Anyone Can Set Themselves Up for Financial Freedom
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Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life. Specifically, win with your money, win in your work, and win in your relationships.

Phone number to jump in is 888-825-5225. That's 888-825-5225. I'm Ken Coleman. George Campbell joins me. We're Ramsey Personalities, co-hosts of the show, good friends. And I want to say, as we start, just a big congratulations. It is launch week. We'll talk more about George's brand new, soon-to-be best-selling book, Breaking Free from Broke.

The Ultimate Guide to More Money and Less Stress. Fabulous book. Congratulations, pal. Your first book launched this week. It's been very humbling and overwhelming in the best ways. Well, it's kind of like another type of baby, and you're a new dad. A lot. So, yeah, it's a lot of similarities. I had a baby about four and a half months ago. Both keep you up at night.

That's true. I'm not sure which one was more difficult at this point, at least for me. That's true. Maybe the book at this point. My wife will have a different story. Thanks to Whitney. That's right. All right, let's get to the phones. We'd love to talk with you. George is here to answer your money questions. I'll weigh in. I'm here to answer any questions around your work and making more money. George will weigh in on those as well. Let's go to Kelly in Indianapolis, Indiana. Kelly, how can we help? Hi. I have...

I've been kind of following the Ramsey plan for just trying to follow it for maybe about a year or two, but I just have one last credit card I just can't quite seem to get rid of. I don't have a balance, but I'm just trying to convince myself to actually get rid of it. I love this. And Kelly, I'm...

I break this down in the new book into eight different characters. So can you tell me which one you fall into? Is it out of fear? Is it for the rewards? Is it the convenience? What is causing you to go, I can't cut this thing up?

I feel like it's more like maybe the pressure of like everyone said, like, you should always have one because you never know if you're going to get stuck in a situation where you're going to need it. Okay. So for you, I'm going to call you the emergency shelter. That's the sixth personality in the book. I need my credit card in case of emergencies, right?

Probably, yeah. Okay. Well, let me tell you, there's a way better emergency fund, and it's where you become the bank instead of Capital One, and that's called an emergency fund. Do you have $1,000 saved for Baby Step One? I do. I'm actually in four and six. Wonderful. So how much money do you have in savings?

I have just a little over, like, almost $11,000. Amazing. Now tell me, when was the last time you had an $11,000 emergency?

Uh, never. Exactly. So a lot of this is paranoia. There's fear we have to deal with. And the other piece of the equation is you have insurance that will transfer the risk. You have things called deductibles and out-of-pocket maximums. And so you're going to be protected and you don't need these credit card companies anymore. They were never your friend and it's just a rubber crutch. And it's only a matter of time before they come knocking saying, hey, Kelly, we'll come save you at 22% APR.

Kelly, is the $11,000, does that represent three months, four months, five months, or six months of your expenses? More like closer to three. Yeah. Is there a number that, let's say George and I were feeling like we could just cut a check here. Let's say we were having Dave's money here. We like to give Dave's money away. I like that. You and I have done it a lot in our role. That's true. We really have. Let's say George and I could cut a check right now, okay? And it would add to the $11,000 in your emergency fund.

And when we cut that check and you deposit it, you would go, I'm cutting this credit card up. I feel so much better. Is there a number that we would add to the $11,000? Be realistic here. What's the number that if we wrote a check to add to the $11,000, giving you a total of in your emergency phone where you'd go, okay, I don't need this stupid credit card. Just curious. What's that number?

I guess maybe another $9,000 to make it $20,000. All right. Now, George, you see what I'm doing there? Absolutely. I'll give it back to you. You're the money expert. We just put some facts on the security gland, which is largely feelings, and we just said if you had $20,000, you would feel so secure it would be a force field between you and life, and that would be more like six months of expenses, correct? Correct.

Yeah, probably. So then I'm not saying you have to do that, Kelly, but I did a little experiment there because that's what George and I are trying to get you to. I think 11 is enough for you to cut the credit card up. That's what we think. That's why we teach what we teach. We should have cut it up when you did baby step one, $1,000. That's what we teach. Why not then? Why not put the 9,000 in? If that makes you feel better and it removes the temptation, I say go for it.

That's the thing, Kelly. If you cut up the card today and an emergency happened, what would you do? You would dip into the emergency fund. Yeah. And that's what it's there for. And then once you use it, what are you going to do after you use it? You're going to replenish it. But you know what didn't happen? You never went into debt. You were never at the mercy of the credit card companies who are supposed to be blessing you with your 2% cash back and this emergency shelter.

And so I'm going to encourage you to do the brave thing. And what's amazing to me, Kelly, is as people have been reading the credit card chapter in my new book, they're telling me for years we couldn't cut it up. And you finally coaxed us into it with all of the research and humor and every objection I've ever had. I address it in that chapter. So I'm going to send you a copy of the book and I want you to read that and then send me a DM when you cut it up with a picture. Can you do that for me?

Sure. That's all I ask in return. So hang on the line. Austin is going to pick up and we'll make sure you get a copy of Breaking Free from Broke. It's chapter three specifically. And Ken, I want to do another little mindset trick if I might, George. I want you to join me on this. You are like the David Blaine of the Ramsey Show. But Kelly, you said something at the start of the call when George was asking you, what's holding you back from cutting this up? And what you told him was,

what other people are going to say to me? Because other people in your life are saying, Kelly, you're a moron. They're not using that language, but that's how you feel. But they're going, Kelly, it's silly to cut the credit card up in case something were to happen. And so you haven't cut it up because you're worried about what they'll say. But what if, what if something happens and when they hear about it, they're like, what? What did you do? You went, I cut a check because I had it in the bank.

or you said, well, I kept that credit card thanks to you, and I put it on the credit card. I've got to pay it off quick because it's about 23% interest. Which of those two answers are your friends and family going to be impressed with the most? You tell me. Probably the first one. So, Kelly...

You're not going to be viewed as silly, Kelly. You're going to be viewed as smart, Kelly, by the very people you're worried about and being criticized by. True or false? True. There it is. And guess what? Those friends are normal, Ken. Normal's broke. We know 4 out of 10 people have nothing in savings. 25% of people have to use the credit card to cover the bills. That's not Kelly. You've unsubscribed from normal and fear is a terrible financial advisor.

And so these credit cards, you know, using other people's money actually makes you feel less in control because your body's keeping the score. It knows that you're not truly safe when you borrow someone else's money.

We don't use debt. You got less stress. And you become the bank, Kelly. That's what we want for you. We'll send you a copy of the book Breaking Free from Broke. Let me know what you think of the credit card chapter and send me a photo or even better a video of you cutting up that last credit card. I love it. This brand new baby is coming your way, Kelly. For the rest of you, you can get it right now wherever books are sold or at RamseySolutions.com. Don't move. We're just getting warmed up in frigid Franklin, Tennessee. This is The Ramsey Show.

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Welcome back to the Ramsey Show. I'm Ken Coleman. I'm joined by George Camel. And we are here for you this hour, 888-825-5225. George is taking your money questions. I'll take any work-related questions because that has a lot to do with your income and your mental health and your emotional health.

It affects pretty much everything. It pretty much does. Considering how many hours of your life you spend working. That's right. So I want to help you out in those areas. If you're thinking about some kind of transition this year, you're just not happy there, you're trying to figure out, do I start a side hustle? Is this the year to do it? Can I do it while I'm in the baby steps? Any kind of work-related question, I'd love to help out on that, and George will as well. 888-825-5225. Let's go to Austin, Texas. Chris is there. Chris, how can we help? Hey, Ken. Thanks for having me on, man. You bet. What's up? Hey.

I've got a question regarding, we're trying to kind of restructure our debt and everything. So fortunately, my wife did really well this year and her commission and bonus coming here in a couple months is going to be about $52,000. Whoa, way to go, wife. That's pretty phenomenal. You were pretty happy when you found out about that, weren't you? Oh, absolutely. Absolutely.

Um, so one of the big things that we're knocking down is the remaining credit card debt, which we have about $11,000 just under with that, that we're going to knock out. And then the next things we kind of want to restructure our vehicle loans. So, um, I own my own business. Uh, I'm in distribution of beverage concentrate. So last year, uh,

About two years ago, it was pretty tough getting a rental car, a rental van. So I went ahead and purchased a truck, ended up paying $63,000 for that truck at a $893 a month payment. And it's been fine because it's been overall savings, I mean, versus paying, you know, $1,500 a month renting vans back then. But we're thinking about, we're going to get rid of that truck no matter what we do because vans are available today. But we do have negative equity of about,

I would say about $13,000 to $14,000 in that truck just because car manufacturers are getting competitive right now. And a new truck would sell for $3,000 less than the one I have with 44,000 miles on it. So my question to you two was, is we have a Ram 1500 and a Jeep Wrangler. The Ram is $893 a month and the Jeep Wrangler is $662.

So the first thought that I had was to go ahead and pay the negative equity, um, on the truck and purchase a new vehicle. And we would basically assume a new loan on that new vehicle. So if we found a car for $25,000, um,

we could go ahead and pay the negative equity of the truck of, let's say, $13,000. Are you talking about the Ram or are you talking about the van? Because I'm getting confused here. You said a van, and then I thought you said a Ram truck and a Jeep.

Yeah, so I have a Ram truck and a Jeep. The reason why I purchased the truck was because I used to rent vans. Okay, it took the place of a van. It took the place. Okay, I just want to make sure there weren't three vehicles in this conversation. So what you've been telling us is the Ram is the one that you've got the $13,000 to $14,000 negative equity on. Yes. Okay, go ahead. So what I was thinking is we have two options. So we can pay the negative equity by trading in the Ram towards a new vehicle for her.

And we're setting ourselves a $25,000 budget. And then what we would go ahead and do is just pay that negative equity and then pay for that car cash. And then keep the Jeep payment of $662 a month. Or the other option was to go ahead and pay off the Jeep, which has a remaining balance of $16,326. And then pay the negative equity in the truck and put a...

Instead of a decent down payment on that new vehicle and take out a new loan, trying to get our monthly payment down to about $400 a month, $450 a month. Well, George, I only want to weigh in on one issue. I just want to weigh in on the Jeep. Sure. Those cars do not hold up well. And so whatever advice you're going to give him, I personally would pay off the Jeep and sell it. Or sell it if you've got... Do you have negative equity on the Jeep or you've got a little equity in that? No, I have...

I'd say about $18,000 equity in the Jeep. Dude, I'd sell the Jeep. Those things, I'm not trying to knock Jeep and I don't want to get any hate mail, but I'm just telling you I'd get rid of that. I'd sell that for sure. Anyway, George, go ahead. The one issue that, oh, there's not an issue with it. It's just that, so the Jeep was a long-term goal for us to be able to even purchase one. And we use it. We just had our first sign about a year and a half ago.

But prior to that, we use it about six times a year going camping and going off-roading. And so we've made the commitment that this is the one vehicle that we're never going to sell. It's actually, you know, it doesn't even get the first car and everything. Your reason for not selling it is because you use it six times a year? Yeah, it's not a strong case. Well, no, it's a daily driver. So we do use it to go to work and things like that. But it's a recreational vehicle in the sense that... For six times a year?

Get you a little Honda Accord for the daily driver and go rent whatever the heck you want with your amazing income six times a year. That's right. So let's walk through the numbers. Let me figure out some options for you. You're getting $52,000 in the bonus. You're going to have to pay taxes out of that? No, that's going to be gross income. So you're going to have to pay taxes. Sorry, not gross. Net. That's net. Okay. So let's say we are the only debts you have, the two car loans and the credit cards.

Yes. Okay. So we knock out the 11K credit cards. We move on to the 16,000 Wrangler. That leaves you with 25K, correct? Yes. Now we pay off the negative equity. It's another 13K out of that, leaving you with 12. But now you can sell the RAM and you'll get out scot-free. I don't think I would trade it in because the dealership's going to screw you on that. I agree 100%. So you're going to get way more private party and probably not be as underwater as you think if you do it that way.

And the dealership will convince you that you need a nicer car than the one you are currently looking for. And they're going to say, well, if you're going to spend $25,000, you might as well spend $35,000, get something new. That is how dealerships work. And so I would encourage you to not purchase it from that dealership and instead search for a quality used vehicle that you can pay $12,000 for with the remainder in cash. Okay. And it's not going to be the prettiest vehicle, but what's your household income? So just a standard salary.

We're looking at about $138,000 a year. That's good. Dude, think about this. Yeah, but he's getting good money for the Ram, George. Yeah, but when you think about it this way, you spend $12,000 on a cash car. Now you have no payments in the world making $138,000. How quickly can you save up an upgrade in car and do it in cash versus trading in debt for more debt, but we're lessening the debt. I'm like, dude, you guys make good money. You could solve this thing with this bonus. What a blessing. Let's just be done with it instead of playing the debt game.

Yeah, exactly. So that's what I would do if I was in your shoes, because you're calling me, telling me, hey, we make great money, but here we are with payments all over the place, and you guys have been able to justify every single one of these. But I think we're done with justification. I think we're ready for freedom instead. Yeah. No, that's exactly where we want to get to. You can find a $12,000 truck. It ain't going to be fancy, but for what you guys are using it for, it's a work truck, right? Yeah.

Yeah, well, and I'm going back to renting a van when I do my route. Yeah, he's not going to need it. It's going to be his driver, just his regular driver. Then just get something reasonable for your daily driving. Yeah, so the vehicle, another...

Yeah, another reason that we're trying to get out of the truck, too, is, you know, our son, as he grew, it was a little easier when he has a baby to put him in the truck and everything. And my wife's actually pretty small, and she has an issue getting him up in the truck, and she doesn't like it. She just thinks it's big and a floor. I relate. I relate to that. Yeah, this is how Whitney treats George every time. She has a hard time getting George up into the van, so they went to a sedan.

Sick of the booster seat. We joke, Chris. But I think we got to start making decisions for what's best for our family 10 years from now instead of, hey, well, the kids and we just got to make future thinking decisions and they all need to require cash and no debt. Once you take that off the table, it's going to change the decisions you make.

It's going to change your level of sacrifice. So you guys are, this is going to be all done so soon if you do it this way, but I would not trade debt for a little less debt. I don't like that game when you guys can get out of this scot-free. Yeah. And get a sedan, get something or a small SUV, whatever, you know, you got one kid, right, George? Did I get that right? So, you know, what's going to happen? Kid's going to throw a peanut butter and jelly sandwich on the floor.

You're right. All these young couples want to get the nicest car for their kids and toddlers. Let me tell you something. The amount of goldfish that are going to be in the floorboard and crammed between the seats, the Smarty Candies. I could go on and on. Pretzels. You'll be on a Lord of the Rings quest to try to find all the crumbs in that car. Ha ha ha!

Well said. Goodness gracious. And by the way, they don't make the attachments on the vacuum cleaner that you need to truly get all those little goldfish. Getting all the nooks and crannies. Yeah, it's not going to happen. Really good stuff. All right, don't move. We're going to take a quick break. Back with more of your calls. This is the Ramsey Show.

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Welcome back to the Ramsey Show. I'm Ken Coleman. George Campbell joins me. Thrilled that you are with us. The phone number is 888-825-5225. 888-825-5225. Taking your money questions, life questions, work related, your professional journey questions. We're here for you this hour. Let's go to Joseph now, who joins us in Cleveland, Ohio. Joseph, how can we help today? Hello. Thank you for taking my call. You bet. What's up, Joseph?

I just recently started going through baby steps. I'm on baby step two. And as I've been starting to share my goal of paying off all my debt with family and friends, I've received a fair amount of pushback on why I shouldn't do that. And I wanted to see if you had any advice on how I could have respectful conversations with my family and friends while also being clear about my goals with them.

Man, well, you're not the first one to experience this when broke people are giving you pushback about your financial plan. It means you're off to a good start. But, you know, I always love the quote, the best revenge is success here. And so I think you just stop talking to them about it. I mean, why do we have to have these arguments? Just go live your life, get out of debt. And when you've got peace and no payments and they're all looking at you going, man, you got a little pep in your step. What's going on, Joseph? You go, I got no payments. And

And they go, oh, I guess that plan actually worked, huh? What was that book? Oh, Total Money Makeover. Okay. That's how these things usually go. So what kind of pushback are they giving you? It's typically that...

I have a little bit of credit card debt, and then the bigger one is my car payment. So a lot of what I've received is, well, you should keep your car payments over time so that you can build your credit and use the money that you can put towards that to do other things. And you share DNA with these people. Yeah.

Yeah, for some of them, yeah. George. But do you understand that... So not nice. But if you explain the credit score to them and you went, hey, let's talk about this credit score idea. What do credit scores do? They allow you to get more debt. And what does getting more debt do? When you play the game perfectly, you get a higher score.

And what does that do? It helps you get more debt. And so if your goal, Joseph, is to not accumulate debt, because we know the pain that it causes millions of Americans, everyone's broke, then I'm going to run the other direction. And if they don't understand that, that's okay. Not everyone has to totally get what you're doing here. For sure. Do you agree with them when they say these things? No, because I'm...

I'm, I can feel the excitement within me of the prospect of not having any debt and being able to save and do things. And just the idea of trying to, you know, quote unquote, wisely leverage debt or anything like that. Just, it sounds, sounds awful to me. So no, I don't agree with them at all. So who is they? Do you mind? Tell us who they are.

One of like, probably like my best friend has given me a lot of pushback and I've kind of floated the idea of paying off debt to some family members that I'm close with that I trust and do respect. But on this, we seem to have

Is there another topic in life that you don't like to talk to anybody about or there's very few people you'll talk to about, like politics or something like that? I'm just curious. Any other something you go, I just don't want to get into that with people. Is there something like that for you? I can't think of anything specific off the top of my mind. This needs to be one of those things. Okay. I think you need to take George's advice. I think he's absolutely right.

I think you need to stop talking to your best friend about this stuff. Treat it like some weird conversation and you just go, I want nothing to do with that and I'm going to create some boundaries. I change the subject. I just think, and same thing with these other family members. If you disagree with them, then don't bring it up. I can just tell you without embarrassing any of my family members, there's a couple of my family members that I can't talk to about certain public figures. That's all I'm going to say.

I leave the room. I don't even want to touch it, George. Because it's just... It's a landmine. What's the point? Well, but we're not going to agree. So we're past the point of fighting. I'm not worried about a fight. But it's just a waste of time and emotional energy. 100%. I'm not going to agree. Therefore, I don't want to have the conversation. And I think, George, this is one of those topics. Agreed. It's why I don't talk to you about sports, Ken. We're not going to get anywhere. You're not going to teach me what a play-action pass is. Because...

you'll never be able to understand it. That, again, is another waste of energy. There you go, Joseph. But I hope you get that, Joseph. So, hey, you keep your eye on the prize. Follow the baby steps because you believe in it.

And you believe that it's going to make a better life for you. And by the way, it's your life. And so I'll focus on that and just no more talking to everybody. Unless someone pays my bills, they don't get a vote. Yeah. And so I'm just going to go, thanks, mom and dad, friend, uncle, broke cousins. I'm good. I'm going to try this plan. And if I fail successfully by getting out of debt and it's terrible, I can always get more of it. Yeah. But no one's ever come to me and said that. Yeah. So-

That's a tough one when people don't get what you're doing. When you're a salmon swimming upstream, all the other salmon are going, dude, we're going this way, man. This is the path. And you're like, no, that's a cliff, my friends. And there's a giant bear right there about ready to eat you. Bears love salmon. Yes, they do. Capital One is the bear in that metaphor. They're all heading toward the Capital One cliff. Yep. Those commercials are so winsome. They just make it seem so nice. Well, you get Jennifer Garner smiling at you. She's the sweetest person on the planet, you know?

Good move getting away from Alec Baldwin. You know what I mean? 100%. Yeah. Let's go to Sydney in Atlanta, Georgia. Sydney, how can we help? Hey, thank you for taking my call. You bet, Sydney. What's going on?

So I just need help with pretty much everything. I'm 24. I bought my first house when I was 20 for $97,000. It was just an older couple that wanted to sell it because they couldn't take care of it anymore. So I have a mortgage. I have a boyfriend that lives with me. We have a daughter. She's a year old.

We have a car payment. You know, we don't have any credit card debt, but we do have like a couple of small loans. We just can't seem to catch up. We can't seem to save anything. And I'm just tired of chasing and chasing and never being able to make any progress. What's your income? So I...

stay at home with our daughter because our where we live our daycare system around here is just not trustworthy and

It would take like half of my paycheck to pay for daycare anyway. So I stay home with her, and my boyfriend brings about $50,000. But I do have a business myself, but that only made a whole whopping like $6,000 last year. Okay, so you guys are making $56,000. And what are your payments add up to? Because so far you've got some personal loans, the car loan, and the mortgage.

If you added those up. I have a car that's paid off, but it's always in the shop. So that's our only hesitation was selling his car. His car has 14,000 left on it. The house has 88 left on it. And then I have a part of my business. I have a sewing machine that's on a loan. What's the sewing machine worth? Yeah.

It was originally like $1,500. It's got like $1,000 left on it, but I'm planning on paying that off soon. Okay. As well as the computer. How much do you guys have in savings? We barely have $1,000 in savings. Okay. Well, I feel your pain.

Luckily, you guys have a small mortgage, and so we're going to ignore that right now. If you added up the car loan and the personal loans on the sewing machine computer, are we talking $15,000, $16,000? No. Like I said, the sewing machine's only $1,100 left, and the computer's like $500. Okay. So it's about $15,000.

0.5 is what I'm adding up to. So here's what we're going to do. We're going to lay these out smallest to largest. We're not going to get overwhelmed by the big picture and we need to get this income up. If that means your boyfriend is doing side hustles for the next six months to clean up this mess, great. If it means selling the car and getting something cheaper to get around in right now, great. But this is a solvable problem. You make 56, we're trying to pay off 15. How quickly can we do it? How do we get that margin? We got to make more. We have to spend less.

And if that means you going back to work for a little bit, even if daycare, you're going to net an extra 500 bucks. That's going to help. Find a grandmother in the area that wants to make a little money, wants to get out of the house that you can trust. And she watches the child in your home. Go make more money. This is The Ramsey Show.

Welcome back to the Ramsey Show. I'm Ken Coleman. George Campbell joins me. We're here for you, America. Phone number is 888-825-5225. 888-825-5225. This is big news, George. I've got to mention this because I just got the email a couple days ago. We've got a brand new event.

entitled Total Money Makeover. Pretty good idea. Total Money Makeover Weekend, May 10th and 11th, named after the best-selling book that's ever come out of Ramsey Solutions, Dave's unbelievable classic Total Money Makeover. And so in one weekend, you're going to crash course on everything we teach about money. Brand new content from all of us Ramsey personalities. And this is a great, great event because no matter what baby step you're on,

It's going to fire you up. You're going to have a lot of Q&A time with all the personalities, and that's always really, really fun. We just get to hang with you. Early bird tickets start at just $99, but this is only for a limited time. Get your tickets now at ramseysolutions.com slash events. That's ramseysolutions.com slash events. Always fun. I'm pumped for this. When we have it here on our campus. Rumor has it you could witness Smart Money Happy Hour Live with Rachel Cruz and I on Friday night. And a special guest.

Ken Coleman? I think it's time. Is this the event? Are you manifesting this? It's a soft pitch, but you have talked about having me on, and I thought to myself, I don't know if your regular audience wants the special guest that much. I think it's time. But I think at a live event,

You, me, Rachel, cocktails and content. If that's what gets butts in seats for the Total Money Makeover weekend, I'm in. I don't know that it will. But I know that it'll be fun. That is a great deal for an entire weekend event right here at the headquarters. It'll be fun. I'm putting it out there. I won't lobby you. Thank you. All right. Very good. Kayla's up in Atlanta, Georgia. Kayla, how can we help? Hi. Thanks for taking my call. You bet. What's up today, Kayla?

So I'm a college student getting a biology degree. And initially I was going to go to dental school, but I'm not really too interested in getting, you know, just a ton of student debt now. Good for you. So I've always wanted to be an entrepreneur. So I prayed on it and I just decided that I wanted to start a clothing line.

So I took a business course and she was basically, you know, just telling how to secure business funding and stuff like that. And I know, you know, how you all feel about, you know, business loans, but I created a business plan and, but I didn't know that they asked for like collateral and stuff like that. Right. So my parents aren't too interested in, you know, putting their house up for collateral. So now I'm just like, okay,

I don't know what to do now because I really want to be financially free. I'm glad you called. So you haven't taken out any loans out, correct? No. Okay. So Kayla, business funding is just fancy for a loan. And now you know that. And so can I just encourage you that you don't need a loan, nor do you need a ton of capital to launch a business in America today. Now, the clothing business...

I would tell you that's a pretty high-risk, very competitive world. Would you agree with that statement? Yes. So if you were to go get a bunch of loans with a great business plan, all the collateral, all the things that you don't want to do, and you're right, by the way, you would still have a tremendous amount of risk. And so how do we remove the risk? By a small test. Now, do you plan to design the clothing? Yes. What are you thinking? In your business plan, did you...

Did you highlight two or three different articles of clothing? Yes. What were you thinking? Like just matching sets. I already talked to like a manufacturer to find out, you know, how much it would be to get them. Okay. What did you find out? I think they were about $30 a piece, like for the matching top and the matching bottom. So $60 for this matching outfit. Is this casual wear? Is it, what is it?

Yes, it's casual. And no, together they're both equal up to $30. Oh, okay. So your hard costs on both top and bottom are $30. And what have you found out in the market as you were putting this business plan together that this type of combo, this outfit, what's the wholesale or retail price? About $115. $115. That's what your competitors are doing for something similar?

Yes. Okay. Well, it's a pretty good margin, but still, you get into manufacturing, and I don't know if you've read the story. If you haven't, you should pull anything you can online. There's a lot of it out there on Sarah Blakely's story. She lives in the Atlanta area, and Sarah is the founder of Spanx. Have you heard of her?

Yes. You need to read her story. There's a lot of hustle and effort on this. And my point here is you need to start smaller than right out of the gate with your dream item. I love the ideal item of the top and the bottom and it's casual wear and it's comfy and we retail for $115. But there's a lot that goes into that and you're going to have minimums.

that you're going to be required to up front with the manufacturer because these guys, manufacturing companies going to get paid up front or at least a portion up front, right? I'm not a super expert on this, but I know the basics. And so I'm just walking you through this. So there will be some upfront capital and it needs to be cash. So to the extent that you can get out of college, start working, save up a bunch of cash,

To get to a point where you go, okay, I can at least invest this amount of cash and I'm going to go with one or two items. I'm going to go online and I'm going to try some things. That's the long term. What can you do in the short term with maybe some jewelry or a t-shirt or a sweatshirt or something that you can test out online? I want to bring George in here because he really understands this world. I weirdly do and it's embarrassing. I'm holding back.

So I wanted to bring you in at this point and now walk her through what would be a, let's call it a low risk economical test. Well, the way I think about this, Kayla, is you can't just get out there and be like, I have clothes for $100. Why should they buy yours over the brand that they know? And so you need to create some unique value proposition here. And I would start by creating an audience. Do you have a big Instagram following?

TikTok following? So I would focus on that. And it doesn't have to be clothing you made. If you have good style, I assume you're very stylish.

And your friends compliment you on your outfit, right? I think she sounds like she's very stylish. So I would start doing outfit of the day. Here's how I pick these outfits. Here's the idea behind it. Here's my wardrobe. Here's some deals I found on clothes that I love. And you start to become sort of a fashion influencer. Now all of a sudden you build up a following of 40,000 people. Brands want to work with you. You're getting money from that. Now you can launch your own line. That's how all the people I've seen actually do it successfully. Yeah.

And that's not going to happen tomorrow, right? This is a six-month, two-year, five-year plan. But there's also no debt baked into that, Kayla. You know, start small is what we're getting at. Start small, grow slow.

This is not going to be your day job coming out of college. And I'm not saying that to shatter your dreams. I'm saying that to support your dreams. Your day job will support this side hustle until you can get the boat close to the dock to where that side hustle now makes more than your day job or close and you can now pursue it full time. Are you tracking with us? Are we making sense?

Yes. I mean, at the end of this month, I'm going to be getting my refund check. It's about $9,000. I was wondering if I should use some of that to invest into the business or whatever, but it's just that my refund check does also cover my rent. So I was wondering if I should ask my parents if they can support me a little bit on the rent while I use some of the money to... Do you have any debt?

No. And do you have an emergency fund fully funded? No. That's where that goes. I think that refund just became your emergency fund. Once you have no debt and an emergency fund of three to six months of expenses, now we can begin investing for the future in retirement and a Roth IRA and for this business. Kaylee, listen.

I know you're grasping what we're saying, but you went right back to, I need to ask mom and dad for help to pay my rent so I can eat. Listen, you don't need to use the $9,000 right now. That $9,000 as a safety net in the form of an emergency fund for a graduating college student is phenomenal. You're ahead of the game. No debt. Now go get a really good paying job.

Two or three paint jobs. And start doing what George is talking about where we test the idea of can I figure out how to sell clothing for a profit. Post pictures of it and say, would you buy this or would you buy this? And start to test this out. That's exactly right. We just took a call this week. This couple took out $200,000 in small business loans. The business failed. Now they're getting regular jobs and they're freaking out. And I don't want that for our friend Taylor. It's like a penalty for trying something.

That's not how it needs to be in America. It just adds emotional and financial pain on top of the failure of the business. Yeah, if you do it right, it's the American dream, not the American nightmare. No debt, folks. All right, good hour. Thank you, George Camel, thank you, James Childs, and all the guys in the booth that keep us on the air. Thank you, America, for listening. This is The Ramsey Show.

Live from the headquarters of Ramsey Solutions, this is The Ramsey Show. It's where we help you win in your life, specifically winning with your money, in your work, and in your relationships. I'm Ken Coleman. George Campbell, my good friend, is here with me this hour. 888-825-5225. 888-825-5225. George will lead and guide on the money questions. I'm here to chime in on any questions.

Of those questions, plus the work-related questions. Not happy in your work? Want to make some more money? Bigger shovel. How do I make more income in 2024? I'm here for that as well. And also very excited. This is the last weekday of Georgia's launch week. Breaking Free from Broke, the ultimate guide to more money and less stress. Look at that. That's a fabulous-looking book right there. Thank you, Ken. Regardless of my face on it, the team did a great job. You've got a great face.

George. Thank you. Thank you. So it's been a fun week. The feedback has been amazing. The reviews are pouring in and there was a guy on the live stream we did yesterday, the Q and a for the book launch 51 years old and he had tears and he was going, this book gave me hope that it's not too late for me. Wow.

He's in customer service in Kentucky. He's got some debt to pay off, and I'm glad I could give him that hope. And I told him, his name's Calvin. I said, call the show today. So Calvin, if you're out there, call us up because I said, Ken's going to be able to help you with this work stuff and help you make more income to clean up this mess. I love it. Well, really good and very excited for you, George. It's going to help a lot of people, a new generation of people that never heard of Total Money Makeover are going to really be helped with breaking free from broke. You can get it at ramseysolutions.com or anywhere books are sold.

All right, let's go to my old stomping grounds when I worked for the governor of Virginia. Wow. Richmond, Virginia area is where Austin joins us. Austin, how can we help?

Hey, guys. Thank you so much for taking my call. You bet. What's up? I've actually, me and my wife, we're in a bit of a debt, but I keep seeing all this stuff about S&P 500 and how if you're in your 30s, if you start in your 30s, you can put like $100 a month and whatnot. And I want to know if that would be a good idea to start doing that, knowing that we're still in debt. How much debt do you have? $222,000.

Whoa, that's a bit to you? Wow. What's that made out of? Yeah, $31,800 is a private loan and credit card, plus my wife's car. And then the $191,000 is for our house, and then I have $11,000 left on my car. Okay, so we got two car loans and credit cards and personal loans? Yes.

Just one personal loan and one credit card, yes, sir. Okay. And what does just the consumer debt add up to if you take out the mortgage? Right at $43,000. Great. So that's the number I want you to tattoo in your mind right now. How much money do you guys make per year?

She makes around $50,000. I'm actually on disability, but I make around $19,000. And then I actually am able to do this delivery order thing, so I can make an extra $1,100 a month. So I make around $19,000, not including the $12,000 that's not guaranteed every month.

Okay, so maybe we'll call that 30. Around $69,000. Yeah, yeah, yeah. So 30 for you, 50 for her. We're going to call that 80, and we got 43 to pay off. So now this becomes a little math equation going, how quickly can we pay off 43 and make an 80? Of course, after taxes. Now, focus on the consumer debt instead of the mortgage and go, how much margin do we have outside of our normal bills that we could create to throw at this debt?

Because I'm looking at this going, could you, after taxes, this become $55,000, $60,000 you guys are working with? Yes, sir. Okay. Yeah, right around. So we're talking $5,000 a month. What's your mortgage payment? $1,450. Okay. So once you subtract your normal bills, your basics, we're talking food, utility, shelter, transportation, insurance, do you have an extra pile of money at the end of each month, or are you guys in the red? No.

We're almost in the red, yes. Very, very close to it. Because of all the debt payments? Well, the credit card is the main thing because the interest rate is outreaching. So that's the main thing we're working on. But we can't work on it too much. So basically, every...

ounce of income I make outside whenever I'm doing deliveries or things like that, I throw all that straight towards the credit card because the interest rate is just so high and so little actually goes to the principal, you know, and the rest goes to the interest. So talking about all this, do you see why investing right now is not a good idea? Yes. You don't have any money. That's why I was so curious. Do you know how you could get more money to invest?

Oh. If you freed up all those debt payments, what would that add up to in your life, these consumer debts? That $43,000, free up all those payments, is that like an extra $1,000 a month in your life? Oh, yeah. You could do some investing with an extra $1,000 and no payments, right? Yes, sir. So we're going to get you back to investing. I know you said you're in your 30s.

I'm 33 and my wife's 30. Okay. I'm 34. And let me tell you, you can pop onto our investing calculator and go, all right, we're going to be debt free in two years. And then six to 12 months later, we're going to have a fully funded emergency fund. So you will be what? 36 years old by then? Yes. Big whoop. And you're going to be investing 15% of your household income, which for you guys by 80 grand. So let's say 12 grand a year, right?

Okay. And let's say you're starting with zero. I'm using this calculator right now to show you from age. This is pretty mind blowing. Yeah. I want you to share this because I'm looking at an eye popping number here on your screen. Well, okay. You ready for this? From age 36 to age 60, if you start with zero and that's age 60, most people will work beyond that. 1200 bucks a month.

Because remember, you're going to invest 15% of your income, which is about 15 grand, at 10% rate of return. Like you said, the S&P 500, on average, 10% to 12% since its inception, you would have $1.5 million at age 60.

And that's if you start three years from now, Austin. But can I tell you what most people do? Most people keep fiddling with debt. They're investing 2%, 3%, putting money in acorns and some spare change, hoping they're going to have money one day. Instead, our plan says, hey, one thing at a time, focus on the debt, focus on the emergency fund. Then we can get to investing with a vengeance.

So that's what I want for you. And I think you'll get there in no time, but continue getting that income up. That's a huge part of it. So can I do a little exercise? Let's do it with you. And I'm trying to think of the person who's maybe listening and going, I'm not young. I'm not 33, 34. Let's put an age 50. Okay.

Let's make up. Let's say 50 to 67. Is that fair? Age 50 to age 67. Okay. And let's take a reasonable salary, the 15%. What do you think is the right number? I think 70 grand is the average in America for households. 70 grand. Okay. So we're talking 15% is 10.5. 10.5. Which is, Ken, if you're doing the math at home, going to be 8.75 a month.

So $875 a month, let's say you started with zero. At age 50. At age 50, you start with zero and you invest $875 a month at 10%, you would have almost half a million dollars.

That's extraordinary. At 11%, over half a million. At 12%, you would have almost $600,000. Thanks for doing that because I want people to understand it's not too late. You can really make up some ground. And that's on a very reasonable number there. So really fun stuff. Yeah, most people in their 50s are at the top of their salary. Yeah, absolutely fantastic. It is doable. Great call, Austin. You guys are going to be okay.

Just follow the plan. All right, don't move. Actually, I'm Ken Coleman. I'm George. You're George Campbell. I don't know what's happening. I'd love to be Ken. I know one thing. This is The Ramsey Show, and we'll be right back. Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me. 888-825-5225 is the number. Thrilled that you're with us. Grace is joining us now in Jacksonville, Florida. Grace, how can we help? Hi, thank you for taking my call. You bet.

So I'm calling for two reasons today. The first are my best friends, Alyssa and Brian, completed baby step number two today. So I wanted to give them a shout out. What's their names again? Alyssa and Brian. Alyssa and Brian, way to go. You guys are rock stars. Hello. Absolutely. But my husband and I actually have a question as well.

Could you just live with one car? Is that the plan?

For a bit until we save up to pay in cash for our next vehicle. I think we could do that, yeah. Okay. What's left on the student loans? Well, so far we've paid off $100,000 in total between our cars and the loans, and we have $40,000 left. Awesome. So this will be knocked out pretty quick. What's your household income? Household income is $150,000. Love it. And what's the truck worth?

The truck is probably worth $16,000 right now at the low end. Okay. So if you sell it for $16,000, it'll knock your student loans down to $24,000? Yeah, that's correct. Okay. So it'll just help you speed this up. But it's not going to be a... You're not knocking it out completely. Do you have any other savings?

We have our emergency fund, and that's about it. We're full-blown doing the baby steps. Okay. Because one thing I'm going to mention is while you're having a kid, we call this stork mode. And we tell people, hey, pause the debt snowball. You need to save up and just stack up cash until mom and baby are home healthy so that you have money to cover any unexpected medical expenses. Okay. So I might hold off and save up as much cash as you can. When does the baby do?

The 4th of July. Wow, very exciting. Ken loves that. He loves Independence Day. I do. I'm trying not to break out into the Star Spangled Banner right now. Where's Lee Greenwood when you need him? Yeah, don't get me started. There we go. So I think you guys are on to something here, selling the truck if you don't need it. And I would stack up as much cash as you can. And then at that point, we can sell the truck. We can clean up the student loans and make it $150. Do you guys just have the student loan payment right now? Yeah, that's it. That's our only debt. Okay. Okay.

Awesome. We do have a mortgage. Sure. Well, I think I would set a goal for how quickly you're going to clean up the student loan. I mean, it would be amazing if you could clean up the student loan and have the emergency savings by the time baby's here, depending on what your income is doing. Well, we're tracking having the student loans cleared right about when the baby's here or shortly after. We pay about $40,000 or $4,000 a month. Okay. That's how much you're able to throw at it.

Yes. That's fantastic. Well, if you can sell the truck, clean up the student loans, and have an emergency fund in place by the time baby's here, then I would go with that plan. That's the goal. That's a fun, aggressive goal. Yeah, you guys are on track. That's exciting. Love it. And love the shout out for their friends. That's really cool. That's a good friend right there. That's a great tribe to be a part of, people that are getting out of debt and taking control of their money. Let's go now to Salt Lake City, Utah. Grayson is on the line. Grayson, how can we help?

Hey, so I've listened to your guys' show just a little bit here and there, some videos on Facebook and that kind of thing. And I feel like, you know, it's a lot of times about these big bets and those kinds of scenarios. And me and my wife, you know, we're young. We're just trying to get started. We're both in school and we're trying to figure out the best ways to get into like a routine budget and get started on investing in that kind of thing, you know, setting long-term goals. Cool.

So where are you guys at financially right now? What's the household income? Yeah. So it varies on a month to month basis just because we both work part time and, you know, hours vary a lot. So I, as I look back over the last couple of months, it's probably somewhere between 2,500 to like 4,500, give or take. Okay. And that's your net income or gross? Yeah. Net. Okay, cool. And what are you guys doing for work?

I ref high school basketball and my wife works as a CNA for a senior care center. How much do you make refing high school basketball? It's $62 a game, actually. Okay. And you're a full-time student, did I hear? Yeah. Okay. All right. When will you both graduate? Next spring, if everything goes on track. Okay. And then your incomes will go up after that? Yeah. Cool. And how much debt do you guys have?

The only thing that we have is my car and my parents. They bought it outright for it in cash, and I've just been paying them ever since, and there's about $9,000 left on that. And you just owe that to your family with no real terms and conditions? Right, yeah. Okay. How much do you have in savings? $8,500. Oh, wow. Wow.

Well, this debt's almost gone. Once you got $10,000, I'd pay that off and have the $1,000 left for your starter emergency fund. Okay. And that'll clean up your debt, right? So you both would have no debt at that point?

Yeah. Okay. And then we can begin to build a fully funded emergency fund of three to six months of expenses. So looking at your budget, I would go through all of the expenses, add those up for one month. On a given month, it costs us $3,000 to cover all of our basic bills. Let's have six months. That's 18 grand we need to focus on saving up. Okay. That's probably going to take you guys another 12 months.

Sounds about right, yeah. Okay. So about a year from now, you're ready to invest because you have no payments in the world and you have a bunch of money ready to protect you. That's going to feel good, isn't it? Yeah. And you said you guys are young. How old are you two?

I'm 21. My wife is 19. She turns 20 in a couple weeks. Oh, my goodness. Think about that. 22 and 20 years old, no payments, fully funded emergency fund. You're graduating. Your income's going to go up. Now we can begin investing 15% of our income at that point and really start to build some wealth.

That'd be nice. Yeah, and you talked about starting your marriage on the right foot. Goodness gracious, man. Having no debt payments and an emergency fund is going to help you avoid about 90% of your marital fights. That's the goal. We've wondered, too, though, with both of our work situations, we would really like to get a second car. We've been holding it off, obviously, as much as possible because we don't want to go into debt, but we also like having a savings account that we can...

you know, just have in case we need something. What would you guys recommend in that scenario of, you know, if we need a second car, how do we go about getting one? You need more money. You buy the car you can afford in cash. And if you don't like that car, you need to keep saving and you need to keep living off one car. But those are your only two options. Yep.

Do not go into debt. So one of the things that will help you here is, because we say things like that and you go, okay, I get it. But what you need to start looking at is, what would $7,000 buy me? I'm randomly picking a number. What would $10,000 buy me? What would $12,000 buy me in Salt Lake City? Start shopping, okay? You can go look at used cars, go under $15,000, under $10,000, under $5,000, whatever. And just begin to go, okay, ah.

All right. So now we have a target because it's really hard to chase something that's not clear. And so if we go, okay, I saw a couple of cars and I think, babe, if we come up with 10 grand, we're going to be able to get you a great car or whatever. Okay.

Now we have a very clear goal. So now all of a sudden you go, what must I do to get $10,000 extra in cash? Well, I'm going to be reffing more basketball games or I'm doing something different. I'm selling anything that I've got or whatever. So now we go, okay, we work backwards. It's just reverse engineering. Good $10,000 car, 8 to 10 is going to get us a pretty solid car for us. So that's what we've got to come up with. And so now you have a very clear attainable goal.

That's how you accomplish stuff like that. Got it? Yeah, that makes sense. All right. You're a sharp young man. Congratulations on being in a situation like this with a young married couple, their whole future in front of them, George, and in good shape. Yeah, 21 years old. That's amazing. He's getting this stuff now. If he actually does the stuff we just taught him, he's going to be a multimillionaire forever.

with a wonderful marriage. Oh, it makes me think back to the last segment when you got out the old investment calculator. They are not far from being able to invest and just really reap the benefits. I thought for a second you were about to go coach some basketball, Ken. You're like, hey, this is a good side gig. Love to see Coach Coleman out there. Yeah. I mean, look, $62 a game isn't bad, but he needs more money than that. This is The Ramsey Show. We'll be right back. We'll be right back.

Welcome back, America. You're joining the conversation here on The Ramsey Show. I'm Ken Coleman. George Camel is with me. And we're here for you. 888-825-5225. 888-825-5225. The Ramsey Show question of the day is brought to you by Neighborly, your hub for home services. Neighborly offers a helpful... a helpful...

reminder maintenance checklist. That's not written, right? You could download for free at neighborly.com. And for the more challenging stuff in and around your home, and that's basically everything for me. Everything, George, is an extra challenge for me. Everything's a challenge for us, Ken. Neighborly has local pros to help. Find out more at neighborly.com slash Ramsey. Today's question comes from Jason in Virginia.

My wife and I have taken the FPU class. We have no debt, and we own a home worth $270,000. I feel like the focus of your programs are directed toward people who live in upper middle class. We live in the country. We homestead. We grow a lot of our own food, and I work full-time and side jobs. My wife cares for her elderly mother full-time. We hire assistant care to give my wife one day a week to get out of the house. But when I look over the list that I'm supposed to be living up to, I feel as if I have failed."

I've never worked a job that has a retirement plan. I've never had a large income. I feel God has blessed us, but my present retirement plan is work till you die. Wow. That's a strategy. Well, let me say this before you break the money part down. You know, I believe we were made to work, and I think that there's certainly...

In the older season of your life, you certainly want to downshift, yes, but not doing anything, working to a point to keep your mind active is certainly helpful. So I understand. We were talking about this the other day, Stacy and I, with our retirement planner, and he's like, Ken, you're going to work until you're 70. And I go, 70? Yeah.

Like, I want to be putzing around, driving around, still putting a suit on, trying to get myself together in the morning to go do something, speak, communicate, something well into my 70s. So to that end, I don't want to poo-poo this idea, but there's a cynicism to it. Yeah, something's off here. Or I'm going to have to work until I die, which is different. Yeah.

So he says he's taken FPU. They have no debt. They have a home worth 270. He says he's never worked a job that has a retirement plan. Let me make it clear to everyone out there. Just because your job doesn't have a retirement plan doesn't mean you shouldn't be investing or that you can't invest. There are lots of ways to do this if you're self-employed. There's SEP IRAs and solo 401ks.

Anyone with earned income can contribute to a Roth IRA or a backdoor Roth IRA if your income's too high. And so there's no excuse to just not be investing. There's even taxable brokerage accounts outside of retirement that you can just shovel money away to grow with compound interest. So I don't like this idea that, well, I don't have a retirement plan, so I don't invest. So we need to start. I don't know how old you guys are. It doesn't say here. But if she has an elderly mother, it tells me they can't be that old.

And so I would get on the ball here and start investing and start having a plan to where you get to work, but you don't have to work. Yeah, I love that. It's a very different mentality. Yeah, great advice. Thank you, Jason. Get your chin up a little bit. I just want to address something very quickly. Our baby steps are not in any way designed for upper middle class. I do want to address that. I would say they work for all classes. And let's not forget, by the way, that...

There are more six-figure earners in America right now living paycheck to paycheck than any other time in American history. So that's upper class, upper middle class, middle class, and down. Now, we see the stories. We see people who – now, when they start the baby steps, they tell us, yeah, we were making $40,000, $60,000, $80,000, and we did side jobs, and we got our income up, and we got the promotion, and we switched careers. All of that's going to help you get to that six-figure household level because

But the average household in America is 70 grand. Yeah. And you can do this plan making 70 grand. That's exactly right. It's just discipline and it's just understanding the baby steps that they work together. And once you get momentum, we've seen this, what's the latest data on people that take FPU? How much they are able to pay off and save over that nine-week period? Oh, I believe it's like an $8,000 turnaround between the debt paid and dollars saved. Yeah. And see, here's my point. Once you really get this system,

And you begin to experience momentum, right? Momentum may look like getting that first $1,000 for some people. For others, it's knocking out two or three of the debts in Baby Step 2. But it's kind of like, you ever had a Pringles, George? Oh, my gosh, yes. Have you ever just had one Pringle?

No, once you pop, you just can't stop. That's the tagline. That's the tagline. And so same thing. Once you get going in the baby steps, the momentum just builds and builds and builds, and it's doable. That's so true. Well, other plans out there, Ken, it's like the financial plan is like cottage cheese. I'm like, I wouldn't even take a spoon of that. It's not interesting to me. It's not. Who wants cottage cheese? Don't even know what's in there. I don't want it. Too much cottage. That's it. Let's go to AJ, who's in Buffalo, New York. AJ, how can we help?

Good. How are you guys doing today? Good. Are you in the Buffalo area?

Well, not at the moment. Currently, my wife and I travel for work, so we're kind of up and down the East Coast right now. Well, you know what I was thinking? I'm a big football fan. I was looking at the playoff game last week, all that snow, and just insane what you folks deal with up there. You guys are incredible. Yeah. We get like eight inches here, and it's like apocalyptic. You guys? Yeah. It's a Tuesday. No problem. Yeah, it's a Tuesday. So how can we help, A.J.?

So right now, my wife, she's got work. I just picked her up and we're kind of going back and forth on the two paths we're looking at right now. We're looking to settle down, start a family. You know, we don't want to wait too much longer. You know, we just turned 31, both of us. And right now we have either the path of settling down, getting my wife a new job because she is a traveler and or,

Buying a house, settling down, whatnot, and or we have been given the option to purchase a fitness center. And we're trying to figure out which financially is going to make most sense for us at this point. Tell me about the fitness center. Before we get to a job for her, what's the fitness center situation?

So I previously come from a fitness background and whatnot, and it's always been my goal to potentially down the road at some point own a gym. It's kind of something we've always toyed with, with the option, if it's something, you know, maybe like a passive income source or something, you know, down the road for us. And we kind of got given the option to potentially buy a gym and we

We would need to take a loan out on it. So we're trying to figure out if that is the correct move for us. It would be an owner-operator gym for us, so my wife would take over that position as a manager there. Is that gym profitable right now? Yes. How profitable? So overall net as far as cash flow, probably talking like $250 a year. Okay.

And how familiar are you with the ins and outs and operations of running a gym? Not super familiar. Yeah, I got warning signs. Yeah, I got warning signs because of two things. Number one, how much would you have to take out? What would be the loan amount? About $500,000. Yeah, that's crazy to me. You have no experience at all.

It's not spitting out a lot of profit. $250 is pretty low margin. And you said passive income. No chance. Running a gym is about as passive as running a marathon. It's just not a passive income model.

And so there's just a couple of signs. And again, I'm not, AJ, in any way trying to be unkind or I love the entrepreneurial vision. I don't want you to take, of course, we don't tell anybody to take out loans. So the answer on that is no. But it's just not a good business to get into, given the fact that you have no experience in it. And you're thinking it's a passive income model.

I'll give it back to George here, but I would rather your wife go get a really good paying job and let's forget about gym ownership or owning any company right now that we have no experience in at all. George, is that too unkind? No, I just, I think anytime we have, we're presented with the option or the opportunity to go out there and do something.

to go half a million dollars into debt. I go, red flag, red flag. Yeah, yikes. I would pause and go, how do we do this the right way? How do we cash flow this? This might be a plan that you do 10 years from now when you can save up that kind of money, but we just had a call this week, AJ. They took out 200 grand in SBA loans, the business failed, they're working regular jobs, and they're screwed now. They're freaking out. And half a million is over double that. True.

So you've got to think about the what-ifs and not just get starry-eyed about what could be. Yeah, save up cash. If you want to get into business, save up the cash to start it the right way. Save up a lot of cash to buy something that's already profitable. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me. The phone number is 888-825-5225. If you want to join us for taking your money questions, your questions about your work, your income, that big shovel that we've called it for decades. Let's go to Michael now who joins us in Sacramento, California. Michael, how can we help? Hey, guys. How's it going? Good. How are you, sir? Doing good. Better than I deserve, as David would say. There you go.

Hey, so quick question on specifically baby step number six for in terms of paying off the house.

We have a pretty low interest rate at about 3.375. So that being said, does it make more sense to put all the extra monthly payments towards the house, like installments? Or I was curious about maybe throwing it all in a high-yield savings or an index fund or something, and then just getting up the lump sum and kind of paying it off in one go. Yeah.

Great question, Michael. And I love that you're actively trying to pay this house down. And we get this question a lot right now because people do have these lower interest mortgages, you know, sub 5%, and their savings accounts are making 5%. So they're saying, like, why would I even pay off the mortgage? But your question is, should I sock away the money in the high-yield savings and at the end of the year throw that at the mortgage? Correct. Correct.

So mathematically, I'd have to be looking at the amortization schedule and get super nerdy, but you can do that with your own numbers. I don't think it's going to make any mathematical sense to do that. Like the spread just isn't worth it for the $100 because your interest on your mortgage payment is going to be calculated monthly. So the sooner we knock that principle down, the less interest we're going to pay every month. And you'll notice...

The interest is sort of front loaded with that mortgage payment. So when you first start paying down the mortgage, you're not making any progress because most of that is going toward interest. So the sooner we can start flipping the scales here and getting most of the money going toward principal, the less interest you're going to pay, the faster the mortgage is going to get paid off. So I'll tell you what I did. We just put extra money on top of the principal payment every single month.

So once a month, if it was on the first and the mortgage was two grand, let's try to put an extra grand that month on top of the principal. And so that I think is the best and simplest method with the least amount of brain calories. Okay. That makes sense. So even if we were to be able to get an index fund or something and even pull it up from like 5% to say like 10% or whatever, you would still just suggest paying it off monthly and not going through the hassle. What's your time horizon for this? Okay.

Well, so I have my salary is about $115,000 that I get paid monthly. And then I have a side business that I also get about $3,000 to $5,000 on that. So right now we're kind of in the space where we can live pretty comfortably on the salary and not touch the side stuff as much. So like I said, it varies. Some months it's two. Some months it could be three or five or seven or whatever. So the thought was to just put any of that extra $12,000

towards, you know, whichever way we decide to go, put that towards the mortgage.

Um, and so we owe about three 30 or so. So I was kind of doing some of the math on it. And, um, you know, if we average out at like three grand a month extra that we're paying, I think it's going to end up being about like a five or eight year, maybe a time span. So it's going to be a minute, you know, cause we're not going to get it paid off right away anyway. So that's where I wasn't sure if, you know, long-term could that interest start kind of building up and working in our favor versus, uh,

Sure.

So I would just do it every single month instead of waiting in a lump sum. And the other thing that happens is you have this money sitting in an index fund and an investment account, and all of a sudden you go, well, we could really redo the kitchen with this money. Should we really pay it down the house? That's what happens psychologically speaking, Michael. That's just human nature. So I like the forced savings plan of just saying every single month, whatever extra we can muster up, we're throwing at the mortgage.

And it's going to be more motivating too, because you're not going to see that mortgage balance go down by doing it the other way. Definitely. Yeah, that makes sense.

So that's what I would encourage and it's what I've done personally. And it's how my wife and I have paid off our mortgage. And I have no regrets of the what ifs of what if I invested that money or put it in the savings account to make the spread. It's not interesting to me. Well, the point that you're making here is that a paid off house or investing in your house by paying it down is a much safer play than even an index.

fund. As good as that return is long-term. Well, and think about it. If you pay off the mortgage faster, now we free up the mortgage payment to now invest in the index fund for the rest of our life. Both hands. Yeah. So people think, well, I would rather invest. We've still been investing 15% of our income the whole time you're paying down the house. That's baby step four and six. Love it. So great question. Let's go to Hunter now in Salt Lake City. Hunter, how can we help? Hey guys, thanks for having me. Sure. What's up?

So I have a career question. So just a little bit of background. I finished a degree in healthcare management within the last year. And just recently, last month, actually, I accepted a position to manage a primary care clinic in Salt Lake. And honestly, it's just kind of not feeling right. I've been working in healthcare for the past three years or so. But I'm just wondering if it's a bad idea for...

to look into a career change after only being in this position for about a month. Might be. Let's figure it out. What's giving you pause? What's making you question this direction? You just went to school for this. You got a job in this, it sounds like. And a month in, you're going, whoa, what is going on there? Give me the roughest part of this that's causing you to question it.

Well, honestly, I don't feel like I've ever been that passionate about the work. Like when I was working, I was working in a separate clinic before. And honestly, I really liked the people. And when I was going to school for it, I liked the people I was going to school with and everything. I just don't feel like I'm necessarily passionate for the work. And this clinic that I've just started at just doesn't have a very good culture. Okay. So we don't like the people.

It's okay to say. Yeah, that's part of it. Well, then I would certainly not make a pivot out of this career lane just based on that. It's kind of like saying, I've been married a month and we had our first fight. I think I'm going to want a divorce.

Like, whoa, wait a second here. Like that's part of the deal, right? There's going to be some days where you don't love your wife so much, right? But you choose to love her anyway and vice versa. So I think in this situation, it would absolutely be premature, right? Because, because, but I will tell you, there's a, what I would call a yellow flag waving. The yellow flag is that you were never really passionate about this work. Anyway, sounds like you chose this as a safe professional path. Is that about right?

Yeah, that's right. Well, I will tell you the odds are that eventually we're going to make a pivot anyway. But let's kind of like stay still for a moment and realize that, okay, I'm an adult.

I made my bed. I got to sleep in it. And either I stay in this healthcare side of things, the healthcare management side of things. I move maybe six months from now, a year from now to a better culture so that I don't look like a flake because I got to keep this resume and I got to keep this professional image intact so that I can keep climbing. You understand that? Yes. Yes. And now I'm going to figure out, okay,

What is that pivot? Let me do the hard work now that I should have done in college. I'm going to give you, by the way, two tools. I'm going to give you my Get Clear Career Assessment, and I'm going to give you the book From Paycheck to Purpose. They go together. The assessment is like a compass, and the book From Paycheck to Purpose is like the field guide to climb the mountain. Does that make sense? Yeah, it does. Yeah. So I'm going to give you those two resources because here's what you're trying to figure out. How can I use what I do best? That's your talent.

To do work I love, you mentioned passion. That's what that is. To do work you really enjoy. To then produce a result that you care deeply about. This is where meaningful work comes into play, right? I see that I enjoy the work, but I also am very, very proud and I feel very significant because of the result that I'm creating. That's the answer. To use what you do best, to do what you love, to produce results that matter. Do you get that?

Yeah, that sounds great. That, my man, is what I'm all about helping people figure out. I'm going to give you those two tools. Hang on the line. Austin will get them to you. Now listen, here's the key. Stay where you are now, okay, until we can figure out where we want to go next.

Right now you're just dealing with a bad culture and you're just going to be a big boy. Put your big boy pants on and learn how to deal with it. And if we make a temporary move that leads us to a long-term play, that's the goal. George Campbell, good hour. Hunter, thank you for the call. James Childs and the crew, thank you guys. This is the Ramsey Show.

Live from the headquarters of Ramsey Solutions, this is the Ramsey Show where we help you win in your life, specifically with your money, in your work, and in your relationships. The phone number is 888-825-5225. He's George Campbell. I'm Ken Coleman. Thrilled that you guys are hanging out with us today. George is our money expert and the author of a brand new and soon-to-be best-selling author status. This book is

It's called Breaking Free from Broke. And, you know, look, I like to make predictions because, honestly, George, it's because I don't mind being wrong. You know what I mean? That's fair. I hope you're not wrong. I don't think I'm going to be. I think it's going to be a bestseller. I think it's going to be a number one. I'm going to project that. Wow. We've got another week. We're wrapping up the first week of pre-sell. So here's the deal. Yeah.

If you're new to the program and you love George, let's be honest. There's no way that you're not new to the program and you don't love George. He's just that lovable. This is the new book, Breaking Free from Broke, The Ultimate Guide to More Money, Less Stress. By the way, you can get it at RamseySolutions.com or anywhere books are sold. And George, give me 10 seconds on the book. Can you give me 10 seconds? I believe the system is designed to keep you broke.

And it's not all of your fault, but it's your responsibility to rise above the system and live with more margin, more freedom, more options, and totally unplugged from this toxic money culture of debt. Yeah. It's going to help a lot of people. So get it now, breaking free from broke, ramsaysolutions.com, wherever books are sold. All right, let's go to Cincinnati, Ohio. Jack is there. Jack, how can we help? Hi, how are you guys? Good. How are you, sir? I'm good. I wanted to get your input on...

a

impending house purchase for my family and I. We have been renting for right now, and we are going to be moving for a new job in a few months. And we've been looking at houses in the $600,000 to $900,000 range. But I feel like our financial situation is a little bit unique. And so I wanted to make sure that my calculations for that being a reasonable budget are correct. Okay.

Lay it out for us. So the bad news is I have $250,000 in student loans. The good news is I've got zero credit card debt, zero car debt, and I use that student loan to become a doctor. Oh, what kind of a doctor? Let's just keep it to one of the higher paying specialties. Oh, okay. Very nice.

I landed my, I'll call it dream job. And so in a few months, we'll be moving for that. And my new salary is going to be $600,000 a year. Congratulations. All right. Fantastic. That's the good news on top of the $250,000. We still get the $250,000. Yeah. So obviously, we're planning on trying to pay that off in a year or less. Good. Wow. Good for you. And so I wanted to...

make sure that we buy a house that will not inhibit our ability to pay that off as fast as possible. So why not? I'm going to lay out a different option, just option B right now or C, where you rent for a year where you're going to move to, and you use that year to pay off the debt, to get an emergency fund, to build up a down payment. It might even be two years of renting. What would be wrong with that move? Yeah.

We have considered that. The main reason why we don't want to do that is because we have been moving quite frequently for the last decade. It's kind of how things go with the medical training process. And so we are sick of moving and, you know, just we're longing to be able to settle down somewhere and get a job.

and not have to uproot our lives every two years. Can I push back on that? That's the main thing. Let me push back on it. And first of all, I understand it. Totally get it. Ken has done some moves in his day. I have. Jack, I totally understand. But you've done it this much over the last decade. You can do it one more time.

And I think that's what George is proposing. You can even hire some of those high-end movers that move all of, like, they'll unpack the junk drawer and put it back in your new junk drawer. Yeah, I love that. But just even higher up the ladder on the priority list than that. I love that George is right. You can get great movers. It's not that big of a deal. However, you're moving to a new area, starting a new job. I would not put the added pressure. Do you have kids?

Yeah. Yeah. See, Stacey and I, when we moved out, so let me tell you, so you know that I'm saying this from experience, this is what I would do. When Stacey and I moved back here nine years ago, we had lived here for three years, no kids. We move away to Atlanta. Dave brings me back to join the team here nine years ago. It's going to be 10 years in June.

And we rented for two years because this time around, even though we'd lived here three years before, it had been 11 years in that gap, George. And we had three kids now, two of which were school age. One was going to be starting kindergarten. And we just said, you know, we're going to rent and resettle and get a lay of the land. And I think even more so because of all the moves you guys have made in the last 10 years.

I would rent. I like George's suggestion for two reasons. One, financial. He's right absolutely about that. Two, gives you guys some time so that when you settle, you're settled. We are familiar with the area we're going to be moving to, so it's not like it's a totally blind move.

All right. You know what? I still go with George. We're not considering doing that path. I was just curious if that number... But you're considering taking on potentially a $700,000 mortgage or more. Yeah. That's going to put you a million or more in debt.

So it's going to be harder to pay off the student loans. Rent is going to be cheaper no matter where you're going when you're carrying that kind of debt. And I recommend you do this with a 15-year fixed rate mortgage where the payment is no more than a quarter of your take-home pay. Now, that parameter you won't struggle with because of your amazing income. But I also recommend you guys save up 20% down.

So think about your next goals. We got to clean up the debt. We need a fully funded emergency fund of six months. We need a down payment of 20%. We just have some priorities here. And so that's why I don't recommend jumping into the house. You'll be there in no time. And I understand moving one more time is going to be a pain. But when you do it our way, it's going to give you so much more peace and margin, a smaller mortgage that you're going to knock out more quickly. And then you can afford all the home renovations and emergencies and the HVAC and all that stuff will just be a slight inconvenience. Mm-hmm.

That's our take, Jack. That's probably not what you wanted to hear. What are you thinking? Before you called us, what number were you thinking about spending on a house, which means lending? I'm sorry? What were you thinking, price-wise, when you called us, that you thought, well, I think I can do this. Let me call George and Ken and see what they think. What number were you putting on the house? The average of houses we've been looking at online has been around $700,000.

Well, what would that put you? How would that strain you? Would that strain you at all? Or do you feel about that $700,000? How much could you put down? I think that we would be able to... We would not be able to put much down at all. So you move in with no equity whatsoever with a bigger mortgage. I mean, we're talking... If you did $700,000 with nothing down, you're talking $7,500, $8,000 on this mortgage every month where you could rent for two or three in a nice place.

So I'm doing that while you clean up this mess. But you'll be there in no time. You make over $600,000. It's mind-boggling. It's going to be a blink of an eye before you're in that house. Yeah, I agree with you, George. I think, Jack, if you can just trust George's advice on this, I think you're going to come out feeling so much better on this deal. You'll have a great house, no debt. This is The Ramsey Show.

You're listening to and you're watching The Ramsey Show. We're coming to you from our worldwide headquarters in Franklin, Tennessee, just a little bit south of Nashville. I know you like when I say worldwide. I just thought to myself, yeah, this is the international headquarters. If you'd like to, you know, hype it up a little bit, it is. There is no other age here. Well, to be fair, people visit us from all over the world now, which is really fun. Thank you. So if you're around the Nashville, Tennessee area, make us a part of your trip. We'd love to have you. We come out in the lobby and...

Sign books and take pictures, and you can get free coffee and baked goods in a mug, and make it a whole experience for you. We really do. It is a lot of fun, and we have some brave souls out here today. It's a winter wonderland all of a sudden in the Nashville area. So, you know, glad you're with us no matter where you're listening, how you're listening, or watching. 888-825-5225 is the number. Let's go to the Big Apple. Christopher joins us there. Christopher, how can we help?

Yes, hi, sir. I appreciate you guys answering my call. I'm just kind of in a situation and I want to learn how to kind of start my life independently and also manage my finances at the age of 23. Okay. Can you be more specific? What challenges can we help you through now at the age of 23 that you're thinking through?

So I was living with my father from the time I moved in from the ages of 15 to 22. We were just living in an apartment together. He passed in September of 2022, so I was 22. Oh, so sorry for that loss.

I appreciate that, sir. Thank you. And pretty much from there, I kind of stayed in that apartment for a while, just rent-free, and I eventually got evicted. And I had to move in with my uncle. So that was back in April of 2023, so not even a year ago, which I'm going to call it. So I've been living with my uncle, so my dad's brother, now for...

About eight months. And he also has his health ailments as well. Like, you know, he has COPD. He's been on oxygen for 26 years. He's 70 years old, so he's limited. His time is limited. And basically, you know, he's actually in the hospital right now. It's just me and him living in an apartment. He's going to be okay, but I just want to...

Kind of just plan for the future. What are you doing for a living? As of right now, I'm just a shift supervisor making $18 an hour. It's like a fast, casual restaurant here in New Jersey. Okay, what are you making per year? I couldn't tell you. I would assume it's a very low income, such as, I wouldn't say it's more than $25. Is this part-time then? Yeah.

No, it's actually full-time. It's 18 an hour, 40 hours a week. Okay. So you're making about 36-ish grand gross pay, but one of the things I want to come back to is coming back to 25. Yeah, Christopher, the fact that you don't know means you don't have any kind of budget, and that's going to hold you back no matter what the professional goals are. We'll get to that. So what do you want to do? Do you have any sense of the direction that you want to take? I do, 100%. What is that?

I've never been too interested in, you know, any type of profession. The only passionate thing I've ever really found in my life was health and fitness. So I have a license as a, like a certification for it to be a personal trainer through this program called NAZM. I have that under my belt. Can you go work at a gym and work your way up to being personal trainer at the gym?

Sorry, what was that, sir? Can you go work at a gym, even if it's for $18 an hour right now, to get into that field? Yeah, of course. Yeah, 100%. What's keeping you from doing that? I don't know. I think nothing really aside myself. I think I took the loss, you know, a year and a half ago, kind of rough, and it should have been, you know, affecting me in more ways mentally than I realized, and it kind of...

You know, because as a personal trainer, it's mainly predicated upon sales. Yeah. So you have to go and talk up to clients and, you know, you can't be shy. You have to be extroverted. And yeah, I'm sure you guys get the point. Yeah. So how can we help you today? How can we help?

So basically, sir, I have 45 grand-ish in an estate account left behind by my father. I'm very thankful for that. And that's essentially, I have the ability to work. I'm willing to do whatever kind of jobs I need to earn money. Do you have any debt? No.

The only debt that I know of that I have is $1,500, so $1,500 in credit card debt. And maybe I took out a few years ago to try community college, some fast-flow loans. It's like kind of lower income loans.

household, you know, to send you to community college. I might have, that might catch up with me in the future, but. Christopher, here's what I want you to do, because you don't really know what's going on. Go to annualcreditreport.com and you can pull your credit report for free from all three bureaus. And that's going to tell you exactly what you owe. You need a very clear picture right now, instead of just thinking and feeling what's going on.

And then use that money that your father left you to clean up the debt and get an emergency fund in place. I think long term, you need to get out of this situation and rent on your own with some roommates because I know it's New Jersey. It's expensive. But I would rather you rent with a guy your age who's on a similar path versus this situation. Man, you got to grieve. You've had a lot of hard stuff happen. And I think it's sort of just held you back. Yeah.

which is fine, but we need to form a path to move forward. And that means cleaning up the deck, get the emergency funds, switching our career. We got to get some mojo back, man. Yeah. Christopher, you said something a minute ago that I want to challenge you on because you called today. And so I want to honor your time and the fact that you've put yourself out there. You said, I'm willing to work to do whatever. And I don't think you are. I think you're allowing your fear to,

and doubt may be a combination of both. You may have fear hanging out on one shoulder and doubt hanging out on the other. And fear, by the way, is worry that something bad is going to happen if I move forward. Doubt is I don't believe something good will happen if I move forward. Very different, but they gang up on you. And the fact that you've done the hard work to get the licensing, I understand that building a successful personal training business is sales. Yes. But

But it doesn't mean you have to start there. It doesn't mean you have to put all your eggs in that basket. And maybe just as George said earlier, I think it was a simple piece of advice, but I think it was profound. Just go work at a gym, man.

And just get your confidence up, right? And don't rely on being self-employed per se if you can get one of those jobs. Just get in the industry, get in there, remind yourself why you love. You said the only thing you've ever been passionate about is the exercise and the nutrition, all that goes into that. You need to get in that environment because what that will do is get your heart reengaged and give you that, what I call the juice, but it's just that motivation, right?

That you need to overcome the fear and the doubt. That's what's missing right now. Is you're not in that environment to where it is igniting your heart and giving you that real chemical reaction that the brain sends to the body. And you're just kind of stuck and you've had a tough time. And we get that and we honor that.

But you need to get in the zone, man, where you want to be. Get in those places. And then over time, you're going to start to get more confident to go, okay, I see what it's going to take to build a little side business here. And I start my physical training business as a side hustle. I don't put all my eggs in that basket. That's what I want you to hear today, Christopher. And I think that you've got this blanket on you of fear and doubt. And the only way to pull that off is to actually step forward and

One little step at a time, much like we teach in the baby steps with get that $1,000. You know, baby step one, I go, oh, I accomplished that, George. I just think he needs to get going. Yeah. I mean, post in a neighborhood Facebook group and go, hey, I'm doing mobile fitness. I'll come to you with a little bit of equipment and I'll show you how to do this. That's a great way to get started at no cost to you. Yeah. And get some clients that way and then work at the gym and start to make connections. Yeah.

Hang on a line. I want to send Ken's book, Proximity Principle. That's what I was thinking. Yeah. Great minds think alike. It's unbelievable. What's he going to get out of that? He's going to get the playbook on how to make connections, getting around the right people, getting in the right places, and opportunities show up on his doorstep. That's what that book does. Hang on the line, Christopher. This is The Ramsey Show.

Welcome back to the Ramsey Show. I'm Ken Coleman. George Camel joins me. 888-825-5225 is the number to jump in. And George, you told me during the commercial break you were excited to tell me about something. What do you got on your mind here? This is very exciting. I never know what you're going to hit me with.

You like steak? I love a good steak. This has to do with steak in a roundabout way. All right. So Taste of Texas. What is that? It's a restaurant in Texas. I have no affiliation. They're not a sponsor. But they posted on Instagram and they tagged us. And here's the post, Ken. Our team's going to throw it up if you're watching on YouTube. Oh, they tagged us. They tagged us. And here's what happened. Here's the post. Okay.

Today we celebrated 17 staff members who completed Dave Ramsey's Financial Peace University course. Nina and I had a drawing, and two winners got $5,000 each to pay off credit cards and get out of credit card hell. Laura and Jason were the lucky winners. Employees were encouraged to pay the $80 for the course out of their own pockets, then submit a completion certificate for reimbursement of $250. I see what they did there. A three-to-one bonus over the cost of the course. Wow.

The names of the 17 who completed the course went into the drawing for the two prizes. So proud of them. And they threw up a photo. Oh, those are the two winners. That's amazing. But it made me think, Ken, because you're in the workspace. Yeah. Imagine if every employer across America said, hey-

we want to do this for our team. We want to put them through Financial Peace University, or if you're an HR, an employer, SmartDollar is the corporate version of this. How encouraging is that to your team to go, hey, we believe in you. We know you guys have money goals. We're a part of that because we're providing income for you and your families. We want to see you win with money and pay off debt. Well, I'll tell you, that's incredible. It's a benefit because here's what happens. If you as a leader or manager

However you want to do it, Taste of Texas was really innovative. I thought pretty creative in doing this. To not cover the cost, but skin in the game, you cover it. When you finish it, you'll get more than you put in. I love it. It was a little bonus incentive there. I thought it was great. What happens is the end result of that. And I want you to remind folks again, give us the averages because you know it off the top of your head. People go through the nine-week course of Financial Peace University and

And they're saving how much and paying how much off? I believe they pay off $5,700 in the first 90 days and save $2,300. So it's an $8,000 turnaround in three months. All right. So you take that number.

And as a manager and as a leader, you help your team member get to that point in their life. And not just that initial turnaround. I don't want to get locked in on that number, but it's the momentum that comes out of that. That becomes an amazing employee benefit. And they're going to be more engaged because they're not stressed out with money. So that leads to higher productivity and higher profitability. There's higher morale.

It's a team building exercise. But all that leads to higher productivity and higher profitability, which you asked me the question. Bottom line is it's a great business growth strategy.

And in a day and age where people are moving on quicker, they're not as loyal because they don't get treated well, candidly, it's a great leadership play. Well, and it says, I believe in you. It really does. And when a leader, a company says, I believe in you, I'm going to be more loyal to that company and more, I'm going to feel like I'm going to stay longer. So where is this taste of Texas at? It's in Houston. Houston.

Oh, I was just in Houston for the national championship. So I don't know if they'll— I'm sure— I hope they end up hearing about this because I started looking at their menu, Ken, and I'm now craving a tomahawk ribeye. Can you imagine me downing 38 ounces of ribeye? Let me tell you something. It would take you three days to eat 38 ounces. You're a little man. I think, like, the TV networks would be calling me saying, we want to start a new series called Little Man vs. Food. What?

Way more impressive. I know that 38 ounces would give the meat sweats to just about anybody. Taste of Texas, congratulations on great leadership. George and I can be bought. So this is not an endorsement in any way, but if you'd like to send a gift card the next time George and I are in Houston, we would love to come and

We'll show up. And sample the food and put it on Instagram. And if you want to check out SmartDollar, you can do that at SmartDollar.com. It's our financial wellness benefit that you can offer to your team. We have huge companies that do this, Ken. That's exactly right. U-Haul and Costco. It's one of the greatest personal benefits that a leader can give to their team member is to give them financial peace. It's a huge, huge payoff. By the way, before we move on, have you ever had a tomahawk steak? I did at my bachelor party.

Oh, that was the one time. How much did you eat? Did you pull it up by the, did you handle it like a man? Well, they ended up, they brought it out and then they took it back and cut it for me to make it more palatable. Now see, if you're going to eat a tomahawk steak, you got to grab it and just chew on it like Fred Flintstone. That's what you got to do with that. I don't care where you're at. That's what you got to do. At least one bite. Wow. I don't care if it's a highfalutin, you know, hoity-toity five-star steakhouse. I'm grabbing that thing.

Like Mike Gundy, the head coach of Oklahoma State, said. I'm a man. You got to grab it. You lost me when you started talking about football. You should know better. It's true. I'll explain it to him on the break, folks. If you want to talk Madonna, I can do that all day. You can talk Madonna? Not much. Me talking to you about college football is like someone giving me maybe like a crash course on the planet Pluto. You know what I mean? Which doesn't even exist anymore.

Pluto doesn't exist? I think they took it out of the running in the textbooks. That's not true. It exists. It's just not classified as a planet anymore. Conspiracy theory. It's not real. James, are you for real? I didn't know this. This is pretty old news at this point. Yeah, I'll send you a video article. This is decades old. Okay, I'm not kidding you. This is breaking news to me. I had no idea. Please tell me Uranus is still a planet. That one's good. Yeah. We're safe. All right.

All right, let's move on. Erica is on the line in Minneapolis. Erica, how can we help? Hi, how are you guys? Well, I hope you're okay, given that last two minutes you had to endure. I'm sorry. I apologize. You're never going to get that back, but I hope you enjoyed it. That's all right. A little lesson for us all today, I guess. Yes, absolutely. How can we help?

I'm just calling because I've got a question in regards to what I'm being paid. I currently work in supply chain in the Minneapolis area, and I've been working as a buyer for about...

Seven years now for raw materials and distribution. And I have to go for my annual review coming up here soon. And I'm just a bit nervous about what kind of percentage I'm asking for when looking at the duties required to move up to the next phase in my career. Okay, let's break it down. So what are you thinking? Let's just, let's fast forward to this meeting with your leader. What are you thinking you want to ask for percentage wise as a raise?

At least 8% to 10%. 8% to 10%. What's that based on?

I would just say just based on the, like, looking at ranges on salary.com for what I'm being paid. Are those ranges, could you sit there in front of me, let's forget the boss for a moment, but could you explain it to me right now to show that those are pretty close to apples to apples as it relates to your experience, your skill set,

And then the industry itself, do you feel like that's pretty fair to say that you're being paid 8% to 10% less than you should be? Yes. I mean, in the industry, the ranges go from anywhere from $66,000 to $82,000. Okay. Where are you?

Uh, I am total compensation for the year without any health benefits or anything is I'm right at 66, five. Okay. So you're on the low range, low end. All right. That's really good. So is your, do you have some anxiety over how to bring this up? Is that what you're asking?

And a bit of anxiety and just when my supervisor gave me the position to move into a buyer's three. And it seems that from the way I'm looking at it and the work I'm putting out every day, the only difference between a two and a three is that it says you have to have expert knowledge in the industry and materials. And you have to have a bachelor's degree or three to five years of experience, which I do have both of those.

Have they brought up compensation? Yes, we did. We did have a quite a few layoffs this year. So I think that's what's giving me a bit of anxiety is pushing back with people. The other buyer that I work with has said that she got five percent off.

Although she's only been there about a year and a half. So I'm just, that's good news for you. That's good news. Given that there's been layoffs. Okay. And in 30 seconds, I'm going to give you the playbook for this that I give to everybody. You've got to do your homework. I feel like you've done a good job on homework and you go in and you go, look, here's the industry standard, but you also need to know that your leader is probably not the sole authority on this approval. Probably got to go up. So what you got to do is not put them on the defensive and,

You've got to make the case and say, hey, I'm on the low end of the range based on the industry standard. I like being here. I want to be here. I want to grow. And so this is where I'm at on the range. I certainly like to move up on the range. What can I do to help you? What's the measurement? And that's the conversation. It's a posture of humility and hunger, not demanding. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me, 888-880-8000.

825-5225 is the number to jump in at 888-825-5225. Let's go to our scripture of the day. It comes from Isaiah 54, 17. When God is for you, no weapon formed against you will prosper. Our quote, now you don't know who this guy is, George.

You don't know that yet. Who is it? Okay. You assumed that. You know what? Good call. I apologize. I stand corrected maybe. John Wooden, the great coach from That's Where You Lost Me. Ha!

I just know he's got a lot of great quotes. I'm impressed. UCLA, I'm going to give you partial credit. UCLA, University of California Los Angeles, for those that are keeping score at home. Was not on my bingo card. He was called the Wizard of Westwood. 11 national championships. This is what he said. Failure is not fatal, but failure to change might be. And I think that has a tie-in to financial failure.

Oh, 100%. I mean, Dave Ramsey's story. Going through bankruptcy in the 80s to building an empire and helping millions with their finances. No shame in your game is what we like to say around here. So good stuff there from Coach John Wooden. Let's go to Aubrey now, who joins us in Houston, Texas. Aubrey, how can we help? Hello, how are you? We are having a blast today. How are you?

I'm good. I'm good. So I was wondering whether or not I should sell 34 acres that I owner financed or just continue to pay it. Wow. Tell us the details on the land itself.

So the land is strictly raw. There's nothing on it. There were cows at one point. It's fenced off for cattle. But right now I don't have anything actual like cattle based on it. It's just completely empty and it's raw land. What would you say it's worth? It's worth about $200,000.

I got a quote from somebody that if I were to sell it, it'd be about $6,000 an acre, but that doesn't include their commission of 6% from the sale. What do you owe on it? I currently owe, as of today, $182,000.

At a 1% interest rate. Okay. What do you think, George? Well, what was the reason you bought the land in the first place? So I had bought the land in conjunction of buying another piece of land that had a house on it. I was newly married, and then in 2021, we started to go through a divorce. So I got the 34 acres, and then he kept the other mortgaged property.

property however my name was on it so it's going into foreclosure here soon so I wasn't sure what I should do because I do have three kids and I gross about 53,000 a year almost 54 but take home is only about 35 34 with all the deductions that come out of my check and that doesn't include like daycare rent vehicle insurance my phone and then I have to have like a lawyer fee and

Basically, monthly I can bring home about $450.

$40, and then split that in half, so it's about $219 to spend on living, and so I don't even have a... Oh, my goodness. Aubrey, I feel your stress right now and anxiety. And for that reason alone, even if this was your dream to have this land and do all this magical stuff on it, I'm getting rid of this land and getting rid of the payment and starting fresh. I agree. You got three wonderful kiddos. You got a lot of life ahead of you, and you're restarting. And part of the restart is we had this dream. We bought this land. Mm-hmm.

The dream crumbled, and now I've got to find a new dream, and that's okay. But hey, Aubrey, you get out of this thing unscathed, essentially, this land, if you sell it now. You owe $182,000, and you'll walk away with at least $182,000 after all the fees? Well, no, not necessarily. So I owe $182,000, and if I were to sell it at about $204,000, and then with the commission, I would probably walk away with between $10,000 and $12,000 after sale. Okay, so yeah, you would net $10,000, right?

Yes. Okay. That's great. That's huge. Depending if I end up having to pay for closing costs or anything. Sure. Do you have any debt outside of that? I have like $1,000 on a credit card, but my tax return is going to come in. I'm going to pay that off. Great. That's good news. And do you have anything in savings? Nothing. Okay. And where are you living right now? Right now I'm cohabitating, so I pay half rent. But I assume you want to get out of there.

Yeah, I do. Okay. So that is part of the reason I would put a fire under your belly to get rid of this property. Get out. What's the situation with the kiddos? They live with me full time. I pay for everything. I haven't even got my final decree yet. Okay. So nothing's finalized. Yeah, I don't receive any type of, I guess you could say it's like child support or anything. It's just strictly me doing it all by myself. Do you think that you will get any?

I should be getting around $1,000 a month if my lawyer ends up finalizing. Yeah, that too, if he pays. Is he a deadbeat? Oh, right now, yeah. The fact that you're taking care of him full-time tells me a lot. It tells me a lot, yeah. So we want to move forward, let's assume. Here's my point in asking that question, Aubrey. It's not to add insult to injury here, but...

George, going forward, I would advise her, let's assume he doesn't pay anything so that if he does, it's gravy.

That would be my advice in this situation. I want you to be self-sustaining in that way. So here's my plan. If I'm doing it my way and I was coaching you one-on-one, Aubrey, I was in your shoes, I would get rid of this land. You pocket the 10K. That's going to become your emergency fund. Let's get rid of the credit card debt. Now let's go find somewhere that we can rent for a while with the kids and start fresh. And eventually, I want you to be a homeowner and have this new dream. But right now, we just got to kind of clean up the mess and get some foundation under us as we walk through this

this terrible situation. Yes, sir. Can I ask real quick, Aubrey, about your income? Yes. What are your income possibilities? If you and I were just sitting at your kitchen table and we're going, okay, how could we make $20,000 more, $40,000 more, $60,000 more? What would you say to me if I asked that question? So in the line of work that I do, there is a possibility that I could work like every Sunday and make like $160,000.

So if I'm willing to sacrifice the family time for money, then that's an option. I think in the short term, every nickel at this point helps and the kids are going to understand and you sit down and explain it to them. You're already going through a very tough thing anyway. So, you know, you explain, hey, this is what mom is doing and why.

I think they're just going to be so grateful for you and your sacrifice. It's the kind of thing that they may mention in a speech, you know, graduating high school someday. So I certainly would do that. But I'm thinking bigger than $160. You know, what can we do to expand your income? What's up the ladder two or three levels? Well, in April I'll get a dollar raise, and then the next go-around in January I should probably get another dollar raise. What are you doing for work?

I work in law enforcement. Okay. Oh, okay. Do you have good benefits with that? I mean, the extra jobs that you can work, yeah. Is there overtime? Can you work at a church doing security? I don't know what role exactly, but are there opportunities like that?

So yeah, like working like an extra job at church for security, that's what I usually do on a Sunday is I'll go out and I'll work. Okay, and that's the 160? Okay. Oh, I see. I try not to count it just in case there's a time where I, you know, somebody else takes the job. So I try not to live off that. So are you a deputy or a police officer? Is that what I'm understanding? A police officer. Okay, great. Well, thank you for your service, by the way. Not only are you a superhero as a single mom,

You also are out there putting yourself on the line for the citizens of your area. And so you're an absolute hero. And I hope you feel that. We certainly believe that about you.

Oh, thank you. Well, we answered a lot more than the question, Aubrey. We apologize, but I hope it helps you take the right next step. There's a lot of steps to take, but I hope we gave you the right one right now, which is get rid of the land, get some financial footing under you, clean up all the debt, cut up the cards, and find somewhere to rent on your own and just get out of the situation to some stability and safety. Aubrey, real quick question. How are you doing on your budget? Do you feel like you're strong at budgeting? Need a little help? What's going on there?

Really strong at budgeting. Literally the only bills that I pay is daycare, rent, vehicle, phone, and then of course I have like a lawyer fee just in case I'm sued. And then I pay like $10 for iCloud. Okay. Besides that, that's where I'm at. You are a rock star. She is on it. Well, hey, I'm going to gift you every dollar premium for the next year just to alleviate one more thing and give you one more tool in the tool belt.

But we believe in you, Aubrey, and I hope you believe in you. You're going to get through this and on the other side. Hang in there. Work the baby steps. Keep going. You're going to be great. Sell the land. It's going to give you tremendous relief and take off a huge chunk of debt. George Campbell, great show as always. Always enjoy it. Always enjoy hanging out with you. I want to thank James Childs, our fearless leader, and all the guys in the booth. And you, America, thank you so much. This is your show. This is The Ramsey Show. ♪

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