Building Wealth Happens One Baby Step at a Time
en-us
January 28, 2025
TLDR: Discussion on financial questions about retirement investing, child support spending, overcoming retirement guilt, upgrading homes in retirement, matching lifestyles, and home ownership worries.

In this episode of The Ramsey Show, hosts Ken Coleman and Dr. John Delony dive deep into experiences surrounding personal finance and wealth-building strategies. The episode centers around the idea that building wealth is an incremental process that can be achieved through thoughtful, consistent actions, also known as the Baby Steps.
Key Discussion Points
When to Stop Investing and Start Giving
- Caller: Corey from Detroit raises a question about when to transition from investing to giving.
- Insights: Both Coleman and Delony emphasize the importance of starting to give back now, rather than waiting until one reaches a certain wealth milestone. Delony argues that generosity should be a mindset and a regular practice.
- Recommendation: Begin with small acts of generosity and find a cause that resonates personally. Itโs about adopting a position of generosity in everyday life.
Navigating Parenting Financial Discussions
- Caller: Jack discusses his concerns over co-parenting with his ex and managing financial expectations related to their child.
- Advice: Coleman suggests having an open dialogue with the ex-partner about financial limitations and the potential for shared responsibilities.
- Key Insight: He emphasizes the idea of being honest about one's financial situation to alleviate unnecessary pressure while maintaining a healthy co-parenting dynamic.
Dealing with Retirement Guilt
- Caller: Darren is a retired individual grappling with feelings of guilt about not working despite achieving financial independence.
- Perspective: Coleman and Delony encourage him to redefine retirement by staying active and engaged, whether through hobbies, volunteering, or mentorship. Itโs about finding purpose beyond the paycheck.
Upgrading Homes Before Retirement
- Caller: Will from Phoenix is contemplating moving to a more expensive home as he approaches retirement.
- Discussion: Thereโs a debate about spending retirement savings; Coleman advises against pulling out large sums from retirement accounts for home purchases, suggesting instead to manage existing properties strategically and remain debt-free.
Practical Applications
- Budgeting for Giving: Coleman discusses setting aside a fixed percentage of oneโs income for giving once basic financial goals are met.
- Financial Conversations with Kids: Suggest working hard alongside children to develop their understanding of finances and shared responsibilities.
- Continuous Education: Emphasizing the importance of lifelong learning to enhance financial knowledge and decision-making.
Emotional Insights
- The hosts underscore the emotional challenges tied to personal finance, such as guilt, shame, and fear of failure. They advise confronting these feelings openly and seeking support from trusted friends and mentors.
- Creating a Safety Net: Individuals are encouraged to build a robust emergency fund as a buffer against unexpected financial strains.
Conclusion
This episode of The Ramsey Show highlights that building wealth is not just about numbers; it's a journey that interconnects with personal values, family dynamics, and emotional well-being. Listeners are reminded that itโs okay to take baby steps towards their financial goals while remaining rooted in generosity and intentional living.
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Welcome to the Ramsey show where we help you win in your life We're gonna help you win in your money win in your profession and win in your relationships the phone number to jump in today So we can coach you up. It's triple eight eight two five five two two five alongside the incomparable The doctor is in sign is hanging above my head dr. John Dolan. What's up my pal and seatmate if you will and
And I'm Ken Coleman. And so we are here for you today. So no money personalities, but we know the basics. And we're going to help you out. We're going to get behind some of this stuff. So excited to have you with us. Corey's going to start us off, John, in Detroit, Michigan. Corey, how can we help today? Thank you for taking my call. You bet. What's going on? My wife and I are kind of trying to think in the future. And we know that our wealth is going to be significant. And we're just trying to figure out when do we start to give?
Yes. Tell us about this wealth. We know we're going to be wealthy. Give us a picture of what's going on and when it happens. We're currently at around 900,000. And my wife and I are teachers, so we have a pension as well. He's about 320 in Ross. We have 210 in our 457.
We currently max out our Roth, our 457s every year, and then we have two additional properties beside their single residence. And those are paid for? Yes. So what's your net worth? 900? Round 900. Okay. So what is the question? I love how Johnny answered. He's absolutely right. So what is the specific giving strategy or question marks you have around this? What are you pondering? So we live comfortably as we are and as we're saving and our kids
Colleges are taken care of in our goals like our set and we know we'll achieve our goals. What question is like when do we when do we stop building our wealth and when do we start giving it away? What if it's both in exploring that part? It's both in do you all not give at all right now at this moment? No, okay? What has inspired the question about giving? We sat down and we paid off our properties. We are I mean, we're saving 35% of our income and
and we still are comfortable. So we're realizing that we have an excess. Yeah, but back to John's question. Is there a specific cause? Something that has spurred this on where you want to give your wondering about it? We're maxed out. We have a child that's going to be leaving daycare going into kindergarten. That's when we kind of really sat down. What do we do with this additional money? So we're trying this to figure out, do we continue investing? Do we keep building well? For what point do we start to share? You do both.
I, my, my, my honest answer would be you start to share years ago. Cause I think, I think generosity is, is a, it's a, it's a, it's a position. It's a, it's a stance you take on, on the world.
When you look at giving as a number, we'll start doing X when we get there. What most people find is their life continues to grow, their needs and their expenses grow with them and that number just, that finish line keeps moving and moving and moving.
So giving is a way of being. It's a way of going through the world saying, I got struck by lightning in that I married. Well, my jobs have been stable. I've worked out. I was left in inheritance. I worked really hard. I owned a small port-a-pot company and then all of a sudden some guy bought 40,000 acres next to us and now I'm a million, like whatever the posture is, or I'm a person of faith.
and everything, every single breath that takes a blessing, and so I'm a pass-through, I'm gonna let this thing, I'm gonna let so much of this go back to those who need. Whatever your position is, every single psychological study, every single faith community throughout all human history has wired into it, generosity, giving, being a pass-through.
And so, for the sake of your soul, not like in a go to church or you go to hell, that's what I'm talking about, but for the sake of your spirit, of your soul, your marriage, your kids, yeah, start giving today. Find causes that matter to you, find moments that matter to you, find people that you see that we can be a blessing towards, and begin to practice it. And Ken, I tell people, practice this in little ways, meaning
Wait until you see a restaurant, when you see a waitress who's working five different sections, because people didn't show up on their shift, and she's exhausted and your food's a little bit late, and tip her 100% of the tab. And write her a note that says, we saw how hard you're working, we're grateful for you. Do that, and then just watch her when she opens it up. Do small things like that, and then find somebody at your kid's kindergarten who can't afford the tuition, and tell the headmaster, hey, we'd like to pick up somebody's tuition, just let us know.
or be more strategic about it once you think about it, but it's just a posture. Yeah, Corey, did I hear you say you guys are investing 35%? Yeah. Yeah. You know, look, here's what Dave has taught for years, and of course, we sing that chorus as well. What we teach is, is in the baby steps, are you familiar with the baby steps? I'm assuming you are.
Yes, we went through and paid everything off. Exactly. You get to do whatever you want, but we've prescribed for 15 percent. You guys are in great shape. You could say, we're going to go back to that and we're going to invest 15 percent and we're not going to stop. That's when John and I said yes and that's that. Now, if you want to do more than that, you can.
but that's the rule of thumb and you're in great shape. So at which point you now go, okay, if I'm going to invest 15% or 35%, then whatever's left over, how much of my income am I going to set aside for continuous giving? So John's right, you can give where you are, however you're moving throughout the day, you find opportunities to give. But for strategic giving,
then I would put a budget number on it. And so let's say you said we're going to do for sake of discussion. Let's say you're going to go back to investing 15% and that's the continuing build. But then you go, okay, we're going to then we're going to take that 35 we've been investing, we're going to invest 15 and we're going to take 20% of our income. And that is now our giving fund.
And to John's point, if you feel generous and you wanna leave a $500 tip that comes out of that number, if you want to invest in a nonprofit, a mission organization, your church, some type of charity, I would find a cause that's near and dear to both you and your wife, and something that has a story attached to it that connects to you all's story, I think that's a great way to do it, but you get to decide. But I would just start immediately doing it, and you've got the margin,
And so now if you're investing 15%, and you are giving 20%, or whatever ratio you want to do there, I would start right away. Okay, we'll just kind of tap onto that. Would you give smaller or would you invest and then give later and larger amounts?
Again, we're not geniein' a bottle, so I'm not gonna answer that. I like John's answer. You get to decide, Corey. I'm not turning to page five in the Ramsey manual right now to answer that question because that is so individual to you. It's a posture. It's a posture. You do what you wanna do. But my only advice on that is, John, and you weigh in on this, if I was in your position, Corey,
I would be giving a substantial chunk. Yes. Consistently. Correct. To something that I deeply connected to. Absolutely. I would leave it at that. You get to fill in what deeply connected to looks like. Yes, and I think what you need to do, Corey, is get out of the spreadsheet and into life. And so, yes, there's gonna be a library someday that wants an extra gargoyle that your $9 million could pay for. You're right.
But you want something special, go tip your waiter a hundred bucks at a waffle house, and he'll chase you out into the parking lot and hug you because you just took care of his kid's light bill, right? You just put food on their table for a month. I love that your brain will do that. Go do that. Go do that. Special customized gargoyle. There's a lot to unpack there on the commercial break. It tells me so much that I love about you. Hey, we have some special coming back. Big news. Big announcement. We'll tell you. Can't wait. We'll be right back.
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Welcome back America Thrill to have you with us here on the Ramsey Show alongside Dr. John Deloney. I'm Ken Coleman and we're here for you the phone number by the way to jump in is Triple 8 825 5225 that's Triple 8 825 5225 225 225 225 All right Ken I gotta jump in. You're jumping in.
I have been waiting for weeks and weeks and weeks for to be able to talk about this publicly, man. This is amazing. It's a huge day for Kent Coleman, for your family, for this company and this incredible new show called Front Row Seat that you're premiering this week. Well, thanks.
Tell us the genesis of this thing, tell us how it's been going, and I'm so jealous of everything from the... It does look cool, the teams of me. The talent, the teams, the videos, all of this, the set design, everything's rad, but tell us all about it.
If you're old enough to know the show, inside the actor studio, if you remember that, we're fame, movie, television, and producer, professor. James Lipton would interview the best of the best of actors, directors, producers, and he would do it in front of a classroom, in a theater, but a true classroom, and then the students themselves would get a chance to jump in and ask questions. That's the concept of front row seats while we call it front row seat.
because we will be doing this in front of a live audience surrounding a very small intimate audience surrounding me and the guest and then we'll do virtual audiences and so where you can sit in almost on a group zoom with somebody that you would never get the opportunity to talk to but you don't just listen
and learn you actually get to ask questions. That's why we call it front row seat. And we're focused on three things. We want people to get better personally. Think of all the areas of your personal life. You think about your relational life. That's where you're focused on helping people. You think of your physical life, your mental and emotional life. We bring whatever version we have to work.
And so we want people to get better. So bringing them people that are experts in all of those areas, deep dive, how can we get better so that we can go to work and we have the best opportunity to do our best work and move up, whatever move up looks like. And then ultimately, as you move up in America, you get thrown into leadership positions that you're largely not trained for. So some leadership 101 stuff. So you're thinking about
you know, personal growth topics, growth development topics at work, and then leadership 101 stuff from some of the best voices in the world, our debut episode out today, former governor, first female governor of South Carolina, Nikki Haley. Now, if you're on the Trump side of things, you're gonna have to get over it because it's not a political interview. Well, it's a great interview. This is a leadership interview, and I'm gonna be sitting with people that are left. Yeah.
Right? Middle? Don't even want to talk about it because this conversation is designed to make us think, to make us feel, and to make us do. And that's what we're doing with the show, and I'm really excited. That's my roots, by the way. Yeah. That's what I'm saying. You've been interviewing
people, athletes, presidents, you've been interviewing people who are extraordinary in what they do forever, like for way before you were. Yeah, and I've had the opportunity to do a lot of coaching here on the Ken Coleman show, but this is a natural evolution of what I've always wanted to do. And I think that, you know, I always tell people,
Do what your heart tells you to do. Follow your heart, Dave, and the leadership. This is a show that I've wanted to do for a very long time. And so we're doing it. And it's designed to, again, bring in a large audience. If you listen to this show for money issues, you're going to love this show. And so the audience themselves brings in a representation that live audience represents the people listening and watching. So I would say this, and we'll move on to the calls and get it on YouTube.
uh, podcast app, the Ramsey network app. Uh, all you gotta search is front row seat. Ken Coleman, it'll come up and it's live now. And I will say this, um, this interview with Nikki Haley, a deep dive on her past as a child, an immigrant, uh, who dealt with bullying because of a race, uh, a woman who broke a barrier.
and instead of from one of the biggest issues yeah that divides us racially i mean this is this is a woman of great substance whether you like her or not right i think you learn something from this interview that's all i'd say on well in my favorite here's what i think sets this whole show part i can't wait to see this thing just hit ground running dude is i don't know how many times we listen to podcast and someone's doing an interview and i think yeah but hold on but what about
And I want to inject myself in that conversation or at least ask the next question or that felt like a softball and you have a live audience. You have real people in there that get to do that. That's right. And I don't know that that show exists anywhere. It's my favorite part is allowing people to get a chance to speak up and ask a question. That's their question. So I love it. I love it. I love it. They're at a front row seat now available from Ramsey Solutions.
You can get it wherever you get your podcasts and on YouTube. All right, to the phones we go, Sarah's joining us in Charlotte, North Carolina. Sarah, how can we help today? Hi, thanks for taking my call. You bet. What's going on? My question is, is how much should I be contributing to my kids by 29? I know there's no magic number of what college is going to cost for them.
But is there a point of, you know, you get $100,000 in there. Should you be putting it in a high yield savings account instead, just in case? Sure. How old are they? And have you done any investing so far? So there's six and three. Okay. And my six year old, we have 15,000.
getting in his account at this point and my three-year-old
6700. Good. So if you were just look, if you get on RamseySolutions.com after this call and pull up our investment calculator, punch those numbers in. And it would be a real fun exercise for you to see, okay, at 18, based on those two amounts, and put in a modest return, nothing crazy, then you're going to see where that number is going to add up to. But I think, John, I like her question, you know,
There's no magic answer, but you get to about a hundred grand. I'm curious, if I were you, and I'm thinking, what education may or may not look like 15 years from now? You could know this, Sarah, that with A.I., with college will look different for your kids than it did for us. I think a hundred grand is pretty good. Just know that, yeah. What are your thoughts on that number?
And I will also add our mortgage. I've calculated out that once our kids are out of daycare that we're going to increase our mortgage payments and I should have it paid off the year my EO is go to college. Sure. So there's a there's a there's a an awesome and then a let me just check you on it. Okay. That will be the year also that one of your parents calls and says we need to move in with you.
So I know in your head, probably I want to get to a place where I can just cash flow all of this and I like that idea. I like that sentiment and also just be prepared for life to happen along the way too, right? Yeah. I would really do the investment calculator, Sarah. I really would so that you can actually see how these numbers play out because again, if you, you could make the case to put 150 to 200 away per kid, that's real right now. That won't cover a lot of schools for four years. We know that way. You'll be fine.
200, you're easy, okay. You're fine. But I just believe that it's a tough thing to discuss, John, because you and I both, we talk about this all the time, higher ed is going to look dramatically different. Correct. Would you agree with that at least? 1000%. Okay, let me ask you this. Actually, we've never talked about this. Yeah. If that's true, I don't see how it gets more expensive. I see it getting less expensive.
The only way gets, if you see a, and again, this is what higher ed people talk, like me and my colleagues have talked about for years behind closed doors, like just having those, we call them sad lunches, right? If you saw a dramatic number of colleges close, which I don't think is wild speculation. Oh no, I think it's gonna happen. And then it will make their remaining colleges very, very exclusive and thus very, very expensive. Interesting.
and I think the marquee will be on a shared experience. It will be the cultural aspect, as much if not more so than the information. If I've got a personal bot who can just coach me along the way. And see, that's where I think, you know what, that's a fun discussion for another time. The human element will be
Can I associate and talk to and hang out with other people my age and older? Can I have multiple leaders like you have multiple professors? I think there will be a premium level just like there's really fancy restaurants now. That's exactly right. But I do think we're seeing the cost of tuition, student loans. I think COVID started the tide. I do think we're going to see decentralized higher ed.
And thus, I think it's going to be a lot less expensive. That would be my prediction. I could be wrong. I still think they'll be your freemium place. There's always going to be a Ritz Karl. That's right. That's right. But Airbnb's didn't exist. That's exactly right. Quick break. He's Dr. John Deloney. I'm Ken Coleman. You're listening to the Ramsey Show.
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They've been protecting my family for over a decade, and I trust them to protect yours too. So get enrolled today by calling 800-356-4282 or just visit zander.com. That's Z-A-N-D-E-R.com. Welcome back to The Ramsey Show. Thrilled to have you with us. Triple 8-8-255-225 is the number to jump in. I'm Ken Coleman. Dr. John Deloney is joining me today. Jack is with us now in Cleveland, Ohio. Jack, how can we help?
Hey guys, how are you? Oh, we're having a blast. What's going on with you? Okay. So I just need some advice. Um, I, my, uh, my ex, I have a kid with my ex and my kid is getting older and big expenses are starting to come up. And I don't know how to tell, um, my ex and we were, we're pretty good co-parenting. We just talk about things a lot.
Um, but I think there's an expectation with money and I don't think I can meet their expectation with money. So I have, it's like a finance question and it's really morale, you know, like my kid needs braces or wants braces. It's not medically necessary. And that's $6,000 who wants to split it with three grand a piece. I just don't have it. Is that something I am just obligated to pay anyway and just figure it out?
Or am I allowed to say no? And then there's a car that's being brought up right now. And there's just some big expenses coming up and she wants to split everything. And I don't know how I can really do that. Well, it's pretty common that people get sideways at this age.
And some parents like you are just steeped in reality. This is how much money I have. Even if I wanted to buy you $6,000 braces, which I do. I want you to have the things that you think are going to make you feel beautiful. I want you to have that. And I don't have those dollars. And then there's other parents who, as the kid gets older, they want to
They want to use money and stuff as a proxy for the world that they thought they would have been able to give them head. They're not been a divorce. I want you to have this fancy car and I want you to have these fancy clothes and this fancy, whatever. I want to say yes to everything that you want. What's your relationship with stepmom? You'll communicate well, you'll co-parent well.
Uh, well, it was really, really rocky in the early years. Um, and we, we've worked on it really well. And I think that we're, I mean, at one point, we've even had a couple of beers together. So I think we've gotten pretty okay. Um, but I just know this.
You know, my kid is, you know, 15 on a 16 and she's so like getting so expensive now with bigger ticket items. It's not just clothing anymore. So well, I, so here's what you have to do. You have to sit down with your ex-wife and say, Hey, could we meet? And I'm glad that y'all are acting like adult. Oh, it's awesome. I love it when adults act like adults. It's so good. So rare, so high five to you. And just say, Hey, here's my financial situation. Here's where we are.
I, it would, it would be honoring to you that you're, she doesn't say, I want to buy this, but your dad's too cheap to, cause at the end of the day, that doesn't hurt you as much as it hurts that kid. And so if y'all could come to some sort of agreement on those kinds of things, um, and maybe you can't and you'll remember, oh, this is why we got divorced in the first place. Hopefully, um, she could say, well, in my new world, I've got 5,000 bucks. If you could do 1000, I'm a tele kid that we're splitting this together and you all work out the money behind closed doors, like adults, whatever you can put in there.
But you have a financial reality that you want to stick to. And I hopefully y'all can sit down and have an adult conversation and come to some consensus here. We're not getting her a Lexus. That's never possible. I can come up over the next year with $3,500 that I could contribute to a Camry. Right. And if you wanted to have a new Camry, go ahead.
We were kind of going down that path right now, and I think you're gonna say no, I'm assuming you're gonna say no, but don't take out any loans, please take Okay. Yes. Well, that's exactly kind of where she wants to go. It's not necessarily alone. It's an IOU to her. She wants to go. No, if you don't borrow money, but if you have to choose between a bank and your ex wife, good God, at least there's like laws regulating a bank.
Yeah, I mean, I, Jack, I'm sitting there listening to you and John talk. You already knew the answer to the question that you asked. I think you're, and again, no judgment here. I'm seriously putting myself in your shoes. I would be a mess internally if I were in your shoes right now, because I would be afraid that
My ex isn't going to like what is the reality. And she's going to say something or do something. And then my kid is going to think that I don't love him as much. I would be sick to my stomach. Just being honest, John, being a. Yeah. Yeah. Jack, I think that's what you're dealing with. That's how I feel. All right. So now that's what we need to address because when you started this call, you already knew what's reasonable and what's right. And what is real? I can't afford it, right? You can't.
Well, it's also real, John, is that Jack can be manipulated. Correct. Into, and I could too. I'm just over loving our 16 year old daughters. Yes. Into credit cards and all the other things to just get through this. And you know what? I'd rather deal with the financial pain than the emotional pain of disappointing my kid. I think that's where he sits. Am I right, Jack? Yeah, that's right. That's what I'm. Okay. So I think we're going to help her out. You're 16 year old out.
And just said, I just need to paint you a picture of how the world works. Here's how much money I got. And your mom loves you and she wants to buy you this. And I love you and I want to buy you this. And here's what reality is. I, that's what I agree. I agree. That's the tack, Jack. You got to go directly to your daughter. She's 16. I agree with you. And I know leather seats feel like it's more love. It's really not. Right. Like, well, what would happen if you had that conversation?
I don't know. I used to make a lot more money and I spoiled, you know, my kid a lot and her family just used to need just handed over money. What did you do? Yeah, the child support. What did you do, Jack? And how much did you make versus how much you make now? I was just a supervisor. I just worked a lot of hours and
I didn't really have a good relationship with my kid, and I made about 90 grand, and now I work at the local lumber yard, I just order lumber, and I make about 40. I actually have a separate phone call I'm going to have to call you on can about a different job.
Well, that's why I bring that up. Just to be home more. I think there's two things. I get that. But I think there's two things. And again, I'm, and John, you weigh in on this, but Jack, I'm going to talk to you as if I was in your situation. And I think that number one, I agree with, with Doc here, that you're sitting down with your daughter and you're explaining reality. And you give her a lot of why.
Here's why I've cut back. If you want to go to that, I got a different thought on that one, but you can explain all that. Explain I don't want to go into debt. Here's why. Explain all of that. Be really honest, really humble, not defensive, but explain the situation. Whether or not she gets it in the form of agrees with it or not doesn't matter.
does not matter. But I think you got to go one to one with the daughter and do your best to, and I don't want to say this the right, I don't want to mean controlling, but the narrative needs to be between you and your daughter. That's the first thing I do. The second thing I do, interestingly enough that you said, I used to make 90 now make 40. I think for this season, you got three more years with this kiddo, right? Yep.
I'd be working a little bit more and I would be doing what I could to cash flow in. I'll come up with three grand for braces. I'll tell you what I'll commit to. If she, whatever she earns towards her car, I'll match it. I'll match it. Up to five grand or whatever number. And then now we got girls skin in the game, moms skin in the game, your skin in the game. And I think for this season, I'd be pulling some more hours and leveraging my past experience
to meet this situation in the middle. No debt, no manipulation and pressure from daughter or ex-wife. However, I can bring more to the table and out of a good gesture I'm going to do that. I think I would try to do that. John, is that unhealthy? I don't 100%. Because here's what gift you're going to give for a gift that's infinitely more valuable than braces, Jack.
If you sit down and have this conversation with her and say, I know you really want braces. I know right now you don't as much have to have them medically as your teeth make you feel less than and you don't smile. There's actually some research about smiling and teeth. But I'm going to go take a second job here and I'm going to bust my butt and I'm going to knock this out for you. And here's my expectation. You're going to put some skin in the game like Ken said when it comes to grades or comes to working whatever.
But you showing her that extra hours and that extra work and I took a second job driving for Amazon when she was at mom's house and you're exhausted and you put that cash on the table, she will understand the value of a dollar infinitely more than you just throwing money at a problem or just saying no to a problem. So I like that, Ken, but all of this starts with real, honest conversations.
Jack, you're a good man, and I'm going to tell you, I think you're a good dad. So believe that, act that way. Hold the line. I'm not doing anything that hurts you financially. This is the Rams issue.
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Welcome back to The Ramsey Show. Alongside Dr. John Deloney, I'm Ken Coleman. So excited that you're with us. 8255-225. Our Ramsey Network App question is from Darren. He writes in my wife and I are 50, debt free, and have a net worth of close to 5 million. I retired last year and it's allowed me to lean in to many fun hobbies. That said,
I feel guilty that I'm not working even though we don't need the money. I'm embarrassed when people ask what I do for a living. Did I retire too early or should I just ignore societal norms and enjoy the fruits of a lifetime of hard work? I'm going to go yes and yes, John. Correct. A little bit controversial maybe. And what I mean by yes is did he retire too early? Yes. Absolutely. And should he ignore societal norms and enjoy the fruits? Yes. Yes. Now, I'll explain the first part of that.
I'll get the second half, because I like this question. Yeah. I don't think retirement is good for us. Oh, I'm sorry. Let me go back. I know it's not good for us, and that's not my opinion that is based on all the data. You know about all the data. You and I are both data nerds, and the data says it's just not good for us physically, mentally, spiritually, the whole nine yards.
But if retirement means going home and doing nothing, which is what he's he's doing fun hobbies, which is great I would say that and this is my goal And by the way, this is a very unpopular pin. I was on Graham Stefan's show and they asked me about retirement and I said it's overrated and I'm not going to ever retire and I have no interest personally slow down. Yes
I will diversify, but I will be doing something that looks, sounds, smells suspiciously like work. Until God takes me home. And that's because A, I believe it's what's best for us. Now again, downshifting, so all I would say here is is, Darren, hey man, keep doing the hobbies, but find something. Even if, by the way, here's what's interesting. I would say, John, that volunteerism
is in the category of not retiring. In other words, he may not have to collect a check, but let's say he's going in and he's, let's say he used to run a sawmill random thing that gets who's came to my head. If he just goes in, he starts consulting with a couple of young guys that are in the wood business or whatever, and he tells them what he knows, and he does it one day a week. And it's about purpose in providing value. That's the idea. That's it. So one can volunteer, and by the way, volunteers work. Exactly.
So that's my little spiel and I'll leave it at that. Let you jump in on the second part of that. I just, I 100% agree. I am also, and I've got one of my closest friends in the world is counting down the minutes. Just counting down the minutes. And so I'm with you. When it comes to work, I have a buddy who has a giant ranch that he
He messes with it. You'd say it was a hobby, but he provides a great place when somebody wants to go for a hunt and bring their kid out for their first hunt. He manages this thing so that people have a welcome place to come. He's not retired. He is not retired. He works really hard. Yeah, I love that. He doesn't draw a paycheck, right? And so I think I also want to get done to this societal norm thing.
If you at 50 years old are financially independent and you're still quote unquote embarrassed when people ask you what you do, stop, stop. The reason people work their lives, did it come financially independent so that they don't have to care what people think. And so for some reason you are still attaching your self worth and your quote unquote feelings to other people's perceptions and opinions of you. Stop.
Yeah, because you know the irony, John. I think most people would love to be where that dude is. Yes, 50. Yes. I'm 50. That'd be amazing. I think I'm young. Exactly. I know I'm delusional. But I still go, I mean, now again, I wouldn't stop today. Right. But you go to fewer meetings.
you know sure but i still can be on the on the show sure sure yeah that's a good point that i don't need one of us like means now but uh... but i don't think there is i think that i think the societal norm is that everybody wants to be where he's at he's in the one half of one percent of all people who do walk at fifty right
or maybe smaller percentage than that. So what is, what do you think? And again, I'm putting you on the spot, but real quick, we'll get to a call, but I would love to know 30 seconds on what do you think is the source of that feeling he gives us in the last sentence that he thinks people are going?
Dude, you're 15, you're not working? Well, I think it goes back to something I heard an AI pontificator talking about more than a work crisis, more than an economic crisis. We are going to have a massive, especially in the United States, a massive social unrest when it comes to an identity shift because in the West, our identities are based on what do you do and how hard do you work at it?
If you don't answer those questions appropriately, you are seen as less than culturally. And so we don't have a psychology for what if a robot just does it, right? And what if the job that you had as an attorney making that $700 an hour goes away because a chat GBT will do it for 35 cents, right? And so we don't have a psychology for that. So I think it comes down to just breathing the cultural air, which is if you don't have an answer to the question, what do you do?
My God, what if you could answer that? I love my life. I hang out with my family. I am currently working on woodworking projects, but I'm also starting a radio building thing and I play in a punk band on the weekends at 50. Like that should be a great answer. I'm creative. I solve problems for people, et cetera. But anyway, I think I want to be free from other people's allowing other people to speak into my value or quote unquote embarrassment because of how I answer that kind of question. Yes. And by the way, last one.
Enjoying fruits of a lifetime of hard work is not in opposition to doing hard things and showing up at a scheduled time. So enjoying the fruits of a lifetime of hard work doesn't mean you stopped doing hard work. I think hard work is good for you. And every single nutritional, physical, psychological thing would say, keep doing hard things. So maybe you don't do it with a mean boss or something like that or shareholders, but keep doing hard things while you're enjoying the fruits of your labor.
Yeah, I love it. Let's see if we can get Will in here in Phoenix, Arizona. Will, how can we help? Hi, guys. Thanks for taking my call. You bet. We got about two and a half minutes and I'm sorry to do that to you, but see if you can get us your quick question and see if we can help. All right. Hope you guys can hear me. My wife and I are in baby steps seven. Our home is worth 400,000. Of course, it's paid off and
My question was, I'm 61 and potentially in four years like to be possibly retired. Not entirely like you guys were just talking about, but from corporate America anyway. And the home that we sell for 400 now, which I'm assuming will go up, and the home we want to buy in the same area is possibly about 100,000 more.
Currently have about 700,000 plus in retirement savings and liquid combined and want to know if you guys think it's okay to spend 100,000 of the retirement to buy a 500,000 house instead of the 400 we're in now.
I wouldn't take the money out of my retirement to do that. I'd work a little bit longer and pay it off quick. And again, you could still retire from corporate world and I think you could still accomplish what I'm suggesting. Why would you move up in house? Most people retire and then they decide we're going to sell the big house that we raise the family in. I'll tell you why. Tell him why. Well, believe it or not, I don't want to. My wife doesn't want to go off the stairs when she gets older.
He's putting something on herself that hasn't happened yet. You think she can't get up the spares of the two stores. I told you to go to a one story. I knew it will. I feel you, dog. I saw it coming like a freight train. I knew it was the wife. Hey, the house I just bought has one of those rad chair lifts in it. I'm coming over tonight. I'm coming over to the house.
well fair enough fair enough i i don't know story so if that's going to be the case john i really don't want him pulling out of the time i want that money staying will and and again you have the income in the experience to uh... to to if you got to do a mortgage on a hundred and that's such a small amount and pay it off quick if you can't convince the one
that's all one thing i didn't throw in is that between now and those four or so years we will probably read and that's another hundred or so between now and then though i wouldn't do that eight fifty i wouldn't and all your time and invest in your retirement account
Well, the whole question is about a house, but the retirement savings, which is $7.50 will probably be about $8.50 by that time. I know, but I still... If you were at that million mark or more, I feel a little bit more comfortable about it, but... I wouldn't. Yeah, I wouldn't pull a hundred grand out when you only have $7.50. I'd tell her she's gonna work a little bit longer. Yeah, I wouldn't have that conversation either. I agree. Just a joke, Will. You're on your own, pal. This is the Ramsay show.
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Just go to burner.com slash Dave to learn more. That's B-Y-R-N-A dot com slash Dave. Welcome to the Ramsey show where we help you win with your money, win in your profession and win in your relationships. Alongside Dr. John Deloney, I'm Ken Coleman. The phone number to jump in today is Triple 8, 825, 525. Triple 8, 825, 525. Let's get it started with Zach and Lexington, Kentucky. Zach, how can we help today?
Um, I'm trying to figure out how to budget my money to get out of debt. Okay. Tell us a little bit more. What's the debt? Um, core payments house and a lot of small day. It's a couple of credit cards and a student loan. All right. Let's go, let's list them out for us. So, uh, go smallest to largest, the biggest debt down to the smallest. Start with the biggest debt.
$150,000 for my house. Okay. We'll leave the house out right now because we're going to work on that other debt. So keep going. $12,000 for my truck, $3,000 for my wife's car, about $2,000 on a student loan, and then two different credit cards are at $1,700 and $1,600. Okay. And what is your combined income? Do you have two incomes or one?
Two, me and my wife. So what's your combined income? Roughly $60,000. Okay. All right. What's the truck worth right now? If you were to sell it, private sale, not to a dealer, what's the truck worth? Roughly $25. Okay. That's great news. Okay. And how much is the $3,000 car? How much is that worth? That's six. Okay. All right. So we got to, that's everything you got, correct?
That's everything. Do you have any cash outside of your checking account at all? What kind of cash do you have? No, and I just sold a full-wheeler to afford tires for both of our vehicles because we live paycheck to paycheck. All right, so you guys are struggling just to make it to the end of the month.
Yeah. Okay. My journey. All right. So what is specific? What is your question today? Are you struggling with budgeting or is it a bigger issue where you guys are on the same page about money? I'd like to see more income, but what do you think is the big cause of this? Is it a lack of budgeting or is it you guys are on two different pages? One's trying, the other's spending like crazy. Give us a little bit more.
Um, I think it's like a budgeting because I mean, we buy our groceries and eat most of our meals at home. We eat about one meal out of a week. You know, it's kind of like a date. It's just we live, you know, our bills take most of our paychecks. We don't really have much income.
Um, week by week and it's just, I feel suffocated and I got a baby on the way cut to do in about three weeks. Okay. And I don't know how I'm going to afford childcare. All right. Let's figure this out. So what is your income and what do you do? And then tell us your wife's income and what she does. Um, my income is like, I won't say 32 to 35. And I don't know exactly. I make about $17 an hour. What do you do? Um, I am a water plant operator.
Okay, great. What does your wife do? She works for the courthouse and she makes about 1550. Okay. All right. What is the mortgage? You don't have a very big mortgage. What's your mortgage payment? It's almost $1,200. Okay. Well, that's that is a huge chunk of your take home. It's a message. And we don't even owe that much. I think it's because we're so young. Yeah. No, let it know. What's your interest rate on that? Do you know? It's all interest rate.
Uh, I think it's almost eight percent. Good. That's the issue. Call my friends at Churchill Mortgage right when you get off this call and see about a, like, refinance in that house. Yeah, I agree. Uh, what's your truck payment? Um, it's three hundred and thirty dollars. Okay, I'm going to start there.
And the reason I'm going to start there is because that's a $300 a month raise, which is a massive deal for you. And you've got equity in that. And I would sell it, if you could sell that for 25, you owe 12, that's going to leave you 13.
I would go buy a $5,000 truck because I can find them all day long online and have done it before. And then I'm going to take that $8,000 and I'm going to knock out your wife's car payment. I still got $5,000 left over. I'm taking out the $2,000 student loan. What do I got left? I'm trying to run this in my head. Then I'm putting the rest of it in a, in a savings account. It's going to be in my emergency fund because I'm about to have a little baby in my house.
I agree, but I mean you also got the two credit cards, which is 1300 per bus. No, I got that. Those are gone then. But I think he can get rid of it all. If I did the math right, I think you pay all of your, you pay your entire debt off with the proceeds from the truck. Brother, you're free. That's massive. What is your car payment on the, on the, on the wife's car?
uh, 180. Okay. So that's 480 bucks. All right. And we should start going down the list. Yeah. You just got a $6,000 a year raise if you do this 500 bucks a month. Now I'm going to say one other thing. You, my friend, your wife's pregnant. So I'll let her off the hook. Although I'd like to see her pick up some hours, pick up 15 to 20 hours a week at Walmart working evenings while the baby's in the oven. Uh, but you definitely need to be picking up another 20 to 30 hours a week.
to actually get this emergency fund built up because you can be debt free and start stacking in the emergency fund really quickly. But this is all effort. I'm going to sell my truck, pay off all the debt, stick the rest in savings and my wife and I are going to work like we got no tomorrow in order to stack up 567 grand.
All this is doable, am I right, Jen? All this is doable. But hey, listen, you're on it. You say the baby comes in three weeks? Oh, three weeks. Yeah. OK, and your wife works hourly, right? So if she is at home for two or three weeks on maternity leave or six weeks, we just took a huge hit. You lose half your income, right?
She has paid maternity leave for six weeks. Oh outstanding right high five those people and let you listen listen my man We live in a world Adam. Excuse me Zack that would tell you well you take off time No, you're not you know how you can't afford it You can't afford to take time off with your wife. You got to be working. Yeah crazy hours. Yeah
And so you go get a second job, sell everything. If you sell this truck, you are debt free, $500 a month raise right there. And let's also call Churchill, like you said. Let's call Churchill and get this house, see if we can't get the house refinanced. That's number two. And number three, brother, you're on the horn to get another job. I think with someone who works in a water treatment plan, who works as hard as you do on a day in day off, you should expect to make 50 to 60 grand. Yeah. Okay.
Well, my biggest, my biggest issue is I'm in laughing, but I'm supposed to be laughing in April. Okay. And that should be a little bit of a pay raise. And then I've been picking up all jobs like crazy and working, you know, 16 or 16 hour shifts. Right. Right away. Good man. But let's go get the best hourly rate we can right now. I don't care what it is. And let's don't get a certification for a little bitty raise. Yeah, I agree with that. Let's go get a certification or change field so that in two years, you're doubling your salary.
I'd like to see you be looking at the trade, Zach. I really would. I want you to get through baby and get a nice emergency fund, but I'd like you to start thinking about the trades. You know, you're talking about a plumber, electrician, that down the road, if that's something that you're interested in. I don't want to push you into that.
But the type of work you do, I think it'll be a nice transition and we're talking about a much better situation when it relates to hourly rate, plus benefits, plus a nice ladder forward. But listen, Zach, we just gave you, I mean, this is easy. It's compared to cars that we get. Selling that truck changes your life.
It also signals to your wife and that new baby. I'm the husband and I'll do anything for my family. By the way, honey, I sold the truck and I picked up a second job for the next six months so I can get us ahead financially. You guys will be fine. You got a small mortgage. Let's see if we can get you better rate on that. But just doing what we said is selling the trucks going to make the margin there. So get it, brother. Get after it, my man. There's no sitting around waiting anymore. You got to move. This is the Ramsey Show.
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Welcome back to the Ramsey show alongside Dr. John Deloney. I'm Ken Coleman. Glad you are with us today. Triple eight, eight, two, five, five, two, two, five is the phone number we'd love to hear from you. Let's go to Orlando, Florida where Adam is joining us. Adam, how can we help today? Hello, and thank you for taking my call. You bet. What's going on? Um, well, I'm expecting to get married in the next year and a half.
And the person expecting to get married to comes from a lot of money. Oh, yeah. And as someone that's in school and expecting to have a stable career, I'm a little nervous because I don't think I can match that lifestyle that you can. You can't let it ride. I mean, her father is an entrepreneur and he makes a lot of money.
And I know that that's have a wealth that she comes from, is only available for an entrepreneur or businessman or have her own thing going on. And, and honestly, I'm not too confident that I could match that. You can't. I thought we just covered him. You can't. And John said, let it go. I can't. How do you think, how do you think any of the men marrying Dave Ramsey's daughters felt?
You don't, and you know what, both of those men, I know them, they're friends of mine, they're confident, they're smart, and they do good work, but they're never gonna have $750 million. That's right. They don't have to move them any less. Is the issue you, which we would understand that, you gotta get over that, but I understand you feeling that, or is it her? Is she putting pressure on you? I mean, what's the reason for this call? What can we help you with?
Well, I don't know her too well is the issue with sort of an arranged marriage type of situation. Okay, hold up now. We're digging in. Hold on. So are you actually engaged? Because you started off the call saying I'm going to get married in about a year and a half. Is there a ring?
well there's not a rain but are there animals going back and forth with the election is like a lot of many goats what are we doing uh... well he's he's from rocco uh... as you know i've had a mention my cousin married her sister actually
And, um, this is actually we went to the wedding and continued our nature. And the way it works is she asked her dad and her dad came to me and her dad said, are you married? And I said, no, I'm not. I'm actually 19 years old. It's not married. And, um, we kind of hit it off from there. Well, who hit it off you and the dad or you and this girl?
Me and the dad, I've really talked. I talked to him. That's what I thought. I thought I heard you say me and pops hit it off and I think I might marry his daughter. I don't know if you know this, but she is a key component of this marriage. Not really. Not with this deal. Is it really an arranged marriage? Yes, sir. Not this. My mom, my mom and dad, well, maybe my mom. I actually have seven siblings and my mom tried to get each of us arranged.
And I'm the last one. And she always wanted, she always talked about it all this. And when she came in contact with her parents, like done deal, they don't like the word arranged, use the word insisted. I think that's probably the better word. I think that's what it is. I think that's actually the right word. Let me ask you this. Where are you at on this deal? Do you want to do this? I don't care how cool pops is or not.
Um, well, I mean, she's pretty. She's really pretty. No, no, bro, you're not answering my question. And I think I know the answer. Do you want to marry this girl or not? I think I think I do. No, you don't even know her. You want to please your mom is what you want to do. You want to make your mom happy because she insists that you marry this wealthy Moroccan girl.
well uh... for me all of the old and understand that i've got her i thought that i'd talk to her here and they're like not nothing crazy nothing like bro i'm not married somebody that i talked to here and there that's an important doing why do i want
and i uh... i believe i will marry this girl and i will in all honesty i i thought that salt basically send stone to them okay in all honesty why did you call it matter that you call john and i want to help you but we've already told you how we feel yes sir so um... how can we go out of mention that will uh... set a first table career later on down the road and i i i i again i i have
i don't know how i can match this lifestyle that i really i don't know her but i don't listen i don't know i feel like we're on a hamster wheel yeah none of the things you're saying matter it is a matter that you know that you don't hold on it is a matter that you don't talk to regularly does it matter that you don't have been on dates it is a matter that you haven't kissed her yet doesn't matter even none of that matters because you said this things are ranged
So if it's arranged and you as a grown man in the United States of America are going to get in that boat and say, all right, mom, you're going to direct the rest of my life, then bro, it doesn't matter what you make. It doesn't matter any of that stuff because you got in the arranged boat and you took off down the river. What do you care? Let that be.
If you wanna be a grown up and decide, I love you, I wanna create a life with you, us too, as two individual adults creating one, not letting my mom and your dad drive our future, if you wanna do that, then yes, I get there being feelings like, man, I didn't make as much money as your dad, you're gonna have a different lifestyle, we may have Honda lifestyle when you're used to a Lexus lifestyle, that's all well and good, but that's not your situation right now, dude.
So just get, if you, if that's what choice you're making, get in the boat, prop your feet up and put your hands behind your head and then just ride on down, down the river, down to the ocean, man. Yeah.
Does that make sense? It makes sense. It makes sense. So you called us saying, guys, I don't know what to do. I don't think I can provide for her. It doesn't matter. She chose you and Pops chose you, it sounds like, or the two of them got together and said, this is my guy, and you're just gonna go along with it. So therefore, it doesn't matter if she's disappointed. It's gotta be the greatest get out of jail husband card of all time. Adam, for what it's worth. It's absurd. How old are you man?
19 I tell 19 year olds to get off their parents cell phone plan Much less their marriage arrangement plans So knock your lights out man. You're in uncharted water for me So yeah, I would tell Pops to get you a good job. Yeah, that's what I would yep What are you worried about? Why are we even going to school? I mean if this guy's wealthy and he selected you I
The whole thing is foreign to me, Adam, and we're having a little bit of fun with it because, quite frankly, it's so absurd. I can only laugh with it. And what is absurd is I'm not insulting other, I probably already have, but we'll get over it. The absurdity is your attitude towards it. I'm not going to judge another culture and arrange marriages. I don't get it, but I'm also... This doesn't feel like a cultural practice. This feels like an overbearing mom.
You could say that what culture what culture you come for are you are you an American family? Oh? I was born in me. I'm born in America right in America, but my my my father's from Yemen. Yeah, we're Muslim They're very broken. So there's obviously some differences. This is a generational thing for your parents. This is a very normal thing for them to arrange insist
my uh... all my parents were arranged by my dad parents were arranged and their parents are in it so i don't understand it but i'm not i'm not knocking the tradition because i don't understand it and i want to be very clear our large audience on that what i'm saying absurd is your response to this is i feel like you've got an option to go to says i'm out or
I kind of think I'm going to do it. And yet you called us to go, what do I do? And I just, I'm pleading with you and I mean this. I hope you remember my voice multiple times tonight before you go to bed. Please don't do this. John, am I right? You can hear it all over him.
Yes. He feels like he has to do. Yeah, that's the thing. I've actually looked at the data on the traditional cultural arrange practices. It's remarkable. It's robust. But there's entire family systems around these new married couples and families and all that. So I'm with you, Ken. Not knocking it at all.
This doesn't sound like that. It sounds like a mom that wants to make sure her boys marry somebody who's going to have a lot of wealth, right? And good on mom. She got you. Well, she got you. Yeah. You though, Adam, aren't in. And if you're not apart into the cultural practice, if you're not on board with the family practice, you're not on board with this woman that you are going to, at some point, they closed the door and it's just y'all too.
This is awful, but I'm going to be real. Okay. If I was in Adam's situation and the father approached me and we're hanging out and we're bros and he goes, hey, by the way, my daughter over there, it's my fourth one. Would you like to marry her? She thinks you're cute. I'd go, let's talk terms. Yeah. I would be like, can I get an offer sheet? I need to run to the bathroom real quick and I would go to Washington DC and I would never be seen again. That's true. But I mean, if we're going to do all this, let's go. All right, what's the job?
Do we got a slush fund? This is whack-a-doodle! I don't know how else to process that. Oh, Adam. He needs to fall in love with somebody. Hey, let us know as soon as the wedding invite me and Kim may show up.
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So start writing a new story this month with BetterHelp. Visit betterhelp.com slash Deloney to get 10% off your first month. That's betterhelp. H-E-L-P dot com slash Deloney. It's that time again, folks. Tax season is here. I know some of you would rather bury your head in the sand until April 15th than face your taxes. But here's a better idea. If your tax situation is complicated, get in touch with a Ramsey Trusted Tax Pro today.
That way they can take the stress off your shoulders and once those tax forms come in and teach you how to keep your tax bill as low as possible. But don't wait! Ramsey Trusted Pros can book up fast. Go to RamseySolutions.com slash TaxPro to find one who serves your area with excellence. That's RamseySolutions.com slash TaxPro.
Welcome back to the Ramsey show thrilled to have you with us. I'm Ken Coleman, Dr. John Deloney joins me and the phone number for you to jump in is 825-525-8255-8255-2255. Okay, folks, a little bit of a mild roller coaster going on in real estate right now. That's just the reality. A lot of experts are saying we're going to stay in this interest rate range for most of this year. Who knows? They don't know. We don't know.
But the reality is, is for years, we've said, marry the home date, the rate. And so whether you're buying a home or selling a home, this is a massive, massive decision and transaction. And it's why you need the tools and resources to get you prepared. And so that's why we have the Ramsey real estate home base.
uh... fabulous location for you're gonna see calculator start to finish guys how to's a podcast books and even a video course all giving you actual steps so that uh... you can navigate the buying a selling process without any massive errors and it's painless ramsi solutions dot com slash real estate ramsi solutions dot com slash real estate or you click the link in the show notes if you're listening on youtube and podcast and i want to point out
When we tell you about all these things, and if you miss it, because we know you're listening to us and watching us while you got other things going on, the show notes, the show notes, the show notes, all of the links, things we talk about, are in the show notes of the podcast app that you're listening to and on YouTube. Alright, and RamseySolutions.com, you can usually find it. Alright, let's go back to the phones. Vanessa is joining us now in Phoenix, Arizona. Vanessa, how can we help? Hi, thanks for taking my call. You bet. So I just had a quick question.
Me and my husband and my brother-in-law and sister-in-law, when we first got married and started having kids, we bought a piece of land and built two houses on it in the city, which is kind of a unique property. Then we refinanced, we bought a house separately, they bought their house separately. We long-term-rentled those two homes, and then we turned them into air-being bees about five years ago.
My question is this, I'm wanting to sell my Airbnb and to pay off my house I live in now and then build an Airbnb on the back of my property.
The problem is is everybody tells me this is going to be the biggest mistake of our life because I can't buy into real estate like I did 20 years ago. I am going to have to pay capital gains because I already own the land that I'm going to build an Airbnb off of. And obviously you have to pay capital gains if I pay my house off. So I'm just wondering is selling my rentals to pay off my house and build another residual income a bad idea? No, no, of course not. You know that, don't you?
I do, but something about, because people are saying the interest rate that I owe 238 on my home, and I'm at an interest rate of 2.99. I owe 166 on my rentals at an interest rate of about 4.25. So they're saying, you know, lumber is going to go up. How do you know you can build an Airbnb on the back? God bless them. They don't know as much about real estate as you do. True or false?
Well, I don't feel like I know a lot. All right. Never mind. Okay, bad tech. Let's go this. Okay. Let's go buy the numbers. Can we do the numbers? Okay. All right. Yeah, let's say I want you to give me these numbers super simple. You sell both rentals. Okay. How much money do you walk with cash? Well, so that's another problem because we
to find a comp in our area with two houses on one piece of land is very difficult. So when we do the numbers in our head like to pay, you know, the mortgage off to pay capital gains, like I think I need at least
Minimum I need to walk away me and my husband personally with 500,000 okay? I didn't ask that and I want you to keep this simple because I'm trying to help you But you're confusing me and your answer you sounded like a congressman on a Sunday morning show there so direct question Stay with me. I'm trying to help you okay Okay, you first of all you need to get a great real estate pro okay It's somebody who can give you real comp real numbers real comps, but I want you to be modest Okay, you own two homes
What do you think you walk away with on a modest sale price of both rentals? Give me a modest ballpark figure. You've thought through this, haven't you? Yes. Okay, then give me the number. I will increase $500. All right, you're going to walk away with $500. And your current home that you live in that you want to pay off is how much? How much do you owe on it? $238. Okay, so you're going to have $500 minus $238 is what? $272 left?
Yeah. Am I doing my math right? I'm doing it quick. I was a history guy. So 272. That's after we paid our house off. Now, what is it going to cost you to build this property, this next Airbnb property on your actual house? Now that you have a paid for home as your main living, what's it going to cost to do that? My husband believes being very generous about 200. So if I'm hearing you right,
And I'm going to round down, we got $30,000 cash left over. We have no debt at all on any properties. My home that I'm living in is paid off. And I've got an actual rental property that is going to spit off cash in perpetuity that it's paid for. Yes. Versus being $238,000 in debt on your main home and how much in debt on each of the rental homes.
Together they're 166. Okay, so what do you like better when I just ask you those numbers? What future do you like better?
I want my home paid off and to have a good life coming in coming money with that paid off. Great. So I'm going to hand you over to my friend who's really smart with emotions and mental stuff. And John, now that I've just pulled out what she would prefer to do, which interestingly enough, lines up with what we would tell her to do. Right. What about these people in her life that know so much about lumber? I guess.
I'm trying to think of the right way to ask this question. He's stumped. No, there he goes. It's this Vanessa. What do you do? What do you do for a living? So I clean our Airbnbs and manage them. Okay. My husband works for UPS. What is your take home salary every year to combine? This last year, it was about 115. A hundred and fifteen thousand dollars. Yes, sir.
How somewhere along the way did you get the understanding that you're dumb? Who told you that?
Well, not that I'm done, but account like you have such a great interest rate on your home. Why would you pay that off? And I'm like, well, because then my husband can work, but he can be basically retired. You have no car payment, you have no credit card. It's a really smart answer. Yeah. Okay. So somebody is trying to tell you that you're, you're able to see into a future that most people who are obsessed with their stupid spreadsheets and Instagram can't.
And that is this. What is life on the other side of not owing anybody anything? Or do I say it another way? What is life on the other side of freedom? And our culture is so stupid and obsessed with short inch by inch gains that they don't look at the long picture, the long game. It's so true. You already have.
It's the same reason companies hire a bunch of people to goose the Q1 numbers and then fire them all Q4, not realizing that at some point people just quit working for you because you're terrible people. But they're so obsessed with the little notch here and the little notch there, the little notch here. So in the same way, you've already projected a future where your husband laughs every morning.
So true. Well, you have a cup of coffee on those rare cold Phoenix mornings in your paid off house that nobody can ever take away from you. And y'all just can go for a walk together. Hey, Vanessa and John, do you both remember the classic Miller Lite ads where it was like, when we grew up, it was like a great taste. And then the other half of the bar would yell, it's less filling when it was a debate. Here's what's going on. But here's what I'm hearing. You're saying,
My life is better, and they're going. Better interest rate. And it's just goofy, weird. What? You're going, my life is better, and they're yelling, but you got a better interest rate. Exactly. It's the goofy thing ever. The capital gains doesn't. It's the cap people are like, well, you're just giving capital gains away. But then when I get a mask, I'm like, but I'm going to pay more in interest over the next 25 years. Thank you. There you go. Vanessa, you're not dumb.
Good answer, Vanessa. The kid and I in your seat would both do the exact same thing that you're talking about. And I'll pay the 3% difference on my APR that I'm losing for my new property. I'll pay that difference in a peace tax every day. You got it right, Vanessa. Do your plan. Not theirs. This is the Ramsey show.
Hey guys, I've got a big announcement. George Camo and I are bringing back investing essentials, our two night virtual event, deep diving into investing and real estate. Learn step by step how to get the most out of your 401k mutual funds and real estate investments, because there's no better time to get the clarity you need to invest with confidence. Watch live on March 4th and 5th. Get tickets today at ramsysolutions.com slash events.
Welcome back to The Ramsey Show. I'm Ken Coleman. Dr. John Deloney joins me this hour. We are thrilled to have you with us. Triple eight eight two five five two two five. That's the number to jump in. Today's question of the day is brought to you by Y Refi. Now we don't recommend refinancing on everything, but for distressed private student loans, there is Y Refi. We trust Y Refi because they can help you with a low fixed interest rate.
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Oh, I started pre reading this question, Ken, and it's already given me gas. All right, today's question comes from Allison in Georgia. Yeah, you're going to want to scoot over a few feet here. My husband and I started building our dream home last year. We took out a HELOC to fund the down payment and start the building process.
We struggled financially for the last few months due to low profits at my husband's business. No way, things weren't gonna always just continue to go up and up and up forever. So he took out several more loans to help put the cash flow. These ended up strangling us, so he used most of the HELOC to keep the business afloat, along with using personal credit cards to make business purchases. The business now owes us over $300,000.
And y'all owe the banks and the credit card companies, I'm assuming. Our house is almost complete, but closing on it is in jeopardy due to all of this debt. How do I come to terms with the fact that my dream house is probably gone? How do I deal with the embarrassment and the shame? And how do I feel safe in my home when everything is falling apart?
A lot of questions for you there, Doc. Well, I mean, a lot of emotional questions. I mean, I would just say on the dream home is I would, if you can get out of it, get out of it. Yeah. And then start to dig out of the situation from the business. Because this is, there's a lot of stress right now. There's a marriage issues. There's the, by the way, she's putting all this on her husband. She doesn't say here.
that either she was complicit in this, like she participated in, well, I guess I'll just put this on, or she needs to deal with some serious financial infidelity issues in her home where her husband came and said, by the way, I just lost the house. And there are times where that happens. He basically gambled it away, yeah. I think when it comes to dealing with when dreams are gone or as when you have to grieve what you wanted to be, man, it just takes time. You got to write some things down. I recommend people go through some sort of
For lack of a better words, a funeral, some sort of ceremony that says this was and it's not going to be anymore. Um, embarrassment and shame. It's just kind of part of it. If you participated in trying to rob Peter to pay Paul and you ended up gambling away all of your losses. Um, gambling away your home, then, um, yeah, there's some embarrassment. There's some shame. I, I recommend dealing with those head on, walk straight into them. When somebody asks, you say,
Me and my husband made some dumb business decisions. We ended up having to pick between the business and the home and we chose the business. And you run straight through it and you'll find that the embarrassment and the shame lose their power over you when you say I'm out loud and you head directly into them. And then how do I feel safe in my home and everything's falling apart? That sounds like a marriage question, Ken. And that's when you and your husband get away for half of a morning and go to breakfast at a cheap diner and say,
We got to rebuild what our ability to trust one another. Forget the business, forget the house, forget all that. I agree. And to your point, the only thing I'd say on that is if she doesn't feel safe financially, which this circumstance would absolutely do that to anybody, then what you've got to do is I'm going to take shame.
Whatever shame there is, and you shouldn't be, but I understand that's a natural emotion. Of course there is. I'm going to go ahead and take shame over feeling unsafe, meaning I'm going to get out of these problems and go back away slowly. I'm going to go get myself a job and get myself a check in account. I'm going to do what we need to do so that I feel like that my financial world isn't crumbling, and then once I get there, that's going to do wonders for dealing with the shame. That's right. That's right. But it's really hard to deal with all that at the same time.
That's exactly right. And it's easy for me to say on this side, but it's just a house. So if their marriage is intact and they made some strategic gambles by taking out a HELOC to fund down payments and putting everything on credit cards and we triple stamp a double stamp and it all came down, everything's not falling apart.
But if your husband's lying to you and now you've lost your house and you may have lost your marriage, it can feel like everything's falling apart. You need to get somebody to talk to and say these things out loud. And you know what? I want to throw this out there, John. I know you're going to agree with it, but it just popped into my head. We need to say that if we are very wise and intentional in who we choose to be our friends.
Those are the people you need to go talk to about. That need, you have to. Instead of shame, you can enter with shame, but real friends will go, hey, don't worry about it. I'll bring them to the nachos, you bring the beers, we're gonna talk about it. They're not gonna leave you. No. They're gonna actually make you feel good, and dare I say safe.
Yeah. And though weep with you, they'll laugh with you. Yeah. A good friend will poke at you and then they'll say, how can we... God, I'm gonna tell you, and I mean that with everything in my being. Stacey and I have always been intentional, but I'm telling you, we've got friends like that around us right now that I'm just telling you.
It's everything. You just have to have the people that, no matter what's going on, you can snot on front of them and cry and ugly cry or be weak or doubtful or insecure or whatever. And they just come around you and they lift you and it is so important. So I just saw, I heard that and I was like, you know what?
I get the shame feeling, but take that shame, take it to real friends and watch shame disappear. That's exactly right. It's really good. All right, let's go to Valerie in San Antonio, Texas. Valerie, how can we help? Hello, I was just wondering, when I'm looking at baby steps four, five, and six, are you supposed to, you know, max out number four first before you move to five, before you pay more towards the house, or I know you're supposed to do them all together, but I just don't know how much of each.
Yeah, it's a good question. I love a good Ramsey rule follower Valerie. Yeah. So, so, so basically what it means is it's like once you get out of baby step three, okay? And you've got that three to six emergency fund, three to six months, uh, then you begin to take the budget. We reorder the budget, right? And so we take 15% of take home and we invest that. And that is for retirement. And so you begin to make that happen.
Now, you start working the rest of the budget, right? And so now we go, okay, we're going to put some, we're going to put what we can away for baby step five, right? And so you may have enough income where you can do all at the same time, but you may not have enough income to be able to do that. And so you may be in four and five for a while. Does that make sense? Yes. So you suggest putting all 15% before you do five and six, right?
Yeah, because it's not about before. It just becomes the thing. It's now, this is the next thing we do. It's like budgeting, right? So once we get through baby step three, the automatic is every time we get a paycheck, we're, we're putting our money away for retirement. So it is, it's just in perpetuity. Does that make sense?
Yeah, so that's, thank you so much. Yeah, that's a really good call, actually. You know, because we have a lot of people that join us all the time, John. And so do you want to talk about the momentum behind that and why Dave over the years developed that so it feels, and there are times where you can do four, five, and six all at the same time. Sure. But that's a function of margin.
Right. It's exactly eight or sometimes like, um, I was really close to paying off a house. So I paused in quote, I guess technically four or five. I paused putting money retirement because it was like six months away and I could ask like, I'm going to just going to hammer it. But so there is some four, five and six flexibility, but the cornerstone principle is if you got kids, there's going to be some educational expense at some point that you don't want them to choose between no education or debt, right?
There is you are going to have life after work at some point or life after an ability to go in and be given a paycheck and you have to prepare for that. So you start saving for retirement. Dave's found 15% over the long haul is a good amount of money that's going to give you a good lifestyle on the end of it. And then, yeah, dude, try to work towards a world where you don't owe anybody anything including your mortgage, man.
But yeah, I think that the hard part for me, for Harper, for most people is toggling out of the, ah, which is baby step one, two, and three, getting out of debt and getting an emergency fund and then settling into living a life, right? Like what do you want life to look like for you? And I think that's a hard part for everybody.
It really is. And we say, we use this phrase a lot and it can sound cliche. And I don't want it to be cliche today, but we talk about we're moving now out of babysit three and we've been super, super intense. And now we want to downshift, if you will, to intentionality. And it's always easier to blame Dave for all your decisions. Four, five and six is where you guys sit down and say, that's what kind of life do we want to build for ourselves and what's that going to look like? And you got to own some of the consequences.
Good stuff. Good hour, Dr. John Deloney. We want to thank James Childs and our amazing crew behind the glass to keep us on the air. And you, America, for listening, this is The Ramsey Show.
The right questions are the key to unlock personal and professional potential. That means if you're not where you want to be, you are not asking the right questions. I'm Ken Coleman and this is what my new show, Front Row Seat is all about. Over my career, I've had the distinct privilege to interview successful people from all walks of life and to coach over 10,000 professionals who wanted more.
What sets successful people apart is a never-ending desire to learn and grow. Each week, I'll be joined by industry leaders and world-class experts to have a conversation about how to get better, move up, and lead well in work and life. But the best part of this show is you get to be a part of the conversation. Live in studio, we'll have a group of professionals just like you who have the power to ask questions and steer the discussion in real time. It's an opportunity to get real answers to real questions.
Like how to make the right decisions, have hard conversations, live a balanced life, and discover your next steps to grow. Join us every Tuesday for conversations that are guaranteed to surprise, challenge, and inspire you. Check out Front Row Seat wherever you get your podcasts.
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