If You Can’t Pay for It, Don’t Buy It!
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships.

George Campbell, Ramsey personality, YouTube star of the George Campbell Show, is my co-host today. It is book launch week for George. His new book, Breaking Free from Broke, is on the shelves. It came out officially yesterday. The ultimate guide to more money and less stress.

And George goes through with great research showing the villains that are out there and the people that are trying to keep you down. They're the man with the thumb on your neck. And you got the thumb off their neck. Absolutely. And it's been encouraging to see the feedback, Dave. One lady, this was a great message I got yesterday. I've been reading the e-book. We've been paying off the credit card in full monthly for years.

Wow. That's what I was hoping for. A little social movement there. We are starting a movement where people are going, these companies are not my friend, and their marketing is so slick.

I mean, how many people brag about their credit card rewards and how much they love their sentimental security blankie? And so that's just one of the many traps they uncover. And it's been great to see that kind of feedback. Yeah, you're getting people to get rid of their little plastic blankie. Yeah, and you've been doing it for years, Dave, getting them riled up with anger. I just do it with snark. We have different methodologies there. Snark is just passive aggressive anger. That's right.

Open phones at 888-825-5225 as we talk to you. Micah is in Washington, D.C. Hi, Micah. What's up? Hey, Dave. Hey, George. Thanks for taking my call. Sure. What's up? Hey, so a little bit about me. I'm 24. I'm currently debt-free. I make $80,000 a year. I am currently maxing out my 401K and IRA.

I want to buy a car that costs $30,000. Um, however, I'm, I don't want to get rid of my current car. It would just be a, you know, a play cards. It's a sports car. My question is, is I have 30,000 in cash that I'm prepared to pay for this car. Um,

I'm not sure if it's better to put this in a different sort of investment portfolio or if it would be okay, you know, to splurge and buy this car. Oh, I see. I thought you were calling the car an investment. My face was turning inside out. Okay. So what's the car? I'm a car guy. I love gears. So it's a Nissan 370Z. Oh, sweet. Nice car. Okay. And what's your model?

2019. Okay. All right. Cool. And what's the car you're currently driving worth? It's $13,000. Okay. All right. What's your income trajectory? When would you be making 90? Potentially maybe five years from now. Whoa. You're going to get a $10,000 raise over five years? Yes.

Uh, well, I'm, I'm, I'm projecting a promotion and then, um, how the military works when I move. Oh, you're in the military. Okay. Correct. Okay. Now I understand. Okay. Yeah. That would be more reasonable in the military. Most people are going to make a lot more in five years than a $10,000 raise. I'm just telling, that's why I went. Right. Right. Yeah. Okay. Well, I mean, here's the thing. I love cars. Okay. I drove here today in my Raptor. I love big engines. Uh,

I like things that make noise. I'm redneck. I want a loud muffler. All that, right? But the stupid things go down in value like a rock. That's where Chevy got that, like a rock. Okay? They go down in value.

And that includes that sweet Nissan you're talking about, and that includes my sweet Raptor. They go down in value. So if you're going to build wealth, you have to keep as small an amount as possible going into things that go down in value. So consequently, we find millionaires driving very conservative used cars.

until they've got substantial money. And one of the guidelines that, George, that we've developed here is to not have more than half your annual income tied up in things that have motors and wheels. So adding up all of your little toys with motors and wheels

does it add up to more than half your annual income? Because if it does, you've probably got too much in things going down in value while you're trying to build wealth. Does that make sense to you mathematically? Yeah, yes. Like, I mean, it would be like $45,000 total. Yeah, and you make 80, and so you're over half. Yeah, okay. So sweet car, sweet car, and you got the cash.

If you do it, you can do it. I mean, you're going to afford it, obviously, but the warning is that you're putting money in the wrong places if you want to be wealthy. Got it. I mean, the way you know someone's going to stay middle class is when they have two very nice cars that are obvious $500, $600, $700 payments sitting in front of a middle class house. Exactly. 100% those people are going to stay middle class until they break that habit.

It's just a huge indicator. Yeah. And the other thing to think about, Micah, is you've got another set of insurance premiums to pay, more maintenance and repair. And so right now, as you're in the military, I don't know how much driving you're doing on these vehicles, but I would consider those because it is a toy. And so this is not going to crush you if you do it, but we're just saying it may not be the time. Yeah. I...

As much as I completely grasp what you're doing and I, and you know, that's a great car. I, as the guy on the radio that tells you to do things to become wealthy, I'm going to tell you, don't do it. I'm going to tell you way to later when you've got more money and you're in a better financial position to do it. You've got the money to pay cash. If you do, it's not going to bankrupt you. That is not what we're saying. We're not being melodramatic. I just wanted, when I went broke, when I was younger, older, slightly older than you, I

I made the decision I'm going to do things that cause me not to be broke anymore. And I'm going to identify what broke people do. I'm not going to do that. I'm going to identify what rich people do, and I am going to do that. And, you know, what we discover, Tom Stanley found it first in 1992 when he did a book called Millionaire Next Door. We discovered it again when we did the largest study of millionaires ever done in North America, 10,167 of them we interviewed. We did not find fancy cars.

It was Honda, Toyota, four-year-old used cars, nothing that's going to turn heads at the stoplight. If they're millionaires. Now, if you're a billionaire, it's different. You can drive whatever you want to drive, right? But a billion is a thousand million. It's a different thing. Scales. Yeah. Millionaires don't have that. They don't have jets. Millionaires don't have seven cars. Millionaires don't, you know, that millionaires just have some money is all. And they have, generally speaking...

conservative but reasonable lifestyles. And so we tell folks not to buy a brand new car until you have a net worth of a million dollars. If you do have a car, you should sell it if it violates those things and or if you can't get it and all your consumer debt paid off within two years because of the stupid car. And so if you got like a $50,000 car, you make $60,000 a year, you need to sell it and you need to

You know, get rid of this $1,100 payment. It's just choking you to death. I mean, it loses 60% of the value in five years, these new cars. It's brutal. We went through a period of time on this show about a decade ago where the answer to every question was sell the car. Sell the car. It was the sell the car show. People would call up and we'd go, hey, how you doing? Sell the car. That was it. Amputate the Tahoe. Next caller. Amputate the Tahoe. Just don't tell people to sell their horse, Dave. I learned that the hard way. Oh, yeah. You got it. You got it. Really, you got it. The horse people don't like George. It's a different kind of vehicle.

They got on, George. The equestrian community. They're no fans of mine. Equestrian. No, it was the horse people. This is the Ramsey Show. So here's a quick math refresher. There are only 24 hours in a day, so your business needs to streamline tasks that are time suckers and focus on activities that make money. So to reduce headaches as they scale, smart businesses use NetSuite by Oracle, the

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George Campbell Ramsey personality is my co-host today. Thank you for joining us. Open phones at 888-825-5225. Will is in Atlanta. Hi, Will. How are you? Good. How are you, Dave? Better than I deserve. What's up? About two months ago, my grandmother passed away, and I received about a $1.1 million inheritance. Wow. Sorry for your loss.

And thrilled for your blessing. What a wonderful thing she did. That's amazing. You're the only grandkid? No, I'm one of two grandkids. Each of you got a 1.1? Yes. Way to go, granny. Wow. But my question today was, how do I make, I'm 23 years old. I was just calling to find out how do I make the absolute most of this?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Well, Paul, I will talk to you like I as if I went back in time because I had more student loan debt than you and I made less than you. And so at 23, I was $40,000 in student loan debt. I wasn't making any progress. I was trying to play the same game you are balancing this all. Here's what you got to do. Paradigm shift. Let's try a proven plan. That means we're going to take $9,000 from this emergency fund, pay down the debt.

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

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George Campbell, Ramsey personality, is my co-host today. Matthew is in Fort Worth. Hey, Matthew, welcome to The Ramsey Show. Hey, guys. Thanks for taking my call. Sure. What's up? So my wife and I, we are currently on Baby Step 2.

And, you know, being from Texas, our biggest debt is my truck besides our house. But I'm kind of in a unique situation where my company pays me mileage, IRS mileage rate, and I do about 30,000 miles a year on the truck.

which comes out to about $20,000 a year in income. And so it makes a truck payment, covers gas, insurance, and all that. I was just wondering, would it be possible to keep the truck, or would you recommend getting something downsizing and maybe pocketing some of that mileage money towards our other debt? Whatever you drive with those miles, you're destroying its value, right? Right.

Yep, correct. So from a business perspective, if you were running a fleet, you would buy the least expensive vehicle that would get the job done, which would be less than you're driving. Get the job done is reasonable comfort because you spend a lot of time in it and reasonable reliability because you have to get there. But that's the definition of get the job done and certainly can do that for half of what you're driving.

Because whatever you're driving, you're turning it into nothing in three years. Four years, you put 120,000 miles in this thing. Yeah, correct. And so now we've got a highly depreciated vehicle. What did your truck cost when you bought it? Right at $40,000. It was a 2023 Toyota Tacoma. Okay. Nice truck. Plus interest. I owe about $35,000 on it currently. And it'll be worth about $5,000 by the time you're done with it.

okay after putting on 200 000 miles on there yeah i mean you're you're a road warrior you're whatever you drive if you want to keep the tacoma and you've got the money and you make enough money to pay this off and all that kind of stuff i'd put it in the driveway and i'd buy something else to drive okay but because whatever you're driving you need to just say out loud i'm destroying it so we don't want to destroy a nice car

Yeah, just kind of like my thought was by 120,000 miles, you know, the truck should be paid off using the expense money. And then, you know, it's a Toyota, so I'm hoping to get, you know, 300,000. You get the expense money whether you lose your butt on the truck or not. Okay. Right? Yeah. You don't have to destroy a $40,000 truck to get the expense money.

All right. Yeah, yeah. Yeah. So, I mean, I don't mind if you keep the thing, assuming the other numbers add up and you can pay it off. You owe $35,000. What's your household income? About $175,000. Okay. How quickly can you pay it off if you just lean into it? Well, we got about $13,000 credit card debt right now and about $9,000 on the wife's car and then $35,000 on this. Mm-hmm.

So you could be debt-free in like a year, a little over a year? Yes, that's the plan with the baby steps. If I'm you, I mean, that's a great truck. That's what Rachel's husband drives. He's got one. They're really good trucks.

and and you like it obviously you're because you're fighting to keep it in the conversation so but i don't really you make 175 000 a year you can drive you can own a 35 000 tundra it's okay but i would own it and put it in the driveway i personally wouldn't destroy it i mean i've got the raptor r which is a super expensive truck the 700 horsepower i'm not putting those miles on that truck

I live eight miles from the office. I drive it to the office. That's the only place I drive it, into the farm. That's it. I'm not putting a bunch of miles on this thing. It's too expensive a vehicle to destroy it with high mileage.

And it gets crummy gas mileage with the 700 horsepower. But yeah. It ain't made for economy fuel. It is not an economy car. You can't fit it in the space and it doesn't qualify. But yeah, same thing. I mean, I can afford the ridiculousness of that. And you can afford this.

So I would say keep it and get something else that you destroy the value of. Yeah. You make $175,000, pay off this $57,000 in no time, and get you a little commuter car. And then get you a $10,000, $15,000 truck and destroy it or whatever it is you want to drive. In 12 months, you can do all of this. Yeah. You're doing great. So I just want you to look at the whole car thing different because you're systematically destroying the vehicle.

in value anyway. I mean, you're not, the stupid Tundra will probably run 300,000 miles if you take care of it. So you're not destroying it in that sense. Those are great, again, great truck. But, but I, I just wouldn't do that to that car. You know, it doesn't make any sense. And you guys that are road warriors out there and your company gives you a car allowance, the car allowance is not dependent upon you having a car payment.

And in his case, the expense, you know, they're giving him mileage and stuff. You get that if you drive a $5,000 paid for truck or $85,000 truck. You get the same exact mileage. People like to justify the car they want. It's okay because I get this. You get it anyway. You're going to get the money anyway. So pocket that $500 instead of sending it to a lender. Exactly. Why don't you keep it? That would be a great idea. So good way to think about this stuff. Good question, sir. We appreciate you joining us.

Open phones at 888-825-5225. Adrienne is in Detroit. Hi, Adrienne. Welcome to the Ramsey Show. Hi. Thanks for having me. Sure. What's up? So I am 33, and my husband is 35, and we are still working on Baby Step 2, so we have $0 in retirement, and it, like, keeps me up at night. I don't know if we're too far behind. You're 33. Retiree?

I know, but we still have $14,000 in student loans. I was bankrupt at 28. You're not too far behind. Okay. Okay. I'm glad you're a little worried because it's going to motivate you to not be a stupid American consumer, and you're going to get out of debt and save money. That's a good motivation for the fear, but I don't want you anxiety-ridden that this is not possible, hopeless that this is not possible. You should retire with several million dollars. What do you all make? Okay. Okay.

We make $97,000 with our salary full-time jobs, but then we also do side hustles. And you have how much of student loan debt? Well, we've paid off $158,000 in debt so far. We have $14,000 left. Amazing. How long did that take? Well, we've been on the Ramsey plan for a little less than two years. Way to go! You paid off $158,000 in two years. Yes.

Yeah, we sold our Tesla. Yes, sell the horse, sell the Tesla, whatever you got to do. That's impressive. So you'll be out of this debt in a few months, it sounds like. Maybe six months? Yeah, that's our goal. Yeah, our goal is to be out of the debt, and hopefully the next three months we're really going to push it, and then we've got to save that three to six months. Okay, so if you're 34 years old and you save $15,000 a year, 15% of $100,000 from 34 to 65,000,

I'm doing this in my head, but I think that's probably going to be close to $10 million. Okay. You're not too late. You can go use our investment template. If I'm half wrong, I think you'll be okay. Okay. Thank you. I do want you to continue to follow the Ramsey plan, get your emergency fund in place, and start saving Baby Step 4 15%, right?

Yeah. And jump on the website at Ramsey Solutions and run the investment calculator, and it'll show you what $15,000 will be. I did that in my head. I don't remember what it is, but it's well in excess of a million. It's probably between five and ten. Yeah, 30 years of working, $15,000, plus your income's going to go up over time. So think about that. You're going to be doing more than $15,000 a year over the course of time with compound growth over 30 years.

at, you know, 10%. I mean, it's going to be mind boggling. You're not too late. You're in good shape. If you play through, if you keep on the track that you're on, okay, which is to work the baby steps, you're going to be a multi-millionaire. Okay.

Okay. Thank you. Yeah. But go ahead and do that math for yourself, and it helps you. So a good one to remember that's easy is age 25 to age 65. Now, she's going to be 35 before she starts. But age 25 to age 65, $100 a month. $1,200 a year. That's nothing. $100 a month from 25 to 65 in a good growth stock mutual funds, $1,176,000. Wow. So you're making it.

And that's some weak savings rate. And so you think about the average income, 15%. Oh, my goodness. Yeah, it's unbelievably weak. Exponential. If you follow our stuff, we're saving $15,000, not $1,200. That changes the numbers. See how I did that? That's how I did that. This is The Ramsey Show.

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

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

You've got to say it out loud, and you've got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282, or go to zander.com. George Campbell Ramsey Personality is my co-host today. If you didn't know, we broadcast in Franklin, Tennessee, just a little bit south of Nashville, Tennessee. It's a wonderful Civil War era place.

We're a little bit south about an exit down, and folks come over to the Ramsey campus all the time. We've got a big lobby to welcome guests. It includes a whole timeline, the history of everything we've done here, places to take pictures, and remember, the debt-free stage is out there. There's free coffee, free chocolate chip cookies, and if it snows a quarter of an inch in Nashville...

People think that it's 92 inches deep and we're ready for a ski slope or a blizzard, and they go in freak-out mode. So everything just shuts down like a hard frost shuts the town down, okay? And so we usually have 50 to 200 folks sitting out here watching the show. We do it live from 1 to 4 Central every day, Monday through Friday, and we always have folks dropping by for the free coffee cookies and to watch the show.

and in the afternoons. We love having you. Thank you for doing that. Because of the snow, we've got just a few folks out here, about 30 or 40 or so. And a cat that runs the lobby just announced to George that we're going to give all of you guys visiting George's brand new book, Breaking Free from Broke, just as a gift, just to say thanks for coming out in the snow, the frost, whatever this was. That's our gift to you. I said, can we do that? She said,

Yeah, we can do whatever we want. It's amazing. Let's do this. We can do whatever we want. We're cat. She's in charge. That's right. That's so fun. Also, we had the Navy recruiting team drop by. What an honor to meet them. They're big sponsors of our high school curriculum and a bunch of high schools around America. Thank you to the Navy, and thank you to you guys. We appreciate you. Appreciate everything you do. It's absolutely incredible.

And a lot of students in America get the high school curriculum because of you guys, and we appreciate you. And, of course, we appreciate your service. And if you visit, good note, Dave, that we actually go out in the lobby twice an hour and we'll greet people and sign books and say hey. That's how we found out about all this a minute ago. Yeah, you and I were out there at the break getting people signed books. Meeting people, taking pics. So it's a real fun way to make a part of your Nashville trip. It's fun.

Not as cool as Disney when the Mickey characters come out, but it's similar. Well, some people are so excited that I'm like, you need to get out more. Pluto and Goofy just went out. I'm not saying who's who. The Ramsey Show Question of the Day is brought to you by Neighborly, your hub for home services from repairs and maintenance to home improvement projects. Winter brings some challenges for homeowners. You need to check out Neighborly's helpful winter checklists.

Today's question comes from Connor in Oklahoma. We have approximately $200,000 in business debt, the majority being $150,000 small business SBA loan that we personally guaranteed. The business failed about five months ago, and we have left the business to get regular jobs now.

The debt still lingers, and we're considering filing Chapter 13 bankruptcy soon, but wondered if there was a better way since this debt is not from frivolous spending. My wife and I don't overspend in our personal lives, but this business debt is in our name and destroying our credit, our mental state, and our blood pressure. Oof. To start with, Chapter 13 is a payment plan. Dude, you're already on a payment plan. You know, you...

Sba loan gets paid in full in chapter 13. So you got 60 months and you're going to pay it off over five years in chapter 13 So filing chapter 13 is useless You know if you're already paying payments and you can work your way through payments Then chapter 13 chapter 7 would clear the loan Uh, except for the fact they probably took a lien on your house and they're probably going to take your house if you do that and so, um

I think you continue to work it outside of bankruptcy. Chapter 13 is of no benefit to you except maybe getting the payment lower, but you're not going to get out of the debt in a Chapter 13. And you're not going to get out of the debt if they have a lien on your house. And most of the time the SBA will take a lien on your house in these situations. If they've got a second on your house and there's big equity in your house, they're going to take the house. You're either going to pay them or they're going to take the house. A hundred cents on the dollar.

you know, unless you negotiate with them. But bankruptcy does not make the SBA lien on your house go away. If it's there, he didn't say, but that's a typical process for the Small Business Administration. That's why I hate SBA loans. I hate them because of this exact situation right here. So...

I instead would pretend like you have a $200,000 student loan, which is also not bankruptable, by the way. And I would just roll up my sleeves and go bananas and take six jobs and... Get your income up, spending down. Get it paid down as fast as possible. Because if you can throw $50,000 at it a year, basic math says we can pay this off in four years. Yeah. If you can pay $100,000 a year, you're done with this in two years. We don't have your income from this email, but...

Um, it's not, it's not overspending, but it was a really dumb idea to open a business with a loan. That's why we tell people don't do that. Um, ouch. I'm so sorry, man. It takes your breath away when this happens. Number one, you got the failure of the business hanging around your neck. And then you've got this reminder every month that we failed when we may have to make these huge payments. So, um,

Couple of things. Number one, I would consider rolling up your sleeves and working six jobs and just paying it down like anybody else with it. Great. Because they're on intensity. That's going to be the best way. Number two, if you have enough equity in your home to clear the loan, you may want to sell the house and be out of it, be done with it and go, go rent and start fresh from there.

um because you're going to lose the house if you file a chapter 7 bankruptcy and if you file a 13 you're paying payments again it's of no benefit you can pay payments pay payments so oh man it's awful sorry you're facing that yeah the success of businesses largely relies on you know this cash flow and when you have two hundred thousand dollars in debt to start and with the high failure rate of some of these small businesses it just makes the problem worse yeah

We're huge proponents of small business, Entree Leadership. We work with about 10,000 of them, and I do the Entree Leadership podcast once a week, talking to small business people every week. We love doing our Entree Leadership events, and every single time we tell you to stay away from loans, particularly loans.

It's an oxymoron that you say the Small Business Administration screws more small businesses than anybody else. I mean, isn't that weird? I mean, it's just weird. It sets you up for failure. Number one cause of small business failure, cash flow problems. What it causes cash flow problems. Don't pay your taxes on time and have a big SBA loan. This causes cash flow problems every time. All right, Jared is with us in Jacksonville, Florida. Hi, Jared. How are you? I'm doing good. How are y'all? Better than I deserve. What's up?

So I've been living paycheck to paycheck lately and just want to know

If you guys have any advice for me, I'm starting on baby step number one right now and just trying to work my way up to being debt free. Do we ever, my friend? Well, one thing you can check out, it's totally free. We just did a live stream called Break the Cycle where we help people break that paycheck to paycheck cycle at ramsaysolutions.com slash break the cycle. But the key here is to get on a budget and start looking at what is going on with my money. Because you make money, right? How much do you make?

Right now I'm making $65,000 a year, but as of the first of February, I'll be making $72,000. Wonderful. And how much debt do you have? Around $80,000 in debt. Okay. So now this becomes a math problem. We have $80,000 in debt. We make $75,000. How do we pay this off aggressively? We recommend budgeting plus the debt snowball, and that's going to help you aggressively pay down this debt. Smallest to largest balance. And we start with $1,000 in the bank. Do you have $1,000 in the bank?

I do not. I'm working on getting that right now, but just with my bills and rent and everything, I'm a very frivolous spender, to be honest with you guys. Yeah, that's what's... So your first step is to get organized and get on a written budget, a detailed plan. Pretend like you were managing this money for someone else. You had $70,000 coming in, and you need to clean up an $80,000 mess, right? Okay. And if I hired you to do that for someone else, you could do it. But the problem is the party in on the weekends. The problem is the impulse spending. Okay.

The problem is you're out of control and it's showing up in your money. And you said that. I didn't, right? Yes. Okay. So we know what the solution is. It's the guy in your mirror. He's the solution to this issue. So jump online and watch that break the cycle. Get the EveryDollar app and start using it. It's free to start. And jump in there and start using it and start to put together your budget and make the money that you have behave.

Instead of wondering where it went, this is The Ramsey Show. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. George Camel, Ramsey personality, YouTube host, and author of the brand new book, Breaking Free From Broke, is my co-host today. Open phones at 888-825-5255.

That's 888-825-5225. A lot of you calling in the last several days have been brand new to this whole Ramsey thing, the stuff that we teach. And so it probably is a good idea, I just decided this, for George and I to spend a

Number one, when I was 28 years old, I'm 63 now. So when I was 28 years old, I filed bankruptcy because I'd gone into too much debt. I lost everything and I got the opportunity to start over. I went on a quest to learn how money really works because at that point I had a finance degree and several other letters and licenses after my name that said I was supposed to know something about money, but I was broke. So obviously what I learned was wrong. And I discovered this thing from rich old people.

called Common Sense. And it also lined up with what the Bible says about money. Get out of debt. Live on less than you make. Have a written plan called a budget. Invest and save. Be generous.

And we've capsulized that into live like no one else so that later you can live and give like no one else. And then we started teaching people what order to do these things in because all these questions came up about insurance and retirement and kids college. And we put together a process called the baby steps and it became a 10 million copy book called the total money makeover teaching people how to do the baby steps and

Also, about 11 million people now have been through Financial Peace University, the class that we teach. All of these things outline what we, the Ramsey personalities, call the Ramsey way, which is now a proven plan to become wealthy, not only get out of debt, but to become wealthy. It is the fastest right way to build wealth.

So, George, let's unpack the baby steps. Absolutely. So it's seven steps in a very particular order, and they have to be done in this order with intentionality and intensity. So baby step one is a thousand dollar starter emergency fund. This is a small buffer between you and life as you begin to pay off debt, which is baby step to pay off all consumer debt except the mortgage using the debt snowball method.

That means smallest to largest balance. We're ignoring the interest rate. We are focused on behavioral momentum and progress here. And you roll the payment into the next one and into the next one as you knock the small ones out and you're debt free. An average of 18 to 24 months, people following the plan. Once you have no debt, now we can get that starter emergency fund beefed up to a fully funded emergency fund of three to six months of expenses.

not income. And most people do that in six to 12 months. Once we have no debt and a pile of money to protect us from life's emergencies, a rainy day fund, now we move on to investing. What's interesting is baby steps four, five, six are done simultaneously, but in order. So you're going to start by investing 15% of your household income into retirement, 401ks, IRAs. Once you have that plate spinning, you got 15%, start funding the kid's college. And that looks different for everyone.

And once you have some money going to the college fund, now we can start aggressively attacking that mortgage and pay the mortgage off early. And that takes you to step seven, which is build wealth and give. And when you don't have any payments in the world, it's amazing. No house payment, no car payment, no student loan that's been around so long. You think it's a pet master card is no longer your master. You haven't discovered bondage or American distress.

Instead, you're free, and you now have control of your most powerful wealth building tool, which is your income. And steps one through three, the starter emergency fund, getting out of debt except the house, and a fully funded emergency fund are done with great intensity. If your broke friends aren't making fun of you, you're not doing it right. If broke people make fun of you, if fat people make fun of your diet, you're doing it right. Think about it.

You're going to eat that. So there you go. So that's the thing. Now, with great intensity, you're not going out to eat. You're eating at home. It's cheaper, and it's better for you. You're not going on vacation. You're broke. Broke people don't need to go on vacation.

So you're getting out of debt. You list your debts smallest to largest and you attack them with a vengeance. We call it gazelle intensity after the gazelle running from the cheetah. He's running for his freaking life. So act like it. Otherwise, you work your whole life and you make more money than 90% of the people on the planet make and you retire broke and hope the government, which is well known for its ability to handle money, will take care of you. That's a stupid but plan.

You're going to count on social insecurity? No, you're not. Don't do that. Then when you get those three things out of the way, I mean, think about it. What if you had no payments but a house payment and $15,000 cash in the bank? Well, you'd be in the top 4% or 5% of Americans, for one thing. You could breathe. Can you breathe that in? Just a little peace right there. Financial peace. Two words that don't go together, like airline service, right? I mean, come on. List it out there.

Now, then you start doing, as George said, four, five, and six simultaneously, retirement, kids, college, and paying off the house with other money we can find. You're going to do that not with intensity but with intentionality. We're going to get off the gazelle thing. We actually can go out to eat, buy a couch. We can go on vacation again. Upgrade the car in cash. Got to upgrade the car because you're probably driving a hoopty at this point because we got rid of the stupid $85,000 car. Have you lost your mind and wondering why you're broke?

See, this is what we do. It's grandma's common sense. If you can't pay for it, you don't buy it for the rest of your life because you will destroy your most powerful wealth building tool, which is your income. Shut up. Be a grown up. No whining allowed. Suck it up, buttercup. That's Ramsey plan.

That's it. It's that simple and it's that hard. And people think, Dave, well, this is going to take me 30 years. No, people on average, baby steps one through three to get out of debt and have the emergency fund. You're talking two and a half to three years, even paying off the house. The people following the baby steps, they pay off their house on average in seven years. Exactly.

And typically they are millionaires easily within the first decade. That's amazing to think about. So how old are you? I'm 34 now. And you're a millionaire, debt-free house and everything. And I started this plan when $40,000 in consumer debt. And you were how old? 23 years old. Okay. So 11 years from then to today.

Yeah. And by the time, actually at about 10 years, you were there. And yes, you were working here, but no, he didn't make that much. I don't pay that well. I'm kidding. I'm a W2 employee. I didn't, I'm not some entrepreneur side hustler guy. Everyone thinks you have to have some kind of weird hustle to make. You cannot out earn your stupidity. I tried it. I went broke trying that.

I'm good at making money. I've always been good at making money. What I wasn't good at is taking care of it once I made it. And that's how I went broke at 28 years old. And then from then on, I've been telling everybody else not to do this. Dave Ramsey just doesn't understand. Dave Ramsey's done it. Shut up. I am the story. Shut up. No excuses. Go do it. This is the Ramsey Show.

This show is sponsored by BetterHelp. Hey good folks, the back-to-school madness is upon us. It's hitting us right now. We got travel and work and all these forms to fill out now and sports to travel to and on and on. My family's schedule is so packed and we haven't even begun talking about things like exercise and date nights and counseling and church and home projects. And those are the things that make our life even worth living.

Here's what I've learned. When it comes to taking care of me, I have to put on my oxygen mask first. And that means that I have to do the things that keep me well and whole. And I know that you have to do those same things too. So don't skip the things that matter to you, including regular exercise, hanging out with your friends and regular therapy appointments. And when it comes to therapy, contact my friends at betterhelp.com.

BetterHelp is 100% online therapy staffed with licensed therapists. It's convenient, it's flexible, and it's suited to fit your schedule. And therapy can help you learn positive coping skills, how to set and practice boundaries, how to become the best version of yourself, and most importantly, how to find peace in all of this chaos. In this upcoming season, make sure you put on your oxygen mask first. Never skip therapy day.

Call my friends at BetterHelp. Visit BetterHelp.com slash Diloni today for 10% off your first month. That's BetterHelp, H-E-L-P dot com slash Diloni. George Campbell, Ramsey Personality, is my co-host today. Thank you for joining us, America. George is the author of the brand new book, Breaking Free from Broke. We'd love to have you pick it up at Ramsey Solutions or anywhere great books are sold, RamseySolutions.com to be precise.

Thanks for hanging out with us. The phone number here is 888-825-5225. I want to say thank you to all of you. We've been asking you to subscribe and click the subscribe button, click the follow button. Uh, and you have been, we appreciate it. Uh, and we've been leaving some really nice five-star reviews on the show. Thank you for that. You're very helpful. We appreciate you. And of course you can help. The big thing is share the show. If the

that you're on has a share capability. Just click share and send it to somebody or cut the, you know, cut the link out. Or if you're listening on talk radio, just tell people where you're listening. Just share, tell people what you're doing. And, um, you know, uh,

We appreciate it because we know it's happening because we just hit number one on all Apple podcasts the other day. Number one of all of them. That's kind of mind blowing. And we've had our billionth download. One billion downloads. And that's because of you guys. Thank you so much for that. All right. Up next is going to be Jim in Raleigh, North Carolina. Hi, Jim. How are you?

I'm well. Hi, Dave. So my question today, Dave, is so me and my family, we're on baby step four and we are, we want to buy a house and we've, we've saved up, you know, about 25, $30,000 to buy a house. But for you, my, my profession is very volatile. I mean, I'm a college football coach.

So, like, we could be somewhere a year. We could be somewhere 10 years. We could be moving across the country. And we're just trying to figure out when is the best time to buy a house. And we've got a young family, and we're kind of sick of renting, and we want our own spot. And we're just kind of trying to figure out when is the best time for us to do it. Do you have a winning season? This last year, we did not. Okay.

So when you're moving, uh, right now we're kind of looking right now. We're looking. So we're, I'm a young coach and we're looking and we're just trying to figure out, okay, this next job, is it that we're going to buy? It kind of depends on where we end up, but, uh,

I'm just trying to figure out, should we even be considering it? Yes, you should buy it. You should buy it because we don't know. Now, here's what you want to look for, Nick, in your situation. I'm sorry, Jim, in your situation. Typically, you need to own a house in most markets a couple of years. Otherwise, you're going to lose money on it. But in most cases, you're going to be there two years. And the way to be careful about that is if you are going into some

job where it's a super small town and there's not much of a market, you need to be careful. But if it's a metro area where there's a good market and you can turn the property over, then you're probably going to make money after two years in most cases, just historically. Now, if you want to be real nerdy about it, here's how you can do it. When you are looking at a neighborhood in the next town, the

that you're going to move into, ask the real estate agent and get one of the good Ramsey trusted real estate brokers that we endorse. Ask the agent to pull some MLS, multiple listing service statistics for you. Here are the two stats you want. Okay. Number one, just say within a five mile radius of this house we're looking at, just like a drop a dot in the middle of it, five mile radius. You following me?

Yep. What is the average annual growth rate in prices for the last 10 years? Got it. Yep. Now, keep in mind, you have 20 in there, and 20 is screwed up statistics because after the Fauci pandemic, people came out of their houses like a Baptist looking for a casserole and ran the real estate market up, right? Yep. Okay. So you got an anomaly in the stats there. But other than that, look for it hard, and you're looking for average annual rate of return.

A correlating number is the second one, and that's average days on the market, DOM. How long does it take the house to sell on average in a five-mile radius of this house? So let me give you a couple of different ways you look at that number, okay? If it comes back, the average annual rate of return on the house is 2%, and the days on the market are 270, nine months, you're going to lose your butt. Don't buy. Okay?

Yeah. It's going to take nine months to sell it. You're going to make 4% in two years and it's going to cost you 12% to get out of the house. You're going to lose money and you're going to have trouble selling it. Right. The other end of the spectrum would that be a slow draggy market. The other end of the spectrum would be average days on the market, seven days. And the appreciation rate is 10% a year. You're going to make 20% in two years and you can dump the thing in a heartbeat. Yeah. You buy there.

Got it. You see how I'm doing these stats? And you'll find them running together. Okay? You don't have long days on the market and high appreciation rates. It's very unusual. You have to go together. It's usually an active market, and you've got good appreciation rates. So...

But if you're moving, you know, we talked to the military guys about this too. If you're in the military, don't buy a house because they move your butt every two years unless you move into a metro area. But if you move in one of these podunk military towns where the whole economy is the military, all you've got is a bunch of houses on the market all the time from the last goobers that moved in there and bought a house.

Okay, so you can't, they don't appreciate and you can't get rid of them. But if you're moving, if you're in the Navy and you're moving into San Diego, which is fairly typical, by the way, or you're moving into Virginia Beach or something like that, you got a very active market and you're going to be able to get out of it and make some money. So two years is your, you need to know you're going to be there two years and look at those numbers nerdy. And yes, you should buy because you might have a 17 year run. Saban did.

You never know. Dream big. And the last thing, Dave, that you've talked about before is not overbuying in the neighborhood. Yeah, don't buy the top of the market. Buy middle to bottom of the market in that neighborhood. So if the houses on that street are, most of them are $350,000, don't buy the $450,000 one. Buy the $350,000 or $300,000 one because people don't drive down that street looking for that price range. They drive down the street looking for $350,000.

So don't buy 450 on that top of the market on that street. That's a good point, George. And use other common sense things like is the house ugly when you're standing in front of it? You can't get over ugly. Ugly is to the bone, man. So you can't get over it. If it's just your standard has no curb appeal and you're getting a deal, when you sell it, you're going to give it a deal because it's got no curb appeal. It's ugly. Make it pretty. Stage it nicely. And there are houses out there that are, trust me, are ugly.

But I have overlooked them in the name of price sometimes, and it's bit me in the butt, so I don't do it anymore. I buy stuff that's pretty or can be pretty when I dress it up a little bit. Well, sometimes we can swap the carpet and the paint. That's an easy fix. But if you put lipstick on a pig, it's still a pig. Yeah.

Yeah. So there you go. Good, good question. I like your question. And yeah, I think you're, you know, you're, you're gonna, you're gonna buy and you're gonna be fine and you're gonna end up, you know, you are gonna move. It's the nature of your business. I got football coaches in our family and, you know, you are gonna move. It's part of it. Uh, but hopefully you got runs that are longer than two years and you're in good, solid markets where you can make some money. Maybe if he buys, he'll be more incentivized to be a better coach and more wins. Is that how that works? No, I think, I think he's gonna be good. He's a great coach. He,

He's listening to the Ramsey show. That tells me he's a wise man. There you go. There you go. He's a great coach. What do you mean? I mean, you don't become a better coach because you buy a house. That just makes you more stuck. That's true. And the other thing, somebody may come along and want to pay you double, and you want to leave. But you're tied with this asset. Yeah, so there you go. It's not as easy to just up and leave. Yeah, you've got to buy my house and buy out my contract in order to get me. You've got two problems, right? Yeah.

I don't think I can coach Little League at this point, Dave. Have you ever done some coaching?

Not been paid, no. I just avoided the parent. Just ministry time. Yeah, Daniel, when Daniel was playing ice hockey, and he's a little bitty guy, we coached from four years old till 13. At 13, the mouth kicked in, and I quit. Oof. So I can't do mouth, and I would get put in jail these days. I think this could be like a Netflix series. It's a hockey coach. I mean, you've got a stick in my hand. You're not going to do this. It's like, no. America needs to see Dave Ramsey coaching Little League. No, it's not a good idea. It's a good idea.

I was sweet to the kids. I just don't. Helicopter parents are morons. You're yelling at the parents, not the kids at that point. I sit down with them for the first of every year. Listen, I'm doing this for free so I can hang out with my son. If you want to take over at any time, you can. And if you bitch about it, you're going to be taken over. So there you go. Hey, Ramsey's Rules of Little League. This is The Ramsey Show.

George Campbell, Ramsey Personality, is my co-host today in the lobby of Ramsey Solutions on the debt-free stage. Seth and Sierra?

Yes. Sierra are with us. I want to make sure I pronounced your name right. Welcome, you guys. Good to have you. Where do you live? Clarksville. Clarksville, Tennessee. Welcome. Just up the road. You had to slip and slide a little to get down here. Yes, sir, we did. All right. How much debt have you guys paid off? $110,000. All right. How long did that take? 36 months. Good for you. And your range of income during that time? Started at $38,000, ended at $120,000.

Good Lord. Okay, what do y'all do for a living? I'm a police officer. Okay. And I'm in accounting. All right. So how did you jump your income from 38 to 120? Somebody got a job? You. I got a job. Okay. I lost my job because of COVID, and then I became a leasing agent at our apartment complex. I did that for two years, and then I got an accounting job, and then that was the last hole for our debt-free. So I've been in that job for...

Well, two years to January. Between the two of us, we had five jobs. Oh, okay. I got two other jobs and she got two jobs. Wow. Getting it. What kind of debt was the $110,000? Oh, we had $10,000 on a credit card, $13,000 on a car, and $87,000 in student loans. Wow. Okay.

So criminal justice degree or what? Yes, sir. Criminal justice degree. Okay. All right. I was guessing. Okay. Good. Very good. So what happened 36 months ago? You said three years ago, this has got to change. Yes, sir. Coming out the backside of the pandemic, right? In short, that's what happened. The pandemic hit and we were doing a lot better off than a lot of other people. I mean, we had money in the savings account, but we just a whole lot of normal. She lost her job. You know, she called me.

when I was at work one day and said, hey, they're telling us not to come back into work. So things got really tight there for a minute and we were kind of

Still making it, but kind of too much month left at the end of the money. So I remember I was just laying in bed and she was laying there and she was just really stressing about the money and I didn't like that. So I was like, I can't control a pandemic. I can't control anything else, but I can control how we spend our money and how we move forward. So I looked you up. Well, I looked up just how to manage money better.

And your plan came across and I was like, this guy's plan works. So I just did it. Never heard of us before that. Never heard of you before that. Wow. I just looked up how to manage money better and I watched just about every YouTube video. It was funny. She went to bed and then I stayed up watching just about every YouTube video of you I could watch. And I was like, you know, I'm not the smartest guy.

guy but dang i can work dang it i can work i don't know how to work i don't know how to work but that's most of the battle when it comes to getting out of debt is being willing to do it and sacrifice and you guys did it working five jobs to get out of this mess yep so the wake-up call is the stress point then you're flipping through these videos what were you seeing there

that made you say, I can do this? What was it that gave you hope? You know, every other plan that I saw, there was some kind of gimmick that went with it. You know, zero interest credit card or do this. I'm like, well, that just moves the problem. That doesn't fix the problem.

And I watched Dave Ramsey does the Baby Steps Live in Dallas, and you're screaming at us, telling us how stupid we are. And I'm like, you know what? This guy. That's one of my favorite videos. Was that from like the 90s or early 2000s? You did a thing, I think, on Fox. I have no idea. I was watching. I'm like, this guy's screaming about gazelles and telling me to go to work and telling me, yeah, this guy. We don't sell microwaves. We sell crockpots. I'm like, that's the plan I need right there. I would like to add that I wasn't on board at first because I was –

like terrified because I just lost my job I was on unemployment and he was like we're getting out of debt and I was like I don't have a job like how can we do this like and he made me watch your video newsflash yeah yeah

So at first I called you a fun terrorist, Dave. Yeah, that's it. But then I got... I am. I am a fun terrorist. That's good. I got on board. Yeah. Looking back, I feel really bad. Not a violent terrorist, but fun. Looking back, I feel really bad because she went to sleep with her husband and she woke up with some raving lunatic. Yeah, some new person that just wanted to get out of bed. That's how it goes. We'll blame YouTube for that.

You go down the rabbit hole of Ramsey videos, you walk out on a different man. Oh, that's one. That is great. Thank you, YouTube. Wow. That's very cool. So you guys, within a few days of that, rolled up your sleeves, got on a budget and started, I guess. Yes, sir. Absolutely. Okay. So way to go. What was the most lucrative side hustle? The one that surprised you? Like, oh my gosh, this is pretty incredible. Well, actually...

I was like, you did electric work? I did electric work. I think the most lucrative for me was working security at the church I attended. Oh, nice. They decided we were really blessed. I mean, God really came through in a lot of ways for us in this. And the church was like, hey, we need somebody to do security. Can you do it? Sure, I'm here anyway. So they paid me like $40 an hour. Wow. Yeah, it was pretty good. So that came through.

And then you got some on-the-job experience there now as a police officer. Absolutely. That's really cool. Are you a police officer in Clarksville? Yes. If I ever get pulled over there, I'll be like, hey, I know Seth. Does that do anything for you? Probably not, but, you know, I'll try. I was going to say, and I got commissions with leasing apartments, so that was also very lucrative. She's really good. Yeah. Very good. Good job, you guys. Well done. What do you tell people the key to getting out of debt is now that you've done it?

Sticking it out together and also trusting the Lord. We had never tithed before. Oh. So we started doing that and that's when everything changed. Yeah.

Yeah. Yeah, it really did. It really did. When we started handling money God's way, it really came through. What church are you in there? First Baptist in Clarksville. Yeah. Okay. Excellent. That's where we go. But yeah, perseverance. We had a lot of things happen. We had to pay a lot of stuff out of pocket. We had to move in there. We had some medical bills in there we had to pay. But just get right back on that horse and keep going and lean on each other. There'll be times I'm working...

It was a hard 36 months. Very hard. Yeah, it was very hard. Very hard. Towards the end of it. Now that you're 100% free. It's amazing. Was it worth it? Yes, sir. Absolutely. Don't want to go back in it. No. No, never. I don't want to ever have to live like that again. It's live like that, so never live like that, right? Yes, sir. It's funny. We kind of switched roles. Seth was wanting to save the money. He saved the money when we were going through the debt journey, and I was wanting to spend it.

And then once we got debt free, I was like, I'm a hoarder now. I want to save all the money. And Seth's like, I want to buy something. Now we're finally out. She's calling me about a $10 expense at Walmart, and I'm like, just buy it. We have the money. You've got to rewire your brain to go, oh, we're free now. We're free. Yeah.

We can enjoy life. Absolutely. Way to go, guys. Congratulations. We're proud of y'all. Thank you, sir. Well done. Very well done. It's honoring to us to hear that the YouTube videos in the middle of the night gave you some hope when everything was closing in on you. Absolutely. And that's a cool thing. That's very neat.

And, you know, obviously you got access to that all free. That's perfect. That's the way it should be. I love it. The YouTube team and the SEO team working on, hey, if he searches for how to manage money, we want to show up. We want to give people hope instead of some shortcut scheme that's out there. Yeah, that wasn't an accident. Yeah, very good. Congratulations, you guys. Hey, we've got the live and give box for you for you to be able to enjoy some of these things and give some away. The Baby Steps Millionaires book.

because that's your next step. You will be one. You are on track to do that for sure. The Total Money Makeover book and, of course, the Financial Peace University membership. We want you to enjoy all of those things or give them depending on how you want to do it. It's the Live and Give box. Congratulations again. Thank you. Way to go. Very cool. Did you have people telling you you shouldn't be doing this, that you were crazy? People thought we were nuts. Yeah, we had people that just kind of didn't understand the urgency of it.

Not that they didn't support it. It's just they didn't understand the urgency of getting out of debt because we're still young. I had so many people telling me, don't pay off your student loans. They're going to forgive it. They're going to forgive it. I'm like, I've never trusted the government for anything. So I'm like, no. Yeah.

These are people that would never say that about anything else, but they say it about that. That's what's strange. Right. Yeah. Well, how do you like me now, huh? There we go. Exactly. Toby Keith, right? Exactly. Way to go, you guys. Excellent stuff. All right. Seth and Sierra, Clarksville, Tennessee, $110,000 paid off in 36 long months, making $38,000 to $120,000. They're free. Count it down. Let's hear a debt-free scream.

Three, two, one. We're dead free! Yeah! That's how it's done. I know how to work. That was his quote for the day. What a talent. It's a mic drop right there. If you're not scared of work, I'm pretty sure you're invincible in this economy. Having common sense is like having a superpower. It's pretty crazy. This is The Ramsey Show.

George Campbell, Ramsey personality, author of the brand new book, Breaking Free from Broke, is my co-host today. Thanks for hanging out with us, America. It's book launch week for George. We're all really excited about this book. It is selling like crazy. You guys, it's going to be a great help to you. We're just pumped for you. Jacob is with us in Macon, Georgia. Hi, Jacob. Welcome to the Ramsey Show. Hey, Dave. How you doing? Better than I deserve. What's up? Well...

I went a little bit crazy last year. Me and my wife jumped on a journey to pay down as much debt as possible. We paid off $240,000 last year. Way to go. But I also spent everything I had in my savings, everything that we had made together. I mean, I unloaded just about everything into it. We still got...

$14,000 between savings and checking. I got $5,000 in cash. But I need a tractor to be able to take care of my property. And I know that you are 100% against any kind of financing, but a new tractor that goes between $50,000 and $60,000 to be able to have the right size to do my property. So I don't know. Is financing...

okay especially at zero percent for 60 60 months or yeah i'm so you went crazy getting out of debt and you know that we tell people not to borrow money and you called here wanting to finance a tractor i just don't know i like i said i think i kind of put myself into a boat you know my property's going to end up taking over what do you make a year

Last year we made $210,000. I am laid off from my job, and so I'm going off of my wife's income at the moment, and she's a women's health nurse practitioner. What does she make? $120,000. Okay, and so when are you going back to work? We're not sure yet. No, I mean, you're not looking for another job? You're waiting on them? No.

We kind of are making a decision at the moment as to whether I'm going to be a stay-at-home dad to homeschool our two girls because we're not exactly too fond of the school systems. So we're kind of in between at this point. We're both talking about getting some cattle and just making some money off of the farm since we've already got the property. How much acreage do you have? 42 1⁄2 acres. Okay.

Okay. Does not take a $62,000 tractor to take care of 42 acres, dude. Seriously. It's not that big a spread. Okay. You know that. And you can't afford it. You don't have the money. So, um, and you're not making a living on the 42 acres. You might have a few cattle, but you don't even need a tractor for cattle. Have somebody run a bush hog over there every so often or something, maybe. But especially if you're going to decide to stay at home, uh,

and cut your income almost in half. Right. Why don't you go back to your old career, even if it's not with the company that led you off? Kind of as much as I'd like to, we're looking at the well-being of taking care of our children. What were they doing while you were working? Well, me and my wife are four states away from each other. You're four states away from each other?

Well, that's an interesting piece of information halfway through the conversation. We did something crazy. We went all out to pay off as much debt as humanly possible. We paid down the house halfway, and all other debt is gone. So you're there. Where is she? She's in Georgia. We're both in Georgia now. She's back to Macon. Yes, that's where she's been. I went to Ohio to work construction. Oh, I see. And that's what you got laid off from.

Yes, sir. I see. Okay. So not only do you not want to be, uh, you're not only worried about the kids in school, but you're also worried about being away from your family all the time. That's fair. That's a lot, that's a lot better plan. Okay. Uh, I mean you could, but, but you might not make as much as you used to make if you work construction in your area, right?

Yes, sir. It would be cut down to between $50,000 to $60,000. So what do you owe? The only debt you have left is your property? Yes, sir. We owe $260,000. Wow. So you paid off other stuff then, not that. She...

The house was almost half a million dollars, and then I paid off her car also. And then my other house in Kentucky is paid off. What's the house in Kentucky? It's one that I bought while I was going to school. It was something I bought online. What's it worth? I did $200 to $220. Sell it and pay off your house and buy a tractor. All right.

Why do you have a house in Kentucky? You didn't set out to do that. You ended up with it from back in the day. If you didn't own it right now, you wouldn't write a check for $200,000 to buy a house in Kentucky, Tennessee, or Arkansas. Right. It's very random in your life now. I understand how you got there, but I would sell it and pay off your mortgage and use your fabulous fact that you have no payments in the world to save up and pay cash for a used tractor. Not $60,000, maybe $30,000, but pay for it. Okay.

Oh, the house. Why do you want to hang on to this house? You're not going to do that, are you? No, I've got some attachment. We've talked about for the last year to sell it. I've got $130,000 to $150,000 equity in it. Who cares? Sell it. Do you care more about your kids or this random house? What are you attached to a house in Kentucky for?

I had it for going to Bible college. Okay. Jesus didn't live there. Take a picture and put it on the wall. Right. Yeah. I mean, it's not an heirloom. It's a house. It's not your great-grandfather's Bible. It's a house.

I mean, dude, really? Okay. I don't think I can help you, man, but that's what I would do. If I woke up in your shoes, I would sell the house in Kentucky and I would solve a lot of my problems by doing that and get the house that you're living in paid off.

I think I heard you could pay it off. I thought it was paid for. And then I thought he said he owed 130. So now I'm confused. I kept learning new facts along the way. This whole thing unfolded. But you kept saying, we keep doing, we did this crazy thing. We did this crazy thing. Paul was an accordion. But I think the craziest thing is to keep this house when you have this dream to run this property and homeschool the kids. And yet you're hanging on to this property that could get you free. You got too many conflicting priorities.

And so we need to decide what it is we really want in this life and give up a bunch of the other stuff to get what you really want. And if you really want to be home with the kids, great. If that's really what's driving this, I think you really want to be off the road. And I think you won't play gentleman farmer. That's what I think. And I don't think you're blaming your kids. So I'm going to be real hard on you now, but, um, that's okay. And by the way, 42 acres is a gentleman farmer. That's not a, that's not somebody making a living. So, um,

Anyway, yeah, you do what you want to do. But if I were in your shoes, I would get a job in construction and I would sell the house in Kentucky and I would buy a used tractor for cash and I would pay off my house. That's what I would do. But you're going to do what you're going to do. But thanks for calling. Appreciate you being here. Interesting story at the very least. A lot going on there. Yeah. Moral of the story, too, is if you move four states away temporarily and take a high-end

you know, high paying construction job. If you're willing to sacrifice being away from your family, which he did for a short period of time there, you can make a ton of money. And that's what he did. And I don't recommend that for a way of life, but I do appreciate Jacob's work ethic. Oh yeah. Being willing to go do that for a short period of time to accomplish some of the goals. He just got stuff out of line in the, in the, in the process. And, um,

Then when he suddenly got sent home, I think it threw him into a tizzy. Yeah, this might be kind of a midlife crisis situation trying to figure out what's next. But hope he figures it out soon. Absolutely. We gave him the plan. Thank you, Jacob. That puts us out of the Ramsey Show. In the books. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show where we help people build wealth, do work that they love, and create actual amazing relationships.

George Campbell, Ramsey Personality, author of the brand new book Breaking Free from Broke, is my co-host today. This hour is a Baby Steps Millionaires Theme Hour. If you don't know what that is, several years ago, we started taking calls from people who are actual millionaires or greater and asking them things about their life so that you could actually parallel them and be one of them.

and put aside all the mythology that is out there about wealth in America today. Number one myth that's out there, that the hope stealers out there, the characters the lefty crazy communists say, is you can't become wealthy in America today because all wealth is inherited. Lie number one. Lie number two. All wealthy people are crooks. That's how they got their money.

Lie number three. All wealthy people are famous entertainers, sports figures, rock stars, etc. Lie number three. Lie number four. They are brilliant. All millionaires have 4.2 GPAs. They're all rocket scientists. Nope. We will prove that to you today by talking to real millionaires, and I've done that for many, many years now. That led us into doing

What became the largest study of millionaires ever done in North America. We did it at Ramsey Research with outside research firms looking over our shoulder to make sure there was no confirmation bias, make sure that our research methodology was accurate and perfect because we knew you lefties out there wouldn't go along with it and because you wanted to say that America is...

The dream is dead and that you can't win. The little men can't get ahead. There's systemic problems with the economy and all that bull crap that some of you peddle out there. And so we knew that...

That would come up and that you would accuse our research of being inaccurate. And so the research methodologies airtight and double checked, double checked. That's good. Double checked. And so if you don't agree with the actual conclusions of studying 10,167 millionaires, you're what's known as wrong.

And we're going to unpack some of that for you and talk to real millionaires today. And we have to start with a basic definition because I heard a United States Congresswoman the other day. God, people are dumb. How do you even elect these people? She says he's not a millionaire. He doesn't make a million dollars a year. Yikes. This is a congressman.

Unbelievable. How in the world did you get out of the sixth grade? Who voted for these people? People that didn't get out of the sixth grade. Oh, my gosh. So the definition of a millionaire is not a feeling. It's not a moral construct. It's a math thing, and it has nothing to do with your income.

A millionaire is someone who has a net worth of a million dollars. A net worth is assets minus liabilities equals your net worth. Some of you have a negative net worth because you owe more than you own. But a millionaire has at least $1 million in the bottom right-hand corner of the spreadsheet when you take what you own minus what you owe, regardless of your income. You can make $1 million a year and not be a millionaire.

Because you spend $2 million a year, like you're in Congress. There you go. So that's the whole thing. So we've got to, you know, that's what a millionaire is. If you are an actual millionaire, we don't care how you got your money, whether you inherited it, maybe you were a crook, maybe you're a famous person, maybe you have a 4.2 GPA. I don't care if you won it in the lottery. If you're a millionaire and your net worth is,

What you own minus what you owe is greater than a million dollars. We want to talk to you this hour. The phone number is 888-825-5225. Our first millionaire is Erica in Austin, Texas. Erica, what is your net worth? Hi, Dave. My net worth is just north of a million dollars. Right at a million. Perfect. Give me a little breakdown in that. How does that break out by category?

So I would say 80% of that is in real estate. We have two rental properties, and about 20% of that would be in cash investments, 401k, Roth, that kind of stuff. Okay, cool. How old are you? I'm 36, and my husband is 38. Oh, did this young. How much of this $1 million did you inherit?

Zero. Zero. Okay. And what has been the range of your working income that you started working in your early 20s? What's the worst year and the best year of your income? I mean, if we're going all the way back, probably 65 early in my 20s. And the last five years, our average together has been anywhere from 280 to 340. Okay, perfect. All right. And what's your career? What do you do?

uh we are both technical recruiters ah very good very good great career feel right now what you get degrees you got four-year degrees um so i have a bachelor's and a master's in hr and my husband has no degrees okay what was your gpa i want to say i don't remember exactly but it was probably around 3.5 perfect okay good all right um well you did this quick

I mean, what do you attribute this to? How do you become a millionaire by the time you're 36? What do you blame it on?

Um, a little bit of luck in the real estate market and just kind of buying young and buying modest. Um, and then those real estate properties growing over time. And then every time we, um, moved out, we just rented the house and, and we had the equity from RSUs from Facebook and from other tech companies to kind of invest in new properties. But we've always lived, you know, very modestly in terms of our mortgages that we were taking out. And your overall lifestyle too. Yeah.

Yeah. Yeah, yeah. You piled up some good cash here. This is good because you've not been making $240,000 for that long. No, no. Or $280,000. Yeah.

Yeah, I would say in the last five or so years, we've definitely stepped up our income, and we also work part-time jobs in the evening to supplement some things. And I wish I would have known about the baby steps a little bit earlier in my 20s, and we're kind of going back and working the steps as we go. We paid off the truck last year. We're going to pay off my car this year in a few months and then really hit the investment piece hard and start moving.

you know, working the full steps, I would say. Way to go. Well, what would you tell, you know, that person who's in their late 20s, early 30s, who's like, how do I actually become a millionaire and not wait till I'm 60? Because you guys did it.

Yeah, I would say max out that Roth and 401k from the minute you enter the workforce. Invest as much as you possibly can and live modestly. Live on the lesson you make. Invest in retirement accounts. Way to go. Four times I heard her say live modestly. She said that a lot. You said that a lot, Erica. I'm proud of you. Way to go, hero. Very well done. Millionaire at 36. First case in point.

How much did they inherit? Zero. How much did they steal from other people? None. Did they have a 4.2? No. Not doctors, not lawyers, not athletes. Do they play in the NFL? No. Do they play in a rock band? No. Maybe on the weekends. There you go. This is The Ramsey Show. We're taking calls from real millionaires, people who did it, not your broke brother-in-law who votes wrong.

This is the phone number, 888-825-5225. We want to learn from you how it is really done if you're a real millionaire or greater. A millionaire, again, George was saying at the break that people were saying you're not a millionaire because you count your house.

On YouTube comments, which is proof that people's parents are cousins that are in the YouTube comments. Well, they like to form their own definitions, Dave. That's all it is. They're redefining millionaire. Yeah, like people redefine recession if they don't want there to be one. Yeah. It's one way to do it. Let me help you with this. House is an asset. It counts in the formula. This is an accounting definition. If you take an accounting class...

and you learn about balance sheets and net worth. This is not something you get to make up based on your little hurt-butt feelings. It's not a moral construct. If you have antique cars that are assets that are worth $400,000, that counts towards your net worth. I don't care if you like antique cars. I don't care if you think they don't run well. None of this comes up in the discussion, moron.

The actual thing is a definition. God, that's aggravating, George. Oh, trust me. I know, Dave. And they say, well, he'd have to sell the house and it's all illiquid assets. So it doesn't count. I'm like, do you not know the definition of an asset? Wow. Here's the other one, Dave, I get on the YouTube comments. Well, he's not a millionaire because it's him and his wife. And so if they divorce and he would be half a millionaire. And I'm like, I don't know how to. You people, you really don't want to win.

You want to just figure out a way to lose. And so everybody, you have to, you know, let's figure out how we can be a loser. I want to, I want to, I'm going to figure out a definition where I get to be a loser and it's okay.

And the faceless YouTube commenter with no profile picture with username 14587. You know, that's what keeps me up at night, Dave, is that troll behind the comment going, how do I just get through to this idiot? I don't think there's a way. I see the difference is you actually read those. Okay. God help you, George. Why do you do that? It gives me fuel, Dave. It doesn't give me fuel. It gives me indigestion. Dave is in Indianapolis. Dave, what is your net worth?

Hey, Dave. My wife and I have accumulated $3.2 million. All right. So $1.6 for you. I'm kidding. Okay. All right. And give me a little breakdown on that $3.2.

Sure. So an IRA is traditional and Roth. That is at $2.4 million. Wow. Most of that has come from 401k rollovers from previous jobs. Got some in brokerage account, about $192,000, $210,000 in cash, and our house is worth $345,000, and then we got $53,000 in a 529 fund. Way to go. How old are you?

I'm 60. Good. How much of this did you inherit? Well, actually, two years ago, I got $200,000. Okay. Were you already a millionaire then? Oh, yeah. Okay. So you did not become a millionaire because of an inheritance, just to be clear. That is clear. Okay. All right. I'm just asking. I'm going to make sure. Okay. Now, so the income range, your best year working income and your worst year? For our household, it would have been $70,000.

for our worst and about 180 for the best. Cool. All right. And what do y'all do for a living? What was your career or is your career? I was in healthcare. Both of us are. I was a radiation therapist and she is in healthcare administration. Okay. Four-year degree? Mine's a four-year degree and hers is a master's. Okay. All right. And what was your GPA? I was a 3.8 and she had a 3.5. Awesome. Very cool. All right.

So if you're talking to somebody and you are that is 30, half your age, can they still become three point, have a net worth of 3.2 million at age 60? And if they can, what would you tell them to do?

Oh my gosh, yeah, they can. First of all, you've got to live way below your means. The second thing is stay the heck out of debt. You've got to stay out of debt and kind of distinguish between your wants and your needs. And the third thing I would say is you start taking advantage of your work 401k. Started doing that as early as possible. And the other thing I did was once I hit 50, I took, you

You know, that extra you could put in as a ketchup. And I just put as much into 401ks as I possibly could. Way to go. Excellent. Excellent. Good work. So are you guys TV people or book people? You watch TV at night or read books? Well, my wife is a book person. I'm neither one, I hate to say it. That's okay. That's all right. That's all right. Good. Good stuff. All right. What kind of car do you drive?

me i got a 2012 honda civic wow what's she driving my wife has 2012 uh kia soul okay and your net worth 3.2 million just to remind the listeners out there what you said earlier okay driving 12 year old very reasonable used cars absolutely amazing way to go hero proud of you man thanks for calling in i love it luke is in seattle luke what's your net worth

Hi, Dave. Our net worth is $1.1 million. Very cool. All right, give me a little breakdown on that by category. Most of it's in retirement, so 401K, two Roth IRAs and mutual funds. That's about $473,000. Next is home equity. We've got about $309,000 in the house.

And short-term taxable savings kind of for goals here coming up in the future. It's mostly just cash or cash equivalents like treasury bills, I bonds. It's about 170,000. We've got an HSA in mutual funds, about 51,000 and two paid for vehicles at a little less than 46,000. And then a little bit of cash and checking and emergency fund. How old are you?

I am 34, and my wife is 31. Ooh, getting young millionaires today. So how much of this 1.1 net worth did you inherit? Zero. Zero. Okay. What was your best working year back in your 20s or lately, and your worst working year income-wise since you started working? Almost 12 years ago, right out of college, my worst working year, I was taking home about $1,200 to $1,500 a month.

and all the way up to about $400,000 now. Whoa, okay. What do you do for a living? I'm a captain for a major U.S. airline. Okay, so you fly jets. Okay, cool. And what about your wife? She volunteers here at home in our community, mainly through our church. Okay, cool. And you said you've got a four-year degree in avionics or what? In flight technology, yes, a four-year bachelor degree. And what was your GPA? GPA?

About 3.6. All right. Very cool. All right. So how long you been making serious bank like this? Mainly the later 20s, later 20s, early 30s. The first few years were really lean. But most of yours is sitting in retirement and into a home. So you started that early, didn't you? Correct. Yes. In the early 20s. Yeah. When you weren't making any money.

And then, and then you go from there. Okay. Cause I guess what I'm trying to figure out, I'm looking at the math. I'm thinking through the curve here on it. It, you're not a millionaire because you make 400 because that's not happened long enough to cause this to be here. Is that my right? That's correct. It is all due to compound interest and starting early. Yeah. Okay. All right. So if, um, wow. Okay. All right. Cool. Do you know, Hey, let me ask you this side plan has nothing to do with anything. Um,

A starting pilot straight out of college right now or straight out of flight school, like they're flying regionals, right? Yes. What are they making these days?

Quite a bit more than they were making five or ten years ago. I would say maybe somewhere in the vicinity of $60,000 to $100,000. Okay. I told the kids $60,000 the other day, so I wasn't too far off. That's why I'm just checking myself. All right. Good job, man. Way to go. Young millionaire. I like it. 34 years old. We're seeing a theme here, Dave. Hey, I got two in a row, or two of them that are youngsters. I like it. Giving everybody hope. That's what this is. It's facts. You know, facts have a way of cutting through all the...

garbage out there. This is the Ramsey Show. George Campbell, Ramsey personality, author of the brand new book Breaking Free from Broke is my co-host. This is a Baby Steps Millionaires theme hour where we talk to real millionaires and ask them about their lives so that you can compare and say, gosh, I could do that and give you hope because you can do that. The four biggest lies told about millionaires is they inherited their money. They are crooks.

They are famous entertainers, rock stars, or sports figures. They have unusually high intellect, like a 4.2 GPA. So let's deal with the last three. High GPA, not true. The data tells us the average millionaire has a 3.0. The real estate that I'm sitting in is worth...

somewhere around $600 million, this one campus. It's paid for with a zero debt, so that would be part of my personal net worth. My personal GPA is a 2.97, three one-hundredths short of a 3.0, which still pisses me off 40 years later. Can we redo this, Dave? There might have been beer involved, but yeah. I think it's increased since then.

Yeah, so anyway. Does it go up over time? No, you can't fix it. It's like a bad tattoo. You're stuck with it. So 3.0 is the average tattoo.

millionaire that were our GPA. We don't find many that get a 1.2. I mean, you can't really be stupid or dumb and do this. I mean, you know, they do have good intellect and generally or work hard enough to get a grade, right? But they're not prodigies and geniuses. No 1%, 1% of the 16 million millionaires in America are

Are public figures that you would know their name. One out of a hundred. One out of a hundred. They are sports figures, rock stars, country music stars, whatever, you know, actors out of

Los Angeles or whatever. But honestly, people in the limelight are notorious for being, we work with them for being on one end of the spectrum or the other. They're either common sense, very careful, got a good business mind, or they're dumber than a rock.

when it comes to their finances. And you've heard all the stories of the Dumber Than a Rock. They make TV shows out of them, and they've been on sports 30 for 30 and all that kind of stuff. In terms of their finances, I don't mean they're personally stupid. They might be, but they're really good at picking a guitar, and it ends there. I mean, that's...

That's what we run into in Nashville. I mean, I've got a bunch of friends, country music people that you guys know out there, and some of them are really good business minds. And some of them, they're just good music. Some of them, their wife can manage the checkbook. I mean, that's it. Her husband, you know, it's yeah. So, yeah, bad news. So the last one, not the last one. That's what we're going to talk about in this segment is their crooks. See, that's the dumbest one to me.

I can understand how you'd think it takes a lot of intellect or the famous people are millionaires. That makes sense. But crooks doesn't even make sense because here's the way it works, okay? If you own a business and you screw people, you mess them over because you're a crook, do your customers then tell everybody to come do business with you? No. They tell everybody to avoid that person. They're a crook.

So crooks in a capitalistic society, especially where social media is there and you can jump on Instagram and say such and such a place ripped me off, crooks have a tendency to not prosper versus prosper. You can't find enough new people to steal from that don't know any of the other people you stole from to run a business based on crooking people. It doesn't work.

So that's just absolutely asinine. I mean, Madoff and Ponzi go to jail. Do not pass go. They go to jail.

Now, they pull it off for a little while, but it's not sustainable wealth building. So this idea that, you know, all the people that ever have any money are crooks, that's just your redneck, backwoods, idiot friend who's jealous, who can't find his butt with both hands, and the only way they can describe it is, oh, they just rip everybody off. That's how they got their money. Now, you're just dumb.

Okay, it doesn't work in a capitalistic society. That doesn't work. It's just easier to be jealous, Dave.

you know jealousy is i want what you have envy is worse than jealousy catholics call that one of the seven deadly sins because envy is i don't not i not only want what you have but i don't think i can get it so i don't want you to have it so i have to tear down everything and tear you up and get tall poppy syndrome the australians call it and cut down anybody who sticks their head up and that's just that's just

ridiculous so it doesn't work doesn't work katie katie is in detroit katie what's your net worth hi dave our net worth is 1.2 million awesome give me a little breakdown by category

So the bulk of that is in retirement accounts, about $600,000. Good. Our home is paid off and worth about $350,000. Okay. And then the remainder is in non-retirement mutual funds, our kids' college savings, and cash. Good. Very good. How old are you? I am 30. Gosh, I'm younger than you. And my husband is 38. Wow. Way to go. How much of this 1.2 did you guys inherit?

So I did receive a small inheritance of $20,000 when I was 17. Okay. But the rest was all us. Did you invest that and that caused this million dollars to occur? No. So you're not a millionaire because of inheritance or you are? No, I am not. Okay. I just want to get from the actual person what the deal is. Okay. And your household income, your best year working and your worst year working, and you're 30 years old. Way to go. Yeah.

Yeah, we're thrilled. We started out, we looked at everything combined. We've been married 10 years. Our starting salaries when we first started working combined was about $130,000, and now today we're making about $240,000. Good, very good. And what is your career's?

I work part-time. I work in finance, and my husband is an engineer. Oh, good. Okay. All right. And what was his GPA, or do you remember? He's a smarty. He did have a 4.0 GPA. Good, good. Well, if he's an engineer, I hope so. I don't want the bridge to fall, right? So there we go. Right, right. Good. And so his degree is in engineering. Yours is in finance?

Yes, I've been accounting my undergrad, and then we both actually have MBAs. Excellent, excellent work. So do you think people that are listening that are 20 and 22 years old or they're tuning in on YouTube, do you think they can do this like you did? Absolutely, yes. Why do you think the dream is not dead? What was that? Why do you think the American dream is not dead?

Because I think it's capable of happening through hard work. I think that in the beginning of our marriage and in our early 20s, we hustled really hard. We had lots of side hustles. We spent three years renovating our house top to bottom and turned a $100,000 house into a $350,000 house. And, you know, I think anybody can work hard and get after it. Wow.

Wow. That's encouraging, especially hearing from a 30-year-old, because most of the youngsters out there that I talk to and that are commenting, they are looking at these investing traps and shortcuts. And I'm looking at your portfolio. It's largely boring, isn't it? It is. It's just retirement accounts and equity in the home and some cash and college savings. There's nothing really that takes some prodigy-level investing here. You didn't do any day trading or sports betting or store it all in gold.

Nope, nope. We're in it for the marathon race. We're in it for the long haul. So just boring and safe investments for us. Yeah. Way to go. I'm so proud of you. Way to go, hero. George, there's a real low occurrence when we do these hours. We find almost no crypto. Wow. Not even as we've done them over the last few years. I've actually never taught. They may exist, but I have never talked to a crypto millionaire. Interesting. I thought they were all over the place.

They've been real quiet ever since they took a turn for the worse. Ever since it became worth zero. Yeah. There's that. There was one. It was a GameStop guy who got rich off the GameStop debacle. I thought we got one of those. He made some serious calls. I did talk to him. He was doing that margin thing that was all over the news for a while. He did get rich quick and got out just in time. But that wasn't crypto. That was playing margins. Yeah. This is the Ramsey Show. Our scripture of the day, Romans 12, 2. Do not be conformed to this world, but be transformed. Yeah.

by the renewing of your mind that you may prove what is that good and acceptable perfect will of God. Albert Schweitzer said, a good example has twice the value of good advice. This is a Baby Steps Millionaires theme hour. We are taking calls from real millionaires. The last lie that is told is that it's impossible to build wealth in America today because the wealth is already held by the wealthy families and the only way you become a millionaire is by inheritance.

And that is a statistical lie. Here are the facts are disturbing things when you believe wrong things. This is a fact. Having done the largest study of millionaires in North America, 10,167 of them. Here's the number. 79% inherited zero. 5% inherited a small amount.

Like $5,000 or $10,000. One caller this hour, $20,000. But not enough to mathematically cause them to become a millionaire. If your granny leaves you $5,000, you did have an inheritance, but it doesn't make you a millionaire unless you live to be 200 years old. Okay? So...

It's not an inherited. The third thing is another 5% received a substantial inheritance after they were already millionaires. We also had that this hour. The guy with a $3.2 million net worth said he received $200,000 inheritance after he was already a millionaire. So he did not become a millionaire because of inherited money. So let me help you with the numbers.

79% zero, 5% small amount, 5% after they were already millionaires, 79 and five and five is 89. That's nine out of 10 of America's millionaires are first generation rich. They are not millionaires because of inherited money. Simple. So anyone that says that is either lying or just wrong.

or both. It is simply not true, okay? You can't make it any plainer than that. And by the way, that matches up with 30 years of doing this and meeting people all over America that are millionaires. I kept running into them, and I ran into very few that inherited the money.

And almost none. I mean, it's less than one out of just right around one out of 10. And I don't care if you inherit money. That's fine. It doesn't make you a bad person. We talked to a guy earlier in the show today that inherited a million one from his grandmother and he was 22 years old. That's wonderful. I got no issue. That's fine. It's not a moral problem. It's just simply not a fact. And when you tell people that they can't do it and they believe you,

You're not only wrong, you're infecting other people's hope. And you should be ashamed of yourself stealing hope. It's awful. Especially when you're wrong. Hello. You're wrong. You're wrong. Dial that one in for a second. Okay? Because I've got the airtight research to prove it. So, oh, by the way, too, the five top careers that came up in the study,

The number one career that came up most often was engineer. Number two, accountant. Number three, teacher. Number four, business executive. Number five, lawyer. Doctors didn't even make the top five. Teachers did.

Well, yeah, I'm a teacher and I don't make any money and I'm broke. Listen, I don't you can whine all you want to whine. It doesn't change the fact that teachers appeared as the third most likely group out of 10,000 to become a millionaire. Why is that? Because all five of those share processes. They have to use a process and become building wealth as a process.

They're all five process people. Engineers use a process to build a bridge or it doesn't fall. Accountants use a process called GAP, Generally Accepted Accounting Principles. There's only one way to do accounting. There's not six. You don't get to be creative about it. There's not the contemporary version and the traditional version. There's accounting. That's it. Teachers use a process for teaching. It's called a lesson plan.

Okay. Business executives use a process for managing a project. And of course, lawyers use a process in front of the judge or the judge shuts them down. It's called contempt of court. Okay. So you have a process in the law that you use. These are process people. They follow a proven process like a baby steps process that we use. That's why they have a likelihood of building wealth because they're process people. So you can decide to do that even if you're an artist, even if you're not a process person. By the way, artists don't show up anywhere on any of it.

And it's not because you're dumb or something like that, but you just make up your own rules. That's part of the beauty of art. Trying to live free. But when it comes to your money, you better be a process person, regardless of what your career field is. Kelly is in Kansas City. Kelly, what's your net worth? $3.9 million, Dave. Way to go. Give me a little breakdown on that by category.

Okay. Investments are at $2.8 million, which is retirement, Roths, mutual funds. House and cars is $600, and about $500 in cash and CDs. Okay. Very cool. How old are you? 59. Cool. And how much of this $3.9 did you inherit?

We did inherit after our first million, but we did inherit $250,000. Okay, after you were already millionaires. Okay, good. Fits what I was just talking about. All right. And your income range, best year to worst year? Straight out of college, we both earned $60,000, and our best year so far is about $250,000. Cool. What do you all do for a living? What's your careers?

I'm a special education teacher, and my husband is a manufacturer sales rep. Okay. A high number of salespeople show up in this study, too. Okay. Well, he also has the accounting degree, so you hit both in the top five. Okay. All right. Teacher and accountant. Yeah, both of you. Okay. GPA? GPA?

His was a 3.4. Mine was 3.9. All right. Good. He married up. Good for him. You think this can still be done? Can somebody still be at 59 years old and have a $4 million net worth? Absolutely. What should they do? Absolutely.

Several things we did. We have to be on the same page together, husband and wife. We've been together for 37 years. My husband wanted this to be a goal, so he asked me to read your book. And about 15 years ago, we read The Total Money Makeover. Wow. And we were all on the same page together. Staying with your budget.

Saving early and often. Started saving the first year I started teaching. Very good. I like that a lot. What advice would you give to the 25-year-old version of you? Start early and more often. What's the biggest mistake you all ever made with money? I think it was a real estate agreement my husband went into. That was probably our biggest. Like an investment deal went bad?

Yeah. Yeah. How much did you lose? I think it was about a hundred K. Okay. Cool. Yeah. That's a bad one. Yeah. Left a mark. Yeah. Okay. Wow. And yet here you sit at 60 years old and you read the total money makeover at 45.

and are 44 and uh with a five million dollar or four million dollar net worth and so wow way to go hero how's it feel thank you oh it's it's amazing um the first thing that you do when you pay off that house when you're in your 40s and it's like a weight went off your back and um you're very comfortable yeah and then it's easy to build after that isn't it it's so easy after that yeah

The most powerful wealth building tool is your income. We've said it for 30 years here, and she's just telling you again, folks. Way to go, Kelly. So proud of you.

George, they're everywhere. From $30 million to $60 million to $4 million, and it's all real boring but also very encouraging. Yeah, yeah, yeah. Nothing flashy. There's no fancy in there. Makes me feel like even someone as dumb as me could do it, Dave, and I did it. Oh, wait, you already did. Yeah, you are an amazing guy. Very similar stories. Way to go. I love it.

That puts us out of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. ♪

Hey, folks, Dave Ramsey here. You know, budgeting doesn't have to be boring. You just need a budgeting app that's made with you in mind, and that's EveryDollar. The EveryDollar app has helped millions of people work the baby steps and take the stress out of planning and managing their money. Start budgeting with EveryDollar for free right now. Just go to RamseySolutions.com slash EveryDollar and download the app today. That's RamseySolutions.com slash EveryDollar.