There’s a Way out of the Paycheck-to-Paycheck Cycle

Hi,

I make about $75,000 a year, but I'm about $49,500 in debt, and I'm on baby step number one, so I'm like freaking out right now. Wow. A tale as old as time, huh? Oh, my goodness.

Well, as far as helping you go, I mean, we're just going to say, okay, Tiffany's, a single mom, makes $75K with $50,000 in debt.

How are we going to help Tiffany? And we're just going to approach it that way. How we got here, sad,

well, heartbreaking, but that's where we are, correct? Yes. So let's just look out the windshield and say, go. Can someone who's making $75,000 have a great life and raise a kid and pay off $50,000 in debt? Absolutely.

We do it all the time. Does your job have paid maternity leave?

I haven't confirmed with HR yet, because I haven't really told anyone just yet. I'm still 10 weeks. So I'm still early on. You got family in the area? I do.

So I actually moved in with my mom last year because I started a business and I was trying to save money on rent.

And so now I'm about to have a baby. So she's like, okay, well, you have to figure out your situation. So I'm going to have to put the business on hold and get my own place.

It's very new.

It's a recent memory. So nine weeks, eight weeks, was the old standard back in the day. People did that all the time. And since that's what you have paid, you're going back to work at nine. Right.

Because you got to pay the bills and got to pay, raise a baby. And so what we're going to do is teach you how to live on a game plan, a written game plan. And Jade can coach you on that and put you on a budget, a detailed plan, and what's coming in. Every dollar that's coming in, we give it a name, an address, where it's going, what it's doing, make it behave. So it has food.

It has lights and water. It has rent. It has the other stuff. And then we start figuring out how we're going to begin to whittle away at this $49,000 in debt. How much of that is your car debt?

My car is paid off.

That's good. That's good because.

We'll tell you about the baby steps. We'll make sure you've got Financial Peace University as well. But what I want you to do right now, between now and when the baby is born, regardless of what you learn about the baby steps, paying off your debt, all of that, right now is just save up mode. You're saving up all your money. You're pausing what you learn about the baby steps and you're saving up all your money for when this baby is born and for you, because you've got to get out of your mom's house.

And so when the baby comes in the next nine months, eight months or so, and everything's good and happy and taken care of, now you have that big pile of money, and that might be first and last month's rent. That's going to be some savings for you to get out on your own feet and start.

We pay off all the credit cards. Boom, that jumpstarts your get out of debt once you get the birth behind you and there's no issues. But in the meantime, Jade's right. Let's see how big a pile of cash we can pile up, because you're going to lose no ground on your get out of debt plan or on your other plans as well. Now, Financial Peace University is a nine-week class.

It's taught online. We're going to show you every detail of how to handle money like a grownup. Everything about becoming wealthy, getting out of debt, insurance, real estate, everything is in there. If we give you that class for free, do you promise to take it? Yes, I will.

Don't you miss one? No, I promise I would not. This is your time. This is your time. Okay.

So yeah. Bring it, bring it. That's an issue.

Wow. It's a self-centered little, yeah. Okay. What do I know? This is the Ramsey show.

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Jade Walshall, Ramsey personality is my co-host. You've never seen a reporter run up after the Super Bowl of the World Series to the star player and say, you just won the Super Bowl. How'd you do that? They never say, I don't know. I just got off the bus.

No one accidentally wins.

Winning at marriage, winning at your career, winning at money is a series of intentional acts. Around here we say you should give every dollar of your money an assignment. Every dollar a mission. Every dollar should have a name. Use whatever vernacular you want, but make your money behave instead of wondering where it went.

Make it behave. That's why we named the world's best budgeting app that we started working on many years ago and have continued to iterate and improve it to where it literally is the world's best budgeting app. That's why we named it every dollar because you give every dollar an assignment and it works wherever you are, on iOS or Android or online. It's free and immediately you can start it for free and immediately you see where you're standing with your money. You can get organized and if you're new to every dollar, we're going to show you, in addition to doing your monthly budget, a long-term financial roadmap.

Track your net worth, your debt free date, your retirement date, your process on the progress on the baby steps, and we're going to proactively coach you to build wealth. Download the free app for iOS or Android or go to everydollar.com and put it on a desktop. and Jade, you and George are going to be hosting a live stream on YouTube on the 11th, later on this week, this month, and setting people up to.

We'll show you everything. We'll have every dollar pulled up. You asked us can I budget and still enjoy my life? The answer to that is yes, but we'll go into detail. George and I will.

You also asked us how do we deal with changes that come up throughout the month, and so we'll be covering that, as well as how couples can best budget together. So definitely stay tuned for more details on that live stream. We want to hear from you and, in the meantime, if you want questions, if you have questions that you want us to answer on that live stream, you can email them to ask at ramsysolutions.com and we'll be sure to take a look at those, and maybe yours will get.

Perfect. Very cool. Very cool. Open phones here. 888-825-5225..

Wilson is with us in Daytona Beach. Hi Wilson. Welcome to the Ramsey Show. Hi. How can we help?

So me and a few of my friends.

Okay. Yes. How many of you is it? It's five of us. Mm-hmm.

Okay. And how old are you guys? We are all between 22 and 24.. Okay. Have any of you run?

About, yeah. And it's not you buying a franchise.

Yeah. And we probably

Yeah. It gets pretty expensive. Really? You'd be surprised. Yeah.

Yeah. No way. Okay. We coach through Entree Leadership. I do a podcast also where I answer small business questions on entreeleadership.com, okay?

And you can tune in that podcast once a week. But been coaching small businesses. We coach about 10,000 small businesses across the nation. I love small business people. So I love your entrepreneurial zeal.

And my job is to not be a dream killer, but I love killing nightmares. Yeah. And what you're describing has three major faults to it. And you're walking into a nightmare, okay? None of you have any business doing this together.

The biggest disasters I ever get into coaching are partnerships. And that's with two people, much less five guys in their early twenties who climbed walls together, drunk beer together, and decide now we're opening a business together. And that's all the more thought they put into it. It's a bad idea, okay? You're getting ready to destroy relationships.

Of the five, four of you aren't going to squat. And I don't know which four it is, but it's going to be awful. Horrible. The only ship that won't sail, Wilson, is a partnership.

Okay. Number two, you have, and I don't mean this, I don't want this to sound disrespectful, okay? But the ability, but I've run P&Ls on businesses. I run about 15 businesses inside this one, plus a couple other things I'm involved in. The chances of you getting a return on investment from individuals.

paying you to climb a rock wall of $200,000 is almost, there's no way this ROIs. Yeah. There's just no way. And so, I mean, that one you might overcome, and I might be wrong on, but the partnership you won't overcome, and the fact that you're $200,000 short. And here's the problem.

If you go borrow this money, you're absolutely, you'll borrow this. Here's the thing. Two things are going to cause this business to fail. Three things. Borrowed money, a partnership, and a bad pro forma, a bad business plan where the return on investment is not there.

The third one I might be off on, but the other two, a hundred percent, are going to doom this endeavor. You ain't going to make it. I'm all about killing your nightmare here. Don't get into this. You're going to get in a nightmare.

Now, let's figure out another way to scratch the entrepreneurial itch.

You know, finding someone that has a gym with rock walls, and how can I go in with them, become the promoter, own a piece of the action with them. That's a bit of a partnership, but maybe we can have a joint venture here, and you get out there and learn how to run the business in a gym of something as nuanced as rock climbing. Okay. And get in there and get your, get some chops, man. Get some calluses, no pun intended, but some mental calluses to, you know, to figure out how this whole world works.

Because you guys are standing back watching it, and it looks like to you, looking in from the outside, that these guys with these $200,000 or $500,000 rock walls are making bank. I don't think they are. Yeah. I want you in the inside of the beast looking at the details.

I mean, like, to me, it's similar to like opening up just a regular gym, and it is like one of the fastest growing sports, like, in the country, but

. You know what the failure rate on gyms is? It's pretty high. Yeah. You got to look into that.

And this is a nuanced piece of a gym. Yeah. It's not a whole gym. And so it's an add-on to a gym. That's what it is.

So you need to learn everything about the gym business. It's like the restaurant business. It'll scare you to death. The failure rate is astronomical. It's.

one of the beauties of the CrossFit thing is they don't buy nothing. They just open up a place, and you're going there and sweat. They don't have any equipment. They don't have any equipment. You're the equipment, you know?

That's one of the reasons that thing's working. 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.

to get a free quote. Call 800-356-4282.. That's 800-356-4282, or go to zander.com.

Jade Walsh, our Ramsey personality, is my co-host today. Thank you for joining us, America. Open phone's at 888-825-5225.. Nicole is in Philadelphia. Hi, Nicole.

Welcome to the.

Hi, guys. Thanks for having me.

Can I rephrase that and see if it's still correct? Sure. How do I proceed in building wealth if my husband doesn't want to include me and talk about money?

Is that still correct? Yes. Okay. So it's not really getting into the baby steps is my point. It's that you're trying to figure out a way to move your life forward financially, and he doesn't want to be involved.

Yes.

It seems to overwhelm him every time we talk about it.

We've been married for seven years.

Yes. Like what?

This is just kind of a symptom of what I'm not sure.

Yes. And so him not wanting to be involved in this is one of many things he doesn't want to be involved in. And all of those, I don't want to be involved or I'm overwhelmed, or whatever phrase we want to use this, is due to a problem. And those are all the symptoms. Does that sound accurate?

So now your question changes to, how do I get my husband to address his issues?

Because until he addresses those, he's not going to get a job. Until he addresses those, he's not going to feel robust and have a swagger to go enjoy life and take life by the horns. Until he addresses those, he's not going to feel ready to draw his sword, pull his gun, or whatever metaphor you want, and attack the world alongside his wife to go build wealth and have a great future together. This guy's hiding because he's scared, because stuff's happened and he's feeling pretty broken right now. Am I missing something?

But I'm not qualified to help you with this. But all I can tell you is just as the old guy here, and you can speak to. if Sam was this, if this was happening with Sharon or if this was happening with me, I'd tell you what Sharon would do, because she's pretty freaking proactive.

We would create a different crisis and define the crisis and say, we're going to address this problem, whatever it is, and we're going to find a solution to it. And it sounds like that involves, if it's in my world, it's meeting with a therapist, with a counselor, and getting very involved with your pastor at your local church, and having a spiritual approach and a psychological, emotional, relational approach to getting to the bottom of whatever's going on so that he can have a wonderful, sustainable life going forward. Oh, and, by the way, that's going to rub off on you.

Does that sound right?

Is that too blunt? Does that mean?

Yeah, uh-uh, not okay with me.

And I've got, I've gotten very intentional. You know, he's been on board with some things and thinking I'm crazy on others. And I sold my car a couple of weeks ago. Um, I, I, I've got hundreds of stuff on Mercari and selling a bunch of stuff.

I'm sorry. You guys are facing this. Um, well, I, um, yeah, I, I just, you, you, you go to counseling if he won't, and talk to the counselor about a proper way, because I'm not qualified to tell you, to draw him out and to create the crisis that leads him to healing. Because you're not going to lead him to healing. If you go fix all the financial stuff, it's not going to fix this.

So, I mean, you would, you, Sam and you, I know how you, I know how you and Sam work.

Southern. Sharon is my girl.

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Hey, we appreciate all the word that you've been spreading out there. We know you are, because our numbers are up ridiculously on YouTube. Wow. I mean, bizarre. how many downloads on YouTube we're having in a single day.

The number of hours listened is the number of downloads over a billion and a half. now. That's bizarre. Same thing on the podcast, over a billion. We were the first.

We were number four podcast of all time to hit a billion downloads on Apple. And some others have done it since then, but that's where we've been. You guys have been keeping us up at the top one, two, three, four, five on the podcast list and way up there on the YouTube stuff. And talk radio numbers are. Thank you.

Thank you. Thank you. Thank you. Thank you. So continue to help spread the word.

Click the follow or the subscribe button. It makes a big difference if you do that. Thank you for doing that. Watch the show. Listen to the show.

However, you do it. Click the share button if they have one, or cut a link out and send it to somebody. Say, hey, listen to these crazy people. They're helping people because we do. We are helping people, and people are entertaining too, if you didn't know.

So just listen to the show, if you don't believe me. And, um, the, uh, you know, and of course, leave a five-star review. If you didn't get anything nice to say, don't say anything at all. So, Jade, you know, talking about the trolls, the newbies, we had new people start at Ramsey every other Monday. We have a new batch, come in and the newbies always meet with them.

Their first 10 minutes on the job, the CEO shows up. And so I go in and sit down and answer questions with them, talk to them. And one of the guys is like, how do you put up with the trolls? And I'm like, it's really easy. They're irrelevant.

They're irrelevant. The comments. What about the negative comments? They're irrelevant. Here's what I know.

Here's the numbers on Twitter as it exists today. They call it X, um, 10% of the members of Twitter do 80% of the posts.

It's just about all trolls. So that tells you how irrelevant the trolls are. And when I was a kid, we read a story about Billy Goat Gruff and the trolls. So yeah, that's what trolls was not something when I was a kid that you were proud to be called. You did not want to be called a troll.

Now it's like a badge of honor for some of you people who don't have a job or something, but, but you know, what we've figured out is you're statistically irrelevant.

The general manager had absolutely nothing to do with whether the movie played or not.

What's up?

Um, and we're looking to buy our first house. We're renting right now.

, She's 31.

Correct. So there's no fear that your life is going to be affected negatively in terms of living, because you're used to living on less than you make.

That's a good fear. That's wise. If that's where the fear is, what else would you, what else would the fear be? Tell me, I don't know where it's coming from.

So it's, you're just switching it, like Dave said, from one savings vehicle to another savings vehicle.

com and pick out a realtor under the Ramsey Trusted Real Estate Agents, okay? Okay. Not a realtor, but a real estate agent. Okay. And pick out, and then, when you're interviewing them, interview at least one of them that's old and ask them the house that you're looking at in the Lebanon area, what it sold for in the year 2014,, when you were 17..

why I'm only paying X. And oh my gosh, the difference in X and Y is where people become wealthy. People like you who learn how to control themselves at 27 years old. You're amazing.

First time you got behind a wheel of a car, I was scared to death. Now people drive with their knees, put their makeup on, they need a Big Mac and text. 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. Our phone number is 888-825-5225.. Jade Walsh, our Ramsey personality. Number one bestselling author, is my co-host. today.

You jump in, we'll talk about your life and your money. Kenneth is with us. Kenneth is in Amarillo, Texas. Hi, Kenneth. How are you?

Well, I guess I thought about it some more. They had an 18-month spent of where it was a lesser payment, and then, after the tax credit thing, they wanted us to submit a tax credit, and we get a refund, and we send it to them. But I did not read the loan. I just signed away and did not know that. So now my loan has increased my payment, and I'm paying double in electricity than before solar panels.

It's because there's not exactly like a big repo market. I mean, they don't have a lot where they sell repo solar panels. So it doesn't happen like it does with a car.

So they may or may not repo them, but they will sue you for the $41,000, plus or minus, whatever they get out of the solar panels if they did do a repo. But they'll probably just sue you for the debt.

And, by the way, you signed a contract and made a promise. So you need to honor the promise. So we're going to take $104,000, and we're going to say we went and did something stupid and put $41,000 on a credit card. Now we got to pay off our credit card. In a sense, that's what we did, right?

So let's just put this in your debt snowball, and let's get after it and get it paid off. And if this is the dumbest thing you ever do in your life, you're probably pretty smart.

I don't like it. And you don't like it. And don't do that. Get it cleaned up. Get it out of your life ASAP.

Hey, I'm not against solar panels, boys and girls. I am against borrowing for them. And there is the reason why. OK, number one, people don't watch what the flip they're doing. They buy the wrong thing.

They buy too much. They overpay when they borrow. Now, solar panels in some areas of the country are very efficient. The technology has improved dramatically over the last several years. And some of you can actually do very well.

I've got a good friend that's doing 40% of his house on and it's a big house on solar panels. Now, he's in an area of the country where he gets plenty of sun, obviously, that matters.

And but the,

you know, it's efficient, but he paid cash for him. And then you just look at a break even.

now, listen, I endorse a couple of solar companies around different areas around the country, and I'm not ashamed of that at all. But the way they sell that crap, the way they sell it is crap is what I should say. The way they sell it is here's your payment, and your payment is going to be less than your electric bill. You heard him say that. Right.

And now it's more than the electric bill, because I didn't follow through and do the thing I.

You're going to have mechanical dysfunctions and malfunctions. We're not going there. But anyway, can they break even if you can run a situation, run a scenario where your solar panels break even in five to seven years? You may want to look at that. if you've got the cash and you're out of debt, your baby step seven.

I'm fine with it then. But if you don't have that level of break even, then they're there. My house is in the woods. No chance. Yeah.

And I ain't cutting the trees. I like my trees. So I like the woods, and wood usually comes from trees. So I like my trees. So there you go.

But no, we're not going to get that. But if you can get a break even and have free electricity, like my buddy, does, you know. Yeah. Essentially, he's got about 40% of his big old house is operating free.

And it's just part of living in South Florida.

50 instead of $3.

50 and that was a payment on the solar panel, you're still saving money monthly and you're helping the environment and all, yeah, right. All this stuff, right.

If you want to do that, that's fine. I've not chosen to do that. I'm not against that way of doing it. Financing it. It's a problem.

Kenneth, the dumbest thing Kenneth ever did. That's what he said. That's what he said. And if it is the dumbest thing he ever did, he'll be all right. This is the Ramsey Show.

Jayde Walsh, our Ramsey personality, is my co-host today. Today's question of the day comes from Carmen in South Carolina.

. We own our home, which is valued at $330,000.. There are repairs and improvements that we need to do, but we do not want to take out a loan because we're debt-free. We plan to stay in our home until we pass away. All bills are paid off each month and we put about $500 to $1,000 in savings every month.

And currently we have $10,000 saved. We have no investments. We are considering taking a reverse mortgage to provide money to work on our home while we continue to build up savings. Is this a good plan? No, it's not a good plan.

My first thought is you've worked so hard. You're debt-free and you've decided that you want to live a debt-free lifestyle. In many ways, this is you taking on debt by basically saying, okay, we're going to take the equity out of our home and have them loan it to us at a very, very high interest rates with lots of fees. And if you're saving $500 to $1,000 a month, my thought would be, well, why can't we just save up and make these repairs? They don't talk about exactly what the repairs are, if it's, hey, we need new carpet or if we need a new roof.

But my thought would be, I'm not going to go into debt after I've come this far. I'm not going into debt, period. So I would not do that. I think it's a terrible plan, actually. And with reverse mortgages, honestly, you're putting your, if they have heirs, they're putting them in a bad situation too by taking out the value in this home.

Old people. And you're scam artists that feed on old people, ought to be ashamed of yourself.

And so the reverse mortgage is a horrible piece of crap. Stay away from it. The most they will loan you is up to 65% of your equity. And if you do not stay current on the taxes, the repairs, and the insurance, they will foreclose on you. Among regular mortgages, FHA, VA, conventional Fannie Mae mortgages, the foreclosure rate in America today is 1.6% of those get foreclosed on.

Among reverse mortgages, 8%.

Almost five times as many houses get foreclosed on with reverse mortgages. What does that tell you? It tells you how bad they suck and what a scam it is. The interest rates are higher. The fees are higher.

The process of putting you back into debt after you've worked your whole life to get out of debt is just abysmal. And look at where they're advertised. Where do you see them advertised?

Magnum P.

I. Well, more of late, New York Blues, or whatever it's called.

And, you know, and the Fonz. Well, he's not the Fonz anymore. Sorry, Henry.

I'm not, I've never met either one of them. But, but no, don't, don't buy stuff, because, and William Devane is the guy with the gold commercial. But the, or whatever his name is. But yeah, oh God, please. no, please don't do this.

Listen, we would never tell you to take out a mortgage on your house to do repairs. But that would be smarter than a reverse mortgage. Yeah. Lower fees. Lower interest rate.

Much more generic product. Not as much scam around it. Not as much foreclosure around it. And you're not even considering doing that, because that scares you to death. Well, this ought to scare you.

Triple X, that. So please don't do it. No, reverse mortgages. Awful.

Like ideally, and the only issue is it's a further commute. And, you know, being a new, not a new mom, it's my second baby. But, you know, being away from my kids a little bit more, you know, just the motivation that taking this job and increasing my pay is the right, more money. Yeah.

I'm going to another non-for-profit hospital. So, with the public student loan forgiveness, it would eliminate about half of my student loan debt.

And my parents live right across the way from us, about a mile. So it's really not an option. with his job. He has to live where we are because he's on call if people were to pass away.

We live in a very rural area. So a commute is nothing that I'm not used to.

And I got to tell you, the people, you're loyal to,

they'll remember you for 30 minutes or so. This is The Ramsey Show.

Jade Walsh, our Ramsey personality, is my co-host today. She is the best-selling author of the book, Money is Not a Math Problem. One of our Ramsey quick reads, The Real Reason You're Broke and What to Do About It. You can check that out, of course, at RamseySolutions.com. We have two new books coming out this month on pre-sale, actually coming out early.

May is Ken Coleman's new book, Find the Work You're Wired to Do. Now, this is a short, hardback book that is designed to walk you through his Get Clear Career Assessment. The assessment is sold online at RamseySolutions.com, and about 100,000 folks have taken it so far. And so if you want to learn, you know, get clear on your career direction, what your strengths are, your passion, how to get dialed in on that, this is the best assessment out there on that. It's very inexpensive, very quick to take, 27 minutes or so.

And then this book will walk you through the results. That's what it's for. So when you buy Find the Work You're Wired to Do pre-sale, you're going to get three codes for the assessment. One in the book. One comes with a book.

One comes with the audio book that we're going to give you as a part of the pre-sale. And one comes with the e-book, which comes as part of the pre-sale. So you're going to get all of those delivered to you in May, and you can get that at Ramsey Solutions. Rachel Cruz has, next week, a new book coming out. Her second children's book.

Her first was a bestseller. It was called I'm Glad for What I Have About Contentment. This one's called I'm Glad for Where I Am. Home is Where the Heart Is. Fabulously illustrated by Lauren Galagos.

Lauren is an absolute world-class at this. And these kiddos' pictures are fabulous. This one, the other one's about contentment. This one is all about gratitude. But the stunning, just beautiful, beautiful illustrations.

And I've already been reading it to the grandkiddos. And the smallest one is, Papa Dave, Papa Dave, read, Papa Dave. And I always want to read to the kids. Because kids that are read to, they always turn out bright. They always come ahead.

They're always ahead in everything. Read, read, read, read, read, read, read, read, read, read, read, in a culture that doesn't know how to read. And in a culture that doesn't know how to comprehend. You give them a huge advantage when you do that. Whether it's Rachel's Books or the Junior series, or anything else you like out there, it's great.

I've gotten pretty good at, Dr. Seuss.

Welcome to the Ramsey Show.

It is paid off. And the rest would be just really the money that I have in the bank. So I feel like I'm at that point where I'm not sure if I should sell my house and where to invest the money.

So I'm just trying to regroup to figure out if I, like I said, whether I sell my home and use that money to reinvest in properties or put it in the market. It's kind of where I am. I've got standstill of like. it's a kind of a now decision to make.

Am I missing something?

I'm used to living on three times that, but I picked a number. That's what I want to be careful of. Okay. All right. So if you sold your house, what would you live in?

But I'd rather really maximize.

Yes. Okay. So you have a million dollar paid for house. We cleared three, give or take. And we've already got seven.

So now you got three, seven. Well, that'll generate more than 200,000.. You can generate a lot more than 200,000 doing flips with that money.

Well, I'll give you a $2 million budget. Okay. How much can you make if you got $2 million cash and you're flipping it?

Yeah. Yeah. You got to have a 20% margin or you shouldn't be doing a flip.

. What was your margins?

And if you make 20 on 2 million, I've still got a million seven sitting over to the side and you're making 400.

. So sell your house, move into a million budget, some amount to do flips, put the rest of it with a good smart investor pro in some mutual funds. And you're going to easily have more than 200 K to live on. Wow. There's a lot going on there.

This is the Ramsey show.

It's way too easy to put off making a will. And believe me, I've heard every excuse in the book, but not having the time is one excuse. We can kick to the curb right now, because these days, most folks can make a legally binding will on their laptop between loads of laundry. If you're wondering if you can make your will online, or if you need a lawyer, we have a quiz to help you figure that out in less than five minutes. Just go to ramseysolutions.com slash wills quiz.

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com slash wills quiz.

Jay Walsh, our Ramsey personality, is my co-host today. She is author of the book. Money is not a math problem and bestseller from Ramsey press. So, uh, let's do some finance 101.. All right.

A couple of things. The first thing they teach you in finance class, one of the first things they teach you is what's called risk return ratio. The more risk you take, the higher return you should get. So when you put your money in an FDIC, insured bank, no risk virtually, but they pay you almost nothing. Fair enough, right?

If you, uh, move it around a little bit, mess with a little bit, uh, you could put it in a good high yield savings account, which we'll sidebar on that for a second. We were talking about this software a little bit. We'll come back to my risk return ratio in a minute, but we'll just turn left for a second and park there. A high yield savings account is exactly what it says. it is.

It is a savings account at a bank that pays a better rate. Ding, ding, that's it. Okay. A CD, a certificate of deposit, is a savings account at a bank and they give you a certificate. Yes.

And you have like perfect attendance. You remember that one yet?

Okay. Uh, 10 years ago, we didn't call them high yield savings accounts at the bank. We had a savings account at the bank that the bank labeled wrong, but they did it for marketing reasons. The bank called it a money market account at the bank. It was a savings account at the bank that paid a higher rate, like a high yield savings account does same exact thing.

It's a savings account that paid a better rate that mimicked real money markets, but the bank did not sell money markets. They had a savings account called a money market account that had an interest rate that was similar to a real money market account. A real money market account was only available through, and still is only available through, something like a mutual fund company. So you could go to Fidelity or American funds or whatever and open an actual money market account. Now you're going to have money market accounts with those that have check writing privileges, even a debit card attached to them and those kinds of things.

But the high yield savings account has, uh, as a marketing methodology, it's a better marketing, actually, the money market, because it says, I'm going to give you more money. Yeah. It says I'm going to higher interest savings account. That's what it says. It is what it says it is actually in the money market.

account was just a misnomer. Yeah. But it was all for marketing. It's all banks selling their wares. So a high yield savings account, simple savings account, little better interest rate, but almost no risk.

So back to the risk return ratio.

If you want to double your money,

you know, you're pretty much going to leave investing and go to gambling or speculating. Now some people call speculating investing, but it's really not. Speculating is where I want a short, quick return on my money. That's speculating. Day trading stocks is not investing.

That's buying and selling stocks on a daily basis or a weekly basis. That is speculating. When you build a, when a builder, a home builder builds a home that does not have a buyer, they're called spec houses.

Speculating. They're speculating. They're building an unsold piece of inventory. They hope to sell now. They're not investing for 10 years when they build that house.

Praise. They pray. they're not investing for 10 years. They hope you're going to buy the house when you, so that's why they're called spec houses. They're speculating.

The builders are speculating. That's not investing. It's right next to gambling and you can make a lot better money speculating, but you're taking the ultimate high risk. It's, it's kind of an all or nothing play. Usually.

it's why I don't buy commodities like gold and wheat, futures or whatever, because it's all speculating. It's short term plays with a gain. It's why we don't do Bitcoin. It's a short term play with a potential gain and it's got no track record. The only track record it has is filled with fraud and go to jail, do not pass, go.

Right. And so it's just a mess. So the whole, the whole marketplace is high, ultra high risk. speculating. It's not even investing, but along the spectrum of investing, the more risk you take, the more money you ought to make.

So if you put money in mutual funds, I've got a mutual fund that opened in 1934.

It has had like in that 80 or 90 years, it's had like, I don't know, 10 years. It lost money out of 80 or 90 years or something like that.