Your Mindset Matters More Than Your Money
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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. George Campbell, Ramsey Personality, co-host of the Smart Money Happy Hour, is my co-host today. Open phone to 888-825-5225. That's 888-825-5225. Paul is with us in Minneapolis. Hey, Paul, welcome to the Ramsey Show. Hey, Dave, thanks for taking the call. I have another Should We Pay Off question.

the house early out of our retirement question for you. Okay. Why is this one different? Well, my wife and I are both retired. I'm 61, she's 58. We retired with the mortgage. And

I've got a number of differing opinions from our financial guy. I've got friends that work in the finance industry. I worked for a bank in 30 years. I guess just looking for another opinion, maybe one with a little bit more credence than some of the others, I guess. Okay. So how much do you own your home? It's a $450,000 house. We owe $170,000. And how much do you have in your nest egg? What's that? What's your net worth? What do you have in your nest egg?

Net worth is about a million and a quarter. We've got just over a million that is investment and retirement. If your house was paid off, why would you go borrow on it? We would not. Then what's the difference? I guess it's just, okay, let me rephrase the question. Maybe a better question is if we decide to do this, is it a process over multiple years to ease the tax burden? Do we just bite the bullet and

Take the hit and do it once, or how would I do it? I've been doing this 30 years. I've never had anybody call me back and say they were pissed off because they paid off their house. Fair enough. So one shot, or would you? I'd write a check today. I'd be debt-free. I'd have been debt-free yesterday if I were you. And quit listening to all these idiots. There's a lot of idiots out there running around with an opinion about your money, and you're a millionaire. What's your mortgage payment? Go ahead. What's your mortgage payment right now?

Mortgage payment is what? $1,200. Okay. You'd freight most of that, which now you can invest. So yes, you'll lose some out of that investment account, but you're going to still invest for the next 20 years.

Dude, you're just going to sleep so much better tomorrow. I mean, we're both retired, so invest is rolling, not necessarily additional. You have almost zero risk in this situation because you could write a check at any minute and pay it off if you got in a pinch. You don't really need the money in one way or the other. It's all about what is your end goal. When you're 85, do you want to have a mortgage? Why would you keep it? There's no reason to keep it. You wouldn't go borrow on a paid-for house.

in order to have more money to invest. And so write a check and sleep better tomorrow. Tonight, pay it off tonight. Hit the submit button. And then when you go and you get the mortgage release in the mail, make a copy of it, take your shoes off, walk into the backyard, have a mortgage burning party, and tell me that didn't feel good.

I mean, there's just no downside to this. You know, you're a millionaire. You're going to be okay either way if you don't follow our advice, if you follow those idiots' advice. But if I've got a financial person that's telling me to stay in debt, I'm getting a new financial person, period. Because, George, we studied 10,167 millionaires. The number of them that told us that they became wealthy because they borrowed on their home in order to invest was precisely zero.

None of them leveraged their personal residence to build their wealth. None of them. And so the idea that I continue to leverage my personal residence in the name of building wealth is an asinine based on the millionaire data. Well, we're seeing so much more of this because people have their record low mortgage rates they don't want to let go of, Dave. Why would I pay off my mortgage? But I got your mortgage rate beat. You know what my mortgage rate is? Zero. I don't have one.

Hello. Heck of a rate. Zero. I got the best rate. Come on, man. Seriously. So when rates go up and down, you don't have to worry about them because you don't need debt anymore. It's a great feeling.

Instead of worrying about what the market's doing. So, yes, it hurts to write that check and lose that much money, lose, quote unquote. But you never really had it if you owed it to the lender in the first place. Paul, pay it off, son. Pay it off. There's a bunch of intangibles that you're not even considering in this decision. You're still acting like it's primitive math, or at least the idiots advising you are.

So you're going to sleep different. Your wife's going to look at you like a hero. Never once have we had a wife said, you know, my husband borrowed deeply on our mortgage, and he's my hero. Never came up. I love the Kermit vibe she had, too. That was great. Kind of a Miss Piggy meets Kermit. Well, it's the best I can do. It's the best I can do. Anna is with us. Is it Anna or Anna? It's Anna, I'm sure. And she's in Grand Rapids. Is it Anna? Is that right?

Yes, it's Anna. Hey, how can I help? So I recently paid off all of my student loans and in debt free. Yay! Way to go! Thank you. Yeah. So I couldn't have done it without you. But I have my three, six months of expenses. I just finished that up. And I'm wondering now if I should be investing my 15% or if I should...

be saving for a wedding that my boyfriend and I are planning to have in about a year and a half. So I'm wondering if I'm saving for that. Wedding. Wedding. Okay, perfect. Are you guys paying for this on your own?

We think so. We don't really want it. We just want to plan for that and that if something comes, then we'll go for it. But yeah, we kind of just want to plan on doing it ourselves just in case. Okay. I would set a very specific goal, a number you're trying to hit to save, and I would try to hit that before the year and a half is over and then begin investing. You got that money set aside. You know you're not going to have to go into debt for this wedding. That is the goal here. And so that's why we're telling you save for the wedding first because what happens is you start investing 15%.

The wedding was over budget. Now we've got to put it on a credit card. For sure, yeah. So what do you think you're going to spend? We're thinking maybe between, I would say probably, we're thinking between $20,000 and $30,000, depending on what rates are. But probably $25,000 is the goal we set. Okay. Well, if you, yes. By the way, that's about an average wedding in America right now. So you're not above average, you're not below average. You're right around there. It was $28,000 last year. So the thing is having...

Three grown kids that all got married, and I was involved in the budget because I was paying for it, or at least part of it anyway on all but one. All of it, but anyway, my part, the bride's part, and then my son, we participated some. Have a detailed budget, not a general goal.

lay it out. Okay, this is how much we're going to spend on the photographer. This is how much we get on the dress. This is how much we spend on the reception. And treat it, I'm sorry, but treat it like a project. You're managing a project. You are. So you have a timeline. You have a budget. And you stick to it. What must be true? Well, we can't have that. We've got to have this instead. If you don't have a very specific thing, then you'll line item. You'll get into a mess there. But that sounds reasonable, I would say, for the wedding first.

I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible, are people that call in and their spouse has passed away suddenly, and they don't have life insurance. When you have to think through how am I going to pay my bills...

I'm going to eat next week. Yeah, in the middle of all that grief. Like it's just, it is, it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here.

You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282 or go to zander.com. George Gamble Ramsey personality is my co-host today. Thank you for joining us. Open phones at 888-825-5225. Will is in Atlanta. Hi, Will. How are you?

Good. How are you, Dave? Better than I deserve. What's up? About two months ago, my grandmother passed away, and I received about a $1.1 million inheritance. Wow. Sorry for your loss and thrilled for your blessing. What a wonderful thing she did. That's amazing. You're the only grandkid? No, I'm one of two grandkids. Each of you got a 1.1? Yes. Way to go, Granny.

Wow. But my question today was, how do I make, I'm 23 years old. I was just calling to find out how do I make the absolute most of this? So this is a little bit intimidating to you. Yes. Good.

That's a good sign. That means you're wise. If you were having a woo-hoo, I hit the lottery moment, it would mean you're a child. And so I'm glad you're a little bit. That's a great. It should take your breath away a little bit. This kind of fear is the beginning of wisdom.

So way to go. It's a good fear. I don't want you to be panicked or anxiety ridden or anything like that, but I do want you to be aware. I just got behind the wheel of a car that is way more powerful than anything I've ever driven. And I need some driving lessons. That's what you're aware of. Good for you. So proud of you. Good, good, good, good, good. Okay. Uh, first thing is keep that mindset. Second thing is never put money in something you don't understand, right?

No matter who says to, including me, anywhere you read or hear to put money in something and you can't tell somebody else how it works in detail, do not put money in it. Okay? Okay. Which means you might be going a little bit slow at first because this money might just be sitting in a bank account because that's what you grasp right now. Okay? Mm-hmm. Okay. The third thing is the Bible says in the multitude of counsel there is safety. Okay?

Money people, too many of them, have a little bit of arrogance in them, and they want to tell you what to do. If you have a money person, a financial advisor, an insurance person, a real estate person, an estate planner that is telling you what to do instead of teaching you, fire them and get another one. You want someone with the heart of a teacher.

Because it is not their job to manage the money. It's yours. Your grandmother didn't leave it to them. She left it to you. So it is your job to sit with a mutual fund broker, with an advisor, and learn and learn and learn and learn and learn. And you're doing that today. You called us because I want to learn what to do, right? That's very good. But always look for someone with the heart of a teacher.

You cannot offload the nervousness of this responsibility by letting someone else make your decisions. Okay. That make sense? Yes. If you have to understand it and you have to have people helping you that have the heart of a teacher, that helps you understand that those two things work together. And then you're going to move slow. You just move at the speed of your comfort, at the speed of peace. When in doubt, don't. Easy enough, right? Yeah.

That is very easy. Yeah. In other words, when your stomach's moving up towards your throat, you wonder if this would make your grandmother angry with you, don't do it, which is your fourth thing. Each time you make a decision with this money, ask yourself, would this cause her sitting in heaven to smile and be proud of her grandson? Okay? And if the answer is no, don't do it. Because this lady had some sense. She left $2 million to her two grandkids.

So I think we can use her as a filter for our decision-making, honoring her legacy, honoring her memory, causing her to smile in heaven as our filter, and that's going to help you also. Does that make sense to you? Yes, it does. Okay. So there's no magic formula on what to do with the money. I put mine in growth stock mutual funds, and I pay cash for real estate, and I live 100% debt-free, and you probably already knew that.

Yes, I do. And George does the exact same thing. Absolutely. And when you look at this money as a steward or a manager of it, it changes the filter. And an easy way to do this is filter it through the baby steps, number one, but also filter it through three buckets, giving, saving, and spending. So you should give some of this and be generous, just like your grandma was. You should spend some of it and enjoy it. And you should invest probably the biggest portion of this for the future. What do you make?

I currently make about $110,000 a year. Okay. So you don't need any of this? No. Yeah. And so here's an interesting thing. If you put it in something like a mutual fund and it makes 10%, it'll double every seven years. So you said you're 23? Yes, 23 years old. So it'll be 2.2 at 30. At 37, it'll be 4.4. At 44, it'll be 8.8. It'll be $16 million when you're 50. Okay.

If you just don't touch it and invest it, and it makes 10%. Yeah. Mind-blowing. I didn't get it, like, wired to my bank account. It just got transferred into one of the financial institutions that she was associated with. But currently, it's split up about $350,000 as in personal stock choices and CDs, and then $750,000 as in a managed stock account. Okay. Okay.

Well, I don't play single stocks, so I probably wouldn't do that because there's more risk. But I want you to get in there and start figuring it out. And again, there's nothing to panic about. But feeling the weight of this as a responsibility to manage is a proper philosophical, spiritual stance for you. If you do that, it'll cause your decision-making to be different than just some little kid who got some money and blows it all by the time he's 26. Yeah.

Okay. Because you're not. You're already more manly than that, I can tell. Very wise. Yeah, I'm very well done. So I don't know if he said it, but no debt, emergency fund in place, that's a good spot to be investing and to buy a property with cash, a reasonable property, enjoy some of it, and then the rest I'd be investing either in more real estate if he's comfortable or just putting it in some good mutual funds. Just take your time. Just take your time.

No rush. Yeah, very, very calm. Well, good question, man. So put good people in your corner that have the heart of a teacher. They'll help you. If you want to know about the investing the way we do it and the way I personally do it and get someone with the heart of a teacher, click SmartVestor at RamseySolutions.com. You'll find a SmartVestor Pro or two or three in your area that are people that have the heart of a teacher and know the way Ramsey does it.

And they can walk you through that and teach you what you're doing. And they're going to move you out of those single stocks. I can tell you that. Once you understand, you're going to move you out of those single stocks. Paul is in Cleveland, Ohio. Hey, Paul, welcome to the Ramsey Show. Hi, thanks for having me on. How are you? Better than I deserve. What's up?

I recently graduated from college. I've got about $20,000 student loan debt and about $40,000 already invested in my retirement account split between a Roth IRA and my company's 401k. What do you make? I'm trying to balance. What's that? What do you make? I make about $60,000 a year. Okay. You're trying to balance what? I'm trying to balance continuing to save for retirement and getting ahead on that. I'm 24 years old.

And just making sure that I also pay off the student loans. So I have a, got about $10,000 set aside as an emergency fund. And I'm just trying to figure out what to do next, whether I should lump some pay down my student loans or just keep saving for retirement since the interest rates are a little bit lower than what you expect to get out of the stock market.

Well, Paul, I will talk to you like I as if I went back in time because I had more student loan debt than you and I made less than you. And so at 23, I was $40,000 in student loan debt. I wasn't making any progress. I was trying to play the same game you are balancing this all. Here's what you got to do. Paradigm shift. Let's try a proven plan. That means we're going to take 9000 from this emergency fund, pay down the debt.

That's going to leave you with 11 left. Making 60, you're going to knock that out quick. Pause investing. You'll be back to investing probably in six months if you do it this way. Yeah. Investing 15%. Don't balance debt and investing. Get the debt cleared and then go whole log on the investing. That's what George is saying, and he's right. This is The Ramsey Show.

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One dollar, Bob. It's like a hip game show. I would love to see when the price is right, Dave. It's not too late. I don't know. I was stuck on an elevator. I don't know what happened. All right. Up next is Jacqueline in San Antonio. Hey, Jacqueline, how are you?

Hi, guys. I'm well. Thank you. Better than we deserve. Good. How can we help? You didn't even ask, but I answered anyway. What's up? Hey, you know, I already knew the answer. I'm on autopilot, Jacqueline. How can we help? I have a beautiful, responsible 19-year-old daughter who lives with us and is about to make me a grandmother. I know it's funny I said responsible first, right? Except for that one time, yeah.

Yeah, okay. Yeah. My question... Well, financially responsible, hardworking, excellent work ethic, and morally sound. My question is, how much should I be helping her throughout this pregnancy and throughout the first month? It was obviously unplanned, and she's had a hard time with processing the whole thing, and she is now unable to work. So...

I'm just kind of looking to you. It was sort of a light came on as I was driving and listening to you, and I thought, I respect Dave's answers, so let's run it by him. Well, I appreciate that. Sometimes when I'm facing something like that that is a little bit ethically or morally or I don't even know. Those aren't the right words. Relationally overwhelming. It helps me to say,

Not what is the right answer today, but what do I do today that is the right answer for 10 years from now? Exactly. Because we have a strong foundation with our kids of teaching them financial responsibility. You know, we go by years for years and years. And so what you've got is, I mean, obviously a baby is an awesome, wonderful thing, particularly grandbabies. If I'd have known how great grandbabies were going to be, I'd have been nicer to their parents.

So, you know, all of that part is wonderful. So this is a bad metaphor, but I would almost say, what if she had a car wreck and couldn't work? She ran a red light. It was her fault. And then she got hurt, right? That's not a really good metaphor because it's not as babies are much sweeter than that, right? But I mean, that's kind of how I think I probably would look at it. I'm just thinking like a grandpa right now or like a dad, right?

And that's where my brain is stuck. This is not a 39-year-old who's done heroin for 15 years and hates me. This is a 19-year-old that messed up, made a mistake that otherwise has led a pretty good life is what you're describing to me. That's correct. Yeah. When our kids graduate high school. Thank God God didn't throw all of us out in the ditch the first time we made a mistake. So I got lots of grace and mercy in this situation. If it's me, I'm just going to take care of her like she's 17. Yeah.

Yeah. But all with the idea that we're going to lead towards a sustainable answer when she's 25. So what's sustainable for her when she's 25? Well, obviously, financial responsibility, career responsibility, mommy responsibility, living on her own and sustaining and developing a life, whether she does that as a single mom or later on gets married to someone, right? Do you mind if I add one more thing? Okay.

When they graduate high school, we have them pay us rent immediately. And the thing is, their grades stay up in college. When they graduate, they get all that money back. So it's basically savings. If they don't, we keep it. She was able to, in school, pay us rent $500 a month, and she also saved $6,000 working full-time in six months. So she has $7,000 in her savings account. And really my question was, do I even let her touch that? No. Are you guys okay financially, you and your husband?

We are. We're debt-free besides our house. This is not a financial lesson. I'm loving my daughter through a very, very tough time. She had a car wreck. That's very validating. That's what I would do. And I'm pretty hardcore on tough love, as they call it.

But this is not tough love. This is not a time for that. For me, this is a little scared pregnant girl, and I'm going to put my arms around her. I'm going to love her. She's mine, and we're going to get her through this. But not with the idea that she lives in your basement until she's 39, but the idea that she's going to, because you gave her some room here to heal, and to not heal, but to go through this process. Well, and heal. It's been traumatic, I'm sure. Yeah.

And so to go through and get back on her feet emotionally, relationally, make better choices going forward. This is not a pattern that represents her life. And so let's get back on that track that she was on. And then you've got a 25-year-old that's an amazing human being. It's an amazing mom, and everybody's happy and proud. Again, I'm not enabling into the distant future, but on the short term here,

I'd just completely take care of her.

As if she was in ICU or something. What do you think, Georgia? Yeah, I'm with that. And I'm also wondering, you said she's unable to work. Is that just a short-term thing? What does that look like? It is. She developed a pregnancy disease around five to six weeks in her pregnancy before she could even process. And she became so sick that she was hospitalized. The good news is that it does go away the moment she delivers. And she's managed it now, the hospitalization process.

helps them to manage her sickness and so she is medicated and she's managed at this point and able to function but it's very unpredictable so she's not able to get another job yeah this is a 19 year old and a baby yeah take care just take care of yeah that's what i would do and that's exactly what i'm going to do okay you're a good mom you got a good heart

And you're not, you know, you've raised a, I know you're tough because you raised a kid that has work ethic. You raised a kid that's making, you're making her pay rent. You raised a kid that did this and that and this and that. And, you know, so you're not a pushover and abler mom. I don't think, I didn't hear that. Well, I think that's where it goes into the long-term ramifications. If this is still a decade from now and we're still,

living like this in the basement, that's where we need to go. We need to have an exit strategy out of this too once she's healed up and on her feet. In my mind, this is the perpendicular opposite of someone who's 31 years old and does this and is belligerent and says, if you don't help me, you'll never see your grandkid and all that kind of stuff. I have a completely different reaction to that person than I do this 19-year-old kid.

And if you're 19 and you don't like me calling you a kid, I got socks older than you. So just calm down. That's the deal. I love that just means I love you is all that means. It doesn't mean that I'm putting you down, but I got a little more rings around the tree. So a little more age going here. So, uh, you know, that, that's the thing. So, you know, what you're looking for in relational things, period, but certainly in, um,

financial relational things is you're looking for patterns, not singular events. And patterns cause you to endorse a situation or to avoid a situation. And that keeps you from becoming an enabler if you're wandering out there and you're a mom and a dad. So if you've got a 37-year-old that lives in your basement and will not work, that's a pattern. You need to kick said butt into the street.

Because you're not a blessing to them. You are a curse to them. You are an enabler. You have stolen their dignity, the dignity of autonomy, the dignity of standing on your own, the dignity of hard work, the dignity of killing something and dragging it home. The only thing they know how to do is play Nintendo, and it's your fault. You should be ashamed. That's a different pattern for moms and dads.

And we got that out there because we got a group of males that aren't yet men that are stuck in their mommy's basement. And mommy's still doing their dadgum laundry. And if you don't like that, that's okay. Get you a show. This is mine. So that's how this works. Wow. Well, nothing will turn you into an adult like having a baby. So the maturity, we just hit the fast forward button right there.

Getting a puppy will do it. But my gosh, a baby. That'll push it right there. This is the Ramsey Show.

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Hi, good, Dave. How are you? Better than I deserve. What's up in your world? Well, Dave, I'd like to liquidate my portfolio and be able to put it, I want to trade on with cryptocurrency. And I just want your opinion. Do you listen to this show? Yes, I do. Okay. What are you currently invested in?

I have an investment account. I have TSFA and I have a RIF account. And what has caused you to go, hey, you know what? I'm going to trade all of that to go into crypto.

Because I'm losing in my portfolio drastically this year. And I just know that I don't believe I'm going to come back like for a long time. Like, I mean, they say it'll come back, but I think it's not going to come back for 10 years. And I'm already 72. So I just feel like and I've also have experienced like it's not like I haven't. I have been doing crypto trading now for a few years.

Have you seen the crypto market? It's a lot darker than the stock market. You're trading a paper cut for a stab. How much? Is that enough to retire on?

No. What's in your investments currently? But I've also picked contracts that have been lower, definitely, because I haven't had that much money to do anything with. At your age, I'm not going to go to Vegas and just put it all on black and hope for the best. That's not a great retirement plan. That worries me. Let's back up. Let's back up a second, okay? You're scared. It worries me.

Because your good investments went down. And right about the time I get desperate and scared is the step before I get really stupid. Desperate people and highly greedy people make the worst financial mistakes. And your fear is making you do statistically or suggesting that you do statistically the equivalent of putting this money on a roulette wheel or a hand of poker.

Because crypto is extremely volatile, extremely risky, at least 100 times more risky than your current retirement portfolio, at least. And you're telling me, oh, I put money in the slot machine and I came out with more money than I put in.

Well, I'm not doing it myself. I have a trader that's helping me, you know, like, so I never close my market in a negative position. It's always in a positive position in crypto. Okay. Well, Maggie, you do what you want. I'm 62. Yeah. My net worth is hundreds of millions of dollars, and I have precisely zero in crypto.

Right. And I'm not desperate and I'm not scared. Warren Buffett said he wouldn't pay. The idea that you have a trader doing it for you scares me for you even more because this is giving you false confidence. A, you've had some wins. B, you have someone whispering in your ear how wonderful they are and how they are going to take care of you, which is how people that are 72 years old lose everything they own. This is how it happens. Okay. Please don't do this.

But I don't think that the decision is really up in the air. I think you've already made your decision. And if I told Maggie, hey, two years from now, your money's going to be back to where it was in your retirement account, I don't know that she would do it. But it's hard to see that far out ahead when you just see your accounts bleeding out. And so you just want to do anything to not be doing that. One of the wealthiest men in the world says, be greedy when others are cautious and cautious when others are greedy. And that's Warren Buffett.

And he doesn't mean greedy like being a bad person, a lack of character greedy. He means be aggressive when others are cautious and cautious when others are aggressive. And crypto is no place to play with money that you can't afford to lose. And you're going to lose it. And then you're going to call me back and say, well, I'm going to have this guy who made me, you know.

And he's singing a siren song, and I sure hope you don't do it, honey. I sure hope you don't do it. It sounds like this trader is probably telling her, hey, just liquidate and give me all your money. This trader is definitely, he's talked her up big time. He's buttered her bread. And this guy's a freaking con artist. He's a crypto con man. Well, we also have the quote from Warren Buffett saying he wouldn't pay $25 for all of the Bitcoin in the world. Yeah. And I think he's got more money than me, you, and your trader put together.

So, you know, and I don't disagree with that at all. So it's just an extremely volatile market, and that's being kind.

It's crazy crazy is what it is. But I don't have any money in it, and there's a reason. Crypto is way more down. Well, how much is it down, George? I mean, it depends on what coin. A lot of them went bankrupt. There's fraud. There's scams. 97%. Oh, and by the way, too, Maggie, the number of people that have lost, the number of dollars lost not in Bitcoin or not in crypto but in fraud associated with crypto is what?

I'm in the billions. Billions. It's two and a half billion dollars at this point have been lost to crypto. And let me tell you who the number one target of that type of fraud and con is. People over 65. People that are desperate and scared. Empty promises. And so I'm not saying your trader is a con artist. I'm just saying there's a higher probability that he's a con artist than if he was in any other business.

because of the number of crypto con artists that are out there. This thing has drawn the worst of the worst. And so you can do what you want to do, but you made the mistake of calling here and asking, and we will give you our opinion, and we are experts on our opinion. Jessica is in Michigan. Hi, Jessica. What's up?

Hi, my name is Jessica and I am 37 years old and I'm a single mom of two. And my question is, is how do I get the momentum to, I'm on beta step number one. I am about 30, or I'm sorry, $17,000 in debt between student loans,

Um, no, my car's completely paid off, but I'm just trying to get momentum into getting that cash shaved up for baby step number one. Cause I always try to validate my purchases and I'm just trying to find a way to get the momentum to stop validating. Um, right now I make about a little over 38 a year. Okay. What has caused you to want to do this plan in the first place?

I have been listening to Dave Ramsey off and on for about, let's see, about 11 years. But I've really jumped into it more in the last couple of months. I wanted to change my family tree. I come from a family where we've all not been so great with money. And my dad actually died. I'll tell you how I did it, Jessica, as a fellow spender.

Yeah. I looked at my kids. They were babies and we were broke because of my stupidity. And I said, I'm not doing this anymore. I'm sick and tired of being sick and tired. And every time I got ready to spend, I would ask myself, if I had to not spend this money so that I had the money to save the life of my child, could I do it? Could I find the discipline?

And that was an easy answer, of course. And so I did stuff like I would practice going to Costco and buying nothing and walking out. And that was like a breakthrough for me because I truly thought that if you went to Sam's or Costco, that they check your receipt on the way out, that it was federal law that you had to spend $200 or you couldn't get out. They wouldn't let you out. That's why they check it. And I was that guy. And so I just had to, I kind of had to equate it with the life of my children because

Which is a bit melodramatic, but it's also kind of true. Because you want to change your family tree, you said. Yeah. What does 40-year-old Jessica want to look back on and say, man, I'm so glad Jessica made those decisions. And if that means, you know, taking away your debit card information from every website that you have, hiding it, having accountability with a friend, do whatever it takes. I would think if you've got a spending problem that Amazon Prime is not even a possibility. I'm cutting that out of my life. You've got to turn it off. If you've got a spending problem.

If you're trying to say, no, I'm not going to spend. Because, I mean, that's just so easy. It's easy for me, you know, and I teach this stuff for a living. So you just got to equate it with a big why, and you got to be sick and tired of being sick and tired. And then gradually you'll reform your character. This is The Ramsey Show.

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George Campbell, Ramsey personality, is my co-host today. The phone number is 888-825-5225. Melanie is with us in Philadelphia. Hi, Melanie. Welcome to the Ramsey Show. Hi, so excited to be here. Thank you for taking my call. We're honored. How can we help?

First of all, let me just say, George, I'm reading your book. It's super awesome. Oh, thank you so much. Appreciate that. Yeah, no problem. So my question is, so my husband and I are in Baby Step 2. I'm working two full-time jobs. He's a school teacher and also has a training, like a personal training gig on the side that he does. He rents his own facility. But he's had it for four years. And my concern is that he really hasn't made any profit off of the business. He makes just enough to just

pay the bills in the business. At what point do I have that conversation that it may not be worth his time in the business just because it's not bringing in enough leverage? Anything that doesn't make money is called a hobby. Right. It's not a side hustle. It's a hobby. He likes personal training so much he's willing to do it for free.

Almost. I mean, he makes some money, but not as much as I think he should because he's been doing it for about four years now. You're changing your tune in the middle of the call. Which is it? How much does he really make, net profit on the thing? Probably, it varies every month. So it can range anywhere from $1,500 to like $2,500 a month. Profit. Oh, well. You said after he pays his bills, he's not making much, if anything. He's not. What bills has he got? The rental on this place? Well, he's...

Yeah, just the rental on the place, and then he has like his utilities are included with the rent in the facility, and then he has like his internet or something that he pays. Okay, so he's getting $1,500 to $2,500 in. What's the rent? $1,600, so it almost takes everything. So if he doesn't make $1,600 in a month, he loses money. Right. Okay. Well, I don't think it's unreasonable to sit down tonight and say, honey,

we've got to look at this as a business and we need to look and see what we've got to do with your pricing and the number of clients that you have to make what you're doing over there profitable. Because it's not okay that you're spending all this time over there and potentially even losing money. Right. So let's get out the numbers and run a P&L on this thing. Just sit there tonight and run a spreadsheet on it. How long has he been doing it?

He's had this place now for four years. Okay. Well, let's go back for the last 12 months and pull the revenue and then put in $1,600 a month and then put in the internet fee a month and let's see if we've really got a profit or not. Figure out what his hourly wage is on this. Yeah. My guess is you can go up further, Jim. You made $500 and you spent $600 over there. Right. You're making $1 an hour. Yeah.

Come on, man. So as a business owner, how do you, like at what point do you say, like, this is not viable anymore? I mean, he's supposed to be like an adult and stuff. He teaches children. Yeah. Yeah, he does. What does he teach? Health and Phys Ed. Okay. And what age children? Anywhere from kindergarten to high school. Okay. And so we would assume that they know how to do basic addition of subtraction. Yes. And he should.

Mm-hmm. If he's teaching. I mean, really. Yeah. He needs, you know, you need to sit down with him and say, I need you to look at this through the eyes of a business, and let's look at it for a few minutes, and let's see if you think this is worthwhile. Okay. But you don't need to tell him. He ought to be able to, a logical adult male, female, should be able to come to a conclusion on this.

Without his wife or husband telling them. I mean, you ought to be able to look at it and go, I'm making a dollar an hour. No, that doesn't cut it. I'm supposed to be providing for my family during this time. No, no, no. And you guys are in debt. And so I think that's a part of this equation is we need to actually make money right now. So here's the thing. Anytime we're in a business situation with our entree leadership clients on a side hustle or a small business idea,

We do one of a couple of things. One is we have to ask ourselves, what can we change to make this viable? And if the answer is there's not a change that will make it viable, then it's time to shut it down. Okay. I mean, I think you guys are going to look at this and figure out. I think you're going to look at this and figure out you put $18,000 or what is $19,000 in rent into it last year. You know, and he brought in $19,500. I think that's what you're going to find.

Yeah, I think so too. And, you know, so and then how many hours you spend over there, divide that into 500, and you look at him and go, honey, what part of this is smart? None. Right. So, you know, so we, something has to change. This is not okay. We have to raise our prices, increase the number of clients, both, or we got to say we're not doing this anymore.

Okay. Yep. We're going to have that conversation. I appreciate your opinion on that. I guess the other thing is, you know, do you have a basement? We do. Why don't you do it down there? Yeah. $1,600 a head per month instantly. Mm-hmm. Another thing people do now is they'll go to your house and do the work out there. Oh, yeah.

Yeah. And the other thing he can do is just go work at a gym that already has personal training, and they hire him and pay him money. So he doesn't have any of the overhead. Yeah. So there's a lot of options. Part of the equation on the business model may be getting rid of this rent. And suddenly, yeah, you're doing in-home work and in-your-home work. In other people's homes for them, you know, personal training, you go visit Jim, then you go visit George, and then you do whatever. That's the dream. And they pay you money, you know. And I have a gym in my house. We did that for a long time.

And so my wife made fun of me. She said, you know,

The guy's counting for you. But that's what you needed. You can't count to 10. That's what you needed in that moment. Paying that guy big money for counting? No, I'm paying him for accountability. Ooh. There's that. But I can count to 10. I already can do one, two. But you need a guy yelling at you other than the guy in your head. We don't need anybody yelling at me. But we need someone. I know if he's going to come over there, then I'm going to do the workout, right? Otherwise, I might find my little butt on the sofa. Mm-hmm.

You know, that could happen. And so that's what, you know, that's what a personal trainer does sometimes. We know it. We can Google the workout. We hire the personal trainer because we need that level of hand-holding right now. Yeah, I mean. That's okay. Yeah. So, I mean, he could provide the service, like George was saying, charge even more to come to people's homes in person and or in your basement and or if you're going to keep the location, you've got to make the location clear.

Having the location needs to cause you to make more money than not having the location would cause you to make. I think you're going to get rid of this location at a minimum. This is The Ramsey Show.

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George Campbell Ramsey Personality is my co-host today. Today's question of the day is brought to you by Y-Refi. If you're in over your head with private student loans and tired of getting calls from collection agencies, you may need Y-Refi. Y-Refi refinances defaulted private student loans so that other places won't touch. They give you a low fixed rate loan built for you.

Go to YRefi.com slash Ramsey today. That's the letter Y, R-E-F-Y dot com slash Ramsey. Might not be in all states. Today's question comes from Chad in South Carolina.

He says, I work full time and I have a lawn care business on the side. Part of my business income was paid in cash and partly by payment apps like Venmo, etc. I've been paying taxes on everything except the cash, and I was wondering morally and legally how I should handle that income. Obviously, I already pay a lot of taxes and I'm trying to save money where I can. Should I feel bad about this? And if so, should I clear everything up with the IRS and pay back what's due to them?

You can decide if you want to go back or not and deal with it and how far back you want to go. But income in America, regardless of how it's received, is taxed. That's the law. And so it is a moral and ethical thing to pay taxes on money you receive as cash, period.

And I pay taxes. I mean if we get paid in cash for something here it all goes into the revenue and It all goes into the calculation and we pay taxes on it. Just like we do everything else so Mechanically how you can do it is when you get paid in cash just deposit it into the business bank account and then it'll be reflected there as income and That'll help you do the totals and figure out what you're supposed to do with your quarterly estimates on your business That's the mechanics of it so

Chad, one of the things I read several years ago that really leans into this, George, as far as I'm concerned, is Tom Stanley, the great Tom Stanley, who did the original book, The Millionaire Next Door. He and I became friends before he passed away. His daughter, Sarah, we interact with her now. She still does research on millionaires and billionaires and so forth. He did another book called The Millionaire Mindset Later. There's two books by that name, but he did one.

by that name, where he studied billionaires that wasn't millionaires, billionaires. And he studied people who had accumulated a billion dollars from nothing. And so these were very, billion is a thousand million. And he went at this research a little bit different. He tried to find the correlating things in their life. You know, marriage, were they married one time? Had they been married six times?

What was their education? You know, what were the things in their life that led them to be in a position to do this? And he found 37 different items or things that he correlated. And then he forced ranked them in how often they appeared. So number 37 appeared the least often among the billionaires. And number one appeared in every one of them.

And number one that appeared in these people who became billionaires from nothing was that they had fanatical levels of integrity. Character. Every time he interviewed a competitor, a friend, an employee, a former employee, his kids, his wife, when they spoke of this man, they always spoke of impeccable integrity, not just honesty.

But integrity is a wholeness to it. He's the same on Sunday as he is on Monday. If he says this guy is falling, duck. I mean, this guy is impeccable, fanatical about his integrity. And that reinforced to me that when I don't pay my taxes, it has nothing to do with whether the taxes are just or not. It has to do with I'm not doing the right thing. It's my integrity.

It doesn't reflect on them. Anybody who has walking around since pretty much agrees that the federal government and the IRS and the income tax system is a complete moronic train wreck. It's absolutely unfair and horrible. But that doesn't say anything about my integrity. My integrity is I'm going to follow the law exactly.

It's what they said to do. I'm not looking for a shortcut. And so we report every stinking dime that we take in at the Ramsey's because it makes a statement about me, not about them. And then I'm going to also make another statement about me. I'm going to spend a lot of money with attorneys and CPA firms to try to figure out what I legally don't have to pay.

And I'm not paying a stinking dime more than I got to on the other side of that because I hate them. But still...

My dislike of the tax system is not going to be reflected, not going to change me as a person of integrity because I want to be on that list that Tom Stanley did. I want to be in that lineup with that Hall of Fame right there. If you want to build sustainable wealth and have your integrity intact, pay your taxes, Chad. So that's it. It's that simple. And I'll go so far as this. Let's just carry that on out a little bit. Fanatical integrity means like,

When you work for someone and they pay you to work there, when you're not working, you're stealing. When you're sitting on your Facebook account for three hours while you're being paid to do work that you're not doing, that's not integrity. That's stealing. It's not cute. Everybody does it, but everybody's broke and everybody doesn't have a good life.

And everybody struggles in their relationships. And everybody can't deal with anything except their anxiety and their heart attacks and their obesity and everything else. So everybody you don't want to be like. So here's what's weird. Even if it's not popular with your coworkers, while you're at work, work all day, every day, because that makes a statement about you.

Not about them. It's not about, well, my boss is toxic. Oh, kiss my butt because they wanted you to work. Now you have a toxic boss. It's a toxic work environment. They expect me to work and I can't live on Facebook. You're killing me here. Dad, come snowflakes work while you're at work. It's an integrity issue, you know? And so it carries. Get there five minutes early. Get there five minutes late. Leave five minutes late.

Don't be the first one screeching tires out of the dadgum parking lot every afternoon. You know, it's not that hard. That's a sign of integrity. It's a sign of integrity. And I figured out being on time is integrity. I hate that one. Once I figured it out, though, I'm trains run on time around here. We put a little clock up on things. Staff meetings got a little countdown clock. We started 830. We don't start 832. We start 830.

You come wandering your little butt in six minutes late, it's, you know, well, there's traffic. Well, there's traffic every day. There's nothing new about that. You know, there's traffic. Of course there's traffic. You know, I had to get the kids ready for school every day. You know. It's not a surprise. You know, we do, you know, if I tell Sharon I'm going to be home for dinner at 530, I come walking in at 537, she's like, it's getting cold. Food's cold. Getting cold. You said 530.

And she's not a butt about it. I'm not a butt to our team about this stuff. But these are things I had to start talking to myself about. And that type of character is the type of character that grows billionaires, Chad. And so pay your taxes, honey, every dime of them. Hope that was clear. Ha ha ha ha ha.

It is true, though. It's interesting how that carries through every part of your life, your career, your marriage, your relationships, your finances. Be the person you said you were going to be. Be a person of character. Do what I said I was going to do. Follow through. Follow through. Follow through. And, you know, God, I can't stand being late. Because it says I didn't think they were important enough to get there on time. It's arrogance. I can't stand it. Stinking airlines. Unbelievable, man. What's Delta mean when you're looking up in the Greek? We ain't going to be there.

That's what it means. This is The Ramsey Show. You've got a lot to keep organized in life. Kids and calendars and carpooling and cleaning. I mean, it is so much. That's why you need a knockbox. That way, if something happens to you, you leave your loved ones with happy memories and not a huge mess. Knockbox is a complete system to help you organize your accounts, personal history, estate planning documents, and all your other info in one place.

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So start getting organized today at knockbox.com slash Ramsey. Your family will thank you. That's knockbox, N-O-K, box.com slash Ramsey. Hey, George Camel here. So you're thinking about buying or selling your home. It's exciting, but there's a lot to think about.

And all those decisions can feel overwhelming. Well, here's the good news. You don't have to tackle the process alone. Ramsey's Real Estate Homebase is the place to find all of your free tools and resources for help to get prepared to buy or sell your home with confidence. You'll find calculators, start to finish guides, a podcast, and even an in-depth video course hosted by

Thank you for joining us, America. George Camel, Ramsey personality, is my co-host. Joe is in New York City. Hi, Joe. Welcome to The Ramsey Show.

Hi. My parents have recently taken out two loans to remodel their home in the amount of $55,000. And they're trying to tell me I'm responsible for it. And I want to know if I should agree to this or not. I'm sorry. Why would you be responsible for a loan on their house? I'm confused. Because after I left college, I moved back in with them and I've been with them for the past five years. So? That's how I see it as well.

Was there not room for you, and they had to create an extra room for you, and you requested this? No, it was my same room from high school. In fact, when they were looking to get the home redone, I told them no. I was part of the conversation with the contractors that came to look at the house. How old are you? I'm 31. Why do you still live at home? I have a lot of student debt I'm working through right now. You need to move out. I agree with you. You should have moved out 10 years ago. Okay.

Got it. What in the world? I mean, no, you're not obligated morally, legally, ethically, anything here. I have no idea where they got this. I don't understand the conversation even. But I also am not going to tell you to stay there one more minute. You shouldn't be there. It's not good for you. Yeah, I've been paying down my student loan so I can recast the loan. It doesn't matter. It's not good for you.

Even if it slows down your debt payoff, this is stunting your growth, and it's causing this relationship to be strained, which it may already be too strained to repair. I don't know. What do you do for a living? I work with the local Department of Social Services. What do you make? $60,000 a year. Okay. So your degree is in what? It's in environmental science. Okay. And what do you owe on this degree? $10,000.

When I last booked, 110. Okay. Well, it sounds like you probably are going to have to make some career choices as well, and you're probably going to have to pick up some part-time income and be working like a maniac because you're not making progress. Okay? You need to be paying like $30,000, $40,000 a year on the loan to make it go away in two or three years.

And you can't do that making 60 living in New York City. And so you probably need a different job, and you need six other jobs in addition to that. And let's get your income up and get you out and get you into the world in a sustainable situation. So the odd thing is the reason you stayed there was to pay down your student loans, and you haven't. Ta-da! Time to go, bud.

Time to go get you a better job, go get you lots of jobs, and get you a different place to live and pay down the student loans for real this time. So that was mythology. That was a lie you told yourself. And you didn't mean to, but lots of people do this. Five years with very little bills, you should have made some serious progress on the debt. And it sounds like it's just you get comfortable living at home. You sort of resort to your old childhood self, and you don't make as much progress as you think. And, you know...

The frustration with the 31-year-old still living in your basement could boil over into a misguided, toxic claim that you owe us money for us taking out debt. You know, like the parents have kind of lost their minds a little bit, and this is their toxic methodology to solve a failure to launch. This is our way of kicking you out because we don't know how to do it.

And we're all really frustrated. So that's probably where some of this is coming from. But to answer your question, no, you do not owe the money. Yes, you should be gone by the end of the month, at the end of next month for sure. And you may need a new job by that time too. And you may need a new state to live in by that time too. You need to live in an affordable area, make a pile of money, and clean up the mess.

Because while you were living in a place with no rent, you made no progress. Or no sustainable progress, no measurable progress. Tom is in Chicago. Hey, Tom, how are you? Dave and George, it is an honor to speak with you both. You too. What's up? I've been renting a townhome for many, many years. And the homeowners, through their property manager, have informed me that they now want to sell homes.

and have asked me if I'd like to purchase it before they list it. I don't.

I don't know how to handle it in that situation without it being listed. Of course, if it were just a house that I was looking after, going after in a normal situation, I'd get a realtor. Do I get a realtor in this situation? Since it's not being listed, I don't know if I'm allowed to do that. You're allowed to do anything. It's just a matter of who's going to pay for it and whether you actually need it or not. So you need a mortgage.

Right? Mm-hmm. And you need someone to guide you through the contracting process and the mortgage process and the appraisal process and all of that. Are they giving you a price on the property? Yes. Okay.

They gave me a price of $330 based on some comps that the property manager pulled up, who is a realtor. I didn't like the comps. I didn't agree with those comps. They were in an area not very close to me, and when I looked at them, the homes were much nicer than...

than this home, so I don't know how to combat that. So they have a real estate agent. It's called a property manager. It's a licensed real estate agent. Yes. And they're probably going to list it with this person.

Eventually, but they're asking me before they list it. Yeah, but what's the benefit to you? There's no benefit to you before they list it. You're not getting a deal. There's no bargain. I guess the benefit is that no one else would be able to make an offer on it. Oh, yeah, okay. I mean, if you had a transaction you were comfortable with and you can go through and get your mortgage and everything, you can go to a title company, get a contract drawn up,

and do this. I think this transaction is so far from happening that you probably do need a pro in your corner to help you navigate the negotiation.

and then help you navigate the closing, help you navigate the appraisal, help you navigate the getting of the mortgage and all the different things, all of things you don't know how to do. But if you had all those things already lined up, you could. You don't have to have a real estate agent, but you can. In this case, I think you'd benefit from one. And just say, you know, if they list it, typically what happens is,

The listing agent, in this case the property manager, they're going to put a 6% commission on it or something about like that. And then the agent that represents the buyer is going to split that with the selling agent typically. That's a normal transaction. And so if you get a real estate agent to represent you and they work with the selling agent before it actually goes on the market but a commission is still paid, then

It didn't cost you anything. It cost them something. And, you know, let me tell you, if you just buy it right now, I think this agent is going to get both of the commissions. They're probably going to charge the seller a full commission. So, yes, the answer is I'd go get a real estate agent. Yes. In your situation, I would. Yes.

I mean, it's kind of borderline, but I think there's a lot of... A, there's another real estate agent already involved. Okay? B, you don't like the comps, so you got some negotiating to do. C, you got to have somebody walk you through the closing process and the mortgage getting process and the appraisal process. So all of those things tell me, yeah, I put a real estate agent in your corner.

It's just worth it for the stress factor at this point. Well, and the expertise to guide you through a journey that you've never been on. Now I negotiate and save you 30 grand to where it was. All right. It was worth it. Ramsey solutions dot com slash agent will help you find a Ramsey trusted agent in your area to help you do that. This is the Ramsey show.

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Shop the New Year's sale now at ramseysolutions.com store. That's ramseysolutions.com store. George Campbell Ramsey personality is my co-host today. Open phones at 888-825-5225. Danny is with us. Danny is in Boca Raton. Hi, Danny. How are you? I'm doing all right. How are you? Better than I deserve, sir. How can we help?

So I have a three-year-old and a six-week-old. Me and my wife would like to put some money away for them. We were wondering what the best thing would be. Okay. Well, we teach folks a thing called a process for becoming wealthy and taking care of all the different components of our life called the baby steps.

You may have heard of that. You may not. But the first thing you would do is not put money aside for your kid. The first thing you would do is to set money in an emergency fund of $1,000, a beginner emergency fund. The second thing is get out of debt, everything but the house. How much debt do you guys have? $1,000.

Pretty much none. We only have two credit cards, but there's no debt on them. We have about $3,000 in emergency funds. Okay. No car debt? No student loan debt? No. Good. What's your household income?

Together is about 80, 85, 90. Okay, cool. Well, once you've done Baby Step 2, which is debt-free but the house, all that means is you need to place some scissors across those credit cards and cut them up, start using debit cards so you don't accidentally slip into debt, which people do all the time. Then we would go on to Baby Step 3, which is finish the emergency fund, and you're short on that. You've got a $3,000 now account, and it needs to be three to six months of expenses. Okay.

Once you have that, then you would begin investing in your retirement, 15% of your income going away for retirement. And once you got that started, then you start saving for the kids' college, which is what you're calling about. But the best thing you can do to stabilize...

the family for the kids is to, you know, to be out of debt and be building your investments. And then in addition to that, we can start saving for kids' college. If you click on SmartVestor at RamseySolutions.com, you might find a SmartVestor Pro that you will find, a SmartVestor Pro that we recommend. Sit down with one that you like that has the heart of a teacher.

and you'll want to learn about 529s and ESAs and putting money in mutual funds for your kid's future. Is that what we're talking about here? Yes, sir. Okay. It says on my screen something about an IUL. Yeah, we were looking into those because my wife... Because you've got a friend in the insurance business. Yeah. Yeah. And guess what? Your buddy's going to make way more commission off of that. Yeah, so IULs are awful.

It's an indexed universal life. You never do investing inside of an insurance policy. It is the world's worst place to do investing. The only people in all of the financial world that recommend that you invest inside of a life insurance policy are insurance people. Nobody else does. Nobody else believes that crap. It's so outdated, so outmoded, covered in fees, horrible product. Don't do it. Was I unclear?

No, sir. Okay. And by the way, your kids don't need life insurance. Life insurance is meant to replace your income in case something happens to you. So you, your wife, you both need a good term life policy, meaning it's not for your whole life. We're talking about a 15, 20-year level term life policy, 10 to 12 times your income. If you have those in place, you can rest easy at night. Yeah. And then if something happened to the two of you, your kids would be taken care of, right? Yeah.

Right. And you get that at ZanderInsurance.com. They'll shop a gazillion companies, get you the best deal. That's who you deal with. And it's way more affordable than these IUL policies. It'll be 5%.

$5 if your IUL is $100, this will be $5. It literally is 5%. It's horrible, man. So just stay away from that. So, you know, walk your way up into investing in real investments. And in the meantime, make sure you've got term life insurance in place and you've got the whole thing taken care of.

Dave, I'm seeing this all over social media. I don't know why, but the young people are gravitating towards these universal life policies. And here's how it's marketed. They go, you know, you're supposed to use your life insurance while you're alive. Did you know that? And everyone's like, oh, my gosh, this is brilliant. This investing policy inside of my whole life. Oh, my gosh, this is amazing. I'm going to become a millionaire.

And the commissions and fees these guys are making selling this crap is insane. And the amount of time you have to spend pulling that premium every single month in order to make any amount of money is absurd. I don't know how it's legal. The indexed universal policy is a newer version of an old bad idea.

is what it amounts to. And so what you're going to find if you take this product apart and look at the components of it, the insurance portion goes up every year. It's basically what we call an ART, an annual renewable term. Term insurance, all life insurance, gets more expensive every year that you're alive.

Period. Because you're statistically more likely to die every year you're alive, right? Brilliant. So if you're 51, you're more likely to die statistically than if you're 50. Period. Okay. End of story. Now, how do you get then a 15 or a 20-year level term insurance? Well, it is cheaper than the average of the 15-year of increases. Okay.

The ART would start out cheaper and it would end higher and the lines would cross right in the middle, hypothetically, if it was exactly how you see what I'm saying. So the ART would go straight up and the 15-year would be level and it would cross right in the middle at seven and a half years. However, it doesn't do that because it is cheaper for an insurance company to produce a 15-year policy because they keep you for 15 years. Then it's called persistence in the real insurance business.

than it is for them to try to get you to stay with a policy that goes up every year. Can you imagine that if you get a bill and every year it goes up, you're probably more likely to cancel that. So that policy doesn't stay on the books, so it's more expensive for them to sell ARTs. So net result is a 15-year is way cheaper than the average of 15 years of ART. Now, the index universal goes up every year inside the policy, but you don't see it.

So if you've got a $400 premium...

A certain portion, like on your, you know, if you ever look at your mortgage payment, a portion goes to interest, a portion goes to principal. The further you go along, more goes to principal, less goes to interest. This is exactly the opposite. The further you go along, more goes to insurance, less goes, because the ART is going up every year inside there, less is going to your investments. And so if you keep the stupid thing long enough, it will begin to be the point that the premium you're paying will not even cover the insurance cost. Oof.

And so it starts to eat back into your savings just to keep the policy alive. And the thing gets what we call upside down in the insurance business. And so now you've got a real piece of crap that's eating itself from the inside out. But they pitch it as this really sophisticated, nuanced. Listen. It's so complicated. You don't understand. Just trust me. Yeah. As your insurance guy, I'm going to make you lots of money. Let me give you a clue. Okay. When you drive past most cities, the skyline has banks.

and life insurance companies. These are the two towers in every skyline. Santa Claus didn't build those, and those people didn't build them with wealth they inherited. They built them with money they took from you. Banks, screwing you. Life insurance companies, screwing you. This has been going on for decades. Nothing new. It's not a new song, not a new dance, and just because you put it on TikTok, for God's sakes, doesn't make it smart.

As a matter of fact, that kind of dumbs it down. That's a trigger word for you. I'm sorry. I shouldn't have mentioned anything. I mean, it's just like what we teach is that you should take the difference that if you pay a five bucks for term life versus a hundred for whole life, take the 95 bucks you would have spent and invest that. And you're going to be way better off than having touched one of these crappy policies. Oh, here, by the way, after you paid an extra on this all these years and you die, they only pay the face value. They don't pay the face value plus your savings that you've been paying extra to build.

So it's like a savings account with a crummy rate of return. They get locked up. That when you die, they keep your money. I mean, who would bank with that? Oh, people that buy stuff on TikTok. I think Danny needs better friends. Yeah, well. It's time. No, I mean, that happens to everybody. Because that's how most...

particularly whole life, permanent life, crappy life, insurance is sold, is some old friend from college suddenly remembers you. My buddy from Northwestern Mutual said, let's be done with that. Oh, that's horrible. That happened to me. That happened to me. I bought it when I was a child boy. Yep, sure did. I did the same stupid stuff, and I have a degree in finance, and I fell for the crap. Now he's a grown man, America. He made it. This is the Ramsey Show.