Don’t Let Toxic Family and Friends Pull You Down
2024-07-17 01:59:21
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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 Camel, Ramsey, personality, number one, best-selling author of the book Breaking Free from Broke, host of the George Camel Show, massive YouTube property, and all-around network, star here at the Ramsey Network. He's my co-host today. Open phones at 888-825-5225.. Steve starts off this hour in Atlantic City.
I'll get it out. Hey, Steve, what's up?
Hey, thanks for taking my call. Thanks, George. I want to thank you guys for what you're doing, first of all, because not many people are financially smart, I guess you would say, and so what you guys are doing is awesome.
Well, thank you, sir.
I'm 41, and I'm really not planning to work until 60-some years old to retire. And so I have retirement, and I have investments that aren't retirement, and so I'm investing heavy right now, and I feel like it's so overinflated at the moment. And being that I'm not completely out, I have significant money in right now, would it be wise to just collect 5% in the money market and wait for a correction? I know you're more of a slow and steady, just keep putting it in every week, but it just seems a little crazy right now.
Yeah. Well, generally speaking, the reason it seems a little crazy is it's the first time you have stood on top of that mountain. If you'd stood on top of that mountain several different times, it wouldn't feel as crazy. And so it's an emotion that says, I've never been here before, and human nature, I think there's something about, you know, there's a black side of human nature, a dark side of human nature that says, oh, we can't stay good, nothing can stay good. It's like if everything's good, I have to look over my shoulder, something must be wrong.
And that's human nature, but that's an emotion, Steve. There's no data that says we're due for a correction. If you had called me five years ago and I said, oh, yeah, yeah, we're getting ready to have a correction, you would have missed out on a 90% rate of return. In the last five years in the S&P 500, your money has doubled in the last five years. And so why do we not think it's going to do that in the next five?
Well, I mean, it goes up, it goes down. You know, in 22, the market was down overall. In 23, it was up 27%. It's up 18% already this year. But that doesn't mean that it has to correct, because there's actual income and assets backing the companies that create the stock price.
You don't price Home Depot stock based on a wish, a dream, and a prayer. Home Depot actually makes money and they own stuff. You don't price Apple stock based on a wish and a prayer. They actually make stuff and make a profit. And you can use those numbers to determine the value of the company and, therefore, the value of the stock.
And that's where this is coming from. It's coming from the prosperity of these companies, George.
And what's amazing, Steve, if you actually look at the data, if you go look at right now the S&P 500 returns, you know, the last major dip was COVID. And guess what? March 2020 was the dip. It came back in July, back to record highs. And so you got to just, you know, the old saying, it's true.
It's not about timing the market. It's about time in the market. And the best investors out there are the average ones who just let it ride.
Yeah, so please don't try to time. the market is the moral of this story, and that's what you're asking about. And, you know, it's one of the reasons I tell folks to be in with a smart investor pro. Because all the data tells us that someone who has a good broker in their corner, not somebody who's a shyster, but somebody who's calm and data-based, and they'll teach you, talk you off the ledge, you know, talk, Steve, off the ledge. They tend to keep you in the market.
They tend to say, don't get out. Don't get out. Don't get out. They don't call you up and go, I'll be scared. No, don't get out.
Don't get out. Don't get out. Set it and forget it. Set it and forget it. Time in the market's more than timing of the market.
That's a great phrase. I love that phrase.
And so all the data says. for that reason, if no other reason, a good broker in your corner, a good smart investor pro in your corner makes you money. Because they keep you from,
as Churchill talked about his depression, he called it the black dog. Right? The black dog inside of every one of us is telling you, you know, get out of the market. It's going to crash. Get out of the market.
It's going to correct. And there's nothing that indicates that.
Well, what causes a lot of that is the inputs you have in your life. And I'm guessing, you know, Steve's watching some headlines and it's going, we've hit record highs, but what's around the corner? What's going to happen with this election this year? And what about the Fed and the interest rates? It's all got to come crashing down eventually.
There's clickbait. every day since the Internet was invented. Every day there's clickbait. that says economists predicting the end of the world.
You know, quickly read my article.
Those guys are my favorite, because whenever they're wrong, they go, oh, we missed a calculation. We're off by a few years. We'll be back. Like, okay, so I guess it wasn't the end of the world. We're all still here.
So, Steve, please, I got to tell you, what's George doing? George is going to stay. He's not looking for a correction. What's Dave doing? We're going to continue to invest.
We're not looking for a correction. If someone handed me a million dollars today, I would, an extra million, that'd be cool. I'll take it. I would put it in the stock market, in good mutual funds, or I'd buy a piece of real estate with it, because I'm bullish on both. I think that America, the best is yet to come, baby.
The best is yet to come. We're not done. It didn't peak out. We missed the top. No, you didn't miss the top.
Because if you go back and look 30 years since I've been doing this, I mean, 2008, the Dow went to 6,800.
. It's almost 40,000.. Wow. You know, I mean, golly. What would your money be worth?
Oh, please, please, please don't tell them.
I had people in my own family. They took out money when they got spooked because someone told them, hey, now's the time. Take the money out. There's about to be a correction. And then the money sat in a settlement account making 0%, and then the market came back, as it always does.
Like a roaring.
And they lost out on all of that growth. And it's heartbreaking to see. And we get calls like that where they say, Dave, I haven't invested or I pulled my money out. Now, what do I do? I'm broke because I didn't stay on the roller coaster.
And that was the last time we saw a major correction in the market was 2008.
. And the Dow took a dive. It took a dive off a cliff down to from, I think it was about 14, and it went down to 68.. It went basically in half your value, what you had in your mutual fund. If you had a million dollars, it turned into 500,000..
And that scared the crap out of people. And you know what I did? I scraped every dollar I could, and I bought more.
It's on sale, half off.
That's right. You're at Kmart, and the blue light's on. Any of you, old people, know what that means, right? The blue light special. You don't even know what Kmart is, much less what the blue light is.
But when I was a little kid, a little redneck kid, we would go to Kmart, and they had these little roller things, little square cabinet with a pole and a blue light on top. And they would roll it over next to an item and put that item on a flash sale and turn the blue light on.
That's pretty impressive technology for that time.
It's blue light technology. It had a little extension cord, followed it around. So you thought the police had set up shop right there, in that corner of the Kmart, but all the redneck women ran over there and got their deals, I'm telling you. A Stanley Temple of the day. It's a blue light, so it's a special.
It's a deal. It's a special. It's a bargain. That's what that means.
If it's doing well, be thankful. And if it's not doing well, it's on sale.
Be super thankful. There we go.
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Hey, jump over there and get that book. I want to put it on. Oh, yeah, absolutely. So, we just laid a book down as we're walking back in from inside, so I'm sending George to pick it up. So, an old friend of ours, Davy Blackburn, just dropped in.
Davy, many of you will remember the story. It was about six or seven years ago, I think. He's a youth pastor, and his wife was murdered in their home in Indiana.
And so, the story is horrible and heart-wrenching and amazing. I endorse the new book called Nothing is Wasted, and it's the whole story of what happened in the whole process. So,
he just got a book done, and the book has come out. So, we want to tell you guys about it. Nothing is Wasted, and he's got the. Nothing is Wasted Ministries, and it's even the murder of his wife. Nothing is Wasted.
Wow. Crazy.
There was a lot of redemption and healing, and forgiveness and hope and all kinds of great things.
Yeah. So, Amanda and their unborn daughter. A profile case, slowly meandered its way toward legal justice. David embarked on the wrenching task of finding the strength to restore his shattered soul and broken pieces in his life. Yeah, that's the write-up on the book.
So, Nothing is Wasted. I want to tell you guys about it. He's a great man, and it's a horrible, tragic story, but a beautiful, beautiful result out of a horrible situation. And so, a picture of Amanda on the front of it. So, wow.
Good stuff. Nothing is Wasted. I think it's apparently on the street right now. It just came out. So, be sure and check that out.
I'll definitely give that a read. I know the whole story. I know Davey, and he's spoken here for our team, and we were behind the scenes helping him with all the stuff when all the things were going on. And, wow, what a deal.
Looks like it's on pre-order right now.
Oh, it's on pre-order.
Publication date, pub date, July 30th. So, coming out the end of the month, you can pre-order it now.
Okay. Thank you, George.
Always here to help.
Well, I mean, you get the book off the chair, you find out their publishing information, the whole bit. So, we make this up as we go around here. All right, and George catches all my slack, which apparently there's a lot of it. Open phones at 888-825-5225.. Adam is with us in Chicago.
Hey, Adam, what's up?
Hi, Dave, how are you doing today?
Better than I deserve. How are you?
Doing quite well. So, I've got a bit of a question for you. I'm currently Baby Step 2.. I've already made quite a bit of progress, but my girlfriend and I are looking to get hopefully married in the next couple years, and I'm just looking for some guidance on what's the proper way to go about doing that, while we're still actively kind of in the midst of that.
There's not a.
We do not tell people to wait to be out of debt to get married. As a matter of fact, we tell them, go and get married. If you're going to get married, get married. Period. That's simple.
We do tell you not to spend $70,000 on a wedding when you've got $60,000 in debt. You know, I would tell you that, right? But the getting married part, getting married does not hold you back for getting out of debt. Now, what I will tell you, and you probably have already, based on the way you formed your sentences and the way you brought this to the table, you're probably already doing this, but I will tell you that you don't want to get married to someone who doesn't share your hatred of debt.
Right.
Because that's going to be a long life. A long, miserable life. Yeah. But if you're both saying, hey, this sucks. We're going to lean in, be, gazelle, intense, and get out of it.
But we're going to wait until we're out of debt to get married. I wouldn't say that. I wouldn't. I'd go ahead and get married.
Okay.
You know, George, that's consistent with what we teach.
Well, how much debt are we talking here? Because you said a few years. To where it tells me, are you waiting a few years because of the financial situation, or are you saying that's a natural sort of progression of this relationship?
Mostly because of the financial situation. So, currently, I'll just lay out our debts, because it's pretty simple. I've got about $11K left on a car loan. That's my last thing to pay off. And then she's got about $50,000 in student loans.
Okay. And what is her income?
Her income, unfortunately, she just lost her job, but she was at about a $50K a year. Okay.
So, probably get something around that range again. And what do you make?
This year, I'm making $47,000, but I'm up in line for promotion next year, so hopefully a bump up from there.
Okay. So, you're going to be the $100,000, $110,000 range, I'm guessing, if you were married. And how old are you two?
We are 27.
Okay. Is there any reason not to go ahead and get married?
No, other than just saving up to make sure we pay for it in cash.
Sure. Sure. Okay. How long have you been dating?
I've been dating about eight years now.
Okay. Time to paint or get off the ladder, dude.
High time, my friend.
Seriously. Oh, my gosh.
You've got to get engaged first.
Yeah.
But let's not make this another five-year engagement. after that. No. And then one day...
I mean, my patience with this, personally, I mean, I'm just speaking for Dave, because, you know, just.
I think Sharon would have been long gone if Dave wedded eight years.
Yeah. She'd be going, what's that country song, Get Me to the Church, or something. I don't know. But anyway, that little big town had a song. But yeah, that's it.
Whatever. Paint the church white. Whatever the thing is. Yeah. No.
Get married. Get married as fast as you can.
The best-case scenario is you naturally both become debt-free before the wedding. Worst case, you get together, you make a hundred-something thousand, and you knock out the debt quickly. That's a worst-case scenario. Yeah.
If you're.
. You know, you've had a lengthy time to get to know each other, and you're ready, and you're 27.. You're not 18 and 17.. You know, you're not that. So, to have that call last week.
At this point, you know if I want to spend my life with this person, because you've already spent a good chunk of your life with this person at eight years.
Yeah. So, yes, I would get married as soon as possible and reasonable, and I would not wait on clearing debt to do that, as long as you're both aligned on how we're going to handle money, and it sounds like you are. So, good question. Thank you, Adam. Appreciate you calling in.
Mitchell is in Edmonton, Alberta. Hey, Mitchell, what's up with you?
Hey, guys. Not too much. Thanks for taking my call.
Sure. How can we help?
Yeah. So, Dave, George, I'm just trying to navigate the baby steps a little bit here. Right now, we're just working on paying off our mortgage, which, obviously, like everyone, we hate monthly payments, mortgage included. So, we kind of just want that gone. The deal is, myself and my wife, we both work full-time, debt-free, other than the mortgage, with about $400K remaining on that,
where it gets a little bit different. On top of our jobs, we also started – this was four years ago – we started an event rental business. So, we ran that throughout the summers. At this point, though, it's just kind of gotten to be a little bit too much for us to manage, especially now we've got a two-year-old. So, we really just want some more time to do family stuff.
So, we decided to sell the business. We have a sale lined up, actually, and after the sale, we figure we should have about $300,000 in cash and liquid investments that we can put towards the mortgage. Yay! Just wondering – hey, there we go. Yeah, just kind of wondering if the best thing to do is just to put that lump sum straight towards that or maybe leave a portion.
It's straight, yes?
Yes, absolutely. You're out of debt. You have an emergency fund, right?
Yeah, you bet.
Your household income is what?
I'm just over $100,000.
. She's right at $75,000..
Okay, $175,000.
. And you owe $400,000.. You're going to get $300,000..
Yeah, baby step six, four, five, and six is what we'd be putting 15% of your income away already towards retirement. And baby step four or five is kids college. If you want to throw something towards kids college or something, you can. if you're not already doing that. And then I'm going to throw the rest of it at the house.
I will take something out of it and just go on some kind of celebration. Let's take $20,000 and go buy a thingy or go on a cruise or whatever it is you want to do. I don't care. There's just some way to kind of-.
Enjoy the success.
Enjoy the success. And then I'm going to throw the rest of it at the house and then reach over my $175,000 income and knock out a house out. in what, two years? You're going to be debt free? That's pretty cool, dude.
Yeah, no, it's good. I guess the reason I was really asking, like I mentioned, I hate the mortgage payments and I had this idea, and don't rip me apart too much, but the idea I had was just basically to have it sitting in some kind of mutual fund or something like that and to just draw that month by month to pay for the house, basically allowing it to produce returns.
Yeah.
Or is that just-?
We don't find any millionaires that do that. We find them just paying off their mortgage. All the data indicates that wealthy people don't do that stuff. They just hate mortgages, get rid of their mortgage, and they dump money in their retirement. And that's the first level of wealth, the first million to $5 million, that's where it comes from.
So I just don't find people doing it. And the reason is it adds risk to the situation.
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George Campbell, Ramsey Personality, is my co-host. Thank you for joining us, America. I am Dave Ramsey. The Ramsey Summer Black Friday Sale ends tonight.
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com slash sale ends midnight tonight. Do not delay. Thanks for being with us. Amber's on the line. Amber's in Detroit.
Hi, Amber. How are you?
Hi. How are you doing, Dave?
Better than I deserve. What's up?
Okay. So, basically, I went to court yesterday as I was summoned to court by Capital One on behalf of the lawyers based on Capital One. So, they directly sued me. The lawyer approached me in court to settle out, but the settlement was for, well, the debt overall is $7,000 with court fees. And so, they pretty much told me I could settle out for $6,000 with interest.
that would occur if I was on a monthly payment. I was trying to do a lump sum, but I can't afford that. I'm in economic hardship, and I explained that to the lawyer. And they're playing hardball, and I'm trying to find out how can I go about settling for a lower amount.
Well, wow.
So, in most states, Michigan, I think, is one of them. They can garnish you your wages, but it'll take them a while if you don't do anything. Okay? So, what happens is the lawsuit, they've offered you a settlement, and in the meantime, they're going to take a judgment. Okay?
The court is going to rule that you owe the money and didn't pay the money judgment. So, when the judgment becomes final, at least 30 days will go by, if not more, before they can execute on the judgment. Executing on the judgment means that they would scarf money out of a bank account or garnish you a wage, if your state allows those things. Okay?
Texas, for instance, does not allow that, but I'm pretty sure Michigan does. I'm not an attorney in Michigan, so I'm not an attorney anywhere. But that's the type of thing you're facing. So, there's nothing on fire. Nothing's going to happen bad to you in the next 10 minutes.
It's going to be a month or two or six or a year. Okay? Does that make sense? See, one of the things I've found is if I can get the panic off, then I can get my edge back in this negotiation. You went down to court, which is so unusual.
I'm really shocked that this moron only offered you a six grand settlement on a $7,000 balance. I would have guessed they would have offered 50 cents on the dollar, hoping you would offer a quarter on the dollar. We generally can get most of these bad credit card debts to settle for somewhere around 15 to 20 cents on the dollar. All we do is just call them up and yell at them. Okay?
And your financial hardship really doesn't matter to any of them. They don't give a crap about you. The lawyer, capital one. The judge. None of them do.
Okay? So, your story holds no water whatsoever. Cry me a river as far as they're concerned. Okay? Now, I understand what it does.
It pinches your emotions, and it keeps you terrorized, and it makes you have things in your throat that, you know, gulp, gulp, gulp. I've been there. I remember these little sweat in the palm of your hands. You had some pretty big courage to walk into that courtroom, Amber. Way to go.
Thank you. I'm very nervous, actually.
I bet. I bet. But it's kind of funny, though, isn't it? I mean, it's like the first time I ever got a speeding ticket, and it's the first of many, but I went to traffic court. And traffic court is like nothing.
I mean, I was more scared of my sixth grade teacher than I was traffic court. Traffic court's a joke. You go in there, and they go, oh, you showed up? Okay, we'll waive the ticket. Right?
Your first one. Most places, they do that. Right? You bother to show up. And did you kind of have that experience?
It's like you were all scared, and you thought you were going down there, and there was going to be like a trial, and they were going to, you know, have a jury, and Matlock was going to come out, or Perry Mason or somebody. And it's just like nothing. You're just like, you know, you're down there in the middle of a grinder, and they're just making hamburger meat.
Taking a number at the deli. Next.
Did you notice that?
Yes.
There's really no drama, is there?
No.
Yeah.
Not what I imagined.
Yeah. So not like your brain had told you for the three days before you went down there. So the same thing is true now of settling this. Okay? They put this out there as if it's their only thing they're going to do.
Their chances of actually collecting anything from you, statistically, is zero. Ninety-eight percent of the people in your situation end up filing bankruptcy or just disappearing, and they can't find them. They collect almost none of these judgments. And they know that. They were so shocked that an actual human being showed up.
They didn't know what to do.
It never happens. So all that to say is this. You owe $7,000.. You could probably settle that for $2,000.. And I want you to scrape together $2,000 really, really fast.
What do you make?
I have $2,000.
. So actually, I'm an independent contractor. I do private college.
You do have $2,000?
Yeah, I tried to settle. I ended up calling them back yesterday after the court hearing because I had to do another motion to say payment installments of. I could afford $100..
No, don't do any payment. No payment installments. No. Do not give them any payments. Okay.
No. I already have the motion put in file day, so I don't know what to do with that. Like, I had to do another motion for them, you know.
For payments? You took an installment plan as a motion?
Yeah.
Okay. But call the judge and tell him you can't do it.
Okay.
Just tell him to pull that out. Because it's just saying, I looked at my budget, Your Honor. I'm sorry. I can't do it. I can settle with them for $2,000, and that's all I can do.
I don't have room in the budget to do this. I was just scared, and I shouldn't have filed that. I'm sorry.
And just tell the court clerk that and tell them to pull the motion off the docket. Okay? Okay. They'll do it. And then call up Capital One boy and tell him that you talked to your financial advisor, and your financial advisor told you to file bankruptcy if he won't take the $2,000..
Because I just told you to do that. I really don't want you to do that, by the way. But I did just tell you that, so you can tell him. I said that.
I mean, yeah. Honestly, it was my next option.
No, you're not bankrupt. You don't need to file bankruptcy. You need to bluff.
Oh, okay. Just walk away. Just go, all I got is $2,000.. If you want some money, Bubba, here's some money. If you don't want some money, we got nothing else to talk about, because I'm not paying you payments.
And if you come after me and start messing with my paycheck, I'm going to file bankruptcy on you. So you're going to get nothing.
I'm a Chapter 7.
. Tell him this. Tell him my financial advisor said I'm a Chapter 7, looking for a place to happen.
Oh, okay.
They all know what it means.
Yeah, because you are. And he knows the same statistics. I know, that as soon as he pushes you to the wall and garnishes your wedges, you're going to file and he's going to get nothing.
Now, I am not saying you're bankrupt. You're not, Amber, because you're going to scrape together $2,000.. Now, here's what we're going to do. He's not going to take it today, but if you keep pestering them, they might take it. In the meantime, pile it up to $3,000 and up your offer.
And keep upping it until you get it settled. And settle it for a lump sum for pennies on the dollar. $0.50 on the dollar max. $3,500 max. Until then, just beat the snot out of them.
Just worry them. Call them every day. Y'all ready to take some money? I got money. Y'all want the money?
When are y'all going to take my money? I'm begging you to take my money. I'm calling you to take my money. You don't have to call me. I'm calling you.
And just have fun with this. This is the Ramsey Show.
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George Campbell Ramsey personality is my co-host today. Our question of the day comes from Ethan in Minnesota.
Ethan says, my wife and I would be best described as Baby Step-ish up until the beginning of this year. Unfortunately, we always seem to slip back into debt and I can't figure out why. We just completed Financial Peace University at our church, but I need help with prioritizing. While we're still in Baby Step 2, trying to pay off our consumer debt, we've been putting 12% into our 401K because of my company's 100% match. We also have $7,000 in a Robinhood account and $10,000 in savings.
Together, our income is approximately $150,000 a year. My question, should I pull the Robinhood 5K and stop our 401K contributions temporarily? I honestly don't want to touch the $10,000 in savings. With five children, an aging furnace, and a second vehicle, Murphy is bound to stop by soon.
Ethan, I don't think we can help you.
You've decided to do Ethan's plan. Yeah. And he said he's going to keep doing Ethan's plan.
So, I mean, you know exactly what you're supposed to do and what we teach you to do. And millions of people have followed exactly what we told you to do. But for some reason, you, the broke guy, don't think you need to do it. I don't think we can help you.
You're not willing to be helped.
They've already been through the financial piece.
If I hire a personal trainer who has a six-pack or an eight-pack, is ripped like a Greek god, and I go down there in the gym with my keg, and he's got a six-pack, my belly sticking out in front of me, and I go, I don't think I agree with your nutrition plan. I don't think I'm going to do those exercises the way you think they ought to be done. You know what that is, Ethan? Dumber than crap. That's what that is.
And that's what this email is. It's dumber than crap. It's unbelievable.
Well, he's wasting his own time, and he's wasting everyone else's time. Because, clearly, you like your plan, even though your plan's not working.
That's essentially what you said. And the results suck, and you're financially upside down and sideways, and you've been all around this. You know what we're going to say, and yet you tell us what the guidelines are that you will go along with. Give me a break, dude. Go do something else.
Quit wasting your time with our stuff. Because if you're half-butt going to do it, you're going to get a half-butt result or a worse result, even. So, no, I don't think we can help you. All right. Dawn's with us in Austin, Texas.
Hey, Dawn, how are you?
Hi, Dave. Hi, George. Thanks for taking my call. Sure.
How can we help?
Well, we were wondering, my husband and I, we think we're in Baby Step 7.
. We think we've maxed out the 529s from where our kids are going to school and wanted to know if we want to continue to contribute on their behalf, where's the best place to place those investments now that we're going to be withdrawing for the 529 plans?
You're not going to put any more in the 529, right?
Well, we've got, they're going to end state college tuition. It's about $120, and we've got $150 in there.
Okay, so you're good.
Trying to identify.
I mean, you can cover housing and books out of that, too, so you're fine. But, yeah, so you want to put more money aside just for your kids, just for life, or in case you wanted to upgrade something at the school?
Right. And we're already in the rhythm of doing so, so we wanted to continue.
Okay, cool. I wouldn't. I would just put it in your name and gift it to them later.
Okay. Well, I appreciate it. Thanks so much.
Yeah, so if you've got an extra $400,000 or $500,000 laying around, you want to give the kid a couple hundred for their first house or something, that'd be cool. All right.
I appreciate it.
Yeah, and you can look into it. It's not going to hit, there's an estate gift limit, but it's millions and millions and millions.
$27 million this year.
So it'll go against that, but you're not even going to go near touching that. So don't be worried about that. What a cool way to bless the kids.
Yeah, very neat.
Parents of the year right there.
Very neat.
That's the kind of stuff you can do when you do the baby steps.
Well, baby step seven, she's brilliant. I mean, well done, Dawn. Way to go. I mean, you killed it. Quite the opposite of our emailer.
And the thing is, like, I've run into people now that have been doing the Ramsey stuff so long, George, that they did this. They had a wedding fund fully funded. They have their education fund fully funded. The wedding fund is in their personal name, but they're able to then pay for their kid's wedding, right? And their first house, pay cash for it.
Pay cash for the couple's first house. And the guy said, I just make my kids sign a little one-page letter that promises that they will never go into debt for anything if I give them a free house so that I'm the last person with my last name to ever have any debt in this branch of the family tree. Wow. Completely break the cycle forever.
That's legacy. That's the definition right there.
It's fun. That's fun. That's pretty cool. And Dawn, she's approaching being able to do that. Yeah.
Well, I wanted to ask you about that. I was going to do it off-air. I'll ask on now, because this is good teaching. For those of us that are following the baby steps, I got about one-year-old little girl now, and I'm thinking about these things. Hey, I'd love to help cover.
I want to cover the wedding. Maybe the 401-Dave plan for her first car. I pitch in half. She gets some skin in the game, pitches in the other half. Obviously, pay for college.
Make sure we cash flow that. Maybe cover her first house. Maybe with her spouse one day. Are those wise things to do? It's sort of like getting an inheritance early in a way.
Yeah.
It is very wise to do, but the wisdom is contingent upon the kid buying into the value system. If the kid's off the ranch, obviously they're out there going crazy. and whatever. We're doing heroin. I'm not buying them a house.
Obviously, your child's not going to be doing that.
Dear God, I hope.
You know what I'm saying. Or if they marry somebody who's got a screw loose or something, then we're not going to do it. But if the two of you are sane and you buy into George and George's family values, and this is what we espouse at our house, and if you're going to do that, then silent note here, just a simple letter. It's not a contract. But I just want your name written down here.
I want you to say out loud, not just verbally because you forget. I want you to write it down. I'll bring this back out later if I need to. It says, we will never borrow money again, because my dream is that my children, my grandchildren, my great-grandchildren, will never have any debt because of the hard work that I did and the teaching that I did, teaching them. But it won't work if you haven't invested into your child's work ethic, their ability to be generous, their ability to save, their ability to live on less than they make, their ability to understand a budget, their ability to hate debt.
If they're doing all of those things and then you give them a house and their new spouse is willing to go in on that, then boom. You know, you got the deal, right? That's impressive. You can change everything. And you're exactly, I mean, you got a one-year-old, so you can do this.
You'll be able to do it. But, you know, it is, well, that's controlling. You're being a control freak.
You're saying because it has the string attached of never going to debt. But the truth is, why would you ever need to go into debt at that point?
Well, because some idiot on Instagram told them to.
You know, leverage some real estate.
Yeah, or some idiot on Tic Tac told them it was a good idea to get passive income. But the thing is this. Yes, it is controlling. It's my freaking money. Want my money?
Do my plan. Don't want my money? Do your plan. That's how this works. It's simple.
And it's, you know, that's the way that my kids were raised and the way, you know, so, yeah, it is controlling. But guess what? Good parenting is controlling. Don't play in the street. You will get hit by a car.
That's controlling. You know? We're not raising wild animals. We're raising humans. They're supposed to have boundaries.
They're supposed to have guidelines. They're supposed to have values. And, yeah, so this is just one of those things. So, of course, it's controlling. All good parents are controlling.
Brush your teeth because you'll want some later. You know? I mean, this is controlling, right? This is, yeah. There we go.
That's a timeless wisdom.
It's a good thing to have some.
Now, I get questions about this. The UTMA, the UGMA, the Unified Transfer to Minors Act. The problem with that is that when they're 18, they automatically get the money if it's in their name.
Exactly.
Which can be very dangerous, to your point.
Exactly.
What if there's misbehavior? We don't know what your kid's going to be like at 18.. Exactly. So, to have $150,000 could be detrimental.
Exactly. So. I put it in my name and then gifted it to them later. Now, in the old days, there was no 529.. So our children actually had UTMAs and UGMAs.
That was their college funds. But I told them, if you're misbehaving, I'll just hide the account. You won't be able to find it. I'll steal it from you. So good luck with that.
Because I'm not going to fund your heroin addiction. So, you know, we're going to have to keep this on the line here. But that's not a suggested strategy. This is The Ramsey Show.
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. Dylan's with us in Nashville. Hi Dylan, how are you?
Good, how are you?
Better than I deserve. What's up?
So, both my wife and I are students in our last semester of college, and we are expecting our first child in February.
Well, congratulations!
Thank you. We're pretty excited. My question is, we have two options on where to go after school. We can go to both of our families in Pensacola and make about $140,000 net. Or, our second option is to stay here in Nashville and make about $260,000 net.
So, we're having a tough time deciding whether to be around family, as we're learning how to be a new mom and dad, or to throw away that money and change our future.
Okay, that's weird.
There's not that much discrepancy between Nashville and Pensacola. What are your degrees in?
So, I'll graduate with an electrical engineering degree, and she'll graduate as an attorney when she passes the bar. So, if she's in Pensacola, she'll do plaintiff work, and she will spend a couple years in the prosecutor's office. Why? Getting experience. To get trial experience.
It's hard to.
What is she going to do if she's in Nashville?
She'll work for a defense attorney.
Why not work for a defense attorney in Pensacola? You're not comparing apples to apples.
No, not really.
How are you guys so sure and so set on all of this? It sounds like you have this all dialed in.
Yeah, so we've been.
. I've done about five internships, and she's done about four. So, her dad does law in Pensacola, so he asked around for salaries in Pensacola. And in Nashville, we have our salaries, just because we've been talking...
You cut out. You have your salaries. Why?
So, in Pensacola, her dad works as an attorney in Pensacola, so we got him to ask around. And in Nashville, it's the salaries that we've been talking to. We've been working for them throughout college.
Okay, a defense attorney in Nashville, one year out of law school, does not make double what a defense attorney in Pensacola makes one year out of law school. That's just not apples. That's not true. You've got bad stats, man.
No, really. You do have bad stats. Her dad got... One of you. two got bad numbers.
Sure. Okay.
I mean, seriously. So, you're talking about her making what in Nashville?
$185,000.
One what?
$185,000.
She's going to make $185,000 in Nashville? She'll make $185,000 in Nashville. As a defense attorney, one year out of law school?
Yes, sir.
Is this an internship that they offered her that?
Yes, sir.
Okay. And her dad asked around in Pensacola and said a defense attorney one year out of law school in Pensacola makes what?
About $85,000 their first year.
I just don't perceive that. I mean, we've got... I don't have any criminal defense attorneys, but I've got way too many lawyers that I give money to. And I just do not perceive that much difference in the Pensacola market. You're talking about less than 50%.
It's not logical. Something's wrong. I'm telling you these numbers are wrong. Or she got the best deal on the planet ever, which the $185,000 sounds high to me, but I hope it's right. And the worst deal ever, or just a perception in Pensacola.
So, in your situation, you're being offered what both places?
I'm offered probably around $85,000 to $95,000 in both places.
Okay. See, that's more logical. Okay. So, the swing is. the discrepancy in her pay.
Okay. And also, she kind of dumbed it down and goes, well, if we go back to Pensacola, I'm going to work in the prosecutor's office and make nothing.
Yeah.
Really? Because you took it all the way down to nothing, then, right? That's not the $100,000, right?
Yes, sir. So, it would be either $65,000 in prosecutor or $85,000 for defense. Yeah.
Private. Okay. All right. So, then the second question is, let's assume those numbers work through and get some sanity to them. I'm still not okay with this discrepancy.
I've got to work through that. if I'm you. Sure. You do whatever you want to do, but I've got to work through that because it's not logical.
The second thing is, because Pensacola is not a huge market, but Nashville is a medium-sized market. I mean, it is a metropolitan area, I mean, for sure. And so, anyway, the second thing is, if we stay in Nashville 10 years from today, from a career perspective, are we glad we did? If we go to Pensacola 10 years from today, are we glad we took that career path? Because if the curve separates them even more severely,
you know, projecting out 10 years, then that's a bigger part of the decision. In other words, is your opportunity more limited severely by being in a smaller market, both of you? You're upside. Because I would expect your income to double in that decade or more in your field, okay? And I would expect hers to probably do, probably double as well during that time in a normal market situation.
But if you feel like in a quote-unquote smaller town, you are not going to have that opportunity. That's the second question is, what's the long-term implications of this decision? The third question is simply, where do I want to live?
Okay.
And Dylan, I'll tell you, as a new dad, I got about a one-year-old. My in-laws, they're near Pensacola. My family's in Boston. And they fly. And it's a one-way direct flight for them to come visit us.
It's a one-way direct flight. We go visit them. And it's been great. And so, I wouldn't make the decision just based on….
As a matter of fact, your in-laws moved away.
They left us.
They were here. And they left you like an orphan.
They wanted to retire at the beach. Can you imagine, Dylan?
They went to the beach. They went to Pensacola and left you.
So, there you go. That's the truth. And it's been great for us. And I wouldn't trade it. And Nashville is wonderful.
So, I would be where you guys want to be long-term, to Dave's point. And the family part is just a bonus. And it's hard not having family nearby. But we got a lot of support, a lot of community. You can pay for babysitters and daycare and be just fine.
I would not make the decision only on the math today, even after I've adjusted the math for the questions I beat you up on. Okay?
And who knows? Maybe the in-laws, if the baby's cute enough, they move to Nashville. And decide, I'd love to be near the grandbaby.
They might move away. If you move to Pensacola, they might move away.
That would be detrimental. Like yours. That would hurt my feelings. That's personal. at that point.
They just don't like you.
We moved down here for you, and then y'all left. Yeah. This is the Ramsey Show.
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George Camel, Ramsey Personality, is my co-host today. We were talking during the commercial break about the young electrical engineer and lawyer on the move, and George and I both had an additional thought.
An epiphany, if you will.
There you go. There you go. That's what happens during commercial breaks. We have epiphanies, I guess. But anyway, the other thing you can do, folks, if you're facing something like that, number one, if you've got this vast discrepancy, you need to look into the differences, because it's not logical.
Okay, I'm going to go back to that one more time. But aside from that, if you can make $260,000 a year at 20-something years old, brand new, married, just out of school, and it's not a town you had planned to live in, look at it as an adventure and go, do it. And say, okay, we're going to do this for three years. We're going to commit to three years, and at the end of three years, we're going to reassess. I mean, the new baby will be three.
We can still move and be near the grandparents.
We can figure out if the travel has been too strenuous on anyone, back and forth to see family and that kind of stuff.
And, you know, while we're having this adventure, we're going to stack some cash. But it's not like you have to – one of the things that we end up doing with a purchase of a home, certainly with a purchase of a car or a decision to make a move on a career, we act like that. you can't undo the decision. Okay, if you don't like the car, you can sell it.
If you don't like the house, you sell it. If you don't like the city, move.
You know what I mean? So these things are not as permanent as our emotions. We fret over it, like God's going to say, you cannot leave, you get one chance.
Decide carefully.
I hope he sounds like that.
I mean, seriously, is that what he's going to? – no, that's not how it works. If you get there and the town sucks, leave. Or you don't like the town, leave.
Nothing is permanent unless you make it permanent. So there we go. David is with us. David is in Minneapolis. Hi, David, how are you?
Hi, I'm doing good. How are you doing?
Better than we deserve, sir. How can we help?
I just have a question. Okay, so I'm receiving inheritance from a family member that had passed away, right? And I currently am living with my girlfriend, Kelly. And at first, when I first started getting the inheritance, she was, like, directed as, like, a payee, as, like, a watch over guy type of thing for me with my money. And I just recently found out that about around $30,000 to $40,000 is just gone.
from that, that I should have saved in a bank account. And it's just missing, don't know where it's at. How can I, like, legally try to go about getting my money back in returns to me?
You're saying you put your girlfriend on your account and she stole your money?
Yes. And there's no, like, receipts. There's no nothing.
Why is she not the ex-girlfriend?
I'm trying to figure that one out myself as well.
Yeah, me too, because I got about a three-and-a-half-second rule on this one, buddy.
I have a low threshold for dating criminals and people who committed fraud against me.
Yeah, I've asked her about it, and she's, like, she's verbally admitted to it, but there's nothing I don't know.
What did she do with the money, pray, tell?
I don't know.
Well, did you ask her? You stole my $40,000.. Where the hell is my money? This is how this sounds.
It's a natural line of questioning.
She literally tells me. I don't know. That's literally it.
Yeah. I literally don't know where you're going to be living by nightfall, because I'm setting all your crap out in the street.
Right. And then I've had a good friend of mine, my buddy, that's one of my neighbors, he's helped me with it and tried to add up and do some financial checking with it. And a couple of times, that's how we found out about this, and a couple of times I've actually had to, I've gotten back pay with my inheritance a couple of different times for two years.
David, is she still on the account today, honey?
No, she is not.
Is she still living in your house? Yes. Why?
She has nothing to do with my bank account.
Why is she still in your house?
I'm renting.
You need the rent money?
No.
We're both on the same lease together.
Is your phone cutting out or is somebody in the background?
I'm with my friend. And he's with me as well.
He's telling you what to say?
He's helping me, like, with.
Okay.
David, how old are you?
I'm 29 years old, sir.
What do you do for a living, sir?
I currently do not have a job at the moment. Why? I'm looking for a new job. Why? I lost my job.
Okay.
Why?
If I'm going to be honest about it, from my past, substance abuse.
Okay. Okay, that's fair. How long has it been since you've worked?
Honestly, about four or five months. About almost five months.
Okay. All right.
So, I think you need more and better counsel in your life than just your friend who's trying to help you. And I'm glad he's trying to help you. But you need some other folks in your life to help guide you through putting your life together in a way that this kind of thing doesn't happen to you, okay? Yes, sir. And so, you are in the Minneapolis area, right?
Yes, sir. What I'm going to do is Christian's going to pick up when I put you on hold, and we're going to connect you with a good local church there and get some of the pastoral team to come around you and help, guide you back into a career and guide you to make sure that these kinds of things aren't happening to you, help you stay sober, help you with your sobriety, and help you put together a life that doesn't leave you vulnerable. To this kind of thing. And that's going to include, my suggestion is that this lady needs to leave your home today, okay? Yes.
And she's not your girlfriend anymore.
Because people that love people don't do this to other people.
Give me one second.
And tell her to take her dog with her, too. Yeah.
She's a payee on the account.
Well, I don't know what – I don't think he's going to get his money back because she spent it. It's gone. It's not like she moved it into her name and has done a beautiful investment that he's going to get back. There's no one in this whole story that's very smart. And so, no, you've got to separate yourself from people that bring you harm.
You have to put physical distance between yourself, emotional distance, spiritual distance, and legal distance. But, David, you're not going to get your money back. Your money's gone. The only thing you can do is prevent this from happening again by putting your life together in such a way that you have a sustainable life where you don't need this inheritance. And it becomes a blessing that you can grow and build yourself a prosperous life long term.
But you're not going to do that with this character under your roof. Okay? And when someone steals your money, there is no magic hack to help you get your money back. Most of the time, when someone steals your money, it's gone. You know, very rarely.
And, you know, you could threaten to prosecute her criminally if she doesn't return the money and see if she coughs some of it up.
But I don't know that she can. Because I think she probably spent it. I think it's probably...
Probably spent on drugs. I don't know. I have no idea what she spent it on.
Another reminder, never combine your finances or life with someone you're not married to.
Ever. Period. Ever. Ever. Never.
do that. Good point, George. This is the Ramsey Show.
George Campbell Ramsey personality is my co-host today. Thank you for joining us, America. We're glad you're here. If you want to win with money, it's an intentional act, meaning you have to do it on purpose. You don't accidentally win at anything.
And money is true as well. If you want to build wealth, no one accidentally builds wealth. Oops, look what happened. They don't say that. They got worked real hard.
I lived on less than I made. I saved and invested. I have been generous and careful. I've been wise over a long period of time. And now I'm very wealthy.
This is the story we hear over and over and over again. How do you do that? on a daily basis? You do it with a written game plan called a budget. And we tell folks to give every dollar an assignment.
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Hi, Dia. How are you?
Hi, good. Thanks for taking my call. Sure.
What's up?
So, my husband and I, we started a trucking company in 2022.
. He was the owner-operator previously. And since we started the company, we just kept losing money. And now we're at the point where we have everything maxed out, all our credit cards, business credit cards and personal. We have a truck loan.
And we had a claim that wanted to go into court. But they kind of backed out. for now. We have two companies that actually need their payments as well. So, that's our situation right now.
And we don't know if we should be filing bankruptcy or if we need to figure something out, because we really don't want to file bankruptcy. But it's just that everyone is calling us, you know.
It's scary, isn't it?
All the fun stuff. Yeah, very, very scary.
I'm sorry.
So, right now, we have two little girls.
How old are your babies?
One's about two months. One's just turned four. Wow.
So, what are you guys, 28?
We are in our 30s, early 30s, 32 and 33.
Okay. All right. Okay.
So, he's still running the company, right?
So, for now, we had to shut down because our insurance was just costing way more than we were making.
What do you owe on the truck?
On the truck, currently, we owe about $8,000.
Okay. What's it worth?
It is worth about $20,000.
Good. Okay. If you file bankruptcy, you understand that the bankruptcy court is going to sell the truck, right?
Yeah. Yeah, and we don't want that, because that is practically our source of income, you know, right now.
You don't have an income. You have a losing business.
Yes, we do.
So, what would I do if I woke up in your shoes and I had been where you are? I've been so scared I couldn't breathe, with a brand new baby and a toddler and a marriage hanging on by a thread and a failed business. I've been right there. That's what happened to me when I was 28..
Yeah. Yeah, it's been rough.
So, what would I do if I were in your shoes? I would tell him to take his CDL and go get a job tomorrow.
Okay. So, currently, he is working for a company. He's a driver now. He just started about three weeks ago. Perfect.
What's he making?
He is making about $1,500 a week. So, the other thing is the truck that we have, the turbo, broke down, and that's $3,000. while he was on the road. He was working, like, essentially as an owner-operator. And then, once the truck broke down, it stopped.
So, the truck is worth $28,000, but it has a $3,000 broken item, and you owe $8,000.
Yeah. Yeah.
So, you're going to sell it for $25,000 because somebody's got to fix the turbo. And you're going to take the rest of the money and start settling your debts.
Okay.
Okay. Let's pretend you walk out of this with $15,000 or $20,000 cash after you sell the truck.
Okay. I would say more $15,000 with the turbo and everything.
Yeah, I think you're probably right. I'm just saying. Okay. And he's making $1,500 a week, and he's working like a crazy man. He's not scared of work.
He's not.
No, he's a hard worker. Y'all have not been good at the business side of it, but he knows how to drive a truck. Not at all. He knows how to drive a truck, and he knows how to work, and he can go make money, and he's good at that. So, we got a $6,000 a month income now, and you got babies.
Is there anything you can do from home to add income?
I'm looking to see if I can find a job from home. I used to work in the pharmacy as a tech, and I was going back to school. I wanted to go back to school.
You're not back to school right now. Right now, we're trying to eat.
Okay. Yeah.
Right now, we need any income you can create. that's legal and moral and doesn't leave your family in jeopardy, okay? Yeah. So, if he's making $6,000, and you could pull in another $2,000, now we got $8,000 to work with. We got $15,000 from the sale of the truck.
You told me you had $70,000 in debt. Yes. Credit card debt is how much?
Credit card debt is about $50,000.
. It's like $10,000 on each.
So, the fuel bill that's calling you is how much?
The fuel bill, one is $2,500, and the other one is $10,000, and he took it to a small court claim, but they didn't serve us. So, we talked to an attorney. He said not to show up to court, because until they serve you, you don't have to do anything with it.
Okay. So, here's what I want you to do. I want you to take the $15,000.. Okay. Sell the truck, and do it this week.
Okay. Sell the truck. Now.
Part of what happens when you get this deep in the mud is you slow down. I want you to speed up.
Okay.
You got $15,000 in your hand. You have $12,500 in fuel bill. Pay the $2,500 as soon as you get the $15,000.. Just pay them. You owe it.
Okay. Call the 10K guy and say, I've got a little bit of cash, but not enough to pay you the whole thing. What would you take? Talk to him on the phone. Okay.
What would you take? We're closing down. We're out of business. We're trying to keep from filing bankruptcy. I got a little bit of cash, and I want to try to pay you before I deal with the credit cards.
How much would you knock off if I bring you cash today?
Okay. And see if he'll take $5,000 or $7,000.. $5,000, $7,000.. Okay? Okay.
And get that $10,000 down just a little bit, and go take him some money, because that's a small business guy trying to eat, too. Right?
Right. Yeah.
You want to pay him. You want to pay him. Okay. So the credit card company can jump in a creek. I'm going to take care of those two fuel guys first.
Okay.
That feels pretty good, doesn't it?
It does, yes. Right now, we're trying to make payments for the credit cards.
I don't give a crap about the credit cards. Let them sit. Let's get these fuel. Let's get the truck sold. Get the fuel thing taken care of.
Settle the 10.
. Get it in writing from him, in writing, that he's accepting $7,000, $5,000, whatever it is, as settlement in full on this debt. No more is owed. Okay. In writing, or don't give him the money, and then give him a cashier's check that day.
Walk over there and hand him his money, and just pay the $2,500.
. Now, those two are gone. You've still got a little bit of money in your hand.
Yes.
Okay? Now, I want you to line up and start doing a budget and take care of the four walls, George.
Absolutely. That's food, utility, shelter, transportation, and your basic insurance. Outside of that, we're not spending any money. But think about this. Now, you're down to 50K of credit cards.
You're making 72.
. There's no need to file bankruptcy. We're going to knock this thing out in two years. Do you see how that works?
You can clean these credit cards up as you can get to them, but you don't pay credit cards until your family eats, and your rent is paid, and the lights are paid.
Okay.
Credit cards are not first. They're last.
Okay. My husband just worries about his credit score.
Who gives a crap about his credit score? He just lost a business.
Do you know what a credit score does? Yeah. It gives him access to more debt. That's how he got into this mess.
Right.
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