Deep Dive
Shownotes Transcript
I know a lot of you probably think that when I'm not hosting this channel, I just spend my days browsing Costco for the best of bulk. But I'll have you know, I have a very vibrant, meaningful life. And in addition to time spent shopping with my fellow Kirkland kings and queens, I have the distinct privilege and honor of co-hosting The Ramsay Show, made popular by finance legend Dave Ramsay. Now, if you've never tuned in, The Ramsay Show is a live call-in show where people like you ask their questions about life,
money, and everything in between. And over the last few years, I've talked to thousands of people live on air, coaching them through some difficult and often strange financial dilemmas. Seriously, there's some doozies in there. My mother gifted me my sister's car, but my sister wants me to pay $100 a month to my mom to pay her. What? And when I think back, there are some recurring themes I see people struggle with when it comes to money. So
So today we're going to take a look at some of my favorite calls from the show and talk about the lessons you can take away. But before I drop these nuggets of wisdom, I need you to drop something too. A little like and subscribe to this channel. Listen, I don't want you to do it for me. I want you to do it for me a little bit, but it's mostly for you. Let the algorithm know what you're looking for. That hot personal finance content. Less flippy, more bluey. Less cat vids, more camel content.
No offense Blippi, Bluey's just better. Unicorns, what's your favorite food?
Okay, the first call we're looking at is about something a lot of us can relate to, and that's trying to do too many things at once. Let's check it out. Me and my brother haven't always been so close on financial things, about saving money together and investing money. The thing is, he offered me to buy a house with him instead of me keeping renting an apartment here in Vegas. He offered me buying a house with him, and I will be paying the house with the mortgage for...
A lot going on there. So in this clip, Alejandro is feeling the pain of increased cost of living. Now, he's already living with his girlfriend, so he thinks he'll just co-sign a house with his brother, and then they'll be able to afford life and live in a house. The problem here is...
many fold. All right, he's trying to do a whole lot of things at once, which can not only wreck his finances, it can wreck his relationships and his life. So let's just say he buys this house with his brother. Well, then his brother gets a job at the National Mustard Museum and has to move to Wisconsin. Now, Al
Alejandro is left paying for a mortgage he can't afford. Meanwhile, he wants to get married, so he decides to finance a ring and a wedding because he's broke, meaning they're throwing $30,000 of wedding expenses on top of a budget he already can't afford. So lesson learned here, be the tortoise. Go slow and steady. Don't buy a house before you're ready. Don't buy a house with someone you're not married to, whether it's a girlfriend or a brother. It's just gonna muddy the waters and it's gonna hurt all the relationships in your life. Go slow. I know it hurts to rent.
But buying a house the right way, when you're ready, when you can get a 15-year fixed rate mortgage, 25% of your take-home pay, you have the down payment, you're out of debt. I know that might be a ways away for some of you, but that's the right way to do this. So go slow, be steady, be the tortoise. Okay, the next clip is about people going broke, trying to keep up with expectations. Let's take a look. I'm sorry, hold the phones.
You said $500,000 for a wedding? George, have you ever been to an Indian wedding? I've seen it on TV. I've seen Love is Blind, if that counts. Oh my goodness, man. They're very expensive. Hold on, who's paying for this? Yeah, so I don't want to get my parents involved. That's why I'm trying to...
Can you break the mold and do like a $50,000 wedding, which is still like really expensive for most people? You'll be shunned by all the people that attend. Yeah, true. I get it.
Man, I mean, that feels just exorbitant for you to be paying on your own. I feel like if it's like, hey, mom and dad, if this is your reputation on the line, then you can fund it. But I've got goals and the wedding is one day and I want to set myself up for the rest of my life with my wife, not throw a party that makes the parents look good.
I still can't breathe just thinking back to that call. $500,000 for a wedding? That is insane. And by the way, after this call, I looked into it. I tried to see like, well, maybe Indian weddings are $500,000. They're not. That is still an exorbitant amount even for an Indian wedding.
Now the average cost of a normal wedding is $30,000 for a ceremony and reception. It's $40,900 if you add in a ring and a honeymoon. So here's the deal, regardless of what culture you come from, spending a ton of money on your wedding day will not prove your love for one another, but it can leave you with an empty bank account. So remember, the wedding is about you and your marriage. It's not about impressing or entertaining others or trying to keep up someone else's reputation, okay? And I understand.
I'm not a part of the Indian culture, so I don't personally get spending $500,000 on a wedding. But just as a human being, we can all agree that's an absurd amount to spend on a wedding. And I know they're multiple days and it's a whole amazing experience. And I hope someone invites me to an Indian wedding sometime 'cause it sounds like an amazing experience. But please do not, as a 22 year old, put your entire financial future at stake by paying for this on your own or even attempting to, and even worse, going into debt for it.
So be content, do this based on your budget. Let that dictate how much you spend on the wedding. All right, moving on. This next call is about people who make a financial move based on fear. Let's get to it. I'm looking for some advice on how to invest $120,000 in cash. Whoa. I retired in 2010 from my first job. Been working a second job full-time now. And over the years, I've...
Wow. We finally found the guy with the tin cans of money in the backyard. Wow. Let's start with your address. Where exactly can we find... It's going to treasure hunt tomorrow.
Jim's like, he's like, my name's not Jim and I don't live in Austin. Fool Jim. Well, if I told you, I'd have to shoot you. Oh, man. I believe you, Jim. I'm still scared of Jim finding me to this day.
Now, while Jim is definitely on the more eccentric side, fear-based financial planning comes in a lot of forms. He's not the only person who's a little bit leery of the stock market and of the banks and of the economy and the whole thing crumbling down and everything hitting the fan and you got to live some I Am Legend life. So putting your money into gold or single stocks or not keeping money in the bank or not wanting to give up your credit card in case of emergencies, this is all fear-based financial
financial moves, and I don't like any of that. Now, I'll admit, investing is like a roller coaster. ♪
And the only people who get hurt on roller coasters are the ones who jump off before the ride is over, and they jump off too soon. And my friend and mental health expert, Dr. John Deloney, says this all the time. Facts are your friend. And the what-if scenarios, they almost never play out. And yet we spend so much time and energy and fear and emotion and brain calories thinking about what could happen. So just focus on what's true for you. Put the blinders on to what the rest of the world has to say. Turn off the news now.
Stop looking at the headlines because what are those headlines exist for? Your clicks and your eyeballs and your fears so you continue watching. So do not make financial moves based on fear. Do not let your money sit in tin cans in your backyard. You got to at least keep up with inflation. So keep money in a savings account, have an emergency fund, utilize a bank that's FDIC insured if you're with a credit union, NCUA insured, and then you can sleep easy at night knowing your money is safe, it's protected, and invest for the future. And don't jump off the ride yet.
Next up, buying too much house because renting is a sin. My husband and I bought a house in August and we are having some buyer's remorse and we're now wondering if we should sell our house. Oh, okay. Walk us through what happened. Well, so we got married in August and also bought our house and we instantly had the buyer's remorse because that was about the time we got into Dave and baby steps and the house is definitely not what he recommends. But then I also lost my job. So that was about a $100,000 loss.
I'm so sorry. You guys have been through it. Of take-home pay? Okay.
And yeah, so we were debating selling our house. We think we have maybe a little bit of equity and just renting and starting fresh, but we didn't know if that was a terrible idea.
Oh man, that was a tough one. Chelsea was going through it with over half of her take-home pay going towards the mortgage, which means there's not a whole lot left for them to live their life, cover emergencies, put food on the table, cover all the rest of the bills, and that's a tough place to be. And here's the thing. A lot of this stems from the fact that a lot of people believe and they're told that renting is a sin and you should become a homeowner at all costs immediately no matter what. Well, I bet those are the same people who pour milk before cereal. We all know cereal is...
than milk. It's the only proper way. And listen, drowning in house payments turns the blessing of homeownership into a curse. And we call that being house poor, meaning you don't have enough money left over after paying the mortgage for your other financial goals, like investing or retirement or vacations or emergencies. So never spend more than a quarter of your after-tax monthly income on that mortgage payment. That includes the principal, the property taxes, the homeowner's insurance, the HOA fees, you name it.
So if you're thinking, George, you're insane. How am I going to get there on a 15-year fixed quarter of my after-tax income? It might mean you need to be patient and save up a larger down payment. And do it aggressively. Cut your expenses. Make some more money. Do the side jobs. Do whatever it takes so that you're not in Chelsea's position where over half your take-home pay is going towards the mortgage. Okay.
Let's roll into the next one. Literally, we're talking about cars. My husband purchased a $72,000 car. We are not in a financial place to have been able to afford that car. He's currently the only one working. Did he do this without telling you? We actually just got married last year. He had a car that he just completely paid off. So he had that car, perfectly good condition. And then he decided he wanted to get an SUV, which he purchased for about $32,000, I think. And then the day...
emailed him saying, hey, we have a great deal for you. You can bring that new car and trade it in and upgrade to this electric car that he's been wanting. He briefly mentioned that to me. And from what he told me, it sounded like it was kind of going to be an equal trade. Maybe he'd be paying a little bit more. That's what it sounded like to me. It wasn't until a few months ago that I fully understand like the gravity of what had actually happened.
But all of that occurred before you were married? Like during, during the time. I mean, he did not do this while you were at the altar. So there is no during. Yeah. It was before or after you were married. You were legally married and then he did this. Yeah. And then, of course, when I questioned him about like what was possibly going through his mind, he honestly didn't really have an explanation and just said it was an extremely stupid decision that he just couldn't take back. Now we found something we agree on. Okay. Yeah.
Yeah, right. Why can't he just go sell this car today? What do you mean you can't take it back? So the reason why he's not able to sell it is because the highest amount he's even getting for this car now is $40,000. And we still owe like $65,000 or $63,000 on the car. Who said? Who said? Um...
He's talked to a few dealerships about this. He's not good at this. Yeah. We're talking private party here. Of course, if you go to a dealership, they're going to give you the bottom dollar. Who's the maker? Kia. It's an electric Kia. $72,000? For a Kia? Yeah.
Yeah, I know. I know. Not counting. Okay, he paid $72,000 for it when? This was in April of 2022. And you're telling me one year. And it dropped in half. $32,000 drop? No, I'm not buying it. Wow. A movement that inspires. That's Kia's tagline. And it sounds like a better tagline for Taco Bell if you ask me. Why not both of them?
Now, I don't recommend buying a new car at all unless your net worth is $1 million or more. And if that sounds crazy to you, you know what's crazier? Spending $72,000 on a car that's worth $40,000 soon after while you're broke. So if you're a millionaire and you want to buy a new car that costs a very small percentage of your net worth, then go for it.
But the prices of even used cars has gone through the roof too, up 30% since January of 2021. So the best time to buy a car is when you have the cash for it. And with a low supply and crazy high demand, now is truthfully not the best time to buy a car. Don't do it unless you absolutely have to. And even if you do, buy a reasonable used car that you can afford. Wait until you have the cash and use your walkaway power to get a good deal. Never take out a loan to buy a car.
a car. And a lot of people that call into the show, they're underwater in their car, meaning they owe more than the car is worth. And that puts them in a really, really tough predicament. And part of that is new cars depreciate more in a few years than a used car will. So do not do this. Please do not be the next Ashley. And talk to your spouse about this stuff. I didn't buy half the stuff about her not understanding when the husband did. You need to make financial decisions
Together. You're married. It's we. Listen, the bad news is most of us can relate to these callers. We've all done stupid with zeros on the end. And I remember being on the other side of the line myself, a confused and broke human looking for some answers. Not literally. I never called Dave on air. I'm more of a comment section troll. But shout out to my trolleys in the comment section spreading some hate and dissension. Stirring the swamp keeps it fresh.
- What are you doing in my swamp? - But seriously, I remember coming face to face with the harsh reality of my own negative net worth. $36,000 in student loan debt, $4,000 in credit card debt, and there's no sugarcoating it. It was a challenge. And I was anxious, I was frustrated, I was cynical, I was scared. And some of these calls are outrageous. Some of them were kind of relatable. And there's some timeless principles that apply to all of these calls that can help you win with money. Number one, simplify your life.
The less debt, the less risk, and the better your life will be. Number two, don't let comparison keep you broke. Whether it's cars or a house or a wedding, the flex is never worth your financial future. Number three, do not let the market dictate your budget. Whether it's a Kia or the fancy house or it's a French bulldog or anything else, your budget should dictate how much you spend on anything, especially the big stuff. And lastly, fear is a terrible financial advisor. Make decisions out of
out of confidence and out of a proven money plan, not because you're scared. So always be learning from books, podcasts, channels like this, channels like The Ramsey Show YouTube, and I'll link below where you can watch full episodes and highlights from The Ramsey Show. And it's a great way to stay motivated day after day after day.
And if you want the tactical steps that I took to go from broke to millionaire, I'll drop a link below to a course called Financial Peace University. Check it out. Now, before you go, make a movement that inspires yourself by sharing this video with the Kia driving Taco Bell lover in your life. Sure, it's an arrow pool, but they need hope and probably a probiotic. Thank you guys for watching. I'll see you next time.