Make Your Decisions Based on Your Desired Destination
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

Ken Coleman, Ramsey personality, number one best-selling author of the book Paycheck to Purpose and host of The Ken Coleman Show, is my co-host today. Open phones as we take your questions about your life and your money. Open phones at 888-825-5225. James is in Appleton, Wisconsin, starting this hour off. Hi, James. How are you? I'm good. How are you doing, Dave? Better than I deserve. What's up?

Awesome. So I have a question for you in regards of scaling my full-time gig into like an entrepreneurial situation where I work for myself and no longer for a company. You mean your part-time gig? Correct. Okay. And how do you quit your full-time job? Is that what you're saying?

Exactly. Okay, I got confused. Okay, I'm with you. All right. All right, so a little bit of background. At this point, with my full-time gig and my wife's income and the side gig, I make about $360,000 to $375,000 a year in annual income. We completed all the baby steps. Unfortunately, we did fall back into baby step 6B.

And we do own a second home at this point as a lake house. And that is on pace to be paid off at 5,000 a month by 2030. And currently one of the ways that we're really being aggressive and paying this off is with my side gig where I buy and resell video games. At this point, just as a side gig, I have about 200,000 a year of revenue at 85% net margin.

And really just looking at ways to really grow and build that so that I could maybe step into that at some point in time. I need to back up because I got lost in a number there. The $375,000, is that your personal income at your day job or is that household income? That's all household income from all income sources. Okay. What is your day job? What do you get paid on your day job?

About $230,000 a year, give or take with bonus. Okay. So you would walk away from that for something that is currently making 85% margin on $200,000? Correct. So about $170,000. All right. So $230,000 for $170,000. How much do you owe on this lake house?

About $400. Jeez, nice lake house. Now, you said, what are you paying yourself off of the side hustle? I know what it's bringing in. Is that what you're paying yourself, the $170,000? I end up paying myself about $80,000, $85,000 a year. Okay, so how much is your wife making? $60,000. Okay, so there we got the breakdown. So $290,000 between your day job and her day job.

Correct. Okay. Well, do you know how you're going to scale this? I mean, you've done a good job getting it up to, I didn't know, you know, buying and reselling video games to get it to that point of about 200 gross income. What is the next phase to scale that? Are you aware of that or still trying to figure that out?

Well, I'm kind of trying to figure that out. So in my mind, I have a way that I could go big, but it would require about $2 million of investment. And that's just something where I'm not in a spot where I'm going to go into debt for or anything like that. I agree with that. It sounds like a bad idea. Yeah, not an option.

Well, the simple answer to this is, when anybody asks us this question, the simple answer is, well, we want to get you to a point where you are replacing your day job income with the side hustle. And I always like to go a step further and have about six months of that income in retained earnings in the side hustle bank account. So that's the simple kind of on paper because that removes all risk and it doesn't put stress on this side hustle, which is ultimately this thing you really want to do.

And so that's a good emotional and financial decision. So that's the straightforward answer. But you've been debt-free, and now all of a sudden you've got the lake house. And so I think it's going to be a while. It would be my answer before I go full-time. What do you do that makes two-thirds? I'm a director of finance for an S&P 500 company. Okay. So here's the trade-off. You've got to have a –

way that you can see the thing scaling that's not $2 million. Because, you know, you don't want to quit your job and be stuck at 85% of $200,000, right? Correct. So what do we got to do to not take this thing to the moon, but to just double it? Correct. And I'm asking, do you have any idea how to do a smaller scale than a $2 million investment?

So really at this point, I do have one employee that does all my packing and unpacking for me and some of my quality checks. I have debated in terms of scaling it, just basically doubling my inventory. I never have more than $5,000 or $6,000 of inventory on hand. Well, you can double your inventory, but only if you can double your sales. Correct. Is inventory limitation limiting sales? No, it's time and investment. I maybe spend five to ten hours a week on this at this point.

So that's what I would be doing, Dave. I would be thinking about how to replace himself to where now the five to ten hours becomes 25 hours, 30 hours, and then a full-time job. So you've got to transfer your knowledge and the experience plus the time. Those are the three components of what you do in five to ten hours a week, yes? So I would say you can go full-time when you can see how to scale this to double. Yeah. And if it doesn't work after you go full-time, are you willing to sell the lake house?

Because the lake house is going to destabilize your whole freaking life right now if you go full time and this thing turns down. Absolutely. So, yeah, I mean. A failure in this move could cost the lake house. Are you willing to do that? So, you know, because that's the risk you take. You step out of the $230,000 comfort gig. You go for it. And it turns down. You've got to dump the lake house while you do the next step. Right? Right.

Yes, yeah, absolutely. That's what you're facing. It's a risk management issue. So, yeah, that's, if you're willing to do those two things, find a reasonable path to scaling this to 400K at 85% or 80% and find, and say, if it doesn't work, we're betting the lake house on this dream.

Not the fact we're going to get foreclosed on, but I'm not going to let the lake house, a toy, oh, 400K on, take down my life because my dream turned left. Okay? Absolutely. So you've got to manage those emotions with you and your wife going into this. If you do that, you're going to be in fine shape here. And I would tell you to go for it as soon as you can do those two things. I'll tell you an interesting story right quick. We've got just a second. A guy called me in 2012 and said, I'm a pharmacist.

And I have a side gig. I make $70,000 as a pharmacist. I make $70,000 on my side gig. My parents, who are pharmacists, say I'm crazy to quit being a pharmacist, but I want to go do my side gig. He's doing silencers for guns, suppressors, okay? And I'm a gun guy. And so I'm like, hey, if you love it, he goes, I love it. I hate being a pharmacist. I love, I don't hate it, but I don't want to be a pharmacist. I love doing this. You love this gaming stuff.

He was doing $70,000 that year net profit. Last year he did $70 million gross. I told him to quit being a pharmacist. It was good advice. Yeah, it was good advice. And he's been successful to this point, Dave. This is now about systems, and he's going to have to train somebody to do what he does. That's how he scales us. Yeah. The margin's there. That's what James has got to do. He can see. He's got the brains to do this. Absolutely. This is doable. This is The Ramsey Show.

Ken Coleman, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Thank you for joining us. David is in Kansas City. Hi, David. Welcome to The Ramsey Show. Hi, Dave. Hi, Ken. Thank you so much for taking my call. You and your team have been such a big source of motivation and mentorship for my life, so I appreciate you. Well, thank you. How can we help?

Yeah, so I've been following you. I found you all in college and sure, I think my main question is, so I'm 25, I make about $90,000 a year and I do just want to point out like I am a child of immigrants and so I've reached a good financial spot being in Baby Steps 4, 5, and 6, but I think thinking of

2024. In short, I think my biggest fear is like lifestyle creeps. And so I still live with multiple roommates and I'm still, it's still very hard for me to, you know, spend money. And so I just kind of wanted to talk through goals with you. I think the next logical goal would be to, you know, save up for a house, but I do plan on maybe going for an expat role outside of the country in a couple of years. So I'm, you know, when I think of the future, there's a big question mark and it's been a little bit harder to kind of define what it is. I want to like, you might, my actions, that, if that makes sense.

Yeah, that makes sense. So if you were to buy a home and five years later expat, what would mean you couldn't sell the home? Well, I think right now I'm, so where I'm at right now, I have around $30,000 as a down payment. So I would want it to maybe save up a little bit more since interest rates are so high. That wasn't my question. You said I don't need to buy a home because I'm an expat in the near future, right? Yes.

So if you were to expat in five years, leave the country, expatriate, right? Because you said you're an immigrant, right? I was born here in the U.S., but my parents aren't. So I brought that up because I think I have this mentality of where I want my parents to stay. So where would you move? So the company I work for, we have positions all over, but I would love to go to Europe for a couple years. That doesn't mean you need to expat. That's a whole different thing.

Ex-pat means you're leaving and not coming back, dude. Okay, okay. You don't want to expatriate, lose your citizenship to the U.S. in order to not pay taxes or deal with the U.S. government anymore, which that part of it sounds real appealing, but the rest of it isn't. You don't want to lose all of that to go work for some company in Europe and four years later change your mind. That's not an expatriate. That's I want to work overseas.

Different deal. Yes, sorry. That's okay. I'm not sorry. It's okay. I just want to explain. People that expatriate, they move to Costa Rica because they're never coming home. It's the ultimate go-off-the-grid thing. Okay. That kind of stuff. So what's the timeline? Realistically, today, you can change this. How old are you? He has an idea. I'm 25. I'm single, and I'm currently in the middle of a role right now, so I plan on rolling off in July 2025. Okay.

And so, you know, when I'm thinking of the next year, I'm like, okay, do I keep being as single as I can and max out HSA, max out 401K, or do I kind of take a step back and kind of like a lot? I think I mentioned this, but I'm a little nervous about lifestyle creep because I've kind of seen like my peers kind of, you know, go all out on their apartments and their cars. And so I don't really fall into that. And so I just, I don't know if I should keep being aggressive. David, I think the chances of you having lifestyle creep is close to zero.

You've mentioned it three times in the last four minutes. So you're not going to do that. It's not inside of you. Okay? Chances, though, that you – what you do need is a place, something to aim at, a more defined process that will enable you then to build your financial plan around that.

And so let's just say, let's just announce to the world, we're going to move to XYZ in 2025 with my company, and I want to live there for five years. Okay? I just made that up. Or whatever. If that's your announced goal, then save to make that happen.

And that's not maxing out HSAs. That's piling up cash in a mutual fund. So you've got a big old pile of cash. So while you're in Europe or Dubai or wherever it is for five years working for your company, you've got some pad. You've got some extra things. And then when you come home, you've got a big later, 10 years from now, you've got a big old pile of cash to buy a house with.

Okay, okay. And I guess the only reason why I bought up the 401k and the HSA is for the tax advantage accounts? That's fine. Load them up, but don't do that and have no other money. You need some other money to make some of these other, to give yourself some wiggle room in some of these other areas. So what's hurting you, what's giving you anxiety is it's difficult to plan when there's not a set goal.

And so I'm encouraging you to set a goal, even if you change it later. Let's set a goal of saying, I'm going to go for five years beginning on this date and

And if it ends up being seven years or three years, so what? Or even if you want a little earlier or a little later, that's fine. But at least you're planning towards that, which tells you then don't buy a house. That's right. Because you're going to be in Europe for five years. You don't want a rental property in the States when you're in Europe or where Dubai or wherever it is you're going to go. I don't know why I picked up Dubai. He didn't say that. But anyway.

But that's the thing. So you can plan, and Ken, in the case of our last caller, you can plan to open a business. That's right. But if you just say someday, then you can't plan. Right. It's like the equivalent, and you're too young to know this, but we used to have these things called atlases, David, right? And so you'd put them out, and it was like what you see on a phone now, but a smart map. But it's the idea of just staring at it and going, well, I could go here, I could go here, I could go here, and it's going to drive you mad.

And Dave's exactly right. I know I want to go overseas, so now let's come up with our three best options based on your company. They have locations, so we start there. Very specific. Okay, these are my top three destinations based on where my company has offices. Now I'm going to look at cost of living there. So we know Portugal is going to be way less cost of living than Dubai, if you will. And that's what Dave's talking about, a very specific strategy. I'm going to go spend some time here while I'm young and single and experience life over there. What's my cost of living?

you know, and I can continue on my financial goals, which you already have done a great job. So this you're stressed out because you don't have a very clear direction, destination, choose a destination, then make the financial decisions based on the destination. Yeah. It's a good point. And you know, that, that really parlays over into a whole nother discussion can of some of you are facing some really tough stuff right now. And, uh,

My friend Jim Collins wrote a book, was it Thriving on Chaos? And I was discussing this book with him in the green room. We were both speaking one day at a leadership thing, and he was so excited about it. He said, I have discovered that people, that uncertainty is much more stress-inducing

than ambivalence is much more stress inducing than a known tough road that's correct so if you'll lay out a road even if it's a tough road it's not as stressful as just not knowing that's correct yeah you know obviously the least stress inducing is a great road but if you've got a tough thing to do lay it out in detail that's correct and say these are the things i have to do

to survive this time I'm in right now, and your level of panic

your level of anxiety will drop dramatically. Without question. That's why the baby steps have worked for millions of people. People are freaking out. My financial house is a complete dumpster fire. I don't know where to start. It's overwhelming. I've got $250,000 worth of debt. And then they begin to watch the show, listen to the show. They begin to read Total Money Makeover. They begin to use every dollar and they begin to see, wait a second, debt freedom is the destination. And now I've got seven steps.

that I can walk through very clearly. It's going to be painful. Oh, gosh, it's going to be hard. I've got to work extra. But now I know where to start. I've got to live like no one else. Yes. But later I get to live and give like no one else. You told me a story years ago. I think you were in the Middle East, maybe even Israel, and you talked about going in a cave, and you were like, I don't get freaked out by dark and close, but this was so dark, Coleman, I couldn't see him with a hand in front of my face. And that is the same emotion that we see in finance companies

in our professional lives, when we don't know where we're going, you're paralyzed. Oh. And even if you are stuck, that freaks you out. Sure. Speaking of caves, oh my God. I'm glad you made it out. Just being stuck. The idea that I'm stuck is...

It's terrifying. It is. I can walk through sewage up to my neck, but just don't make me stuck. You know, that's the thing, right? That's the way we all are, though. And that relates really to David's situation as well. The ambivalence is more stress-inducing than the hard path. This is The Ramsey Show.

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Ken Coleman, Ramsey Personality, is my co-host today. I'm Dave Ramsey, your host. Open phones at 888-825-5225. Thanks for joining us in the lobby of Ramsey Solutions on the Debt Free Stage. Lance and Morgan are with us. Hey, guys, how are you? Pretty good. Awesome, how are you? Better than I deserve. Where do you all live?

Evansville, Indiana. Oh, yeah. Just up the road. Not a bad run to Nashville. Welcome here. Good to have you. How much debt have you guys paid? $168,170. Good for you. How long did that take? About 35 months. Good for you guys. And your range of income during that three years? Started out around $140,000 and we're going to end out the year around $195,000. Good for you. What do you guys do for a living?

I'm a GIS technician at a local wastewater utility. And I'm a railroad signalman. All right. Very good. You guys are doing great. Congratulations. Thank you. What kind of debt's the 168? It was our mortgage. You paid off your house? We did. Looking at a couple of weirdos. That's right. I love it. Way to go, you two. Well done. What's this house worth?

Around $275,000. Wow, very good. And how much have you guys got in your nest egg already, your retirement? We're halfway to a millionaire. Okay. About another $100,000 in that. So you're about a half million dollar net worth. Yeah. Way to go. How old are you two?

I'm 30. And I'll be 30 tomorrow. Hey, happy birthday. Thank you. So 30 years old in a paid-for house. Y'all know how weird that is, right? Yeah. It's pretty weird. That was the goal. It's pretty weird. We want to be weird. That's good. Way to go. So tell us the story. What happened 35 months ago that made you think you could actually do this by your 30th birthday? We got married in October 2020. Oh, wow. Yep. Good. A little COVID wedding. Yeah. And then we decided, hey, we might as well get married.

We might as well tackle it. Hit the road running. Yeah. Okay. Prior to that, I had to pay off my student loans, and he was like, okay, well, let's see you can do that. So the day I paid him off, he decided to go buy the engagement ring. Oh. Yep. So. That's an interesting correlation. Yeah. So it feels a little bit longer than 35 months for me, but we decided to.

Go ahead and be weird. We set the goal and we're able to do it. Knock it out. How did you find us? Radio. Okay. Yes. So you were listening on the radio and y'all are talking about it when you're engaged or when you're dating and then you're engaged and then you're married so we're going to pay off the house. Yeah, I made her listen to it quite a bit. I became slightly obsessed a little bit. Oh, slightly. Listening to it every day. Oh, yeah. Yeah. Eventually, I think we just said...

we can keep being gazelle and um you know give up some boating yeah we gave up boating two years that was a little hard and then uh gave up vacations we did you know many weekend trips and

some concerts we had to give up. We had some COVID concert tickets that had to be moved. So at least we still kind of got to enjoy that a little bit. Yeah. Okay. All right. Wow. So I want to know on the other side of this, you paid the house off now and you guys went after it. There's some serious sacrifice you just mentioned, but this was a lot of effort. Why?

I want people to hear why did it matter to you to pay off the house? And in that why, what does it feel like on the other side of this? Did it match up with your why, the actual feeling? Yeah, we got a lot more freedom, I feel like now. The grass feels a lot greener. It still feels surreal seeing our checking account start to increase the first of the month. It's not getting the mortgage being taken out of. And then off to the stage here, we got...

A three-month-old that we just had. Oh, nice. So we get to bring him into this world. Yeah. We really were trying to get him to come to a home that was actually ours. Oh, wow. That's great. And you did. I did. So what's your first big thing you're going to do with money now that you're completely debt-free at 30 years old?

We've got a couple vacations planned already. Where are you going? We've got Kenny Chesney concert tickets to Boston. Okay. Nice. Good run. We were hoping to do Ireland as well, but it'll probably be pushed back to 2025. But for now, that's about it. It's a great combo. We don't really know. We're going back boating now next summer. There you go. What's that mean? You buy a boat? We always had a boat. We just parked it because the upkeep was...

Okay. So it's in the driveway. We just got to activate it. That's right. Okay. Gotcha. It's cool. It's a good reminder to come back. Yeah. Yeah. I'm waiting. I'm waiting. Yeah. Good. Yeah. Good for you. Well, way to go. You guys way to go. What do you tell people? The key to getting out of debt is because there's people listening going, you, you'll now never have a house where you've got a house paid for and you're 30. Mm-hmm.

I would say budgeting was huge. Using every dollar. I liked being able to track, you know, each transaction we have. Every dollar is addicting. It is. I always look forward to going to work and, you know, moving it over real quick. Particularly for merch. But yeah, it's addicting. Communication was a big one between us.

Being great about everything we spend pretty much. Like, is this okay? You know, is this in the budget? Can we go for this this time? Yeah. Okay, let's go for it. Yeah. When it got really tough, it just...

We had to remind ourselves this is the goal. You know, we're almost there. Keep going. Teamwork makes the dream work. You know, we've got to be on the same team. Yeah. And we want to bring this baby home to a debt-free house. That's right. So we're not going out to eat tonight. Right. Way to go, y'all. And you've got the rest of your lives to do anything you want to do now. I know. It's surreal. Yeah, and you already have a half-million-dollar net worth. You're going to be Baby Steps Millionaires in 20 minutes now. I mean, it's going to happen so fast. It's ridiculous. Yeah.

The next one's going to come home to a millionaire's house. You know, that's where you're going to be. That's how fast it'll roll because you've got no payments. I know. No payments, you get wealthy. I mean, and your generosity factor this time of year particularly, you start seeing it, you know, around Christmas. So you can go just bananas with stuff. You don't have to. Right. But you've got the margin to, you know. And, you know, find somebody that's in need. You can do all kinds of stuff to help people. I mean, it's a cool place to be. I'm excited. It's a very cool place to be. Yeah.

I love it. I love it. Listen, here's what I want people to hear, okay? That the sigh of relief, even as you're recounting it, you said this is very surreal. And you guys have got total freedom to do whatever you want to do now. And I think that people need to understand the exchange for all the sacrifice is true freedom. When we talk about peace, it's freedom to make the choices you want to make, to live the life you want to live. That's what's on the other side of this. And that's what I see with you guys. It's really exciting. Yeah, it's a great feeling. It really is. Yeah.

Way to go. We're proud of you, heroes. You took control of your life. You've got to keep control of it for the rest of your life. You're an unusual married couple. Yeah.

You know, you actually get along. You actually communicate. I mean, we watched it happen. I asked a couple questions. Both of you knew the answers to the questions at the start of this time together. I mean, you both are on the same pack. This is what we're doing. This is who we are. This is where we're going. And there's nobody dragging their feet, nobody having a hissy fit like a four-year-old. We're both going to go win like two freaking adults.

I'm so proud of y'all. Well done. Thank you. Well done. This kid's got a great set of parents. What's your baby's name? It's Cormac. Cormac? Yes. Okay, so here comes Cormac into the shot because if we're going to do a debt-free scream, we've got to have the reason for doing it in here. That's good. How cute.

That's so fun. All right, Lance and Morgan and Cormac, who has no idea. From Evansville, Indiana, $168,000 paid off. That's their house and everything before their 30th birthday. Did it in 35 months, making $140,000 to $195,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

Yeah! Oh, yeah! Didn't even face for me. He's still rocking. He just kind of furrowed his brow. What's mom yelling about? Pretty cool. Very fun. Congratulations, you two. Absolutely beautifully done. Hey, we've got the live and give box for you. It includes the Baby Steps Millionaire's book because, as I mentioned earlier, you're about 20 minutes from being there. You'll be surprised how fast that'll happen now.

And, of course, the Total Money Makeover book, you can give that to someone who doesn't believe your story. But if you follow the plan, the plan works, people. It's not rocket surgery. You can do it. It's really simple. It's just hard. That's the deal. And, of course, a Financial Peace University membership is in the Live and Give box as well. So thanks for coming down from Evansville, Indiana. We're proud of you, heroes. Way to go, Lance and Morgan and Cormac. You got it down, buddy. This is The Ramsey Show.

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NMLS ID 1591. NMLS ConsumerAccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. Ken Coleman, Ramsey Personality, is my co-host today. This is The Ramsey Show. Thank you for joining us. Jack is in Portland, Oregon. Hi, Jack. Welcome to The Ramsey Show. Hey, Dave. Hey, Ken. Thanks for having me. Sure. What's up?

Hey, so my question is, my wife and I are looking to purchase our first house in the near future here, and I'm kind of curious if you think we should keep saving and pay cash, being that we are close to affording it, or should we get a small mortgage and maybe the pros and cons to each of those situations? What's your household income?

Household income is around $150,000. Okay. And what have you got saved now? We have around the end of the year, we will be at around $300,000. Okay. And what's the price of the house? We're looking in the range from $400,000 to $450,000. Okay. So you're talking about like three more years or so, right? If you pay cash.

Yeah, I mean, hopefully not. I mean, we've saved up what we have really quickly. Well, out of $150,000 household income, what are you saving a year? Roughly $70,000, a little over maybe. Okay, so it's two to three years then? Yeah. Okay, all right. Or you take out a small $150,000 and you pay it off in two to three years, right? Right, yep. Okay. Okay.

Well, there's actually one of the few things on this show there's two answers to. Answer number one is I don't borrow money, and I'm always a little bit uncomfortable telling somebody to do something I won't do. But anytime you take out a mortgage, that's something I won't do. And so if this was Sharon and me, we don't have an option. We have to wait and pay cash.

Because we don't borrow money for anything ever under any circumstances. I will never be a dime in debt again, ever, for any reason. There's nothing I'm scared enough of or want badly enough to get in debt for it ever again. Nothing. Period.

So I'm not borrowing money. So we would wait and pay cash. That doesn't mean you're wrong. And we, because taking out a mortgage, as you know, from listening to the show, Jack is something we don't yell at people for on this show. Now, if you go take out a stupid, but car loan, I'll yell at you for being a fool. Okay. But not, but just for your own good, not because I like to yell at you, but I'm just going to call you a fool.

So, because it's going to keep you from getting rich. That's the bottom line. And so, but that's, you know, in your case, if you take out a mortgage, it's a 15-year fixed where the payment's less than a fourth of your take-home pay. That's the maximum mortgage we tell people to do with the whole idea of turning around and getting it paid off as fast as you can. You know all that, Jack. Yeah.

And so that's one end of the spectrum. The other end of the spectrum is I tell people I don't borrow money at all. So you could do the I don't borrow money at all and wait two years and pay cash or you could take out a small mortgage and pay it off in two or three years. And you're well within the range of what we say to do on the show. So either answer is OK with what we teach on the show. You see what I'm saying? Yes. Yep. OK. What is the living conditions where you are now?

Uh, they're pretty good, actually. I mean, we're happy renting where we're at. Our rent is relatively low compared to if we were to move to another area. If I ask your wife, does she give me the same answer? Yes. You hesitated. I have a feeling I'm talking to the nerd tightwad and she's not.

Well, you're correct. Okay. All right. She would say buy the house and pay off the mortgage quickly. You would say I want to save and wait.

Yes. We're just so close to being there that we're getting trigger happy, I'd say. Yeah. Well, she is. Yeah, you are not. And you're trying to go, Dave, please tell me I can't do this. I'm not going to tell you that because it would be inconsistent with what I've told people for 30 years. So I'm okay if you go ahead and buy. Prices are not going to come down in Portland, Oregon.

I don't think, unless Portland in and of itself has issues, which it does, but depending on where you are in Portland, actually, as to whether or not you're going to see price problems. But that's a political climate thing. That's not a...

It's a law and order thing. It's not an economic thing for you. So as long as you're outside the realm of where issues are and you're in a stable area that you're talking about buying, prices are not going to go down in that area of Portland, Oregon. You're going to be fine. And I would not wait for prices to come down. The interest rates are irrelevant because you're going to pay it off so fast, you're not even know you had an interest rate. Right.

And now what I would want to do if we go with her side of the deal where we're getting, where we're getting house fever and start looking in the spring and buy something, I would want a firm commitment that the two of you sit down, pinky swear, spit shake, sign a little agreement together or whatever to where you both are saying, when we buy the house, we're going to lean in and pay it off in this many months because I, it wouldn't be fair to you, your side of the

feelings and argument for you to buy. And then she goes, oh, we're going to pay off in four years instead because I want to furnish it. Right. That's not fair to you because you're saying we can pay it off in two or three. And she needs to commit to that if you guys are going to, if you're not going to wait. You follow me? That's just a relationship thing, though. That's not a math thing. Yep. Because what will happen is you go in there, it's easy to just say, oh, we got to go buy the $2,500 play set for the backyard.

Yep. And, um, didn't have to have that before, but now we got to have it, you know, and there's all this stuff that you need to have after you buy a new house that you don't really need to have. Right. People spend 18,000 bucks to decorate the nursery for a child that takes up about four square inches of place. You know, it's just like ridiculous. People go bananas. We had to do that for the baby. The baby doesn't even know what you did it for yourself. That's a lie. So, you know, that gets the same kind of arguments people get into there. So,

I don't care which way you go. Ken, what would you and Stacey do? I would buy it now. And the reason is I'm just looking at the real estate market. And even though rates have gone up, we see that the inventory is really low. And so housing values haven't dropped. Now you've seen housing purchases drop, but prices haven't. And to your point, I just don't see a situation where they're going to get a better deal on a house. So I'd go ahead and buy now with his intensity and pay it off quickly. Yeah.

But agree to a 36-month plan or whatever the plan is. Do the math and go, okay, we're going to take a $150,000 mortgage and we're going to pay it off at 70. And so that's 24 months, right? I agree because they're saving $70,000 a year on a $150,000 income. That's extreme saving. I got a lot of hope and faith that he's going to pay that house off and she as well. If the whole idea doesn't get sidetracked. And that's what he's a little bit afraid of.

I think so. But I think she... You've had more experience than this. Yes, she wants the house. You nailed that. But she's also gone along with this. She hasn't fought him. She's on board. To save $70,000 a year, they're on board. Yeah, they're hardcore. So I feel really good about it. That's what I would do, Dave, only because I'm going three years from now or two years from now, what are the housing? That housing, is that going to go up to $500,000? That $400,000 to $450,000? Is that going to go up from $450,000 to... So from that standpoint, I'd probably buy now if I find something I like. I do think...

That even if house prices are stagnant for the next 24 months. Right.

As soon as the market is enlivened again, we're going to see them jump up. I think you're right. Because demand. Any gains you get by an interest rate reduction in your payment, you're going to lose in a price increase. Yeah, I agree. Because people are sidelined and they're all going to come back to the game like they did after the Fauci pandemic, right? They're going to come back to the game after that. Yeah.

Well, I've asked you about this before. I'd love you to share with our audience. You know, let's say we got another year of sevens. All of a sudden, if we see something in the high fives, there's a psychology to that. And people go, well, that's a lot better than the seven. And so now they move. Is that what's going to happen? It's exactly the opposite psychology of what we had. We went from three to four, and you would have thought we shot people. That's right. It's true. It's true. Three to four. Right. You know, I'm selling real estate in 1982. Yeah.

And the interest rates went down from 16 to 14. And the floodgates opened. I sold 78 houses that year. I was 22 years old. I just had a horrible but slightly entertaining thought. Could you imagine if interest rates on mortgages were 14 to 16% right now? TikTok would melt. You know? That generation would melt. There's something we could hope for. This is the Ramsey Show.

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Ken Coleman, Ramsey personality, number one best-selling author of the book, Paycheck to Purpose, is my co-host.

Thanks for joining us. The phone number is 888-825-5225. Marcus is in Oklahoma City. Hey, Marcus, welcome to the Ramsey Show. Hey, Dan Perry, yeah. Better than I deserve. What's up?

I'll just be quick and to the point, 2020, 2021, I was working a mortgage company. They closed their doors in 2022. I was making quite a bit. Now I'm a teacher, didn't file my taxes for 2020 and 2021. Probably 80% of that was paid.

um, obviously commission. So I did, um, uh, I know I need to file those now, obviously, and I'm going to owe quite a bit. I was just going to see if I can maybe get some, um, advice on how to go about doing that. No, the least harmful way. Ouch. Okay. Here's the thing. Not paying taxes is not a criminal act. Not filing taxes is a criminal act. That's what's weird.

We do not have a debtor's prison. They don't put people in jail for not paying their taxes, but they do put people in jail about 2,500 a year for failure to file. Okay. So that's where, that's the danger that you're in. I'm more concerned about that than I am the payment plan. I don't think you're in trouble. And because 99% of the time that you're not some Paula, not some public figure that you come and self, uh,

You catch up your filings. They're just all late. You don't get into any criminal issues, but I want you to get it done now. I don't want them to come find you. I want you to go to them immediately. No later than the middle of January. These documents need to be filed. That's the panic. Then the second issue is how do we pay it? Well, number one, we've got to assess the damage and figure out from the actual filings what you actually owe.

And then, you know, your worst case scenario is you're selling some stuff and putting the KGB, I mean the IRS, on a payment plan. Okay? So, because, I mean, if you were doing mortgage origination in 2020, you made some bank. Yes, sir. Yeah. Like what'd you make that year? Probably $250,000. And you paid zero taxes? Yes, sir. Did you save any?

Yeah, yeah, I got about probably $100,000 saved. Oh, good. Okay. Because you're probably going to have $100,000 in our tax bill. Oh, yeah. Okay. If you've got two years of that, you will. Yeah, easy. Yeah. So you're going to give them what you've got to limit it, and then you're going to work out the payments. What you've got to have is a real tax pro in your corner right now.

And if you'll go to RamseySolutions.com and click on the tax ELP for your area there in Oklahoma City, I know them. They're good people. They can sit down with you and help you first get the filings done and then secondly negotiate the payment plan and how much of this you've got to throw at them to keep them off your bank account. Because we don't want them putting liens on everything after you file, but also don't want them putting bracelets on you that connect because you didn't file.

Yes, sir. So we need to get filed and then we need to develop how tough the path is that we've got to walk through. Do you own a home? Yes, sir. What's it worth? About $500. What do you owe? About $200. Okay. And what is your household income nowadays?

I'm probably about 70. I have three jobs right now. So I'm a teacher. I do some data entry at night, and I do wait some tables on the weekends. Do you have any money other than the $100,000? No. Do you have any money in retirement? I do. Okay. I do not tell people to cash out retirement to pay off debt. I might to pay off the IRS to keep from selling your home. You follow me?

So that's what you've got to get into. You've got to ascertain because let's just say this. Okay. Let's say it's 150 and you throw a hundred down and you say, okay, we're going to pay 20 or we're going to pay $2,000 a month for three years and we'll be out of debt. That's okay. But if it's a, if it's 200 and you put a hundred down and you're going to be in debt for a decade, you don't want that. You need to, you need to clean out something else, the house or the retirement accounts and clean up the mess. Yeah.

So the not filing and it's not the not filing, the not paying and the not filing. I hope it's not a ton more than 100 when you get there. It's going to be something more than that. But you need to get you need to understand the size of the problem. The not knowing is a bigger stress inducer than knowing the details. So you've got the cancer diagnosis. You just don't know what the treatment is yet. And you don't know whether it's terminal.

You know, so the first thing they do is they scare you to death and you go around for about two months or two weeks with no information. And then they start going, okay, well, here's the treatment plan. Oh, you mean I'm not going to die? Well, that would have been handy information about a week ago, you know, and that's kind of what you're dealing with here is that same set of emotions. So, um,

You know, the, yeah, get with a tax pro today. When you hang up, open up RamseySolutions.com, click on Tax Pro ELP at Oklahoma City and go sit down with them this week. I don't give a crap if it's Christmas. You know, you need to give yourself a gift to get this monkey off your back.

Oh, man, that's scary. Yeah, and I hope he has – he saved some money. I hope he also has some write-offs and records of that kind of stuff so that he can, you know, take this. The better your records, the more you can limit this. Yes, that's exactly right. Write-offs and records. Tax Pro here is huge, though. Do not try to figure this out on your own. No, and don't go ask the IRS what to do. Oh, yeah. Good Lord. Yeah. It's like asking a dog if it's hungry. Yeah.

You know, no, we don't do that. So, you know, where did you get your tax information from the IRS? Oh, my God, you're a fool. You know, no, no, no, no, no, no, no. We don't we don't ask them. We don't ask the fox about the hen house. Hello. Yeah. So, yeah. Oh, yeah. They're tasty. And by the way, don't ask them for grace either, because they don't have any.

This is get your tax pro to help you. I used to talk to Grace. I used to talk to her weekly. She called me all the time. It's like from Chris's vacation. She died 10 years ago. Yeah. Yeah. They're just not going to be kind. And a tax pro here is going to be your advocate. And they know everything that they can do. They're worth it. So don't try to navigate this on your own. Yeah. And here's the last part of this. Okay. Okay.

These commercials that are on cable TV. Do you have $10,000 or more in tax debt? We can get it forgiven. We have ex-IRS agents working for us. Just give us $5,000 and we will promptly do nothing for the next 24 months. That's what that is. That's a complete freaking scam. There's a thing called the OIC, an offer in compromise that you can get your federal income taxes forgiven. About 1% of them are approved.

You have to prove total paupership, meaning you don't have a house, you don't have a job, you don't have any potential income, and you don't have any assets of any kind. And then they will forgive your debt after fooling with them for about two and a half years. Don't answer those stupid butt cable TV ads. Go get a tax pro and actually work a plan to get the mess cleaned up. This is The Ramsey Show.

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Ken Coleman, Ramsey Personality, is my co-host today. Thank you for joining us, America. Sarah's with us in Honolulu. Hi, Sarah. Welcome to The Ramsey Show. Hi. Thank you for taking my call. Sure. What's up? My question is what I should do with an inheritance that I'll be receiving. Okay. How much of an inheritance did you get? $180,000. Wow. Who left you that? My mom. Oh, I'm sorry. When did she pass, hon? I don't know.

Earlier this year. Oh, my. I'm sorry. How old are you? 52. 5'2"? Yes. Okay. Cool. What do you make a year? My husband and I's household income is $250,000 net. That's good. Okay. So how long have you been listening to us? A while off and on. Okay. So you've heard us talk about the baby steps, I assume.

Yes, we don't have any debt except for our mortgage that we owe $410,000. Okay. Do you have an emergency fund? Yes, it's $55,000. All right, good. Do you have anything saved for your kids' college, or are they grown and gone? They're grown. They're kind of doing it now. And we do have, in our checking account, we have $100,000 right now. Okay. All right. For what? I don't know. We're just...

You don't know what to do. We're just overthinking everything. Okay. So you have $100,000 in addition to this $180,000? Yes. Okay. So that's $280,000 and you owe $400,000 and you make $250,000. Yes. Okay. All right.

Well, as you probably have heard, if you've listened for just a few minutes on the show, we know that from the data we have and the 30 years of experience doing this, that as we talk with millionaires, they have two primary areas that cause them to get their first $1 to $5 million of net worth. And the two primary areas are a paid-for house and their built-up retirement plan, investing steadily into your 401k, Roth IRAs, and those sorts of things.

And so we teach people to become debt-free other than their home in baby steps two. And then three is have an emergency fund. You've done those. Baby step four is invest 15% of your income into retirement. You should already be doing that or you should start doing that. Five is kids' college. Does not apply here. Yours are grown and gone. And six is pay off the house early.

So if you were to work the baby steps, you would apply any free money that you have, not counting an emergency fund, not counting putting 15% of your income towards retirement, any other free money that you have, like, for instance, $180,000 inheritance, or

or any free money that you have, like, for instance, an extra $100,000 laying around sloppily in the checking account, I would throw all of those towards paying off your home as soon as possible. If you did that, you would only owe about $100,000 on your house, and you could pay it off in a couple of years. Okay. And if you had a paid-for house, then, that'd be a whole cool thing, because that house in Honolulu is pretty stinking expensive. Yes. What's it worth? I believe about $1.1. Yeah. Yeah. Okay. Okay.

So paid for house alone makes you a millionaire, right? Yes, it does. So any objection to paying off your house? The only thing that we've been thinking about is that we may or may not have to move in a year to the West Coast, and we haven't been able to decide where we want to retire when my husband retires in seven years. So we're just kind of like... That doesn't matter. You can sell the house when you move.

Okay. You're not giving the money away. You're paying off a house. When you sell the house, they give you a check. Okay. And then another option was SmartVestor Pro said that we could invest the money until it builds up to the amount that we need to pay off the mortgage. No, they didn't. If they did, they're not going to be a SmartVestor Pro anymore because that's contrary to what we teach, and they know that. Okay. I'll fire them for doing that.

I will not endorse someone that says to do that. And SmartVestor Pro is who I endorse. So you hang on. We need to find out who it was that said that, and I want to follow up on this story and make sure you got your story straight before I fire them. Because that's not what we teach people to do, and we don't send people to SmartVestor Pros who teach them to do something different than what we teach.

We never tell someone to build up enough in their mutual fund with their smart investor bro until they pay off their house. We tell them pay off the stinking house as fast as you can, though the money added as fast as you can. So either you misunderstood or they're getting ready to get fired. One of the two.

So we'll find out about that. We'll have Austin pick up and find out what really is going on here. But, no, you need to pay off your house, son. Throw the money at the house. That's what I would do. You called and asked me. Now, you're a grown-up. You get to do whatever you want to do. But I don't think your mom who left you this money is going to be mad when your house is paid off. I think it's a great legacy, a great tip of the hat to your mom, a great way of honoring her to have your home paid off.

The difference in stability in your life, the difference in future wealth building, making $250,000, living in a million-dollar paid-for house, how fast you will be able to add to your wealth is mind-boggling. It's mind-boggling. So hang on. I'm just going to pick up, and we'll get to the bottom of that.

Open phones at 888-825-5225. Ken, that's some type of thing sometimes comes up. So we've got about 5,000, 6,000 people that we endorse through our SmartVestor Pro program or whether it is through the ELP program with real estate, taxes, and so on. We require all those people to first and foremost have the heart of a teacher.

We require them, second, to give advice that is consistent with the advice that you hear here so that I'm not telling you to do one thing and then someone I send you to is telling you to do something else. That would be hypocritical.

And then you're just confused because of the inconsistent lack of integrity that that represents. So that is something we require. So when we tell you to go to a smart investor pro, you're going to get the heart of a teacher and advice that is consistent with what you hear here. And that advice is not consistent. Yeah. And as a matter of fact, it's almost perpendicular. Well, and I wanted you to explain why, because I think that makes a lot of sense to people. Okay, put it in a mutual fund. Let it gain some. Why do we teach the opposite to say, no, let's knock the house out now?

get on that, not save it up in an investment fund and then pay it off. Because in my experience of doing this for 30 years, when you build up $400,000 or $200,000 in a mutual fund, you end up doing something stupid but with it instead of paying off the house. Yeah. So it ends up becoming a distraction. It ends up being a problem rather than a blessing. Right. And about half the time, about half the time, people actually follow through on it. Mm-hmm.

But it's a bunch of theoretical hogwash. Oh, I'm going to make money at 12% in the mutual fund, and I'm going to offset the 7% mortgage or 5% mortgage or whatever I've got. No, you're not. You're taking risk here that you're not even ascertaining. You're not even measuring risk properly. So that's just, you know. The number of millionaires that we interviewed out of 10,000 millionaires that said, Dave, the way we got rich was we saved up money in mutual fund and paid off our house. Almost none. Right.

Almost none. They paid off their house and they dumped money in their 401ks into mutual funds. That's how they did it. It's almost none. It might be five or something out of 10,000 of them. So, you know, these people, all these people have freaking theories, but they're people with no money.

They've got all these theories. Or they've got a conflict where they're trying to get a commission. That's the issue. And so whether it's, it shouldn't be from one of our. Better not be. From one of the folks that pisses me off. Yeah. But. Put my name on that. There's an agenda. It's Ramsey Trusted. Hello. Yeah. Good God. You know, so I'm, but most of the time when we check into this, when it comes up on the air, someone misunderstood. Yeah. Or the story was wrong. Yeah. Hopefully. Or whatever. So hopefully that's the case there.

And it's because it almost never happens because we're so freaking hardcore on the due diligence with these folks that we put in these systems. Because Ramsey Trusted does mean something. It means I trust them. Hello. And everybody that works here does. Hello. This is The Ramsey Show.

Ken Coleman, Ramsey Personality, is my co-host today. In the lobby of Ramsey Solutions on the debt-free stage, Phillip and Rebecca are with us. Hey, guys, where are you? Hey, how are you? Where do you guys live? We're actually from Phoenix City, Alabama, which is outside of Auburn. Auburn, Alabama.

And you're wearing an Aggies shirt. I'm so confused. So we actually moved to Alabama because I joined the military. So we're actually from Texas. Oh, okay. Now I understand. All right. Well, thank you for your service. Thank you. Which branch are you in? I'm in the Army. I'm a competitive shooter, and she is a nurse. Cool. Okay. So competitive.

competitive shooter now i'm a sidebar just second what the flip what do you do uh so uh spoiler alert uh i actually went to the tokyo olympics uh i compete oh with the air rifles then uh i'm actually a shotgun shooter but you're close okay yeah so i'm a competitive shooter uh and what they do is they then take my name and likeness and try to get people to join as well and show what the army uh can provide for you as a career so with a shotgun

Correct. So you're talking about clays and... That's me. Okay. Wow. Okay. So you essentially are a spokesperson for the Army by showcasing your skill. That's exactly right. Very interesting. All right. Thanks for the sidebar. How much debt have you paid off? We paid off $275,000 in five years.

In 60 months. Yeah. And your range of income during that time? It was from, let's see, I got it written down here, 115 to 165. Okay. Very cool. And you're in the military. We got that established. You said you're a nurse? I'm a nursing director. Nursing director. Okay. Two great careers. Very cool. Very cool. So what kind of debt was the 275?

We had a couple of cars and our mortgage. Paid off your house? Paid off the house. Couple of weirdos. Absolutely. I love you. Wow. What's this house worth? Well, it was originally 220, but now it's about 325. Excellent. Wow. How old are you two? 28. 27. Wow. And you have a paid for house that's worth...

200,000 or 300,000 bucks. Wow. Wow. Wow. Wow. Wow. Well, tell us the story. How'd you get turned on to Ramsey and how'd you do all this stuff? So I actually grew up listening to you through my parents. Financial peace, baby. Yes, I was. Yep. So I listened to you. It was right after some lady that would come on and talk about computers.

I would tune into your channel after hers and we would listen to you on the way home from Christmas and Thanksgiving and while on the road. So I just kind of got interested. Actually, whenever we bought our house in 2018, about three days later, a hurricane came over and I had never been in debt a quarter million in my life before. And then three days later for a hurricane to come over, it kind of sends a little bit of a shock through you, right? So then I was like, you know,

I don't want to be in debt anymore. We should probably listen to what this Dave guy has to say. Wow. So Kim Commando, I bet. Yes, that was her. Yeah, Kim's a friend of mine. That's awesome. Yeah, she's been doing talk radio almost as long as I have. Way to go, you guys. Congratulations. So you did it.

$275,000. How long have you two been married? Five years. Okay. So the whole time you've been married, we're getting this debt paid off. Yep. So we actually bought the house just a few months after we got married. Okay. All right. Very fun. So, Rebecca, at what point did you realize you had married a freak? This guy's crazy. He listens to these people on the radio and wants to get out of debt. I know, right? Well, actually, we grew up together, so I've known him my whole life. Oh, you knew all along. I know. I knew what I was getting into. You knew what you were getting into. Okay.

Okay, childhood sweethearts. There's a picture of us somewhere where we're both about eight years old at a birthday party together. Oh, my gosh. Wow. Wow. There we go. Very cool. The only thing I can think of is they've known each other a long time, which probably takes away that weird situation when he comes to date and her dad brings out the shotgun. Then he's like, oh, well, I better not bring out the shotgun.

That could be a really tough situation there. You had some skills, I'm guessing, early on. I could give him some lessons. I know. Sorry, that's where my brain goes. Oh, cool, you got a shotgun. Yeah, yeah. He's probably pretty proud of you as well, I'm guessing. Absolutely. Okay, here's what I want to know. So you guys start right out of the gate, you know, newlyweds, and we're going to go after this big goal.

Was there a time where you wavered at all? And if you did, how did you stay focused? Or were you just kind of locked in the whole time? Great question. So I actually, like any advice that I get, I don't just like jump all the way in. I kind of like test it a little bit. So it took me a little while to be honest, did not get rid of the credit cards right away. It took me a minute.

And then over time, it just seemed like everything that y'all teach came true. So then as it slowly became like a thing that comes true every time, I was like, okay, maybe I should trust a little bit more than trust a little bit more. So it just kind of like went from dipping my toe in the water to jumping, you know, head first. That's fair. Yeah. I mean, that's wisdom. That's right. A good dose of cynicism will keep you out of a mess. That's right. Yeah. One other follow-up question, and it's shotgun related. I can't help myself.

Instead of cutting up the carts, did you throw yours in the air and shoot them? I'm just curious. Actually, I just went with the shredder, but it would have been more fun to go ahead and shoot them. A little disappointed you didn't do that. We've had some people do some pretty creative plastic surgeries with firearms. I'm

One guy with a .223 on full auto. Yeah, he just shredded them. It was great. Yeah, so a lot of fun. Good job, you guys. I'm proud of you. I bet your parents are hollering and yelling. I bet they're screaming loud. Oh, they'd be watching. I love it. I love it. Well, they should be. They should be. Way to go, you two. You got an incredible start. You're going to be multimillionaires. Now, somebody else is 28.

or 27 or 25 is listening, they're going, gosh, when I'm 28, I'd like to have a paid-for house. What do you tell them the key to getting out of debt is?

You just got to be boring. I mean, that's the best advice you've ever given is that everything that you should do is it should be so boring that you get tired of it. Like whenever you're out and you're, you're spending your money, you're trying to make things more exciting than what they actually have to be. And the secret is that there is no secret. And until you learn that, then, uh, you know, you're not doing this right way. Rebecca, what do you think? My advice would be it's,

a deliberative act. You have to choose this lifestyle and just continue moving forward with it. We're very competitive people by nature and, you know, just watching the debt tick down is what kept us going. You game-ified it.

It's addicting to run through it and knock it out. It is, yeah. Yeah, that's very cool. Waiting for the next paycheck to come in so we can throw more money on it. It's kind of dumb. I know. It's kind of like, so I can mark through these zeros. It's like, wow. But it's not dumb because when you get there, the other side of it, how's it feel now?

Oh, amazing. Yeah. There was this moment, you know, whenever we reached Christmas last year where we had $70,000 left and we were like, huh, I wonder if we can do $70,000 by next Christmas. And we looked up and it wasn't even Halloween yet and we got our $70,000. Wow. Look at that. That's awesome. When you put it in front of you, that's how it works.

Hey, we got the live and give box for you. The baby steps millionaires book. You're going to be one quick and early. Wow. 28 years old. Here you are already. Absolutely. You guys are amazing. I'm so proud of you heroes. Well done. And thanks again for your service. Uh, also the baby steps millionaires books in there, the total money makeover books in there. You'll give that to one of your friends who might've been thinking you were crazy.

even the Financial Peace University membership. So all of that's there, the live and give box. And thank you for coming all the way up from Auburn, Alabama. And thanks again for your service and Merry Christmas to you. Way to go, Phillip and Rebecca.

$275,000 paid off. That's house and everything. They did it in the first five years of their marriage. House is worth three-something now. They're well on their way to being Baby Steps millionaires. $115,000 income up to $165,000. Debt-free. House and everything. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free!

I love it. That is so fun.

That is so fun. That's great. I feel like we should be celebrating Old West style right now, just firing shotguns in the air, you know, celebrating. Yeah, because they fired shotguns a lot in the Old West. What are you talking about? Well, sort of the bar scene. It was more the revolvers. Yeah, the revolvers. I understand. I took a little bit of— Yeah, you reached. Well, I went to the West, and I thought instead of the revolver, let's go with the shotgun. I was making it all come together.

I mean, you got to give me a little creative license here. But that's a great story, though. Another young couple here who's literally changed the trajectory of their life. That's two in a row. Both of them under 30 with paid-for houses. That's crazy. I mean, you know how many years I did this show before somebody under 30 came over and paid off their house? Paid off their house. Yeah. And it happened twice just today already. Yeah. Oh, my gosh. You won't see that on TikTok.

You do if you watch this show. Yes, there it is. Because we're taking up some space in that crazy environment. This is The Ramsey Show.

Ken Coleman, Ramsey personality, is my co-host. You can hear him daily on the Ken Coleman Show and podcast, broadcast on radio, on Sirius XM, on podcast, on YouTube. And he's always talking about your career and your job and how to make more money and how to do something fun with your life where you actually end up with money. And that's a cool idea. A lot

Lots of cool projects and things around that, including his number one bestselling book, Paycheck to Purpose. He's my co-host today. Aaron is in Orlando. Hi, Aaron. How are you? I'm doing well. How are you? Better than I deserve. What's up in your world?

Well, I have a couple questions for you. I'm torn right now with the current economy to either start my own business or to enter a better paying trade than what I am currently in for the long haul. What trade are you in? Currently, I do lift station work, sewage pump stations, and

and either for private companies and then I maintain them. What do you make? I currently make $24 an hour at 22. Okay. You're 22 years old. Oh, wow. Okay. And what trade are you thinking about pivoting to or moving to? Are there several or is there one that's got your attention? The one trade that has my real attention and has been one I've wanted to for a while is I would like to do wine work if I don't start my own business. Yeah.

Big money. Big money. In fact, I was talking to a guy a couple weeks ago who runs a line company training business, a line training these folks, and it's just they're looking for people. There's great opportunity. So what's keeping you from moving into that? He might open his own business. Yeah, but I want to know the answer to this first question because I think that helps us with the second one. Are you truly considering it? You've been thinking about it a long time. Why haven't you moved? The biggest thing with is

Economic climate. I live in Florida, and that's one thing that has kept me from throwing away a job and jumping full in to try to start my own business. Because right now, the price of everything in Florida is so high, not a lot of people have the money to go ahead and pay for that. So why would you be throwing away a job if you're taking another job in line? I want to know why you haven't moved towards that trade.

Okay. Currently, one of the biggest things is I would have to travel, and I'm not trying to jump into a vehicle payment to get a better vehicle where I can travel with. Okay. But you're assuming that you have to go into debt to be able to get a decent vehicle to be able to get to the job. Do you have any money?

I have about $2,500 in emergency after some medical expenses. Okay, so when they hire you to do a line job, do they pay a signing bonus of any kind right now?

Uh, no, sir. Um, there's a local union out of Ocala, Florida that I'd be looking to join. Um, and that's a three and a half year process to get a journeyman's card. And that would put me in the range of 44 an hour. Okay. Yeah. All right. So it's not instantaneous. This takes a while. All right. Now the business idea takes 20 minutes to start, but you just don't know whether to do it right now. What is it?

It's fencing. I have some experience doing it from I used to work at a municipality, and I have some experience doing that. Building the fence. Yes, sir, building and installing, clearing the land to go ahead and install the fence. Commercial fencing or residential? Residential is what I have experience with, like cattle fenced and then residential privacy. What kind of equipment do you need for that?

If I needed equipment, the ideal and what you would really need to turn over a profit margin would be a small skid steer with an auger is the best piece of equipment you can use if you're not trying to break your back. It saves about 75% in time. Okay, so what's a good one going to cost? $10,000. Yeah, yeah.

So now you know what you're dealing with. I don't want to make your decision for you or hang something on you, but I would say that I think that you should try saving up the money for the auger, and let's see if we can get a couple contracts here and there. But this isn't an all-in situation. I don't think you have to quit your job to start working on fencing as a side gig. Yeah, I agree.

I think you could pick up some side gigs with it, break your back for a little while. You're 22. And dig some holes, man, and build a fence or two, get the profit from that by the skid steer used, and then you can increase your profits and increase your speed. But listen, there's never an economy that allows you to start a business ever that's easy. It's always hard.

The worst boss you'll ever have is working for yourself. That guy is a butthole. He will work you to death. You follow me? Yes, sir. But you're not, Aaron. You're not. We're just metaphorically speaking. I currently do do fencing as a side gig, and that's part of what's keeping me from wanting to jump full in as well, is I currently do do it as a side gig. Great. Are you making any money?

Yes, sir. Yes and no, depending on help. Down here, it's very hard to find help, especially in my area. You can't really find anyone who's worth anything. So, Aaron, here's the deal. I don't want in any way to, you know,

squelch the dream here, but this is some really good data you're getting as to whether or not, is this something I really want to do? And I think you've got some real options here. You know what the path to moving into the trade of being a linesman looks like, and maybe you can launch a business once you get into that industry and really get some great experience and they pay you well to learn the trade. I think you're at an inflection point where you have to decide, is this, if I had the 10,000, if I had all the clients, would

Would I really want to do the fence business? When I'm 30 years old, what am I going to be glad I did? Okay. That's the way I ask it. When I'm 32 years old, 10 years from today, a decade from now, and whatever you do, both of these things are hard physical work. Both of these things have risk. Both of these things have strain. Both of these are hard. Both of them have tremendous income potential.

Either way the economy or it's hard to get labor are not your problems What your problem is is you're gonna have to decide what you want to do with your life for the next decade

And do you want to look up at 32 years old and own a residential fence company with 25 people working for you running jobs all over the city and you're running around checking the jobs and you're checking your profits and you're estimating and you've dialed it in and you've become known in the, in the area as the go-to guy for fencing. And is that who you want to be or do you want to be a lineman and, um, high risk, hard work, um,

But unions dictating when you're working, where you're working, all that kind of stuff. You're not your own boss, but you've got a tremendous income and pretty steady too. Pretty steady. It's not an old man's game. That's true. You won't be doing it when you're 60 probably. But I've got to say this. Those kind of trades can fund everything.

another trade or fund your entrepreneurial venture and you being a small business person. If you want to stay in the trades, you know, I see guys all the time that are jumping from trade to trade to trade. They made really good money in one trade that funded them being able to start their business. So I would look really hard at that long-term. What does that 30-year play look like for you? Yeah. What do we want to do in the next decade? Where do I want to end up? And that should tell you where you're going. Don't let whining about the economy or whining about it's hard to find good help or

Let me just tell you, I've been running a business for 30 years. It's hard to find good help. Period. Most people don't care. Most people don't work hard. So don't hire them. Don't hire most people. I got a building full of champions, but I go through a lot of turds to get some champions too. You know, a lot of them over the years. So that's just part of running a business, man. It's hard. Nothing you're signing up for is easy, but you're the hero material. You can do it. This is the Ramsey show.

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual, amazing relationships. Open phones this hour as we talk about your life and your money. Ken Coleman, Ramsey personality, career expert, number one best-selling...

Author of the book Paycheck to Purpose and host of the Ken Coleman Show, he's my co-host today. The phone number's Open Phones at 888-825-5225. Today's question of the day comes from Neighborly, your hub for home services. Here at Ramsey, we believe in making home ownership a blessing, not a burden. So we recommend Neighborly's nationwide network of service professionals to help repair, maintain, and improve your home.

Find the help you need at neighborly.com slash Ramsey. Today's question comes from Jeff in Florida. I got a new job recently and I have a boss from hell. I'm pretty sure I'm going to get fired soon. The problem is I enjoy the work and I get paid well. I tried looking for other jobs similar to this, but there's none in my area. I feel like I'm walking on eggshells at work, like I know it's a matter of time before I get fired. I paused Baby Step 2 to start saving in case I get fired.

I now have $2,200 saved up. I figure we can live on one income if we sell our cars and take our kid out of daycare. Should I start, one, looking for a new job, two, downgrade everything except child care to prepare for the worst case scenario? If I downgrade and get a job, I'll have that extra income to pay off debt, which

which is a substantial amount. So yeah, it should be looking for a job right away and taking maybe one or two extra jobs while looking. If you really feel like the shoe is about to drop and you could get fired at any moment, you just want to be stacking cash, which means making some extra cash right now. If it were this bad, the way you're describing it, I would be working extra, saving extra, pausing some things. Sure. But let's move quickly.

because you know what the work is. I'm not going to accept the reality just automatically that I've tried looking for job similar lists, but there's none in my area. You were looking for one when you found that one. Yeah, I just never want to accept that. That's just, that's a bull crap, okay? You know, there's no houses for rent in this area. Of course there's houses for rent in your area. You just don't like them, you know? So yeah, you need to look for another position immediately. And you know, I'm going to throw in one other thing.

I do not, I cannot tell this from this email, but Jeff, I want you to ask yourself, are you whining? Is your boss really the boss from hell? Are you the lame employee from hell? You just got the job. You walk in the door and they ask you to do some work and you don't like that. Are you whining?

It might not be true. Yeah. But I would want to ask myself that question. Well, you actually make it. Why is it that you're so freaking useless that even the boss from hell is going to fire you quickly? Well, let me throw another scenario that could be out there too. This could be a boss who may be not the boss from hell, but it's got a lot of crap going on in their own life, personal life. Maybe they're stressed out of their mind. And this boss isn't talking to you with the sweetest, kindest of demeanors and voice. And maybe he's a little grumpy and,

And maybe you're not going to get fired at all. Maybe they got some rough stuff going on in their life, and you think because of the way they're treating you, you're going to get fired. Yeah, like are you whining? That's what I'm asking. That's right. But what's the cause of them thinking that the boss is from hell? Maybe they're just having a bad day or a couple bad days, and you're not going to get fired. Everybody that disagrees with you is not a narcissist.

Yeah, it's interesting. You know, everybody that you don't like the way they said something is not a toxic work environment. And people telling you to do your job is not a toxic work environment. That's like you buckle up, buttercup.

So I don't know if that's what's going on or not. Yeah, it could be. But sometimes that stuff comes up. It doesn't come up here. We don't run into it much because you don't even make it through the interview process if you're going to be that wimpy here because we get crap done and we don't pull any punches. I could be the boss from hell because I believe you ought to work and stuff because you've got to outwork me, and I'm 63 years old and been doing this 40 years, so keep up, kiddo. Buckle in. Buckle in.

So this is what we're doing. I mean, if you're not going to do that, you're not going to like me. Yeah, I agree. Yeah, you would. Jeff, I don't know that that's you, but if you're ever facing this, I'm increasingly hearing and Ken is too in the career space that every person

environment that feels momentarily unpleasant, like I'm going to get a callous, is a toxic work environment. And that's just the wussification of America. You're just being a wuss.

You know, suck it up and, you know, dig, you know, get the shovel, dig the hole, man. Yeah. I mean, if that's really what's going on, I don't know if that's what's going on. So Jeff, ask yourself, are you whining? Are you being a wuss? Is it really that bad? Are you exaggerating and melodramatic in this?

I mean, you just took the job. How could you mess up the interview that bad? Yeah, well, here's another clue in this. I enjoy the work, he says, and I get paid well. People don't enjoy doing stuff they suck at. So he's either delusional, and I don't think he is,

Or I think this is an emotional situation. He doesn't like the way he's being talked to and treated. And I get that, whether he's whining or not. But the issues don't think that the boss is going to fire you just because they're not talking to you with roses and treats. That's the issue. People quit too soon in these days because they want to be coddled.

That's what I'm saying. You can't get coddled at the workplace. That's what I'm saying. And it's not, you know, I do not expect anyone to stay in a real toxic work environment.

But asking someone to work and correcting them if they don't do the work properly is not a toxic work environment. That's called training. Yeah. Okay. You know, I think back to my favorite coach all time, Benny Polk, high school basketball. If you were to watch those practices from outside the gym doors and just watched his demeanor, you would have thought he was verbally abusing us. He wasn't. He was. Well, in today's world, he was. But he was just coaching us.

And I think there's a difference between verbal abuse, bullying, and all the stuff we hear about, and then just good old-fashioned tough-nosed leadership sometimes. It's not all roses and pom-poms. Well, I mean, you know, so, Jeff, I am not accusing you of that. I am suggesting, though, that just reading through the email and the way this is put together, that, you know, maybe you need to analyze how much of this is you.

Um, if it's not you and it's truly just a guy that's being a twerp and he's a jerk and he's yelling and screaming or something, I wouldn't ask you to work there. We don't yell and scream at Ramsey. We don't cuss at our team. We don't do that. We don't abuse. We don't, we're not the bosses from hell, but I have been accused of being that just cause I told somebody to get up off their butt and get their stuff done. Okay. And if you don't like that, you don't need to work around here cause we get stuff done.

You know, we leave the cave, kill something, and drag it home pretty regular. And when you kill something, usually there's blood. So get ready. You know, I mean, there's crap going on here. All right. So this is what's going on. And so you've got to decide if that's, you know, that's a part of the equation here. Like, I've been fired from jobs, too. And, you know, one time I got fired is 100% my fault.

It took me a little while to realize that. When I went broke, it was 100% my fault. You know who got me broke? The idiot in my mirror. And one of the best things I did in my life is discover that he was the problem. This is The Ramsey Show.

Ken Coleman, Ramsey Personality, is my co-host today. The Ramsey Cash Giveaway is here. You could win one of our $500 weekly prizes or the grand prize of $5,000. Enter every day to increase your chances of winning at RamseySolutions.com slash giveaway. No purchase necessary, of course.

You can also get meaningful gifts for Christmas during our $12 sale. Shop our best-selling books like The Total Money Makeover, Baby Steps Millionaires, and Own Your Past, Change Your Future, all Dr. John Deloney books, Dave Ramsey books, and so on for $12 each. The Questions for Humans conversation cards, as low as $10 right now, and the popular Questions for Humans Christmas edition is back.

There it is. And we've got the New Year's edition, Christmas...

New Year's. These sold out pretty quick last year. We've got a handful of them. I know we've got at least two left because I'm holding them. Yeah, these are great for navigating the awkward moments with family you only see once or twice a year. Just to keep you from discussing COVID and politics, which are kind of the same thing. So, hey, check it all out. Shop the sale at ramseysolutions.com. Shannon is in Orlando. Hi, Shannon. Welcome to the Ramsey Show.

Hi. Hi, what's up? Thank you for having me. How can we help? My husband and I are in $130,000 of debt. We have about $120,000 income. I opened a business, and right now it's not going very well. I'm working a full-time job. Aside from the business, my husband is working two jobs.

and we're just trying to figure out what we need to do here. Should we let go of the failing business? Should we? We started reading your financial piece, and we're trying to start the baby steps. Right now we have no savings. I put everything into this business. The $130,000 in debt, is that on the business? No, that's between us.

The business is debt-free because I paid everything in cash, long story short, sold a house that was given to me, and we moved to a different place. What kind of business did you open? I opened a medical uniform store. There wasn't one where we live, and there's a lot of medical places here. I'm a nurse, and I didn't like to have to drive 35 miles to get someplace for uniforms, so I did a survey, found out that other people felt the same.

And I opened up a store. So why did they not come? I've done everything I can for marketing, everything I can within my budget, and I've blown my budget. And now I don't know what to do because some people say it's the season. Most people are focused on their children, not themselves. Either way, it doesn't matter because I'm sinking. So you have a physical location that you've rented. Correct. And you have how much in inventory?

I have about $40,000 in inventory. Okay. So what is sinking? What cost do you have? So monthly for the business is $2,800. That's the rent, that's the utilities, and that is, well, actually it does have debt. I am leased the embroidery machine.

The embroidery machine, okay. How much is the monthly payment on the embroidery machine? $700. Okay. You make $120,000, not counting this business, right? Correct. How long a lease did you sign on the property, on the location? One year. And when is that up? That is up in June. So you've only had this open for six months? Correct. Okay.

And I haven't even made $2,000 from sales yet. So you have no traffic, no foot traffic at all? A few people a week. How many hours are you working at your day job? I'm a nurse. I do 3-12 one week, 4-12 the other week. I work night, and then I come into the shop from 11 to 6. Okay. You need to close the shop, and you need to sell this out of your car.

You need to start setting appointments with doctors and nurses to meet them at the hospital or at their medical and go take the stuff to them, sell it to them, go back home and embroider it, and bring it back the next day. You need to be a clothing specialist out of your car. You're a food truck now. And talk to your landlord about what you can pay them to get out of the lease. Okay. Because your problem is your business model.

You're sitting, you did a field of dreams here. Build it and they will come. That always fails. No one just looks up suddenly six months, two months, 60 days after you open your doors and goes, oh, I'm going to rush over there and buy $2,000 worth of uniforms. It just doesn't happen.

So what you would have had to build here would have taken a long time for people to know where you are and then start coming. And whatever marketing you did was an abject failure. So what you've got to do is get in front of people's faces, go knock on their door, call them, talk to nurses, talk to doctors that you know and that you know that you and 22 people that know somebody that you know. Mm hmm.

and spread the word that you will come to their office, fit them, embroider it, and bring it back the next day, and do a cash transaction, and you get rid of $40,000 worth of inventory, and then you decide if you want to keep doing it or not. But at least you can get your inventory sold that way and stop the bleeding by doing a negotiation with the landlord and get out a lease. Sitting there and waiting on this to bleed out is not a good idea.

That's what you already know. That's what you said. I'm just saying it more graphically. Correct. Okay. You've already realized what I'm doing is not working. Something has to change. And if I just sit here, it's just going to bleed me to death, right? You're okay. The biggest thing you are right now is scared. Yes. Yeah. And a little bit ashamed. So, Shannon, just practically, where are people buying their uniforms? All these people in all these medical facilities in your area, where are they buying them? Online? Online.

No, they're going to a town about 40 miles away, 35 miles away. Why are they driving past you? Because that's where they've been going for the past few years when there wasn't a place here to go. Yeah, but now there's a place to go. Why are they driving past you? They don't even know you're there is why. They don't know you're there. Shannon, what Dave gave you, it sounds like a lot of hustle, but it's actually really practical. You've got to start talking to nurses. How many nurses do you know? And you just start telling them. I've been...

I've gone to every nursing home. I've gone to every hospital. I've gone to every place that used medical scrubs personally myself for three days. I walked every place in my county and gave out flyers, spoke to people. Did you show them the uniforms? Did you have the fabric in your hands, actual uniforms? No, no, no. What I did was tell them the brands that I carry because we're pretty familiar with these brands, the nurses and medical scrubs. And all of that created zero sales? So far, yeah. When did you do that?

I did that a week before I opened. Something's wrong, okay? There's something missing in the story that you're not seeing because you're not able to tell us what it is. There's a gaping hole in this story, okay? So here's the thing. When we open a business, we pour our heart and soul into it. It's very emotional. And the idea of failure starts looming over us. It can shut down our thinking, okay?

And I got a real sense you're paralyzed. There's a sense of deer in the headlights here. Okay. And that's a normal reaction. It doesn't mean you're weak. It doesn't mean you're bad. You actually are pretty cool. You're pretty smart. But you missed something in this.

So somehow I'm going to get out of this lease. I'm putting this three uniforms in my basement. I'm either going to burn them in the backyard or I'm going to go find a way to sell them online or out of the back of my car or one of the two and at least try to get my money back. And if I can discover a business model while doing that, maybe we've got something to continue. But you're not bankrupt. You're just scared and a little bit ashamed that you made a mistake. If I quit every time I made a mistake around here, we'd have been closed up a long time ago.

Hey, Ken. Yes. Did you hear that Mint, the budgeting app, is closing? They shuttered it, Dave. Shut it down. The end of the year, it's gone. Gone. Poof. Smoke. Done. Nada. Nothing. Yes. If you got a budget on Mint, what I'm telling you is the end of the year, you're screwed. You're done. They're trying to move you over to Credit Karma.

But it doesn't have budgeting function, so it's kind of stupid. But, okay, go ahead and do that if you want. So here's the deal. What's happened is hundreds of thousands of people, as a result, have automatically moved their budgeting stuff over to our EveryDollar app, which is one of the world's best budgeting apps and already was. And we're not going to try to sell you a bunch of credit cards, which is what Mint was doing. And they quit their effectiveness on converting you into credit went away, so they quit doing it.

Um, so every dollar is there. It's a world-class budgeting app. It helps you manage your money. The Ramsey way. It works wherever you are. iOS, Android online. It's free. And immediately you see where you're standing with your money. You get organized, you personalize. It's a lot more usable and user-friendly than it was anyway, but you don't even have men as an option now. So there you go. I can't say I'm sad.

I'm not sad. I'm happy to have a bunch of new customers and I'm happy for you customers because you're going to have so much better experience and we're not going anywhere. We're not trying to sell a bunch of stuff. We're just trying to get you in every dollar. I mean, we're not trying to get you on a credit card debt. We're not trying to get you in a rocket mortgage or whatever else. We're not trying to do any of that. So we'll proactively coach you on how to become wealthy

and reach your goals. Download the free app on iOS or Android, or go to everydollar.com and get started right now. Spread the word. We're here to help. Whether you were meant or not, we're here, and we can help you. You want to get control of your freaking money? This budget app will do it for you. It's called EveryDollar. You'll know where every dollar is going. Derek's in Dallas. Hi, Derek. What's up?

Yes, sir. So my wife has a question. Where is she? She's at work right now. Okay. We took FPU. We've got everything listed out from smallest to largest. We've knocked out some debt already with the bonus that I got. She gets a 10-year bonus in January. She's got seven school loans here, about $19,000 worth. And her question is,

For peace of mind, the credit cards are a lower balance. So theoretically, going by the program, we'd have to hit the school loans. I'm sorry, you said the credit cards are a lower balance. You mean the school loans are lower balance? No, the school loans are larger balances, but lower monthly payments. And if we...

Did it according to FPU. We do the school loans before the credit cards. No. No. Whoa, whoa, whoa. You must have flunked. Go ahead. You just told me the balances on the credit cards are smaller. Yes. Okay. You're supposed to pay off smallest to largest, not payment, balance. There's two school loans that are larger than or smaller than

The credit card. Okay. So what? The question is, if we pay off the larger balance on the credit card to get up and free up a larger monthly payment to go towards other things versus if I pay off two credit cards, it frees up about $117,000. Hey, Derek, can I be smart for a second? Go ahead. If you had a plan, it got you where you are. Why would you question this? Why don't you just do it?

We've taught 10 million people how to do this. Why are you trying to be a genius now? I'm not. She's just wanting the snowball to be bigger. She's wanting the snowball to be working her way. It doesn't work her way. I got you. Pay off the smallest to the largest. I got you. All kinds of studies have backed up that what we're doing actually works, including 10 million people of going through Financial Peace University and getting out of debt.

Yes, sir. Yes, sir. I agree. Okay. I'll get past the smart aleck and I'll calm down a second. Now, let's try a second. Let's go back at it for a second. So do you need to be, do we need to walk through reinforcement on why we teach that? Did you not, you all didn't grasp that from Financial Peace University?

No, we understood it. It was just a question that she wanted more reassurance. She's a government official, so she was out a lot of the classes, and I was the one that was attending. So just because required meetings that she had to attend. Okay, so she, like, missed the class. Yeah, he does need reinforcement, Dave. Derek, it's okay to admit it. You need the reinforcement to be able to answer the question. No, no, no, no. She needs to go through that lesson. Well.

Well, that's true, too. That's the answer. That's true. Because she wants a logical understanding because she doesn't have this knowledge base that you've got. That's okay. That makes more sense than I went to class and I disagree while I'm broke. Yeah, no, we don't disagree. No, not we, her. Okay? Okay. Because she was the one asking the question. She's not here. But now I can defend her because she has an honest question about something because she doesn't know.

She didn't go to that lesson, right? Correct. Okay, cool. That's fine. I completely understand that. So let's go back then, and instead of picking on her, because she's not here and it's not fair, but we can do one of two things. All right, let's do number one. When did you take the class? It was started a few months ago. We just finished it up like three weeks ago right after Thanksgiving. At your church or online? Online.

At church, yes. Did you get the online application as a part of the package that you guys got into? Yes, sir. Do you have access to the lesson to watch it? Yes, sir. Okay. Pull up the lesson on debt, and the two of you sit there and watch it, and don't you say a word. Let her catch up with the knowledge base. Okay? Because here, now, that'll help. Now, but then here's what...

For your benefit at this moment and the rest of people listening here. Here's what she's going to hear for the first time And that is this I Personally when I started this as a math nerd wanted to pay off the highest interest rate first, which is mathematically correct It's only mathematically correct if you have the same probability of completion, right?

However, when you pay off the highest interest rate first or you start monkeying around with paying off balances that feel good, you don't have the same probability of completing the whole get out of debt plan. And when you enter probability into the mathematics because you messed with the behavior tool, then you lower your completion rate.

And all that garbly gook to say, if you don't go get out of debt because you screw with the plan, then your plan was dumb. You know, that's what it amounts to. So what we've proven is, is that personal finance is 80% behavior. It's only 20% head knowledge. It's not a math problem. If we were doing math, we wouldn't have gotten in credit card debt.

It's not a math problem. It's a behavior problem. So the way you attack a behavior problem is with a behavior-based solution, not a math-based solution. That's what we started doing 30 years ago, and it's been highly successful. That's why I was leaning back in and being a smart aleck, okay? But I didn't understand at the moment that I did that that your wife hadn't even seen the lesson, so bad on me. So anyway, now...

So the way we what we know is, is that if you go to the gym and you work out and you eat salads for a week and you gain four pounds, you will quit. Right.

even if it would work a month from now you won't keep doing it so your probability of completion is zero you have human beings have to have a sense of traction we have to have some solutions we have to have a sense of progress a feedback loop psychologists call and we need a feedback loop that says you're winning if i go to the gym and i lose weight i'll keep going to the gym if i quit eating big max and i lose weight i'll quit eating big max you

You will keep in the loop. Well, if you pay off some debt, you'll pay off some debt. You'll pay off some debt. You'll stay in the food back loop. That's why the debt snowball works. And that's why it's been more successful than any other get out of debt plan in America. This is the Ramsey show. Our scripture of the day, second Timothy two 15, do your best to present yourself to God as one approved a worker who does not need to be ashamed and who correctly handles the word of truth.

Steve Maraboli says, hustle until your haters ask if you're hiring. I like that. That's pretty good. I don't know how many years that is. I've been doing it 30 and I got a couple of them, but, uh, I did, I did have done that in, in this, in this business within a couple of industries, but, uh,

I don't know if we overall, we definitely don't have all the haters asking if we're hiring. But the fun about that, the principle of that is true about your show, the early journeys of your show, where you just kept hustling, you kept adding stations, and then people started going, oh, I want you on. Yeah, we were talking about that in the radio business just the other day with a bunch of radio execs. We were laughing about the old days and naming names about, this guy wouldn't even take my call, this guy was a jerk.

And then later actually hired him as a consultant. Exactly. You know, two or three of them, as a matter of fact. But yeah, that is true about that. But not public haters, but more like industry haters. Right, right. Publicators are different. Doubters. Publicators are trolls. That's different. Yeah, that's a different thing. But yeah, that's very interesting. Well, Merry Christmas, everybody. Yes. We're so glad you're here. Ken Coleman, Ramsey Personality, is my co-host today. Edward is in Tampa, Florida. Hi, Edward. How are you?

Hi, Dave. Hey. Hi. The question I have today is I'm kind of struggling with coming up with a plan of attack here of how to pay off my mortgage while I'm planning for retirement. Okay. Are you out of debt except your mortgage? Yes. Good. What do you make? We have a household income of about $240,000. Sweet. Okay. And what do you owe on your house?

Uh, we owe, uh, 535,000. How old are you? 62. Okay. Um, if you're wanting to do this tomorrow, that's a struggle, but what we teach is, yeah, 15% of your income towards retirement and anything else in the budget that you want to squeeze out, throw towards the house. Yeah. We've got about, uh, $300,000 of equity in the house. Yeah. Um,

And I'm currently putting in, well, 16% of my income into the 401k because I'm taking advantage of the makeup payment, you know, increase of the limit. All right. Are you putting anything else in retirement? Is that all you're putting into retirement? Yes. Okay. So you're at 16%. I said 15%. Whoopee. Okay. So that's like 40 grand out of 250. Yeah.

So, okay, you got $200,000 left to live on and pay down your mortgage. How much are you going to pay down your mortgage out of $200,000? Okay, well, I got the current mortgage is $2,300. Now, your balance is what?

Balance is $535,000. Okay. And you make $240,000. We have established you're putting $40,000 of that into retirement, which leaves you $200,000 to do everything else with. Pay some taxes, obviously. You're obviously going to pay the current mortgage payment. And then you should have, what, $50,000, $60,000, $70,000 more, $80,000 more, if you watch what you're doing, to throw at the mortgage. Right.

But you're not going to be able to cruise on the Mediterranean three months of summer and do that. Right, right. I mean, there are definitely some behavior changes that I think I need to make. Okay, so, Edward, let's put a real number on this. When do you want to have the house paid off? Well, the original goal was to have it paid off by the time I retired so that I could walk into retirement with no payment. When is that? Well, it was 65. Okay, that's three years, and the 500 is 150 a year. You're not going to make that.

What can you put towards this house realistically? Do you have any money other than retirement saved? Do you have other investments? I have a few other investments. How much? I've got $34,000 in cash, an emergency fund. Okay. And then I've got about another $15,000, $20,000 in investments. Okay. So how long have you been making $250,000? Quite a few years. Okay. So you guys are spending a lot.

Yeah, we're spending a lot. Yeah. Okay. So you got to decide. Okay. So it's big math. Just take 500 and divide it by the number of years you want to work. That's what I was trying to get to. You know, if you divide it by 10 more years instead of three more, if you divide it by 10 more years, it's 50 grand a year.

If you divide it by, you know, what are we going to divide it by? Yeah, but I could work the 67. Okay. So that's five years. That's $100,000 a year. That's doable, but that's going to be a pretty dramatic cut in lifestyle because we've established you've been spending about $200,000 a year. So lifestyles get, if you want the house paid off in five years, you need $100,000 a year, right? $500 divided by five, right? Right.

And you make $250,000. We're putting $40,000 in retirement. How much is in your 401k now? $840,000. That's good news. Okay. All right. And when I looked at the projection, by the time 65, it would be probably 1.2, and by the time 67, it would be 1.5, yeah. If it's invested in good mutual funds, it should double about every 7%.

I'm at 12. Yeah. Yeah. Now, would it be better, though, to stay where I am and, like you said, just eat beans and rice? What house do you want to retire in? Or would it be better to downsize and move? What house do you want to retire in? Right. Right. Here's the tradeoff. The tradeoff is you're going to cut lifestyle and put $100,000 on this for the next five years.

up to 67, and you're going to cut lifestyle. Or you're going to move down so you don't have to cut off lifestyle, but you're going to live in a smaller house all the way through your retirement years. Right. That's your tradeoff. What you're putting in retirement is not what's killing you. What's killing you, what's messing up your math is your spending, your lifestyle. And that's okay, but, you know, I agree with you that you need a goal of by the time you hang up the cleats, the house is paid off.

That is a real goal. That's a solid one. So 67, 69, you know, these are all things that can go back and forth. But, you know, and you're okay with retirement nest egg. Your retirement nest egg is going to be okay. But I do need to clean this stinking house mess up. And it's a tradeoff on what y'all are spending. And I don't know what you're spending it on. So I think that's a discussion you and your spouse are going to have. Do we want this house into retirement or do we want this lifestyle into retirement? That's the question.

And then if you take care of that, you're going to be sitting with approximately a $2 million net worth or probably a $3 million net worth at 67, 69. You'll be able to do anything you want the rest of your life. But you've got to make some solid decisions for the next five to seven years mathematically. And it could be a move down. You may say, we like our life. I'm not touching our life. We would trade that for a smaller house. That's an okay trade.

If you want to do that, that's okay. That's what I would do. If I were in their situation, I'd go a little bit smaller. You'd rather buy the experiences than the house. I would. I'd rather travel, eat good food, do fun things with people that I love and enjoy being around. That to me matters more than the sweet, awesome, huge house. Fine dining is a wonderful sport. I know. You know? I mean, no kidding. But.

But, I mean, he's already a millionaire. Yeah, he's doing great on that. He's making a quarter million a year. So you're not a stupid guy. You're doing great work. You've done great, Edward. Congratulations. But if you want to have – what you're asking for is a good goal. Yeah. You're suggesting smart goals. And I'm just trying to help you get there. It's just a math trade-out. There's always opportunity cost on this. If I do this, it means I can't do that. If I do that, it means I can't do this. So you just – whichever one. It's okay. Okay.

And both are probably going to entail not 65. Yeah, that's probably the case all the way around. That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus.

Dr. John Deloney here. Mental and emotional health challenges, broken relationships, it's all just part of life, but they don't have to define you. The Dr. John Deloney Show is here to help. It's a collar-driven podcast where you can get practical advice on dealing with anxiety, loneliness, depression, relationships, and more.

relationship challenges, your kids, and so much more. Listen to questions from our callers, or if you're walking through a tough situation and need some help, give me a call. You were never meant to do life alone, and that's what this podcast is all about. Follow along on Apple, Spotify, YouTube, or the Ramsey Network app. Remember, you're worth being well.