What if You Could Build a Life That Didn’t Exhaust You?
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November 22, 2024
TLDR: 'Dr. John Delony & George Kamel discuss financial topics such as investing while paying off debt, getting on the same page with finances, waiting for economic improvements before investing, and whether to throw everything at a mortgage or not.'
In this episode of The Ramsey Show, hosts Dr. John Delony and George Kamel engage with listeners on various financial concerns, emphasizing the importance of building a sustainable life that minimizes exhaustion and maximizes financial well-being. The discussion highlights strategies for managing debt, investing wisely, and aligning financial goals with personal well-being.
Key Topics Discussed
1. Debt Management and Investing
- Question on Student Loans: A young listener inquired about investing while carrying $30,000 in student loans. The hosts advised prioritizing debt repayment over investing initially.
- Strategy:
- Focus on paying off debt as a priority.
- Once debts are settled, build an emergency fund before considering investments.
2. Financial Alignment in Relationships
- Discussion on Spousal Financial Goals: A caller expressed concern about his wife wanting to leave her job to stay at home. The hosts emphasized the need for open dialogue about financial goals between partners.
- Insights:
- Both partners must agree on financial decisions.
- Use budgeting to understand the feasibility of staying at home based on income and expenses.
- Insights:
3. Building a Sustainable Life
- A Call about Career Transitions: A veteran expressed feelings of unfulfillment after transitioning to a stay-at-home parent role. The hosts stressed the need for purpose and community engagement, urging him to explore job opportunities in his desired field of IT.
- Takeaway:
- Re-engaging with the workforce can offer fulfillment and connection after significant life changes.
- Takeaway:
4. Evaluating Investment Timing
- Question on Investing after Paying Off Debt: A listener with an inheritance wondered whether to invest now or wait for a better economic time. The hosts advised that waiting for the perfect moment often leads to missed opportunities.
- Recommendation:
- Invest now to benefit from compound growth, regardless of market conditions.
- Recommendation:
5. Simplifying Financial Choices
- Avoiding Overcomplication: The hosts discussed the tendency many have to overcomplicate their financial situations with unnecessary credit card rewards or investment strategies.
- Advice:
- Keep financial strategies simple; prioritize emergency savings, pay down debt, and invest wisely rather than getting lost in complexities.
- Advice:
Practical Applications
- Prioritize Debt Repayment: Focus on paying off outstanding debts before considering investments.
- Engage in Financial Dialogue: Encourage open conversations about financial goals between spouses to ensure shared understanding and agreements.
- Invest Early: Rather than waiting for a better market, begin investing as soon as feasible to take advantage of time and compound interest.
- Simplify Choices: Avoid the temptation to create unnecessarily complicated financial strategies or plans.
Conclusion
In this episode, Dr. John Delony and George Kamel provide listeners with valuable financial wisdom centered around creating a life that doesn’t exhaust them. They emphasize actionable strategies for managing debt, investing thoughtfully, and maintaining open communication about money in relationships. By prioritizing these elements, listeners can feel more empowered to achieve their financial goals without overwhelming themselves in the process.
Takeaway: Achieving financial freedom doesn’t have to come with stress; by following practical steps and prioritizing well-being, anyone can build a fulfilling life.
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where we help people with their money, with their mental and emotional health, with their work, with their marriages, with their lives. I'm John Deloney joined by my great friend, George Campbell. We are taking your calls live at AAA 825, 5225, AAA 825, 5225, on this incredible, this beautiful, cold, Nashville day. Let's go out to Sheridan, Wyoming and talk to Brett.
What's up, Brett? Hey, am I coming through? Yeah, we you are coming through loud and clear, brother. What's up? Awesome. So I'm 24. I just took a new job. And so after expenses and rent and all that good stuff, I was about $1,300 each month left to play with give or take. I currently have 30,000 student loans, but I do have $1,000 already saved up.
And I'm hoping in the near future that I can buy a house here. And I was just curious as to like what money markets or mutual funds that you guys would, excuse me, sorry. I'm curious as to like what kind of ways I should invest my money in to make this dream a reality, to be debt free and to hopefully be a homeowner here soon.
love it well i'll tell you this right now you should be investing in your freedom and that means getting out of debt as fast as possible which then means the home dream needs to take a back seat for now so that thirteen hundred bucks extra i i don't think it's play money i think it's get out of debt money and we'll get to investing soon enough because you have thirty ken debt what do you make um... i think about forty seven
Yeah, about 47, 48 a year. Okay, cool. So basic napkin math says you got 30 grand in debt. You're adding 1300 bucks on top of your minimum debt payment. Um, so that 1300 is just what I have left over after all of my, um, basically, so you still got to make your student loan payment and that.
Yeah. My student loan payment is already made. That's 1,300 every bit of my rent, Wi-Fi, groceries, gas, all that is paid for. You're going to be out of debt at this rate in about a year and a half.
Okay. Let's go to that. And so, I mean, that's just, if you do 1,300, if you can do 1,500, we'll clean it up faster. So that would be my challenge to you is how much faster can we get rid of this debt to get the fully funded emergency fund to then begin saving up the down payment? And if I'm in your shoes, if that down payment is going to be, you know, let's say you're going to save up for two years, I wouldn't put it in the market. There's too much risk there. I would put it in a high yield savings account. Okay. How old are you, Brett? I'm 24 years old. What's your work that you do?
Um, I'm like a lower level project manager. Okay. I'm telling you this 20 years older than you. Okay. I'm trying to think of something cool that happened to me when I was 24. I got married when I was 24. So that was pretty cool. But before that, I can't remember. I can't even remember a dinner I went to. I'm sure I did or a concert I saw. I'm sure I did. I don't remember it.
If you will do something for your 25 year old self, if you would go get a weekend job, or if you would leave your job and be exhausted and go throw boxes at Walmart from 6 p.m. until midnight, and you did that for six months, you will owe nobody any money at the age of 24 or 25.
Yeah, see, that's, uh, I was considering getting another job. I've been looking around town for part-time work, either something like early morning, like, uh, I know like some of the local gyms here are looking for some morning work, um, or at night too. So there's some, there's options here that I was considering. Dude, if you will do that 25 year old, you will be free forever, forever.
And I tell 20-year-olds all the time, work like crazy in your 20s. The work you put in in your 20s pays dividends in your 40s. You have precious resources at that age, which is time and energy. Yes. And in a strange, superhuman way to rehabilitate yourself. I don't understand how 20-year-olds' knees don't hurt like mine do, but they just don't. It's awesome.
I mean, minor, mine can get pretty sore sometimes, too, I guess. Alright, well, what's your 40, bro? You think they do. Anyway, dude, yes, work three jobs, work four jobs. Give yourself a bananas challenge. George just laid the math out. You can be debt-free in 12 months. Just right now with nothing changing. Do the math and see what it would take to be done in six months. Challenge yourself. You're 24 years old.
And everyone, if you'll know you're doing it right when everyone around you is like, you're crazy. You need to rest. Honey, I'm worried about you. Yes, perfect. But then when you hit that 25, exhale, relax. It'd be amazing. And here's what I promise you's going to happen. You're going to find some synergy at your work too.
People are going to ask you like, man, you're like getting stuff done. Hey, I want you to come help me on this project. Like it just has a leveling effect that levels up every part of your life in a really strange bizarre way, but it's pretty cool. Are you in?
Am I it? Oh, yes. Absolutely. I mean, I love talking to 24, 25 year olds who are like, dude, I'm ready to burn the ships. Let's go do it. So good for you, brother. That's awesome. I'm ready to get rid of this stuff. Cause they said I want to live the American dream best I can. Excellent. And at Brett's age, I didn't make as much and I had more debt. And I didn't 18 months. So that tells me Brett's going to do it even faster and he's going to be going places because I was still a knucklehead at that. I thought the American dream when I was 24 was a bigger truck. I had no idea. So good on you, brother. Good on you.
All right, let's go to Justin in Seattle home of Allison chains. What's up Justin? Are you with us? Hey, you just broke up a bit. Oh, what's up, brother? I'm here. I think you're breaking up. We got crystal clear signal, man. What's up? All right. I'm 23 years old. My wife is also 22 and we're over here and
We got a mortgage that we just bought on the house, like, you know, 340,000 in February. We should have, you know, not have bought this house, but we are now in it. Um, and now we have also the car loans. So I'm calling out of getting a second opinion on some debts. Uh, like, how much money do you make, Justin? How much money do you make right now? $60,000.
You have car loans, a $340,000 house note, and how much other debt do you have? So $25,000 in car loans, about $3,500 of that $25,000 could be refunded in a warranty on the car that we just bought. Good. Gets us down to $22. OK, what else? What other debt? So that's all the debt.
That's all of our debt is our house and the $25,000. And is your wife working outside the home? No, not currently. She's trying to do some babysitting on the side because we just had a baby son back in front of her. And congrats. Thank you. But it's not fun because you're stressed and broke. Had not fun. Diapers are $1,000. They didn't tell you that, did they, Justin? What's that? Diapers cost $1,000 a piece through mid of gold, I think.
no they didn't uh... across the run that will help out here uh... so how can we help today right up against the clock just until get right to your question well
I have about $3,500 in a Roth IRA that I can take out in contributions and put towards this debt. I also have bonuses that I get each year about $6,000. I would use the bonuses toward the debt. I wouldn't touch the Roth IRA. And I would consider selling the car if you guys are really up against this and that mortgage is more than like 40, 50% of your take on pay. This is an on fire situation. You got to get your income up. You got to sell the car in downgrade. And long term, you might decide we can't stay in this house.
And she's probably gonna have to get a job, and so not just fiddle around the edges with babysitting, but she's gonna have to open a babysitting shop in her house, because y'all need income. This is The Ramsay Show, we'll be right back.
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Welcome back to the Ramsey Show. I'm John Deloney joined by George Camel triple eight eight two five five two two five. We're taking your calls live. Our early black Friday sale is here. Whether you're shopping for yourself or looking for that perfect gift to help someone get their money in order. Now's the time to shop and get hardcover books for 12 bucks or audio books. If you can't read like George for only eight bucks.
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go out to the eight oh six to amorillo texas and talk to sam what's up sam hey how you guys doing we're rocking on to the break it down brother what do you have to all man let me tell you uh... last few years of my life has been uh... some people call it easy street and i uh... i would agree with you told me ten years ago but now i'm i'm struggling to find purpose i'm struggling with uh... with being fulfilled what is easy street mean well i uh...
I was in the military, I did eight years in the U.S. Navy, and I came home, got a four-year degree, and I made the decision as I go, okay, if I meet my eventual wife, I'm in college, then I'll settle down, I'll start a family. If I don't, I'll go back into the services and officer, and you wouldn't say just have it, the Lord blessed me, and I found my wife, and we've been married now for six years. She is a family medicine physician.
and board certified surgical obstetrician. So she makes all the money and we have three beautiful babies. I love my babies. I love them so much. But the Bible makes it very clear it is not good for men not to work. And I just, I feel like the pressure is on even though I don't need it for financial purposes. I just feel like I'm not doing anything of value, which I know is a lie. You know, raising my kids is the greatest value that I can have as a human being.
But because they're going to leave the most lasting impact, you know, money is only going to go so far, but my kids can make a lasting impact on their communities. But I just don't see the return on investment right now. And that's where I'm struggling. So man, if you're, if you were here, if you and I were just sitting, um, if we met up in Lubbock and we were just sitting down in the shadow of the stadium, having a drink, I would get up right now and I'd walk around the table and I'd give you a hug.
Here's why. For some reason, you believe that your value is economic. Like that's it. And for some reason, you have backed yourself into this corner of either or. And none of us make good choices when it's either I got to stay home with the kids or I've got to leave everything and go do like, you have backed yourself into an either or you're going crazy.
So take all clear, clear the deck, clear the whole table. You can snap your fingers. You got a four year degree. You got, you got, you got, um, someone that you says a great wife who's also super talented and her talent actually makes a whole bunch of money. My wife was incredibly talented, but she was a school teacher. Right. So very different, but your super talented wife makes a Jillian box. Forget all of that. What do you want to do?
When I say that's, that's, that's the part of this equation that makes me feel kind of overwhelmed, you know, like, I'm, I'm, I'm, I'm an experienced writer. Obviously, my 40 degree was in network engineering. Hold on. Sam, Sam, I don't care. Anybell that crap you're saying. What do you want to do?
We're impressed by your LinkedIn, I promise. Yeah, it looks great. You want to do it in your life. What I want to do, honestly, is I want to get into IT. I want to grab that bull by the horns and I want to take it. I want to take it for a ride. What's it for you to read? I promise you. Network administration. Why are you not working in IT? I was. But then when my wife said, go to Memphis, Tennessee. Why aren't you working in IT?
Uh, we didn't have childcare until like three months ago. And I've been trying to fill application after application. And I'm just, I'm not getting emails or phone calls back. And it's really starting to kill my, my job. Okay. So what you're finding out is you want to do a thing in the road you're trying to take isn't working. Cool. Can you find some folks at your local church there or over at WT and go sit there and have coffee with him and ask them about IT opportunities in Amarillo, Texas?
I could probably talk to someone for sure. I don't know who that someone would be, but I could start asking questions. All you want to do is take someone to coffee. Do you know anyone that works in IT, even Facebook friends? I gave it Facebook like 10 years ago. Okay. Well, you need to find some people who are in that field. Bro, you got people that you got people you're in the service with that are out of care scattered across the country.
they are actually and uh... i tried getting help there and uh... they try to help me get jobs but even even there i i came up short but i have admittedly i have not dug in i haven't dug as deeply locally as i could have probably could have and i'm not even from here that's part of my hesitation i'm like they're going to be like who's this guy this nobody i don't know who you know they're not that's that's bull crap that's a story you're telling yourself
And again, it goes back to you. That's why I would have come around the table and hugged you because you're big. The cancer here is not that you haven't found an IT job. The cancer here is you have lost purpose. You think when you checked out of the military and married an amazing woman that there was a period at the end of your sentence and that's wrong. It's not true. It's a lie.
And so when you go looking for a job, you're going looking for a job with one foot. You're just sending out a bunch of LinkedIn profiles and that's not how people get jobs. And you also, I know, you're eight years in the service. You somehow convinced an amazing physician to marry you.
And by the way, you didn't convince her. You're probably a pretty amazing guy. You went knocked out a four-year degree route and you got home. You've got all of these qualifiers that tell me that you're a hardworking, good man. The only person in your world who doesn't believe that is you. You're not the first person that's revealed that to me. Okay, but here's the thing. You can't manifest that belief. You have to go, you have to stand on a series of concrete steps that can only be stood on if you take action.
Okay. So what, uh, so this is you going to Sunday school this weekend and you asking for a prayer request in your Sunday school class and say, Hey, I'm a military veteran. I've got, I really want to get into IT work. I don't even know where to start. If anyone has anybody, um, I would really be grateful if I would love to take something to coffee and learn about what's going on here in Amarillo, Texas, or if anyone has a connection down in the multiple small startups that go on in love with Texas on, on a connection there.
and I guarantee you somebody will call it. We'll talk to you after class. Good, George. And just do your homework and research and go, what are all the jobs that I really want? What are they saying must be true for me to get this job? Okay, let me make sure I have that so that when I do show up for the interview, it's not a dud. I know exactly what they're looking for. I've done my homework. I know the company. I know the mission. I know the skill set needed. And then on top of in person,
Go scour the subreddit threads for IT and see what people are doing, how they got the job they're doing, do they enjoy what they're doing. You've got a lot of homework to do and I think that will get you, get the fuel going again, get the fire lit. Do you have any men there in Emerald that you hang out with regularly? No, that's part of my problem. We moved here five years ago and I never really kind of ingratiated myself on the social circles. Okay, that starts today.
The most common conversation I have with former veterans is you more than anyone else on planet earth. Veterans know more than anything, what it's like to be in a relationship with somebody, stand shoulder to shoulder with somebody who will die for you.
And it's almost impossible then to come home to unhook from that level of community and connection and come home and sit next to some Ned Flanders in a coffee shop who's like, you know, it's really hot. And you're like, dude, shut up. I know what real connected friendship looks like. And what so veteran after veteran after veteran that I talked to does, they just circle up and they stay inside their house and Netflix says, Hey, I got the next show for you. Just stay there.
And so your mission right now, brother, is to go find a group of men you can go do something with. Go mule deer hunting, go hiking out in the canyons, go do some stuff with other guys, and they're gonna say no, you're gonna ask again, and they're gonna say no, and you're gonna ask again, you're gonna find a small little gang out there. Even if you can find some folks who used to be in the services, and now they're retired out to West Texas, great, man. But your mission is to go find a group of men, one, two, five, 10, I don't care, who will do life with you, and I promise you,
There will be connections into IT. Make sure to call my brother. We'll be right back. One of the questions I get all the time is, which life insurance company should I use for my term life policy? A valid question since there are hundreds of companies out there with rates all over the place and riders and add-ons that are simply a waste of money. You need to get this done and make the right decision.
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Hey, how you doing? We're just partying, brother. What's up, man? So my question is that I have a little bit of money for my inheritance. And I'm wondering if right now is the right time to invest or if I should wait a little bit for the economy to do its thing. What does that mean? What does do its thing mean? It's been doing it. It's low and it's right now it's starting to pick up. What economy do you live in, brother?
We're at record highs every day. Are you waiting for it to crash and then get in? Well, you know, I don't know what's going to happen with the whole election. And it happened with it with this happening. But I'm worried that I've already invested some money for my kids from my inheritance in the trust fund. So they're taking care of.
as far as them uh... but i'm i'm concerned about my new my wife's retirement how much money did you get an inheritance uh... i got about a hundred thousand dollars who passed away from
And I used $40,000 to pay off all my debt. That's the first thing I did. I paid off all my debt. Wonderful. Good for you. So, and then I had, of course, I took $20,000 for my kids and I put $10,000 into diversified portfolios with a stockbroker and then tied a trust to it so that that's their inheritance when if something were happening to me and my wife.
Uh, specifically because I have a three year old son who's, um, um, special needs. Do you have life insurance? Oh, I wanted to make sure that he was taken care of. Hey, Jason. Jason. Jason. Yes. Do you have life insurance? I do. How much? I have life insurance on myself, my wife and both of my kids. Okay. Why do you need life insurance on your kids?
just in case. I mean, something happens to them. I mean, it's never a bad idea that my mother had life insurance on me because both of my brothers passed away, one when he was six and one when he was 25.
And it hit my family hard financially. So my mother took life insurance out on me in case something were to happen to me that way to be paid for. You've had a lot. You've had a lot hit you in your lifetime. A lot of trauma. I'm in the last of my family. So my father, my mother, my mother died October 1st. And that's why I'm an inheritance. I'm sorry. Here's the deal. You've been making a lot of decisions out of fear.
I can tell there's a lot of anxiousness about, but what if it's not enough and what I need to take care of? And I want you to just breathe, slow down. You're going to be okay. You are so far beyond what most people couldn't even spell the word trust. And you've got it set up for your kids already. So let me just give you some facts to slow, let you breathe when it comes to the economy.
Under President Trump's last presidency, the stock market was up 53%. Three and a half years into his presidency, it was up 53%. Under Joe Biden's presidency, three and a half years in, it was up 50%. So basic math says over seven year period, the stock market went up 103%. It doubled.
Correct? Right. And I'm not a guru. I don't have a crystal ball. My guess is we're going to see the same thing happen over the next seven years. We're going to see about 100% return. And I think it's going to go half. I think it's going to be worse than that. And you know what? What's fun about this is you still win. It doesn't matter. Like me sitting here trying to predict it, George, like,
We don't time the market. And that's what you're trying to do right now is go, well, I want to wait till the right time. I want to wait for a crash to invest. I wouldn't wait. I would invest now. And what you'll see is over time. The sooner you invest, the more money you're going to have later. The more time compound growth has to work, it's magic.
I don't know what headline you're looking at, what stock you're looking at, but I'm looking at the S&P 500, the largest 500 companies that largely represent the overall US economy. When you invest in a mutual fund, that's largely what you're investing in as well, the top companies. Can I give you a different perspective, Jason? I mean, what I was worried about was
rather than putting it in the stock market, should I go into CDs that are a little bit more secure, but with less interest. If you want to lose money, you'll lose money against inflation. Can I throw something else at you, Jason? Something totally different? You had $100,000 and you paid $40,000 of your debt off, which left you a 60. You took $20,000 and created a trust for your kids, especially a special needs trust for your three-year-old, right?
That leaves you with 40 grand. Do you and your wife have a house? Our house was a gift for my father-in-law. It's paid off. Okay. So you have a paid off home? Yes.
You have an emergency fund. Is this, you have an emergency fund where you are now your own bank? No, I don't know. We only make about $37,000 a year. I'm going to stay at home dad. I'm a caregiver for my son. Well, listen to me. So I don't really work. You now have $40,000. I want you to put it in a high yield savings account. And now you have six months. If anything ever happens, you've got six months of, of taxes, bills, groceries in an account that you never have to borrow money again.
And I want you to look at what you're actually solving for. What you're trying to solve for is you're trying to look at a crystal ball and see what's going to happen in 35 years because you're still in the backdrop of the pain of losing your mom, of losing your brothers, losing your dad. The one thing you have never had in your home is peace.
And instead of trying to solve for the next calamity coming, which by the way, they're going to keep coming, that's just life and it sucks. It is. I want you to solve for peace so that when those things come, you don't have a care in the world, you can just focus on being sad, on grieving. Because right now you have, you are in a financial position that very, very few Americans are in.
And that is you don't owe anybody anything. You have a paid for house. You now have six to eight months of cash in the bank that's just yours. Period. Nobody can take your house away. Nobody can take food off your table. You see what kind of position you're in. Right. That is peace, homie. I would solve for peace. And your main breadwinner in your house makes 37,000 bucks. That's not going to be enough money over the long term. You're looking up to figure that out.
but right now y'all are safe, okay? You get what I'm getting at?
Yeah. I would not invest any of this extra money. This is me. The main breadware isn't making enough. And I won my own small business selling stuff at farmers markets to try to make extra money. But in three and a half years, I'm only at, I only make about $10,000 a year. Okay. So let's quit that job. I'm literally just dumping it into re into the company. I don't even pay myself. Yeah. So it's been a hobby and we're going to stop that now. You're tired. I can hear it on you. You're exhausted.
You're playing whack-a-mole with the next anxious thing that pops up. Let's just stop. Let's just put the, stop putting quarters in the machine. We're playing. Does that sound, if you hear my voice, does that sound good? Yeah. I mean, I'm just, it's, it's, I do a lot. I know. I mean, I haven't, be honest with you. I haven't agreed for my mother because I have too much to do. I know you have too much to do. I know, but here's the thing, your body's grieving whether you stop and do it or not.
So I'm just, I've never, I've never stopped. I never stopped, man. I'm going nonstop. I know what to do. And as my friend in Simken says, if busyness is your drug, rest will feel like stress. And right now you're medicating with whack a mole. You're medicating with busy stop tonight. It's the weekend. I want you to, you're about to come up on Thanksgiving for the first time without your mom. I want you to write mom a letter tonight. And I want you to tell your mom how much you miss her.
I don't want you to tell your mom in that letter what kind of dad you're going to be. What kind of provider you're going to be. And how you're going to give peace to her grandkids that she'll never get to meet. Okay. You're burning your hole through your home right now with your anxiousness. I want you to relax. You're safe right now. You got to pay for our house. You got 40 grand in the bank. You have a small account set up for your kid's future, man. You got life insurance on everybody.
You're so far ahead of the game, I mean. Now you gotta turn and sit and just exhale in the sadness. I mean, that's part of the part of the deal. We gotta make Jason well again. And then this whole thing will take care of itself. And then we gotta, we'll have to deal with the money, we'll have to deal with, you know, how are we gonna, like, we don't make enough money to eat and what job am I gonna do? Am I gonna go back to school? We can figure all that out. But right now, we're gonna exhale, we're safe. We're gonna grieve mom. And then when the new year rolls around, we're gonna figure out what comes next for our family. Thanks for the call, brother. We'll be right back.
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Welcome back to the Ramsey Show. The Employee Benefit Research Institute recently did a study asking how many people have a million dollars safe for retirement. According to their research, only 3.2 of Americans have a million dollars or more and their taxed advantage accounts like a 401k and IRAs. 58% of Americans have less than $10,000 saving their retirement accounts.
Dude, that's dark stuff. I had no idea what that meant. 60%, 6 out of 10 Americans basically could do a month and a half in a retirement home. That's it. As a listener of the Ramsey Show, are you staying on track with the baby steps to reach your financial goals? Here's the deal. Take a quick quiz to check your progress and receive a personalized plan just for you.
Simply head to the show notes, click on the link titled, are you on track with the baby steps and complete the free quiz? If you were one of the six out of 10 of Americans that have less than 10 grand, there is a light for you, but you got to get on it, right? You have to, you got to begin to act differently.
George, that would freak me out. That would scare me to death. Yeah. And people think it's a life sentence. They think their DNA inherently has this in them where they go, well, I'm just going to, I'm a broke person, John. You can change. You can just snap your fingers and go, I don't want to live like this. I want to change my family tree. I don't have to retire broke. And so this quiz will help you start to take the next step, figure out where you're really at. And if you just look at, man, basic demographic data,
this same six out of ten who have less than ten thousand i'll go as high seventy percent eighty percent that ours that are fragile but about the same stat that a living paycheck to paycheck but also is there's a lot of news that there's there in the bell saying hey uh...
Your Social Security is going to be less than. We're not solvent here in the next 10, 15, 20 years. By 20, 34, they're going to reduce the benefit by 27%. So there is a- It already wasn't that high. It's a slow car crash coming. You got to be your own financial plan. Act today. Act today. Act today.
Check out the show notes. Are you on track with the baby steps? Complete the free quiz. Stare down this anxious moment in your life and begin to do something different. It's got the Stanford, Connecticut, and talk to James. What is up, James? Everything about the nose, John and George has to say fine to you. Excellent. The same. What's up?
Excellent. I need some advice. We're going to try a little bit carefully because I am trying my best to thread the deal with my mother-in-law. She keeps giving financial and career advice to my family, specifically my wife, that do not work for our family situation and really do not work in 2024. So, James, you do not have a problem with your mother-in-law. She has your proxy work. You have a problem with your wife.
I would think that you are probably correct. I am worried that my wife is going to listen to her mother. My mother-in-law was able to raise four children in the Midwest through the 80s and 90s without working. I don't believe has ever worked. A 40-hour-a-week job in her life. A couple of days helping out at this nursery school, a couple of days here. What do you disagree on with your mother-in-law? What does she want your wife to do? Stay at home.
Well, yes, basically all of the advice that she's giving involves things around. We have two children under six.
And it's comments along the lines of, you know, when both the kids are out of daycare, my wife works as a daycare teacher as well. When the kids are out of daycare, you can leave that job and just teach music lessons. I make 60 an hour teaching music lessons. And that's great. But that doesn't make up for the income that we need in order to live where we have to. Here's the thing, James.
I have the greatest mother-in-law who's ever lived. She's amazing. And I expect my mother-in-law to give the advice that she sees fit for how she wants the world to work. I acknowledge that too. But when it comes to the life that me and my wife have to build for ourselves, she doesn't get a vote. And so your mother-in-law can see whatever she wants. Good for her. That's awesome. It's amazing. She's not the problem here.
The problem here is, is you and your wife are not on the same page. And so it doesn't do, it doesn't matter what your brother-in-law's saying. It matters that you look at your wife and your wife says, Hey, I want to stay home. And you say, we can't afford to do that. Or we can, but here's what's going to cost. You have to sell the car. We can't live in this particular house or in this particular neighborhood.
Yeah. And at this point, we're having to have this conversation about every six to nine months or so. And I've tried showing my wife the math and that it does not. So James, I'm hearing your wife wants to stay home. If she could have it her way, she would stay home. Is that true? I think that she gets the impression that she is working to pay for daycare and nothing else and that once the children are out of daycare that that need might disappear. And then she wants to stay home.
I think so. I think part of it may be a byproduct to that's the home environment that she was raised in, so she has seen it work, but that
I don't think is realistic or sustainable. I want you to reverse engineer y'all's dream that you decide together, and that might mean, okay, here's the math of it. We can't do this right now, here's why. But if she says, hey, my dream is really I want to stay home and you want to support that dream, then you go, let's do the budget. What's it going to take? Okay, I need to do this many more music lessons. We need to do this. We need to cut our lifestyle by this to get in a financial place in order to do this.
So I think she's the wow, you're the how, and you're going, we have no way to actually accomplish this. But then there's also the part of you don't want this to happen right now. So this is really, like John said, this is between you and your wife. She wants to stay home, you don't want her to stay home. Take the mother-in-law out of it. Yeah, you keep crafting all these stories and imaginations like, well, it's probably because of this, and maybe it doesn't matter. Just forget all the story parts. Just sit down and look at the woman that you've made humans with.
Look at the woman that you said I do till death do us part. Like what kind of life do we want to have? What do you want this house to feel like when we get home every day? How much are you making a year, James? Just just you. Just myself about 60,000. And are you doing music lessons full time? No, mother and all those. My wife. No, she is a music teacher. Okay. What are you doing full time?
I am a program director for a medium-sized nonprofit. Okay. Okay. So I think we also need to go, okay, if this is in the future, my wife staying home, we're going to be a one-income family. What changes do I need to make? What education do I need to get? What career moves do I need to make in order to sustain a good life for my family? And that's the part that I think scares you. Is this involves you having to change too?
Or at least it involves y'all having to have a truthful conversation about, hey, what do I want? What do I really want? I really want to work at this job. I love my nonprofit work. And I know I make half of what I could make in the for-profit world, but I feel valued and loved here.
And then your wife looks across the table and says, I really want to stay at home with our kids. I see what happens in daycares. I want to be with our kids. Okay, now we have a desires challenge. Both of us are being honest. Both of us on the table. Now we're just going to look at the math does not care about what we want. Math is just math. So let's look at the math problem we have here. And maybe it's for three years, I'm going to stay at this nonprofit, but I'm going to work an extra job so that you can stay home because I know that's important to you.
And maybe it's, you know what, for three years, I'm going to keep working at daycare because at least I get to see the kids half the day. And we're not netting a lot of new income, but this mission that you're called to at this nonprofit is really important. But now you all are actually talking substantively. You're being honest with one another and you're putting your hearts and minds and souls on the table like you promised each other you would at your wedding. And your mother-in-law doesn't get a vote.
But right now when your wife says, well, my mom says that I, that's her knowing if I, she just tells you what she wants, you're going to blow by her with a spreadsheet. And when your wife says, um, something, and you go, well, it's just your mother in law speaking, that's you not being able to say, I really love my work. It means something to me. Do you get what I'm saying? Let's just take mother in law of the equation. Let's just talk directly with your wife. Is that possible?
Yeah, yeah. Most of the time, you sound like a, actually you sound a lot like me, brother. You sound like a spreadsheet guy. You can pull up a spreadsheet and you can make the math work or you can be really honest about it not working. I want you to sit down with your wife and talk about emotions and feelings, which may be a scary thing. Here's how I feel about this. Here's what I want. I feel like your mother-in-law has a seat at our table, a dinner table. I feel like your mom has a seat in our bedroom. I don't want her in here anymore.
I want it to be us. What world do we want to create? Thank you so much for the call, my brother. This is The Randy Show. Do you ever feel like you're finally making progress towards your goals only to get quickly distracted by something else in your feed? Well, that's why we created the Ramsey Network app. Your single source for content that keeps you motivated. The Ramsey Network app is designed to keep you laser focused on reaching your goals.
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where we help people with their finances and getting out of debt. We help people do work they love and we help people with their relationships and mental and emotional health. I'm John Deloney joined by George Campbell. We are taking your calls live at 828-825-5225. Let's go out to British Columbia, Canada and talk to Allison. Hey Allison, what's up?
Hi, I have a quick question for you guys, and it might not be a short answer, but... Let it rip. Go for it. It never is, right?
So my husband and I have about $3.2 million worth of debt total. And most of that is in our business, but some of that is personal. And I'm just wondering, is it better to focus on paying personal debts before your business debt? I have a friend named Denny and he can help you change your identity. I think you should hook you all up. Allison, Allison, here's, I hate, I'm like, am I the first one to tell you this? That's all personal debt. Yeah.
You guys signed the dotted line. There's no like magic businessman who gets to take the brunt of this. Yeah, that's fair. What's this debt? What's the business? So it's a medical practice that may have been denial. Okay, are you off positions? He is. I am more of an office manager. So how are y'all working through it? Are y'all making enough to pay your bills? Are y'all working to pay this thing off? How's the business working?
Like we got it 100% fully financed from the bank. So we do have a big loan from them, but we are able to make our payments every month, which is great. What's the debt service on that? I'm just wondering. What's the number for debt on that? What's the total payment every month? On 3.2 million, what are you paying to lenders every month? Total. I think it's around 30k. And what is the practice bringing in between you two and profit?
Um, so our profit at the end, like we've only owned for about two to three years, but the profit every year that we've gotten is about 250 to 300 and that's after all all the bills, all the loans, staff costs, everything is all paid. So you guys are essentially your gross income as a household is two fifty three hundred. Yeah, but then we have to make all the debt payments. That's your take home?
Well, that's not what we take home in our personal account. We, we pay ourselves as contractors. And so we only pay ourselves about 12 grand a month. Okay. That's my. Are you saying your profits are after making this $30,000 monthly payment? Yes. Okay. Okay. So how many debts are there total? If you split everything out.
So for our business, the reason I split it up is because they're in separate accounts, and they're also taxed differently. But yes, it is all kind of one number. But for the business, it has $2.6 million worth of debt. And then the rest of our debt is all personal. OK, so what is the other 600? So for the personal stuff,
So my husband, because he's a physician, he graduated probably five, six years ago from school. He has 300k worth of student loans, but he has to pay back still. Okay. And then we have 20k for our car, 215 for our house, but we still owe. And then I have 4k from my schooling as well. Okay. So your question is, what's the best way to tackle all of this?
Yeah, like, where do I start? Is it more important to focus on personal stuff off or business stuff? I know it's best to kind of tackle everything it wants if you can, but... Well, I mean, just based on the sheer numbers, if you just do the debt snowball, that would be your student loan first, then the car loan, then his student loans, then the business debt, and then the mortgage would come later. Okay, so mortgage is always last then.
The mortgage is a baby step six item. So you can consider this kind of a consumer debt. I mean, 2.6 million, that's trumping all of these other debts. It's going to take a while to pay this off. Yeah. So my guess is you probably have the mortgage knocked out by the time the business debt is knocked out. I'm hoping you guys continue to make more, take home more, and use more to tackle the debt. Because right now, that's my question. You're bringing home 150 grand a year. Are you paying each other 12, each of you 12 grand a month? Or just as a family, you are taking home 12 grand a month?
As a family, so we reduce for income. Okay. Because I manage the medical practice and he physically works in the practice. Okay. So we just pay ourselves to expand each. Okay. Gosh, man, he's the most. So is his reimbursement capped in Canada?
Um, I'm not really sure. That's a good question though. I know that we can claim capital gains, but that only comes like if we ever sell. Yeah. That's not what I'm talking about. I'm talking about like because of the medical system you'll have in Canada. Is there a cap on what he can charge per procedure or which procedures he can do or how many patients he can have? Can you work on Sundays? I've heard there's a cap for physicians that after you make a certain amount of money, physicians just take the next four months off because they can't make any more money.
I'm not really sure how that all works. I'll have to ask my husband. Okay. If y'all were in the United States, you had a medical practice, I would tell you there's what y'all need to earn more money. Yeah, because paying off $2.6 million with $200,000, that's going to take you forever. Yes.
Right? What's that? Is that the 13 years? Like, y'all gonna have to make more money and all your nurses are going to want raises. Like everything's going to go up, right? And so like that's expensive. I just don't know if y'all can do that in Canada. Well, we just hope that interest rates go down and so we pay less interest on our loans. Oh, sister, you have a you have an adjustable rate loan on this thing? Yeah, we do. In Canada, is it every five years they adjust the rate?
I think it's every five years. Yeah. That's not on mortgages. That's on all loans.
Not on all of them, that's only with the business one, which is the two points. Which is the giant one. This new segment is brought to you by Dr. Butler's, hemorrhoid spray, because I now have hemorrhoids. Here's some basic math for you on the business loan. You pay 260 grand a year, it would still take 10 years. And that's 260 grand of extra money beyond all of your bills that you can throw at the business debt. So that's why we're saying we need to drastically get our income up. I'm guessing there's no way to get out of this. I mean, even if you sold the practice,
you're going to lose it to the tune of a million bucks, I'm guessing. Yeah. Yeah. There's only one way out then and that's to increase income and decrease expenses, both in the business and in your personal life.
Okay. Which means vacations are off the table. We're not getting any more car loans. You may want to sell the car in downgrade. Truthfully, it's such a small percentage of this debt. I would just pay it off and keep the car. He's working Saturdays and probably being the only doctor's office open Sundays for a half day on Sunday. Like there's just not a way you'll just dug yourself a humongous hole and so you have to just find a way to get a big shovel. Yeah.
Yeah, we'd have to try to find another doctor to hire and work with us part-time or something like that.
Potentially, but you've got to make sure that works because that doctor is going to come in. They need a hefty salary. Come into salary, right? She's going to have to earn beyond their weight. They need to bring in 600 grand a year to get paid 300 grand a year. It may be that you'll do with one less nurse and you and or your husband has to pick up some administrative duties that most fancy physicians just pawn off on.
their nurses. But here's what I would do in order. Number one, as George said, I would split off the personal stuff. What's our take home? We're making 140 grand a year. We're going to pay off our consumer debt and we're going to hammer the student loan. When it comes to the business, man, I'd find out what is your cap in the medical system that you guys find yourself in Canada. And then I'd figure out ways to increase drastically the income of this practice.
Woo, I couldn't sleep with that much debt, John. I'm so sorry, Allison. I hope you guys get out of this unscathed. This is the Ramsay Show.
This show is sponsored by BetterHelp. This month is all about gratitude, and most of us have people in our lives who we're grateful for. One of those people, for me, is the great Januil Thompson. He taught me how to be a dad, a husband, a professional, and had a balance caring for a bunch of people all at the same time. We all know of somebody else we can be grateful for, but there's one person that we often don't take time to thank ourselves.
We don't always acknowledge that we're surviving, that we're moving forward, and that we're working towards a better life and better relationships. And in a world where everything's gone bonkers, it's not always easy. So here's my reminder to thank the people that you love, thank the people in your life, and
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Let the gratitude flow with better help. Visit BetterHelp.com slash Deloni to get 10% off your first month. That's BetterHelp, H-E-L-P dot com slash Deloni. Hey guys, it's Rachel Cruz. And guess what? It's my favorite time of year. The lights, the music, the decorations. I mean, I love it all. And as a natural spender like myself, it's really easy to overspend. And I want to do all the things and give my family the kind of holidays they'll always remember.
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Welcome back to the Ramsey show. I'm John Deloney. Let's go out to Oh, I'm joined by George camel. Thanks, John. I'm here too. Happy to help. I thought you kicked me under the bless be a blessing. I don't even know what that means. Let's go out to city. I talk to Eric. What's up, Eric? Good afternoon. I hope everyone is doing well. We are running a scam here called a podcast YouTube show and we're doing great. How about you?
Couldn't be better. Thank you so much. It's awesome. What's up, brother? So fun so fun fact I've heard about you guys back in my senior year 2012 heard all about the baby steps and From years on I've been on and off on and off and I hate to say it I haven't been really committed to the whole thing
It wasn't until this year when I almost got evicted that I, well evicted from my apartment that I decided, yeah, I need to change. I need to be dedicated. I need to be devoted. So I am for real this time going through the seven baby steps as we speak. Yeah, man. Drick of the Kool-Aid. Finally.
So I've been completed Baby Step 1. I have $1,000, currently saved up. As of last week, I've paid off the only debt I ever had, which is my middle bill. And I'm currently ready to start Baby Step 3. And this is where my question comes into play. So I didn't know a little research about where to put that $1,000 I have. And two things keeps popping up.
One is a money market account and the other is a high yield savings account. Good research. So my question is which of the two overall would be the better choice for me as well as what situation would one be better than the other?
I'll tell you what I do, and most folks out there following the Ramsey Plan, they're remarkably similar. The money market versus the high yield savings. The money market may have an extra benefit like you can write checks out of it. It might come with a debit card, but outside of that, they're a savings account. And so I have a high yield savings account.
You're going to get some still really decent interest rates, talking over 4% with some of the good ones out there, and that'll help your emergency fund stay liquid, grow at the pace of inflation, and it's there to protect you. It is insurance, it's not an investment. We're not trying to make money off of this thing, but we also want to keep it somewhere safe that's FDIC insured, doesn't have any minimum balance and monthly fees and all of that. Those are the boxes you want to check when it comes to a good high yield savings.
But also, it's a thousand bucks, man, so you can drop it in a local credit union. Don't step over dollars to pick up nickels, as my friend Lane Norton says. Don't go chasing the nicke. Well, it's 0.1% more if I move it here. So I would just choose one and stick with it. Overcomplication is going to be your enemy at this point. Let's keep things simple, man.
Right. So which comes to another thing, is there like any place that can look at the CE, like which would be the most beneficial place to put the $1,000? Because the one I currently, the Bank of Korea, if I work with the USA, I've been in there for like over years or since I joined the military and they do this thing where it's like a 0.01%. So if I leave it there, I'm only getting a penny a month.
No, yeah, that's terrible. You can do better. So there's a balance here. And so we've got a great partner called Fairwinds. If you go to fairwinds.org slash Ramsey, they've got a bundle just for our Ramsey listeners. I've got a partner on my YouTube channel called Laurel Road. You can sign up at laurelroad.com slash George. That's the one that I'm using. John and Jade and Rachel, they're probably all using different ones. But the key here is you want it to be FDIC insured with a minimum to no fees and you can get that money easily.
And probably a good answer, a good question you might ask is, yes, George and I both put our emergency funds into online high yield savings accounts. I'm pretty old school. I like to go to my local bank. I still like a brick and mortar, like bang for my house stuff. But I do have my emergency fund in a high yield savings account.
Okay. And the reason they're simple, they have less overhead because they're online. They don't have all the brick and mortars. They don't have to cover as many bills and hire as many people so they can pass on their savings to you in the form of a higher interest rate. But me, as my wife says, being born in the wrong century, I still like to shake the hands of my banker. I want to see their face. So I have both. I want to bank with a local bank for my checking account and for my high-yield savings, I'm fine putting that online knowing that I'll touch it, you know, once or twice a year.
Okay, it's interesting that you say that because I do have two banks. I have one bank for like general purpose. My second bank where again, that's my thousand dollars is at and I was always been thinking of looking for a third one to pick my thousand dollars.
And let that. No, you don't need over complicated. You're going to get too complicated. Too many. Yeah, you're going to be like triple stamp and a double stamp. Minimalist. Yes. A checking account with a good local bank. A credit union is a great option. And then for your emergency fund or short term savings, we'll call it one to three or four years. A high yield savings account with a great online institution is great. I mean, credit unions can sometimes have great rates. They're amazing. So hey, can you do me a favor, Eric? Yes, sir. This is kind of impromptu in front of, I don't know.
several million people you cool yeah that's fine we do like an impromptu debt free screen we counted down okay you just you you paid off all your debts right that's correct how much that was it how much was it it was around five hundred bucks in the medical bill you you owed five hundred bucks uh... it's a long-term emergency situation
no that that's the let's the smallest debt i've ever heard paid off that's amazing this could be a world record smallest that free scream ever how long did you have the dead for uh... all my goodness uh... i've had this since i want to say
December, if not January. Wow. Donski. All right. So Eric, uh, making a hundred million dollars paid off his debt of 500 bucks in, uh, we'll take you one month. Uh, it did. Excellent. Count it down. Do let's hear your debt free screen, Eric. All right. I'm debt free. That's right. Let's go.
Even got it. There we go. Hey man, we celebrate the big ones and we will celebrate the $500 debt free screen. That's right. Because here's the deal. Freedom is freedom is freedom, right? And it comes with a promise. You got a promise not to go into consumer debt ever again.
I promise, promise, promise, promise. There's your fall on this Ramsey plan now after ignoring it for 12 years. And it's about to change your life, man. I want to set you up for freedom. We're going to hook you up with my book, Breaking Free from Broke, as well as a year of every dollar premium so you can budget your way to that emergency fund and investing and everything beyond. George, how many people do you see get to the stage and begin to try to over-sophisticate things?
The amount of complication we try to do because it seems too simple. We're like, no, it's got to be more complicated to be smart and efficient and great. And I'm going, no, if you look at Dave Ramsey, who has more, he has enough wealth to feed my family for 17,000 generations. He owns mutual funds in real estate.
He doesn't have a crypto wallet. He doesn't have 17 offshore accounts. He doesn't make it overcomplicated. And that's what I found. It's the people that don't have wealth that want to overcomplicate it. The ones that do have his dirty little secret where they go, yeah, I just, I have a savings account. I have money in the bank. I invest in the stock market. I own paid for real estate.
And it's always amazing to me that when you get around those people, they have a different energy about them. You're expecting more. You're like, no, but wait, there's a secret. No, but it's this. It's just like my give a crap. I took it apart and I e-bade all the parts like I like if you're around Dave, it's like when we go hang out, right? When we go to his barn or we are out traveling, there's just an air of like, yeah, I don't care.
And it's because I've just in a complicated life, right? I'm gonna do the things I gotta do to make things as simple as possible. And you and I both have been hit up by the Instagram finance bros that are like, you pay off your 3.2% mortgage and you can get 4.8% like bro. And they use the word arbitrage and then a puppy stops wagging its tail. Exactly. Oh, it's exhausting. It's like, yeah. Get the whole life policy and then you can borrow against it and then you need 16 credit cards to maximize the rewards and I'm going, dude,
Listen to yourself talk exactly sound like a crazy person trying to maximize your freaking rewards to get an extra 1% Arbitrage to pay for that first-class flight so you can take a picture of it and post it to your Instagram. It's exhausting. Yeah, you know what I have I have a an Olympic wrestling mat in my living room that I just wrestle with my daughter I'd rather spend my energy doing that
That's a flex right there. Or like, hey, wife, let's go for like a two hour walk tonight and leave the kids rather feral. Let's just go spend time with it. What a thought. What if you could build a life that didn't exhaust you? Yeah, that you were exhausted. Everyone around you. You were excited to wake up and be a part of. Keep it simple. Yeah, I saw for peace, people. We'll be right back.
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Welcome back to The Ramsay Show. I'm John Deloney joined by George Campbell, AAA 825 5225. The Ramsay Show question of the day. This is a spicy one. It's brought to you by Y Refi. Y Refi refinances defaulted private student loans, which are different than federal student loans. Y Refi refinances your defaulted private student loans and builds a custom loan based on your ability to pay.
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Today's question comes from Meg in Maine. I've been an avid follower for 20 years and I'm debt free. However, I'm facing a bit of a challenge and would love to get your advice. I travel quite a bit, now that I'm semi-retired, and I've been considering getting a travel points credit card. My plan is to charge my travel expenses and large purchases, then pay them off immediately.
I feel disciplined enough to handle this without carrying any debt, plus the idea of earning points and not carrying so much cash is appealing. But here's the kicker, despite having a credit score of 833, I've been turned down for several credit cards since I haven't used one in many years. Do you have any suggestions on how to approach the situation or any alternatives I should consider?
I think you should get a credit card for points if you hate widows orphans and those who are struggling to pay the bills. John shots fired. Hot going on here. I remember it's not for Rams. I was moving across. I was moving. I was taking a long move and the business I was moving would pay reimburse my move. It was a whole family with a big old monster truck.
but I had to front it. So I thought, oh man, I'm gonna open up a credit card and with points on it and I'll make just three points because I'm just gonna turn around and this new company that I'm working for is gonna reimburse me for the move. So I did that and I remember getting a whole bunch of free points for opening the card and then I got a whole bunch more points for this massive amount of money I spent right out of the gate to move my whole family. And then I was literally driving on the road and I remember thinking,
Wait a minute. The credit card company's not my friend. And the airline company's not my friend. Like they're not hooking me up. Like, bro, you spent money with us, we're gonna hook you up. Somebody's paying for this flight.
And somebody's paying for these hotel stays. And when I dug into it, that's when to my horror, I realized, oh, it's not the companies. It's not the credit card companies, not the airline. It's not the hotels that are paying for these rooms. It's the single mom of three kids who just left an abusive relationship.
who is struggling to feed her kids, who puts this credit card in, and then her boss cuts her hours, and she gets a $50 late fee or a $39 late fee, or her APR goes from 13 to 29% in one month. She's paying for my flight.
or the single dad whose wife just passed away and like they're scrambling, scrambling. He opens up a credit card at a desperation and then he misses a payment and it balloons on it. That guy's paying for my flights and it, it all of a sudden got very gross for me. Like I don't want to be a part of this system. I travel, you and I travel a lot. I travel all the time, all the time.
I'd rather pay for my own flights or work out a business arrangement with the companies paying me to come speak for them than ever think I have some single mom who can't put food on her table, pay my bills. And it just got gross for me real fast. Yeah. I mean, there's a, you did some research on this, right? There's a moral argument to be made. Yeah. My book, Breaking Free from Broke. Here's the, the quote from, from the book.
a 2023 study by the Federal Reserve. They set out to determine who pays for these credit card awards and the results they expected are alarming. In the report, the Fed said we estimate an aggregate annual redistribution of $15 billion from less to more educated from the poorer to richer and from high to low minority areas widening existing disparities.
Simple. And here's it gets worse, John, as they dug into it. Families with household incomes below 40 grand are less likely to even qualify for these rewards, but they're more likely to pay late fees and additional interest. The family's making 100 grand or more, obviously more likely to have access to these reward cards, and less likely to pay late fees and interest.
So it's not saying you're a bad person if you use the awards. This is not a moral argument to say John's a better person than you. I mean, but John sleeps better at night because of it. Yeah. And can you play the game? Sure. Is it worth the 2%? Let's say you spent 25 grand. I mean, is it really worth that? Well, they put in huge flaunt cash back.
Yeah. Right. Cash back. Well, and they go, well, it's points now, John. It's not cash. Oh, it's a point. What's 100,000 points? I don't know. It's like Chuck E. Cheese. You spent $100 at Chuck E. Cheese to get a thing that's actually worth $7. Right. So you get like a cool monogrammed Bluetooth speaker, like, because I got 100,000 points for a brand. It's a no-name brand. Yeah. You get some, you know, one of those sticky hands, you're gonna pack a gum, and you're like, I spent 20 bucks for this. Refurbished, like, new balances, right?
So can it be done? Can you be super disciplined and beat the cyst? Sure. I don't think it's worth the brain calories and the energy and the money spent to try to do it personally. And if you, geez, I don't want to make it a moral issue, but I want to call these programs to task.
If you like the idea of somebody's of wealth being redistributed from the least of these in our communities to pay for your flights and hotels, knock your lights out. For me, Georgia just got gross. And again, we could line up the things that...
I need to work on. I'm not a better person than anybody, but in this one particular thing, this is just a hot button issue with me. The banks aren't your friends. The credit card companies aren't your friends. The airline companies are not your friends. They're running businesses. They would not be giving you these flights if they weren't making that money up somewhere else. There's an old saying in the internet world.
If you get online and you log in and you have to put your email address in for free and you get a product for free.
you're the product, right? They want you, right? So it's similarly asking that next layer question, who's paying for these flights, actually? Who's paying for the advantage I just think I got? Because they're not hooking you up like your friend to your neighbor. Well, when you think about this, let's say you do spend 25,000 a year on travel. I think we'd all agree that's a lot. Someone's traveling a lot with 25 grand a year and 2%, it's 500 bucks.
You could put 40 bucks in a savings account every month and give yourself the rewards. Yeah, absolutely. So you're never going to convince me because of humans being emotional creatures that psychologically you're not going to spend $500 more on that card over the course of a year because you're going, well, I'll get some points might as well get the nicer flight.
Well, and if you fly, like if you fly Southwest or America, you fly these companies all the time, you get flight points for participating. I'm okay with that, right? Because they're marking up that your ticket and they're going to give you a piece. That's fine. If I fly 25 times in Southwest, I'll get a free flight. Not good. That's fantastic. That's awesome. It's that next level of, hey, my gasoline, my Snickers bar, my whatever, your haircuts, which is a mean.
That's a lot of them. I'd get some serious cash back. But instead, here's what I do with my haircuts, John. I pay cash, and I get a discount. I do. Because we use the same barber. He gives the cash discount. Exactly. So I'm like, well, I'm making more by paying cash than by swiping my card, which, by the way, hurts the small business owner. Because they've got to now pay the 3% fee or pass it on to you.
all to get my 2% cash back. So either way, you are not the one winning. It's the card processing companies. It's Visa, it's MasterCard, it's AMX, it's Discover, it's Southwest, it's Delta, and these are not evil companies. This is just how they do business and you need to understand how they're marketing to you. There is a reason they're always offering you, hey, John, you're so wonderful. Here's more line of credit. We're going to give you an extra $5,000 in credit that you can spend. You're telling me psychologically, I don't get the dopamine hit that tells me, I am winning. The banks love me.
Yeah, they love you. So I, I, I don't know. As for me in my house, we solve for peace. And if I can opt out of the system, I like that. I like that. I like that. This is truly how we love people think. Well, they just have to say that on air. Dave secretly, no, you can check his wallet. You can check any of our wallets.
There is not a single credit card to be found. And it's not because we're scared of Dave finding out it's because we truly have no need for the opt-out of the system. Once we started following the Ramsey plan, we're like, oh, we can just use our own money and have freedom and control over our life. Great. Sign me up. Screw the rewards. It's just, again, we're going back to simplicity.
Screw your awards. I like the one that says go fund yourself. That one I'm still trying to get as part of Ramsey merch. That's fantastic. Yeah, I don't know that Dave's gonna go for it yet. He could. I like that though. He's not here a lot on the show. Imagine if America said go fund yourself, go fund your own retirement, go fund your own credit card rewards, and America would be a better place instead of making banks and lenders richer. If you made a shirt that said go fund yourself, and I made one that said that gives me hemorrhoids, you and I would both. We'd be billionaires.
America would buy those teachers. This is the Ramsey Show. We'll be right back.
Well, it's decision time again. Every year during open enrollment, you have the chance to check in on your insurance and make sure it's right for you and your family. Whether you have health coverage through your job, a private company, or a government program like Medicare, you don't have to figure this out alone. We have reliable folks. We trust to help you get the right coverage for whatever stage you're in. Go to RamseySolutions.com slash health dash coverage.
welcome back to the Ramsey show triple eight eight two five five two two five i'm john Delaney joined by george camel
This is the radest thing I think I got going on in my life right now. Me and Dave Ramsey launching a brand new tour this spring called the Money and Relationships Tour, it's gonna be gone. Oh, that is rad, yeah. So this is a very different event than we've ever done because there is no like talks, there's no like scripts. You guys are gonna riff based on what the audience wants to hear, is that right?
It will not be, yeah, it will be like two one hour lectures. It will be chaos. It'll be a blast. It will, yeah, the audience gets to vote on what we talk about and Dave and I will have spent the last six months like researching and digging into these topics and then we'll spread them out and say, all right, y'all pick from this menu. What do you want to talk about? I think Dave's accidentally starting an improv troupe.
I never thought this day would come. This is amazing. This is as close as we're gonna see to Dave doing improv. So you guys are heading out to Six Cities. Six Cities. So Louisville and April 21, Durham and April 23rd, Atlanta, April 25th, Phoenix, May 5th, Fort Worth.
Fort Worth, Texas, Texas. Y'all gotta show up for me. May 7th in the Kansas City, May 9th. We're gonna be there live and we talk about relationship dynamics, your marriage, your kids, budgeting, financial goals, whatever you got. Your voice will drive the night. Get your tickets at ramsysolutions.com slash tour. By the way, great Christmas gifts. ramsysolutions.com slash tour
I was telling somebody on the audience, just a little bit, I don't get nervous, just being on stage with Dave for two and a half hours and letting it rip. I'll probably be a little puckered up. Yeah, I might show up to like the Atlanta one just to see what the heck happens there. You can bomb with some questions from the audience and that'd be real fun, actually. I'll put on a fake mustache. That would be hilarious. But then we'd all find out that, well, actually, you have a pretty nice beard going. Thank you. That looks good.
I haven't shaved in seven months. This is all I got. Scaredly five. It's like a four o'clock shadow. Couldn't even make it to the moon shadow. My faces gave up. Let's go out to us. Go out on the street to Nashville and talk to Michael. What's up, Michael? I'm on a whole lot, guys. A bunch of stuff. We're just running the scam out here. What's up, man? How can I help? All right. So I got a question. So me and my wife have
Finally got to the point to where we paid off all of our debt and we decided that's a pretty good amount of money. And we actually came into a pretty good amount of money as well on top of that. And we ended up putting a big down payment on a house now unfortunately.
I didn't want to be in a scenario to work with both of our income to pay the mortgage. And I'm a big farm guy. I had to have land. So we ended up with $300,000 a day now on a home for 30 years. And that I did pay my rates down to 5%. And like I said, I've paid off everything. I have $10,000 to a emergency fund.
I have 6,000 or six months of payments ready for any time. And right now it's currently only taken like $3,000 for money to pay all of our bills. And we grow anywhere between $8,500 to $9,000 a month. So my question is, yes, I know I went with a 30-year note. Would it be better just to pay double payments?
or literally take everything I got and just keep dropping in there until I get paid off. So you said your bills are how much per month? Total expenses? About three to thirty five hundred thirty five hundred. Okay. So you've got plenty of margin to the tune of, you know, five grand a month. You could just chunk at the mortgage and then you have how much you said you came into some money. How much is sitting there outside of your emergency fund that you could use?
Outside of my emergency fund, I have, uh, well, I put everything in the three categories. I got 10,000 to emergency fund and I have, uh, just over 22, uh, just for six months of everything. Um, I'm going to call that emergency fund. So let's get your emergency funds already grand. Well, I, the reason I say I got 10,000 for your like, you know, vehicle stuff like that. They tore up.
With that being said, so yeah, we have $32,000 and I also have just like vacation money that we could in that we have close to five grand right now. Just that way we don't spend anything extra. So we're not going to touch the emergency fund. We're not going to touch the vacation money. Keep your sinking funds happening as they should. But all of your future income, that five grand a month, I would be throwing at the mortgage, my friend.
How quickly do you think you could pay that off? I would go punch the numbers in a mortgage payoff calculator at RamseySolutions.com and see for yourself how quickly you can pay off 300 grand making an extra $5,000 payment every month. It'll blow your mind. You'll be done in probably, I guess, 60 grand a year on top of your normal mortgage payment, probably four years.
instead of 30. Yeah, I've already done that. We looked into that. I just didn't know if it would be smarter to put half of that money towards mortgage and invest half the other money into something else. Well, you should be investing already. Are you investing 15% of your income? No, we have not. Like I said, we were. So when I got my wife, she had $100 in debt.
And it was all school dads, she's a school teacher. And I was big about getting that done, getting that out of our hair. And we spent the last three years just hammering at all of our big bills. How much do you make here? What's your household income? What's your household income?
Well, before this year, it was a hundred and twenty now it's ninety six because of the came. I went from OTR to local. Okay. Can I, I, here's how I hear you asking this question. Like you're in the studio and you're standing with me and George and you just have your head hanging in shame.
Give me a huge favor, man. Like, George and I, would we sign off on a 30-year mortgage? No. I'd do a 15. That's what we recommend. You paid off all your debts. You didn't go crazy. You bought a $300,000 house. George and I both live in Nashville. We both recently bought places. I don't know where you found a $300,000 house, but God bless you and your family and your grandkids. That's amazing.
You got yourself some land. You've paid off all of your debts, including the hundred grand that your wife can hear me say this, dude. Y'all are crushing it. You're doing great. And how old are you? How old are you two? Well, I am 34. She's 36. Oh my goodness. This is amazing. So can I do some fun math for you, Michael? Yes, sir. Okay. So let's say you start investing now and you do 15% of your income. That's about 1200 bucks every month going into retirement accounts. I assume you have one through your employer.
I do. Good. So we'll shovel away 1200 bucks into these tax advantage retirement accounts in 23 years that puts you at 57. Correct. You're going to have probably $1.4 million in that one account.
And by the way, 23 years from now, your mortgage payment has been gone for like 20 years, which means you probably increased your investing and you've had freedom for the last two decades of your life. And so your neighbor's property and the property next to that one. Do you see how it changes your options? You're a great man.
And so you set yourself up for that kind of future because of the hustle and grind you just spent the last few years doing. So I know you're tired, you're worn out, you're like, what do I do now? We got the money. You think you did it wrong? Should I do 17 things at once? Just follow these steps, man. 15% of your income to retirement, anything beyond that, throw at the mortgage and let's be done with it. Set a goal for, let's say five years. And if you're like me, and I have like a kind of an obscene allergy to owing somebody something,
I hate people telling me what to do, and I hate owing somebody. Hate it, hate it, hate it. Yeah, so sit down with your wife and say, okay, it's going to cost us three years of some BANAS living, but let's just do this and get this thing over with.
All right, 38 years old. That's fine. But you have to work weekend, Saturdays, whatever. And we're going to keep. We're just going to gnaw on this thing and gnaw on this thing until it's gone. If it goes beyond three years and y'all can't figure out a way to do that, just exhale. And just say, OK, when I'm 40, I'm going to have a paid off house and make peace with yourself and go hunting tomorrow morning when the season opens. Like, you know what I'm saying? Like, you have done such a good job, man. You should be proud of yourself. Yeah, I am. And that's so my loss.
She has this monster like me, like I'm a big avid hunter, and every time I see something for hunting, I don't splurge on anything. I mean, you sound just like John. I have the money to buy anything I want, but like I'm the type of guy that I'll go take my boots before I have to go find anyone.
Well, don't do that. Enjoy your life and have a good time and also get this house paid off. For all of you listening to the show on YouTube or podcast, it's about to end. Head over to the Ramsey Network app and the party will continue. Go to the show notes and you can watch the rest of the show on the app for free. We'll see you soon.
Hey, you're still here? What are you doing? You do know that the rest of today's show is playing right now over on the Ramsey Network app, right? All you gotta do to finish the episode is search Ramsey Network in the App Store, Google Play Store, or just click the link in the show notes to download the app for free. Yep, you heard me right, for free. Then right there on the home screen, you can watch the rest of today's show, Bada Bing, Bada Book. All right, I'm getting out of here. Enjoy, we'll see you on the app.
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