2 and investment income now since last four to five years, we are paying approximately $300,000 to IRS in taxes. So this year I decided to consult with one of those tax advisory firms and they recommended, hey, we can add you in some kind of a business program where you can take a debt of $550,000 and call it $85,000 as initial investment and then rest of that, you can put that in tax write off and then you can claim you can deduct that from your overall tax payment from it. So I wasn't sure it's a good idea to take a debt to save taxes, so thought I should ask you.

[Dave Ramsey]

Okay. The only write off is the interest on the debt, correct?

[Caller]

Well, yeah, that's, that's pretty much. They were saying, well, they were saying that if I'm taking a 200 $550,000 worth of, of debt to invest in a business, I can use the $450,000 worth of money as a deduction as an investment in the company as for a new Trump bill.

[Dave Ramsey]

Okay. Do you own a business?

[Caller]

No, I don't. But they're saying they can add me as an investor. I no idea what that business is as well. So that's why I was like, you know, I don't worry about the business going to be, is it going to be profitable or not. But they're claiming that I, hundreds of thousands of high paying taxpayers do that. So like, no, I'm not sure about it.

[Dave Ramsey]

Okay. I'm sure run away from these people as fast as you possibly can. But let me, I'm going to guess at what they're trying to do because I can't tell. Normally if you own a business, you have a write off. If you have a debt, you can write off the interest as tax deductible as an expense of doing business, but the interest would not be 450,000 on a $500,000 loan. So all I can figure is they're doing some kind of section 179 write off which you can do in business, and I take that in our business here. But the problem is if the business fails, you still have the loan.

[Caller]

Yeah.

[Dave Ramsey]

And you got the write off, but you've got the loan. Which means that. And so another way of looking at this is if you had 550,000, would you invest $550,000 cash in this in order to get a $450,000 write off? Well, obviously then you have a net of $100,000 invested in a business that you don't know anything about. Well, we wouldn't even do that.

[Caller]

Right.

[Dave Ramsey]

Much less have debt around it. And so their explanation and their process. So here's a. Here's a. Let me backtrack just a minute. You're making incredible money. What are you doing for a living that's making this kind of money?

[Caller]

Yeah, so I'm AI architect. So.

[Dave Ramsey]

Okay, good for you. Awesome. I'm so happy. All right, so what I learned, and I learned this as a young guy that was making the kind of money that you're making, and I ran into these people in the real estate world who were doing the similar things, and they all got burned and ended up bankrupt. And so did I. I didn't end up bankrupt for the same reason that these people are gonna cause you to have problems. But here's the principle that I learned at the time. This was around real estate. It wasn't Section 179, which I think is what these guys are doing. I'm not positive where they're getting this kind of a write off on only a $550,000 investment. It shouldn't be that big. But all I'm guessing is they've syndicated out the 179s. And so that's a complicated way of saying there's a write off you can take in business and they're giving you a portion of it. So they're probably putting you and two other people or something in this. It's a limited placement thing. Now in the real estate business, what they did was the Reagan, Ronald Reagan, that's how long ago it was. Changed the tax laws to where we could take a. What used to be depreciate a piece of property over 30 years, and instead we could depreciate it over 15. And then we could use what's called double declining balance and depreciate. You take the first year's depreciation and double. And so you could put $5,000 down on a $35,000 condominium, and you could end up writing off $15,000 that year is the way the numbers worked. And so people were doing this en masse. But guess what? The stupid condominiums wouldn't rent for enough. Then to support the debt, they ended up getting foreclosed on. And all. All of the tax savings got recalled back on the people. And so the lesson that I learned from that, which, it's a little different deal than your deal, but the lesson I learned from that is never do a deal that doesn't make economic sense. And only makes tax saving sense because it's always gonna bite you in the butt. It has to make economic sense. Meaning if you're gonna invest in the business, it's a good business investment, and I get a tax write off. Not it's a stupid, crazy business idea. I'm gonna lose all my money in it. But I get a tax write off. And I'm doing this just for the tax write off. And that's what these guys are proposing to you, like my old real estate buddies did. And they got their heads taken off, all of them. And it was a massive bloodbath in real estate in the 80s over this. All the limited partnerships and syndications fell apart. I knew One guy had $110 million net worth. He's bankrupt. Gone. Took him out. And it's this very principle they violated is they were doing deals just for the tax write off that were bad deals. And what I smell here, and I'm 99% sure this is a really bad deal and a really good tax write off. Run and run. Because these morons are morons and they're going to give you other stuff like this to do.

[Caller]

Yeah.

[Dave Ramsey]

And you might not be able to smell it. So you smelled this one. You could tell something was wrong, couldn't you?

[Caller]

Yeah, absolutely. So even I offered. Hey, what if the business is going well, I can pay that debt off. No, no, no, no. You don't want to pay off the debt.

[Dave Ramsey]

Yeah.

[Caller]

You want to stay in debt, carrying the debt.

[Dave Ramsey]

Here's the basic thing on that. If you have a 10,000. $100,000 in debt in interest payments, you can write $100,000 off.

[Caller]

Off.

[Dave Ramsey]

But writing it off means that you deduct it from your income. It doesn't mean you save $100,000 on taxes. It means you save 37% of $100,000 on taxes. So you put out $100,000 to the bank in interest, and it saves you $37,000 on taxes. Well, that's trading a dollar for a quarter. That's stupid on a sixth grade level. Okay? And so you never do that. If you're gonna do that, just give a charity $100,000 and you get a $37,000 write off. $37,000 tax savings, $100,000 write off. And you don't have to be in debt to do it. Run from these guys. They're d.

[George Camel]

Hey, guys, George Camel here. You ever feel like you make good money and still have nothing to show for it? You run into Target for one thing. And Somehow walk out $87 later with toothpaste and emotional support candles. Just me. Okay, well, that's the problem. Most people don't pay attention to how they spend their money. So it does whatever it wants. And that's why we created EveryDollar. It's a budgeting app that helps you create a simple plan for your money. Everydollar is simple, it's clear, and it helps track where your money's actually going. Plus, you get daily lessons to DOs and reminders along the way. It's like having a money coach in your pocket. Your money's been freelancing long enough. It's time to give EveryDollar a full time job. Go download EveryDollar for free on the App Store or Google Play.

[Caller]

Foreign.

[Dave Ramsey]

Is in New York City. Hey, Carl, how are you?

[Caller]

Hey, y'. All, how's it going? I hope you're doing well. Thanks for taking my call.

[Dave Ramsey]

Sure.

[Caller]

I'm 29. Hey, I'm 29. I live in New York City. Just signed today making double what I was making on my previous job.

[Dave Ramsey]

Congratulations. What are you making?

[Caller]

Thank you. Starting off at 85 salary and hopefully 95 after six months.

[Jade Washall Ramsey]

Good.

[Dave Ramsey]

Good for you.

[Caller]

Appreciate that. Yeah. So the car question, it's kind of a. It's a car question. I've had a bit of car trouble and I've been driving a car solely to get through the winter over here. Doesn't have ac, all these different things. Needs a whole bunch of changes, needs a bunch of fixes, but it's not worth it because the car is about 220,000 miles on it and I'm running into the ground. Basically, it was a free hand me down. Now, being that I have a father as well, I wanted to know best fixes. Now in going into looking for a car, I've looked for the past six months and in short, I. I'm forgetting one thing. Sorry about that, y'. All. My father gave me about $10,000 to go toward this car as of the beginning of this month. And so while originally I was just looking for something that keep on the road, that's reliable, etc. The added cash was added to what?

[Dave Ramsey]

Yeah. What's it added to? You already got money saved for a car?

[Caller]

Yeah, I was saving for a car.

[Dave Ramsey]

How much do you have in savings?

[Caller]

I've got now I've been continually saving. I've got about 8,008 to 10.

[Dave Ramsey]

Okay, so with your dad's gift, you have $20,000 to buy a car.

[Caller]

Correct.

[Dave Ramsey]

What's your question?

[Caller]

Well, the car that I suppose that that answers all the questions is about. Because I'm looking at Carvana. I guess it's shipping to New York.

[Jade Washall Ramsey]

Say it. What are you trying to spend on this car?

[Caller]

I have a feeling about 25,000.

[Dave Ramsey]

Okay, don't. You can't buy that car. You don't have 25,000. Buy a $20,000 car. You have 20,000.

[Jade Washall Ramsey]

Yeah. Or can you wait until you save up the 5,000 more? Because when I. When you tell me that the other car was a free. It was a free. Hand me down. You have no money in it, so if you wanted to continue to repair it for a while, you could.

[Dave Ramsey]

It's because you didn't buy the car, junker. Probably bring a couple of grand, won't it?

[Caller]

I'm not sure. It's. It's 07 Honda Fit.

[Dave Ramsey]

Yeah, I don't either, but go find out. I mean, whatever you can sell it for, plus 20 grand's your budget.

[Jade Washall Ramsey]

Carl, do you have any other debt? Do you have any debt?

[Caller]

Just a balance transfer in June. That's about 2000, which. Yeah, that's. That's the rest.

Okay.

Otherwise, again, I'm looking at. Well, new job, new position. How do I.

[Dave Ramsey]

Hey, listen, don't celebrate your new job with a car payment. That's kind of dumb.

[Caller]

No, and that's not the intent.

[Dave Ramsey]

Well, it's what you're doing. You. You say, oh, I hit the lottery. I doubled my income. I signed up for 85 grand. So I'm going to run down the car dealer and give them my freaking money. No, thank you. No, no, no, no, no, no, no, no. Time to be a grown up. You did not hit the lottery. You have 20 grand and an $85,000 job, and you live in New York City. You did not hit the lottery. Okay? You can go buy a $20,000 car, not a dime freaking more, because you don't have a dime more. You do what you want to do, dude, but you called here. I got to tell you, there's zero chance you should have a car payment. You have plenty of money. You are upgrading so far from the hooptie you've been driving, you ought to be dancing in the street. So that 20 grand, act like you got a dadgum new Porsche or save

[Jade Washall Ramsey]

up the 5,000 and pay 25,000. Just do it in cash.

[Dave Ramsey]

Absolutely. Dude, please don't do this. Please don't do this.

[Jade Washall Ramsey]

So, Dave, let's talk about this, because I know people. People are like, what are you saying? This man is buying a $25,000 car in cash. That. That's so countercultural. It's so abnormal. The majority of Americans have car payments and they will have car payments their entire working career. Right.

[Dave Ramsey]

Majority of Americans are broke.

[Jade Washall Ramsey]

Exactly. So the correlation there is very, very clear. You look at the percentage of Americans out of car payments, and then you look at the percentage of Americans who are living paycheck to paycheck, and suddenly the whole equation makes sense.

[Dave Ramsey]

So you interview. We interviewed 10,167 millionaires and we did the Ramsey research piece on millionaires. You know what the data tells us? The actual science. Science. Science. Right. You know, what's it tell you? Okay, well, the science. The data says that when we interview millionaires, they say, what's the dumbest thing you ever did with money? I bought a car with payments. What's the dumbest thing you ever did? I bought a new car with payments. And when did you stop doing that? About the time I got on track to be a millionaire, which was 16 years ago was the last time I did that stupid butt idea. And then I became a millionaire. And they look back on their lives and say the turning point of me becoming wealthy, the vast majority of them, it's like 84% of them answer the question this way. It's crazy. They look back and they say the dumbest thing I ever did. And the turning point that when I changed my life and started habit patterns that caused me to become wealthy was getting away from car payments. If you want to be middle class, stay in car debt debt. You will stay in the middle class. You will never build wealth because it will suck the bone marrow out of your money.

[Jade Washall Ramsey]

Well, when you're paying 800-900-1000amonth for cars, and for some people, that's just for one car. Many households have two car payments. Yeah. How the heck are you supposed to have money to invest for the future? How can you pay for your kids college?

[Dave Ramsey]

And there's an affordability crisis. I can't buy a house. It's because you have $1,400 in car payments because Ford Motor company screwed you, Lexus Motor company, Toyota Motor company screwed you. And they got you so far in debt because you had to have something shiny with toxic plastic smell.

[Jade Washall Ramsey]

So then the big question then comes is, okay, how do we do it? And that's the number one question that I get when I start talking like this.

[Dave Ramsey]

Quit caring what other people think.

[Jade Washall Ramsey]

Yeah, that's the. That is the first thing mindset has

[Dave Ramsey]

to symbol as a car.

[Jade Washall Ramsey]

And Then let's talk about it practically, because most people, you can go about this in two ways. Ways for most people, what this looks like, getting away from car payments looks like whatever your current vehicle is, you're either going to pay it off and from that point off, say never again. No, never again. And now that I paid my car off, I'm putting a portion of money aside all the time so that when the time comes, I can trade this one in, add a little money to it and upgrade little by little. It's a stair step motion that we're doing. So that's one way it can look. The other way it can look is you're looking at, you're facing down a 950 car payment right now. You still owe 40,000. You need go, this is for the birds. I'm just going to sell the car. And from the beginning, you're making a giant step downward because you're going from driving a $40,000 car down to maybe a 8 or $9,000 beater. Dave.

[Dave Ramsey]

Yeah. Decide who you want to impress. People at a stoplight you're never going to meet, or your grandchildren because you could change your family tree if you don't impress the people at the stoplight.

[Jade Washall Ramsey]

Absolutely. And, and, and, and let me take it back even further. The people at the stoplight. But a lot of you are worried about the people in your life, how it's going to feel when you pull up to the cookout and you were driving Suburban, brand new, and now you're driving, you know, a Honda Fit, right? And it's like, what happened to him? Right?

[Dave Ramsey]

And you're thinking about it, it's not going well for old Dave. He's driving a car he can afford. Oh, poor Dave. Bless Dave's heart. Yeah, you're right. And you know what? It's worse. I think men are the worst. Guys are the worst on cars because we, we get too much self esteem out of what we drive. Now, ladies, some of them are that way, but most ladies just think a car is a really large purse. And guys, but we're real concerned about the motor and the 0 to 60 and you know, how fast is my little battery, George Camel.

[Jade Washall Ramsey]

And the size of the rim? I don't know.

[Dave Ramsey]

Yeah, there you go. Whatever that was.

[Jade Washall Ramsey]

How much I know.

[Dave Ramsey]

No, I'm telling you guys. And pickups are the worst on car payments. They're the worst. So sorry, Carl, but you just set us off on a tangent. All of that wasn't aimed at you personally, but if we could please Talk you into loving yourself enough to not going into car debt. Love yourself that much, Carl, in New York City, don't go into car, Deb.

[Caller]

Sam,

[Dave Ramsey]

Listen. Your home is your most expensive asset. And now you're ready to sell fast and for a lot of money. But in this wackadoodle real estate market, one mistake could cost you tens of thousands of dollars. Here's the deal. This ain't amateur hour. You need a pro in your corner. Someone who knows how to price your home right, market it well and negotiate the best deal. That's where a Ramsey trusted real estate agent comes in. To find one near you, go to ramseysolutions.com agent. That's ramseysolutions.com agent. In the lobby of Ramsey Solutions on the debt free stage. They're here. Arnie and Randy are here. What's up guys? How are you?

[Jade Washall Ramsey]

Hey, James. Hi.

[Dave Ramsey]

Welcome, welcome. Where do y' all live?

[Caller]

Thief River Falls, Minnesota.

[Dave Ramsey]

What's that near?

[Caller]

We're about five and a half hours north of Minneapolis.

[Dave Ramsey]

Okay. No, that's not near it, but okay.

[Caller]

Close to Canada.

[Dave Ramsey]

Ah, okay. Good deal. Well, welcome to Nashville.

[Caller]

Thank you.

[Dave Ramsey]

It's warm and sunny.

[Caller]

Much warmer.

[Dave Ramsey]

Life is good and here to do a debt free scream. How much have you paid off?

[Caller]

$193,000.

[Dave Ramsey]

Yo. Nice. How long did that take?

[Caller]

Four years and nine months.

[Dave Ramsey]

Wow. Good for you and your range of income during that time.

[Caller]

We went from 98,000 to 161,000.

[Dave Ramsey]

Very good. What do you all do for a living?

[Caller]

I'm a public works employee for the

city and I am a credit and collections manager.

[Dave Ramsey]

Wow. Well, great incomes. Way to go guys. Congratulations. So goodness. Approaching five years here, you've been pushing on this. Pushing the rock up the hill. Way to go. And 193,000. Was that your house and everything?

[Caller]

Yep. We did it, Dave.

[Dave Ramsey]

Debt free out your weirdos.

[Jade Washall Ramsey]

Oh, wow.

[Dave Ramsey]

Paid for house. Look at you. How old are you paid for house, people?

[Caller]

I am 39.

Hey, I'm 47.

[Jade Washall Ramsey]

Wow.

[Dave Ramsey]

Way to go you guys. So what's this paid off house for worth about 325. Excellent, excellent. How much you got saved in your nest egg so far? Your retirement? 4 4, 34 something. Okay, so we're creeping up on not far from being baby steps millionaires.

[Caller]

We're really close.

[Dave Ramsey]

Way to go, guys. So proud of y'.

[Caller]

All.

[Dave Ramsey]

Congratulations. Okay, so how much of the 193 was the house?

[Caller]

That was all the house.

[Dave Ramsey]

That's the house.

[Caller]

We had about 40,000 of baby step

[Dave Ramsey]

two debt and then you tore into it. Okay, so five years ago, you must have run into Ramsey stuff. How did that happen?

[Caller]

Yeah, so I actually saw a Facebook post. A high school friend was giving away five copies of Total money Makeover. Just.

[Dave Ramsey]

Wow.

[Caller]

Hey, this book changed my life. No strings attached. The books were gone by the time I saw the post, but I downloaded it, read it in 48 hours, and then I text him and was like, do you know Dave Ramsey?

And, yeah, I was actually ice fishing. It was middle of winter, and I had heard of Dave Ramsey. So I said, yeah, we.

And I never had. I had never heard your name.

[Dave Ramsey]

Oh. And you said, yeah, I've heard of this. And whatever you want to do, honey, I'm ice fishing.

[Caller]

Yeah, pretty much. Yep.

Mind you, in our financed fish house.

Got it.

[Jade Washall Ramsey]

Got it. Wow.

[Dave Ramsey]

I love it. So what does a fish house cost?

[Caller]

So that one, I bought it for 14 grand.

[Dave Ramsey]

Okay.

[Caller]

And then full circle at the end, we were. We had about 17,000 left on our house. And I jokingly had set up, I'll sell the fish off, and if I can get what I want for it, we'll pay off the house, and then I'll just buy another fish house. So I actually listed it on Marketplace, and she didn't believe me at first, but she saw the post and we sold it.

[Dave Ramsey]

It did sell.

[Caller]

Oh, yeah, I sold it.

[Dave Ramsey]

Oh, you really did do it.

[Caller]

A month later, we drove to the mortgage office and paid off our.

[Dave Ramsey]

That was that. The fish house. Paid off the house, completed it.

[Caller]

Yep.

[Jade Washall Ramsey]

So you did it in person? You did the payoff in person?

[Caller]

Oh, yeah. Yeah.

[Dave Ramsey]

So now you're gonna save up and buy another fish house in cash?

[Caller]

Yes.

[Dave Ramsey]

Yeah, of course. Sure. Yeah. So how's this work? You slide it out on the ice?

[Caller]

It's like a. It's like a camper.

Okay.

It's just a. It's a winter camper. You drive on the lake and. Yeah, we park and you drill holes in the ice, and we.

[Dave Ramsey]

You sit in the warmth of the house so that you're not freezing while your ice fisher.

[Caller]

Three or four days.

[Dave Ramsey]

I mean, you're talking to a southern guy who has no idea what you're talking about right now.

[Caller]

Come on up, dude.

Come to Minnesota.

[Dave Ramsey]

So. Sounds cold to me, but yeah.

[Jade Washall Ramsey]

Well, no, he's in the fish house. He's been warm.

[Dave Ramsey]

Congratulations, you guys. Thank you. So you're. So. Bottom line is Arnie figures this out, called Randy. Which one's Randy? Yeah, I'm Randy. Randy. So Randy figures this out and calls Arnie and he's easy to get along with and he says go for it. All the way to the point that he's sells his fish house and pays off your house at the end of the story. At the end of the story. But It's a long five years.

[Caller]

Yeah, it was the end of 2020 and we're at that $98,000 and it's like, man, we make a lot of money for northern Minnesota and like where is it? All right. And then I read the book and I dug in and I'm the nerd and spreadsheets and where did all of our money go? And just figuring out, man, we spent $700 during COVID on eating out in March of 2020. I'm like, we couldn't even go inside a restaurant. How are we spending that much money?

[Jade Washall Ramsey]

And had you avoided debt up to that point or were you just kind of dabbling in it a little bit?

[Caller]

We had regular consumer debt. We had our vehicles and the fish house and you know, 50,000.

[Jade Washall Ramsey]

Okay.

[Dave Ramsey]

You cleaned up the 40 grand right quick. And then just keep. Let's just get the house knocked out and everything.

[Caller]

Yeah. So we really as like I took on a new role at work and then Arnie has switched employers as well. In that five year span we just lived on what that minimum was in baby step two and just everything else to the house.

Wow.

[Jade Washall Ramsey]

Way to go.

[Caller]

Wow.

I mean we did take our kids on vacation.

[Dave Ramsey]

Yeah. How does it feel to be completely free?

[Caller]

It feels really good.

Weird.

[Jade Washall Ramsey]

It does.

[Caller]

You mention weird people all the time and it does feel weird.

[Dave Ramsey]

Yeah.

[Caller]

Yeah.

It's so abnormal.

Right?

Dentists.

[Dave Ramsey]

Do you know anybody else that's gotten out of debt?

[Caller]

I have one co worker. Yeah. That's a single mom and she's a rock star. Wow.

[Jade Washall Ramsey]

Yeah.

[Caller]

We actually revisited here before together, Dave.

[Jade Washall Ramsey]

So that was cool.

[Caller]

It's weird to look at the checking account and. And the money just keeps going up.

[Jade Washall Ramsey]

Yeah, it's yours.

[Dave Ramsey]

Yeah, just start. You start stacking cash automatically now.

[Caller]

Oh yeah, you do.

[Dave Ramsey]

So what's the first big thing you're gonna do to celebrate not having a single bit at debt?

[Caller]

Well, our trip here was a good one, but so what we put off in those five years was new vehicles. So both of us will.

[Dave Ramsey]

You need upgrade.

[Caller]

We'll need an upgrade.

[Dave Ramsey]

Yeah, you got get out of the hoopdies in time to get in some good stuff.

[Caller]

Yeah.

[Jade Washall Ramsey]

And they're fine. Then there's the fish house too. And then the fish house.

[Caller]

Yeah, that'll come eventually.

[Dave Ramsey]

Yeah. Good.

[Jade Washall Ramsey]

Wow.

[Dave Ramsey]

Congratulations. All right. What do you tell people the secret to paying off 193,000 in four years and nine months?

[Caller]

I would say the budget. We had never done a zero based budget. Right. We were the can we afford this payment people.

[Jade Washall Ramsey]

Right.

[Caller]

The normal people. And discipline to me is discipline. You gotta keep your eye on the prize. It's a long time. It's a grind.

[Jade Washall Ramsey]

It is a long time. Five years.

[Caller]

You know, we got kids, they want everything and yeah, it's a grind.

It doesn't seem possible at first, but it, you know, it just keeps going and eventually it's, you're there.

[Dave Ramsey]

If we had told you, Arnie, at the start of the process that you were gonna end up selling the fish house to get to pay off the last bit, you would have told us we were crazy, wouldn't you?

[Caller]

Absolutely.

[Dave Ramsey]

But the idea.

[Caller]

Wanted to tell her she was crazy.

[Dave Ramsey]

The idea, the idea of being free grew on you. It did by the end of the story.

[Caller]

So far away and, you know, it's here now, so.

[Dave Ramsey]

Yeah. And now it's believable.

[Caller]

Yeah, it is.

[Dave Ramsey]

Yeah. Way to go. Way to go. Proud of you guys. You're amazing. You've changed your whole family tree.

[Jade Washall Ramsey]

Yes.

[Dave Ramsey]

Way to go. I mean, you make a close to $200,000 a year, you know, payment in the world, you know, stack cash and build wealth and you'll be able to do anything you need to do and be generous. You'll be able to do all kinds of stuff. Congratulations. Very, very well done.

[Jade Washall Ramsey]

Very nice. Yep.

[Dave Ramsey]

Good stuff. All right. Arnie and randy from Minnesota. $193,000 paid off, house and everything, plus or minus a fish house. Four years and nine months. 98,000 to 161 was the income. Come spread. Count it down. Let's hear a debt free scream.

[Caller]

Three, two, one.

[Jade Washall Ramsey]

We're debt free.

[Dave Ramsey]

Yeah, baby.

[Caller]

I love it.

[Jade Washall Ramsey]

Look at that.

[Dave Ramsey]

That is so fun.

[Jade Washall Ramsey]

So cool.

[Dave Ramsey]

Isn't it interesting that there was some watching his reaction when she calls? He's ice fishing.

[Jade Washall Ramsey]

Yep.

[Dave Ramsey]

They already had a strong relationship.

[Jade Washall Ramsey]

Yep.

[Dave Ramsey]

And he's like, okay, babe, fine, let's do it. And I don't know if I. I think you're a little crazy, but let's do it.

[Jade Washall Ramsey]

Yeah, I'm on board.

[Dave Ramsey]

That's where the whole thing started though, was that they had this strong basis to start with.

[Caller]

Wow.

[Dave Ramsey]

Cool people. I love it.

[Caller]

Very cool, Sam.

[Dave Ramsey]

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. Our scripture of the day, Proverbs 12 and 3. No one can be established through wickedness, but the righteous cannot be uprooted. Warren Buffett said, the best investment, investment you can make is in yourself. Jeff is in Detroit. Hey, Jeff, how are you?

[Caller]

I'm good, sir. How about yourself?

[Dave Ramsey]

Better than I deserve. What's up?

[Caller]

Well, so I'm 56 years old, make about 56,000 a year. Back in December, I had filed for a Chapter 13 bankruptcy. I was one of the 390,000 in Michigan the state came after for back unemployment that they stated that I owed. I fought it. I won the case. That was one of the reasons why I was looking into bankruptcy just in case they came back and said, yes, you owe this. I was already ridiculously upside down in a vehicle purchase that I had made about four years ago. Oh, a ridiculous amount on that. Still. I ended up dismissing the bankruptcy because when it was filed, the information was not filed appropriately or properly. And they came back and changed my payment from initially it was supposed to be 439amonth for three years. And then they said, hey, wait, your numbers don't add up. Now it's going to be 700amonth for five years. I only have three years left on the car loan. I ended up dismissing the bankruptcy before was officially filed.

[Dave Ramsey]

No, it was filed. It was filed. But you dismissed it voluntarily.

[Caller]

Yes. Yeah, yeah. Dismissed it before it actually was finalized at the end of court.

[Dave Ramsey]

Exactly. Just just to be clear for your future, you have filed a bankruptcy.

[Caller]

I've learned that. Yes, sir.

[Dave Ramsey]

Anyway, but go ahead. That doesn't bring it. That didn't help anything. That brings us to where we are. So now you got a big buck car payment still, right?

[Caller]

Right. I do.625amonth on a 2014 Jeep and I'm in the process right now of trying to get it negotiated with Capital One by finance company with whether I'm going to be able to get the vehicle caught up and continue paying on it or should I turn the vehicle over? I mean my credit scores are in the low five as it is right now.

[Jade Washall Ramsey]

What do you owe on that Jeep and how Many payments behind are you?

[Caller]

I'm about three payments behind now, I believe because of the bankruptcy and I believe the last thing that I seen on there because I can't access the account online because of the bankruptcy right now, I believe it was right around the 16 to 17 thousand dollar mark still. And I've already paid like 23,000 on it.

[Dave Ramsey]

What do you think it's worth?

[Caller]

Four or five thousand? Yeah.

[Jade Washall Ramsey]

Okay.

[Caller]

This is all of my own doing. I understand that.

[Dave Ramsey]

Okay, I want you to go check, I want you to go check that number. That number sounds like an emotional number, not a proper number. So go, go to Kelly.

[Caller]

As far as.

[Dave Ramsey]

Go to Kelly Blue, book kbb.com and put in the information on a 2014 Jeep. What kind of Jeep is it?

[Caller]

It's a 2014 Jeep Cherokee. It's this kind of a baseline model.

[Jade Washall Ramsey]

Just have a bunch of miles.

[Caller]

The last one that I looked at was $4200. I'll buy that for Kelly Blue.

[Jade Washall Ramsey]

What else? What else is, is outstanding. So you're 1875 in the hole on that?

[Caller]

Yeah, I've got about 7000 in credit card debt that I'm working with a debt consolidation company right now because after I canceled or dismissed the bankruptcy, I needed to try and make a quick move to get all, to not have them all come at me and try and garnish and everything else. So I've got those tied up with a debt counselor company right now. Yeah.

[Jade Washall Ramsey]

Is it just you? Are you married with kids? Is there, is there anybody else in the situation?

[Caller]

No. I mean I live in the same home as my brother and sister in law. It was a home that we acquired after my mother and stepfather passed. We have a mortgage on that that I am a, on the mortgage. I am a survivor in interest and on the deed. We did a enhanced life estate deed, thankfully prior to her passing. And all three of myself and the two brothers are on the deed as partners in interest.

[Jade Washall Ramsey]

But is there debt on the house or it was paid for?

[Dave Ramsey]

No, it's got a mortgage.

[Caller]

There is no. Oh, that's right, it's got a mortgage. We still owe 91,000 on it. I had an opportunity about two years ago to get a mortgage to have it put in my name because technically the mortgage is still in my mother's name, my late mother's name.

[Jade Washall Ramsey]

Okay.

[Caller]

But it was at 7.75% interest and the current mortgage on the home is a 3.25%. I wasn't about to refinance it just to get it Put into my name and increase our payment by 3 or 400.

[Dave Ramsey]

Okay, so to recap, you've got the credit cards under control because you threw them with a debt consolidation and I assume you've paid that company already or signed with that company already.

[Caller]

Yeah, I have signed with them, yes. And they're negotiating for them all.

[Dave Ramsey]

Okay, so that's under control. The only thing that's out of control is we're $1800 behind on a $16,000 debt on a $4000 Jeep. Have I got that right?

[Caller]

Right. Okay, absolutely. Yes sir.

[Jade Washall Ramsey]

So how's your income looking? Are you. I mean it sounds like 27 an hour.

[Caller]

I mean 56,000 a year roughly. Probably more than that because of over 10 time, but.

[Jade Washall Ramsey]

Okay, so I. What I want going forward on this, I want you to know your exact numbers. Cuz knowing the exact numbers is the only way that we can create an exact plan and, and decide how long is it going to take. How quickly can I get the 1875 to get this car loan current? How quickly can I pay off the 17,000 or am I going to try to.

[Dave Ramsey]

What's the interest rate on the Jeep?

[Caller]

That's a good question and I know that's a very stupid answer and it was stupid of me to sign that without even looking at it.

[Dave Ramsey]

My cousin, you think it's a high rate, don't you? I do too.

[Caller]

Oh, it's ridiculous. It's got to be ridiculously high after paying 23,000 over three to four years that I've already paid on it and I still owe 16. Yeah, it had to have been an actual.

[Dave Ramsey]

Okay, so here's your, here's your options. Okay, there's three options and none of them are pretty. One is you scrape together the 1800 and you catch up and you just finish paying the Jeep off. You just work it off, put it in the debt snowball and get rid of it. Okay, two is you get Citibank, I think you said had this, right, Capital One, but Capital One, Capital One. Okay, you get them to recast the loan, reset the loan and they roll the 1800 in and you start fresh with no payments behind. And while you're at it, get them to give you a decent interest rate.

[Caller]

Rate.

[Dave Ramsey]

Okay, 3 possibility is you toss them the keys, tell them come get it right, and they sell it for $2,000 on the repo lot and then you have a $14,000 debt with them that you'll have to settle later.

[Caller]

Right?

[Dave Ramsey]

And you can settle a repo debt for pennies. On the dollar, of course, that, you know, that puts a monster in the closet that's going to come out someday. And so you need to be saving like crazy. About a year after they repo it, they're going to start bothering you and want some money and they can sue you for up to the deficit, but they will settle that for about a quarter on the dollar. So you can probably settle this four or $5,000 in cash. And so you build that war chest over a year and you offer them $5,000 and they'll go away. $4,000 and they'll go away and you'll have a repo. But you have a bankruptcy and you already have a 500 credit score. I don't know that a repo does much to your credit. Yeah, it's not like you got any.

[Caller]

Yeah, that's what. At my age, that's what I was curious about. That's what I've considered. That was what I was considering, was just turning the vehicle back in.

[Dave Ramsey]

Yeah. If they, if they don't cut you some kind of a deal that makes you want to keep it, then that tells me they're. That I'm going to toss some of the keys and, you know, go get you a 2, $3,000 car to drive and start stacking cash, clear those credit cards and get out of the mess and then stack cash and be ready for the phone call that's going to come on the deficit, because it's going to come. This is going to come bite you later. Okay. But again, they'll settle that deficit for usually 25 cents on the dollar is pretty standard. And always when you're doing a settlement, you get it in writing or you don't give them money. Right. Because you can tell, you can tell that the bank is a bank like that. You can tell they're lying if their mouth is moving. Okay. They're crooks.

[Caller]

Right.

[Dave Ramsey]

And, and that's the business that they're in. That's why they set you up in this deal the way they did. They screwed you going in. So the car company, the bank screwed you going in. You allowed it. You said that. You signed up for it. You said that. But that's, that's the reality. So you can fight through it any one of those three ways, but get yourself a plan so that you don't, you know, so you, then you get all of this stuff in the rearview mirror and you start to rebuild.

[Caller]

Yeah, that's right.

[Dave Ramsey]

That's what we're trying to do. That puts us out of the Ramsey show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of peace, Christ Jesus.