If You Can’t Pay for It, Don’t Buy It!

it came out officially yesterday the ultimate guide to more money and less stress and George goes through with great research, showing the villains that are out there and the people that are trying to keep you down there the man with the thumb on your neck and you got the thumb off their neck.

I don't want to be a part of that system.

what's up? hey Dave, hey George.

I make $80,000 a year. I am currently maxing out my 401k and IRA. I want to buy a car that cost $30,000. however, I don't want to get rid of my current car. it would just be a, you know, a play car.

it's a sports car. my question is is I have 30,000 in cash that I'm prepared to pay for this car?

I'm not sure if it's better to put this in a different sort of investment portfolio or if it would be okay, you know, to splurge and buy this car. oh I.

sweet, nice car. okay. and what your model 2019? okay, all right, cool. and what's the car you're currently driving worth?

it's $13,000. okay, all right, what's your income trajectory? when would you be making 90? potentially maybe five years?

that's why I'm right right? yeah, okay, well, I mean here's the thing I love cars. okay, I drove here today in my Raptor. I love big engines. I like things that make noise, I'm redneck, I want a loud muffler.

all that right, but the stupid things go down in value like a rock. that's where Chevy got that like a rock. okay, they go down in value, and that includes that sweet Nissan you're talking about, and that includes my sweet Raptor. they go down in value. so if you're going to build wealth, you have to keep as small an amount and as possible going into things that go down in value.

so consequently, we find millionaires driving very conservative used cars.

until they, until they've got, you know, substantial money, and the one of the guidelines that, George, that we've developed here is to not have more than half your annual income tied up in things that have motors and wheels. so adding up all of your little toys with motors and wheels do does it add up to more than half your annual income? because if it does, you probably got too much in things going down in value while you're trying to build wealth. does that?

those people are gonna stay middle-class until they break that habit. it's just, it's a huge indicator.

we're not being melodramatic. I just wanted. when I went broke, when I was younger, older, slightly older than you, I I made the decision. I'm going to do things that caused me not to be broke anymore and I'm gonna identify what broke people do. I'm not gonna do that.

I'm gonna identify what rich people do and I am gonna do that. and you know what we discover. Tom Stanley found it first in 1992, when he did did a book called millionaire next door. we discovered it again when we did the largest study of millionaires ever done in North America ten thousand one hundred sixty seven of them we.

millionaires don't you know that? millionaires just have some money is all. and and they have, generally speaking, conservative but reasonable lifestyles. and so we tell folks not to buy a brand new car until you have a net worth of a million dollars. if you do have a car, you should sell it if it violates those things and or if you can't get it and all your consumer debt paid off within two years because of the stupid car.

and so if you got like a $50,000 car, you make $60,000 a year. you need to sell it and you need to you know, get rid of this $1,100 payment. it just choking you in that it loses 60% of.

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George Camel Ramsey personality is my co-host today. thank you for joining us. open phones at triple eight, eight, two, five, five, two, two, five will is in Atlanta. I will. how are you good?

how are you doing better than I deserve what's?

you're the only grandkid. no, I'm one of two grandkids. each of you got 1.1. yes,

it should take your breath away. this kind of fear is the beginning of wisdom. so, way to go, it's a good fear. I don't want you to be panicked or anxiety ridden or anything like that, but I do want you to be aware. I just got behind the wheel of a car that is way more powerful than anything I've ever driven, and I need some driving lessons.

that's what you're aware of. good for you, so proud of you. good, good, good, good, good. okay. first thing is keep that mindset.

second thing is never put money in something. you don't understand mm-hmm, no matter who says to including me anywhere you read or hear to put money in something and you can't tell somebody else how it works in detail. do not put money in it. okay, okay, which means you might be going a little bit slow at first because this money might just be sitting in a bank account, because that's what you grasp right now. okay, mm-hmm, okay.

the third thing is in the Bible says in the multitude of counsel, there is safety money people too many of them have a little bit of arrogance in them and they want to tell you what to do. if you have a money person, a financial advisor, an insurance person, a real estate person, a an estate planner that is telling you what to do instead of teaching, you fire them and get another one. you want someone with the heart of a teacher, because it is not their job to manage the money, it's yours. your grandmother didn't leave it to them, she left it to you. so it is your job to sit with a mutual fund broker, with an advisor, and learn and learn, and learn and learn and learn.

and and you're doing that today you called us because I want to learn what to do. right, that's very good, but always look for someone with the heart of a teacher. you cannot Alf offload the nervousness of this responsibility by letting someone else make your decisions. okay, that makes sense. yes, if you have to understand it and you have to have people helping you that have the heart of a teacher, that helps you understand that those two things work together, and then you're going to move slow.

you just move at the speed of your comfort, at the speed of peace when in doubt, don't.

easy enough, right, that is very easy, yeah. in other words, when it rear stomachs moving up towards your throat, you wonder if this would make your grandmother angry with you. don't do it, which is your fourth thing each time you make a decision with this money. ask yourself, would this cause her, sitting in heaven, to smile and be proud of her grandson?

okay. and if the answer is no, don't do it, because this lady had some. this lady had some sense. she left two million bucks to her two grandkids, mm-hmm. so I think we can use her as a filter for our decision-making honoring her legacy, honoring her memory, causing her to smile in heaven as our filter, and that's going to help you also.

does that make sense to you? yes, it does okay. so there's no magic formula on what to do with the money. I put mine in growth stock mutual funds and I pay cash for real estate, and I live a hundred percent debt-free and you probably already knew that. yes, I do, and George does the exact same thing.

it'll double every seven years. so you're you said you're 23, yes, 23 years old. so it'll be 2.2 at 30. at 37, it'll be 4.4 at 44, it'll be 8.8, it'll be 16 million when you're 50, if you just don't touch it and invest it and it makes 10%, yeah.

if you do that, it'll cause your decision-making to be different than just some little kid who got some money and blows it all by the time he's 26. yeah, okay, because you're not, you're already more manly than that, I can tell. hmm, very wise, yeah, I'm very well done, so.

just take your.

they'll help you. if you want to know about the investing, the way we do it and the way I personally do it, and get someone with the heart of a teacher, click smart Vesta at Ramsey. solutions, calm, you'll find a smart Vesta pro or two or three in your area there that are people that have the heart of a teacher and know the way Ramsey does it, and they can walk you through that and teach you what you're doing and and they're gonna move you out of those single stocks. I can tell you that if, once you understand, you're gonna move you out of those single stocks, Paul is in Cleveland Ohio. hey, Paul, welcome to the Ramsey show, I think.

what do you make? I'm trying to balance. what's that? what do?

let's try a proven plan. that means we're gonna take 9,000 from this emergency fund, pay down the debt. that's gonna leave you with 11 left, making 60. you're gonna knock that out. quick, pause investing.

you'll be back to investing probably in six months if you.

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but that's the definition to get the job done and certainly can do that for half of what you're driving, because whatever you're driving, you're turning it into nothing in. you know, three years, four years, you put 120,000 miles in this thing. yeah, correct. and so now we've got a, you know, highly depreciated vehicle. what did your truck cost when you bought?

I owe about 35 on it currently, yeah, and it'll be worth about five by the time.

what's your household income? about 175. okay, how quickly can you pay it off if you just?

they're great, they're really good trucks and and you like it, obviously you're cuz. you're fighting to keep it in the conversation. so but I don't my, I really, you make 175 thousand dollars a year. you can drive it. you can own a $35,000 Tundra.

it's okay, but I would own it and put in the driveway. I personally wouldn't destroy it. I mean I've got the Raptor are, which is a super expensive truck, the 700 horsepower. I'm not putting those miles on that truck. okay, I live eight miles from the office.

I drive it to the office. that's the only place. I drive it into the farm. that's it. yeah, I'm not putting a bunch of miles on this thing.

it's too expensive a vehicle to destroy it with high mileage and and it gets crummy gas mileage with the 700 horsepower. but but yeah, but it ain't made for economy fuel. it is not an economy car. you can't fit it in the space and it doesn't qualify. but yeah, the same thing though, I mean, I can afford the ridiculousness of that and you can afford this.

so I would say keep it and get something else that you destroy the value of. yeah, you make 175.

so you're not destroying it in that sense, because they're great again. great truck, but but I I just wouldn't do that to that car. you know it doesn't make any sense. and you guys that are road warriors out there and your company gives you a car allowance. the car allowance is not dependent upon you having a car payment and the, in his case, the expense.

you know they're giving mileage and stuff. you get that if you drive a $5,000 paid-for truck or $85,000 truck, you get the same exact mileage people like to justify. it's okay, because I get this. you get it anyway, you're gonna get the money any pocket.

Adrian is in Detroit. hi, Adrian, welcome to the Ramsey show, hi.

what do y'all make? okay?

well, we've been on the Ramsey plan for a little less than two years 158 in two years. yeah, we sold our Tesla and yes, sell the horse sell.

yeah, our.

okay, you're not, you're not too late, you can go. you found that. if I'm half wrong, I think you'll be okay. okay, I do want you to continue to follow the Ramsey plan. get your emergency fund in place and start saving.

baby step for 15%. right yeah, and jump on, jump on the website at Ramsey and Ramsey solutions and run the investment calculator and it'll show you what 15,000 will be. I did that my head. I don't remember what it is, but it's if you start with zero, well, in excess of a.

I mean it's gonna be. you're not mind-boggling, you're not?

but age 25 to age 65, a hundred dollars a month, 1,200 a year, that's nothing. $100 a month from 25 to 65 and a good gross stock. mutual funds 1 million 176,000, Wow.

this is the Ramsey show.

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George Campbell, Ramsey personality, is my co-host today. if you didn't know, we broadcast in Franklin Tennessee, just a little bit south of Nashville, Tennessee. it's a wonderful Civil War era town, historic and beautiful, and point and all that kind of stuff. we're a little bit south about an exit down and folks come over the Ramsey campus all the time. we've got a big lobby to welcome guests.

it includes a whole timeline, the history of everything we've done here, places to take pictures and remember the debt-free stages. out there there's free coffee, free chocolate chip cookies and if it snows a quarter of an inch in Nashville, people think that it's 92 inches deep and we're ready for a ski slope or a blizzard and they go and freak out mode. so everything just shuts down like a hard frost, shuts the town down, okay, and so we usually have 50 to 200 folks sitting here watching the show. we do it live from 1 to 4 central every day, Monday through Friday, and we always have folks dropping by for the free coffee cookies and to watch the show and in the afternoons we love having you. thank you for doing that.

because of the snow we've got just a few folks I hear about 30 or 40 or so and a cat that runs the lobby just announced to George that we're going to give all of you guys visiting George's brand-new book breaking free from broke just as a gift, just to say thanks for coming out in the snow, the frost, whatever this was, and that's our gift to you. I said, can we do?

thank you to the Navy and thank you to you guys. we appreciate you, appreciate everything you do, absolutely incredible, and a lot of students in America get the high school curriculum because of you guys, and we appreciate you and, of course, we.

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you know, if you're already paying payments and you can work your way through payments, then chapter 13, chapter 7, would clear the loan, except for the fact they probably took a lien on your house and they're probably going to take your house if you do that. and so I think you continue to work it outside of bankruptcy. chapter 13 doesn't is not of no benefit to you, except maybe it may be getting the payment lower. but you're not going to get out of the debt in a chapter 13 and you're not going to get out of the debt if they have a lien on your house and most the time the SBA will take a lien on your house in these situations, and if they've got a second on your house and there's big equity in your house, they're going to take the house in a bay. you know, you're either going to pay them or they're going to take the house a hundred cents on the dollar.

you know, unless you, unless you negotiate with them, but chip, but bankruptcy does not make the SBA lien on your house. go away they, if you have, if it's there. he didn't say, but that's a typical process for the small business administration's why I hate SBA loans. I hate them because of this exact situation right here. so I, I instead would pretend, like you have a $200,000 student loan, which is also not bankruptable, by the way, and I, I would just roll up my sleeves and go bananas and take six jobs and get your income up.

you know spending down, get it, get it.

number one you got the failure of the business hanging around your neck and then you've got this reminder every month that we failed when we may have to make these huge payments. so a couple of things. number one I would consider rolling up your sleeves and working six jobs and just paying it down like anybody else with it. great, you sell intensity. that's gonna be the best way.

number two if you have enough equity in your home to clear the loan, you may want to sell the house and be out of it, be done with it and go go rent and start fresh from there, because you're going to lose the house. if you file a chapter 7 bankruptcy and if you file a 13, you're paying payments again. it's of no benefit. you can pay payments, pay payments. so, oh man, awful sorry.

particularly it's. it's an oxymoron that you say the small business administration more small businesses than anybody else. I mean, isn't that weird? I mean it's just. it's just weird.

it sets you up for failure. number one cause of small business failure cash flow problems, what it calls cash flow problems. don't pay your taxes on time and have a big SBA loan. this causes cash flow problems every time. all right, Jared is with us in Jacksonville, Florida.

hi, Jared, how are you?

but the key here is to get on a budget and start looking at what is going on with my money. because you make money right. how much do you?

do you have a thousand?

right, okay, and if you, if I hired you to do that for someone else, you could do it. but the problem is the party in on the weekends. the problem is the impulse spending. the problem is you're just. you know you're out of control and it's showing up in your money and you're so.

you said that I didn't write. yes, okay, so we know what the solution is. it's the guy in your mirror. he's the solution to this issue. so jump online at and watch that.

break the cycle, get the every dollar app and start using it. it's free to start and jump in there and start using it and start to put together your budget and make the money that you have. behave instead of wondering where it went. this is the Ramsey show.

live from the headquarters of Ramsey solutions. it's the Ramsey show where we help people build wealth, do work that they love and create actual, amazing relationships. George Camel, Ramsey personality, YouTube host and author of the brand new book breaking free from broke, is my co-host today. open phones at triple 8, 8, 2, 5, 5, 2, 2, 5. that's triple 8, 8, 2, 5, 5, 2, 2, 5.

a lot of you calling in the last several days have been brand new to this whole Ramsey thing, the stuff that we teach, and so it probably is a good idea. I just decided this for George and I to spend a segment outlining some of the basics. number one when I was 28 years old. I'm 63 now. so when I was 28 years old, I filed bankruptcy because I'd gone into too much debt.

I lost everything and I got the opportunity to start over. I went on a quest to learn how money really works, because at that point I had a finance degree and several other letters and licenses after my name. that said, I was supposed to know something about money, but I was broke. so obviously what I learned was wrong, and I discovered this thing from rich old people called common sense, and it also lined up with what the Bible says about money get out of debt, live on less than you make, have a written plan called a budget, invest and save. be generous.

and we've capsulized that into live like no one else, so that later you can live and give like no one else. and then we started teaching people what order to do these things. and because all these questions came up about insurance and retirement and kids college, and we put together a process called the baby steps, and it became a 10 million copy book called the total money makeover, teaching people how to do the baby steps. also, about 11 million people now have been through Financial Peace University, the class that we teach. all of these things outline what we, the Ramsey personalities, call the Ramsey way, which is that now a proven plan to become wealthy not only get out of debt but to become wealthy.

it is the fastest, right way to build wealth. so George was unpacked the baby steps absolutely so.

an average on 18 to 24 months people following the plan once you have no debt. now we can get that starter emergency fund beefed up to a fully funded emergency fund of three to six months of expenses, not income, and most people do that in six to twelve months. once we have no debt and a pile of money to protect us from life's emergencies a rainy day fund. now we move on to investing. what's interesting is baby steps four, five, six are done simultaneously, but in order.

so you're going to start by investing fifteen percent of your household income into retirement 401ks, IRAs. once you have that plate spinning, you got 15%, start funding the kids college and that looks different for everyone. and once you have some money going to the college fund now we can start aggressively attacking that mortgage and pay the mortgage off early, and that takes you to step seven, which.

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

think about it you have. you know you're gonna eat that you're just gonna. yeah. so there you go, so that that's the thing that now, with great intensity, you're not going out to eat. you're eating at home.

it's cheaper and it's better for you. you're not going on vacation. you're broke. broke people don't need to go on vacation. so you're.

you're getting out of debt. you list your debts smallest to largest and you attack them with a vengeance. we call it gazelle intensity. after the gazelle running from the cheetah, he's running for his freaking life. so act like it.

otherwise you work your whole life and you make more money than 90% of the people on the planet make, and you retire, broke and hope the government, which is well known for its ability to handle money, will take care of you. that's a stupid butt plan. you're gonna count on social insecurity? no, you're not. don't do that.

then, when you get those three things out of the way, I mean think about it. what if you had no payments but a house payment and $15,000 cash in the bank? well, you'd be in the top four or five percent of Americans. for one thing, you could breathe. can you breathe that in just just a little piece right there?

financial peace two words that don't go together like airline service, right, I mean come on, list it out there. now, then you start doing as George said, four, five and six simultaneously retirement, kids, college and paying off the house with other money. we can find you're gonna do that not with intensity but with intentionality. we're gonna get off the gazelle thing we actually can go out to eat, buy a couch, we can go on vacation again, upgrade the car in cash. gotta upgrade the car, cuz you're probably driving a hoopty at this point.

cuz we got rid of the stupid $85,000 car, have you lost your mind and wondering why you're broke? see, this is what we do. it's grandma's common sense. if you can't pay for it, you don't buy it for the rest of your life, because you will destroy your most powerful wealth building tool, which is your income. shut up, be a grown-up.

no whining allowed. suck it up buttercup.

the people following the baby steps they pay off their house on average in seven years exactly and the.

what I wasn't good at is taking care of it once I made it, and that's how I went broke at 28 years old, and then from then on, I've been telling everybody else not to do this a day. Ramsey just doesn't understand. Dave Ramsey's done it. shut up, I am the story. shut up.

no excuses, wuss, go do it. this is the Ramsey show.

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thanks for hanging out with us. the phone number here is 888-825-5225. want to say thank you to all of you. we've been asking you to subscribe, but click the subscribe button, click the follow button and you have been. we appreciate it and we've been leaving some really nice five-star reviews on the show.

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that's kind of mind-blowing and we've had our billionth download one billion downloads and that's because of you guys. thank you so much for that. all right up. next is gonna be Jim in Raleigh, North Carolina. hi, Jim.

but for you know, my profession is very volatile. you know I'm a college football coach. so, like we could, we could be somewhere a year, we could be somewhere ten years, we could be moving across the country and we're just trying to figure out when is the best time to buy a house. and we've got a young family and we're, we're kind of sick of renting and we want our own spot, and we're just kind of trying to figure out when is the best time for us to do it. you have a winning season.

we did last year. we did not, okay? so when you're moving right now, we're kind of looking. right now we're looking. so I'm a young.

we're looking and we're just trying to figure out. okay, this next job is that we're gonna buy? yeah, it kind of depends on where we end up. but just trying to figure out, should we even be considering like, yes, you should buy this pack by you.

but if it's a metro area where there's a good market and you can turn the property over, then you're probably gonna make money after two years, in most cases, just historically. now, if you want to be real nerdy about it, here's how you can do it. when you are looking at a neighborhood in the next town that you're gonna move into, ask the real estate agent and get one of the good Ramsey trusted real estate brokers that we endorse. ask the agent to pull some MLS multiple listing service statistics for you. here are the two stats you want.

okay. number one, just say, within a five mile radius of this house we're looking at, just like a drop, a dot in the middle of it, five mile radius. you following me. yep, what is the average annual growth rate in prices for the last ten years? got it, yep.

now, keep in mind, you have 20 in there and 20 is screwed up statistics, because after the Fauci pandemic, people came out of their houses like a Baptist looking for a and ran the real estate market up right. yep, okay, so you got an anomaly in the stats there. but other than that, look for it hard and you're looking for average annual rate of return. a correlating number is the second one, and that's average days on the market. dom, how long does it take the house to sell on average in a five mile radius of this house?

so let me give you a couple of different number ways you look at that number. okay, if it comes back, the average annual rate of return on the house is 2% and the days on the market are 270. nine months. you're gonna lose your butt. don't buy yep.

it's gonna take nine months to sell. you're gonna make 4% in two years and it's gonna cost you 12% to get out of the house. you're gonna lose money and you're gonna have trouble selling it right. the other end of the spectrum. would that be a slow, draggy market?

the other end of the spectrum would be average days on the market seven days, and the appreciation rate is 10% a year. you're gonna make 20% in two years and you can dump the thing in a heartbeat. yeah, you buy there. you see how I'm doing these stats. so and you'll find them running together.

okay, you don't have long days on the market and high appreciation rates. it's very unusual. you're together, it's usually usually an active market and you've got good appreciation rates. so but if you're moving you know we talked to military guys about this too if you're in the military, don't buy a house because they move your butt every two years, unless you move into a metro area. but if you move in one of these podunk military towns where the whole economy is the military, all you've got is a bunch of houses on the market, all the time from the last goobers that moved in there and bought a house.

okay, so you can't. that they don't appreciate and you can't get rid of them. but if you're moving, if you're in the Navy and you're moving into San Diego, which is fairly typical by the way, or you're moving into Virginia Beach or something like that, you got a very active market and you're gonna be able to get out of it and make some money. so two years is your. you need to know you're gonna be there two years and look at those numbers nerdy.

and yes, you should buy because you might have a 17 year run, Saban, did you never know? dream big and the last thing, Dave, that.

Oh, that top of the market on that street, that's a good point, George. so, and you know, use other common-sense things like this is the house ugly? when you stand in front of it, you can't get over ugly. ugly is to the bone man. so you can't get over you.

if it's just your standard has no curb appeal and you're getting a deal when you sell it, you're gonna give it a deal because it's got no curb appeal. it's ugly. make a pretty stage houses out there that are, trust me, are ugly and so. but I have overlooked them in the name of price sometimes and it's bit me in the butt. so I don't do it anymore about stuff that's pretty or can be pretty.

you know you are gonna move. it's the nature of your business. I got football coaches in our family and you know you are gonna move. it's part of it. but hopefully you got runs that are longer than two years and you're in good, solid markets where you can make some.

he's called. he's listening to the Ramsey show that tells me he's a, he's a wise.

that just makes you more stuck. you know, that's true, you know. and another thing comes. somebody may come along. I want to pay you double and you want to leave.

oh but you got.

at 13, the mouth kicked in and I quit. oh so I can't do mouth and I would get put in jail these days. so I think this could be like a Netflix series. it's a hockey coach. I mean you got a stick in my hand.

you're gonna do this, so it's.

this is the Ramsey show.

George Camel, Ramsey personality, is my co-host today in the lobby of Ramsey. solutions on the debt-free stage. Seth and Sierra yes, Sierra are with us. I want to make sure I pronounced your name right. welcome you guys.

good to have you. where do you live? Clarksville, Clarksville, Tennessee. welcome. just up the road you had to slip and slide a little to get down here.

yes sir, we did all right. how much debt have you guys paid off? hundred and ten thousand dollars, all right. how long did that take? 36 months, good for you.

and your range of income during that time started at 38, ended at 120. good lord. okay, what y'all do for a living? I'm a police officer. okay, I'm an accounting.

all right. so why did you jump your income from 38 to 120? somebody got a job, you. I got a job. okay, my job because of COVID, and then I became a leasing agent at our apartment complex.

I did that for two years and then I got an accounting job, and then that was the last hole for our debt-free. so I've been in that job for almost well two years to January. so between the two of us we had five jobs, other jobs, and she got two jobs. Wow, getting it. what kind of debt was the hundred and ten thousand.

oh, we had ten thousand on a credit card, thirteen thousand on a car and eighty seven thousand dollars in student loans. Wow, okay. so criminal justice degree or what? yes, sir, criminal justice, okay, all right, I was guessing okay, good, very good. so what happened 36 months ago?

you said three years ago, this has got to change. yes, sir, coming out the backside of the pandemic, right. in short, that's what happened. the pandemic hit and we were doing a lot better off than a lot of other people. I mean we had money in the savings account, but we just a whole lot of normal.

she lost her job. you know, she called me when I was at work one day and said hey, they're, they're, they're telling us not to come back into work. so things got really tight there for a minute and we were kind of still making it, but kind of too much month left at the end of the money. so I remember I was just laying in bed and she was laying there and she was just really stressing about the money and I didn't like that. so I was like I can't control a pandemic, I can't control anything else, but I can control how we spend our money and how we move forward.

so I looked you up. well, I looked up just how to manage money better and your plan came across and I was like this guy's plan works, you know. so I just did it. never heard of us before that never, never heard of you before that. I just looked up like how to how to manage money better and I watched just about every YouTube video.

it was funny. she went to bed and then I stayed up watching just about every YouTube video of you I could watch and I was like. you know, I'm not the smartest, you know, guy, but then I can work. dang it, I can work. I don't know how to work, I don't make money, I don't work.

but that's most of.

you know every other, every other plan that I saw. there was some kind of gimmick that went with it. you know zero interest credit card, or do this one well, that just that just moves the problem. that doesn't fix the problem. and I watched Dave Ramsey does the baby steps live in Dallas and you're screaming at us, telling us how stupid we are.

and I'm like you know what this guy.

like. and he made.

yeah, so at first I called you a fun terrorist, Dave. yeah, I am, I am a fun terrorist. looking back, I feel a lot of violent terrorists, but fun looking back, I feel really bad, cuz she went to sleep with with her husband and she woke up with some. yeah, we'll blame YouTube for that. go down the rabbit hole of Ramsey.

sure I'm here anyway. so they paid me like 40 bucks an hour. Wow, it's pretty.

probably not, but you know I got.

oh so we started doing that, and that's when everything changed. yeah, yeah, it really did. it really did when we started handling money. God's way, it really. what church are you in there?

First Baptist in Clarksville? yeah, okay, excellent, that's where we go. but yeah, perseverance. you know, we had a lot of things happen. we had to pay a lot of stuff out of pocket.

you know, we had a move in there. we had some medical bills in there. we had to pay. but just get right back on that horse and keep going and lean on each other. you know, there'd be times I'm working not hard, 36 months, very hard, very hard, 100% free.

it's amazing. was it worth it? yes, sir, absolutely don't want to go back in it. no, never, don't, ever have to live like that again. it's live like that.

so never, never live like that, right? yeah, it's funny. we kind of switch roles. Seth was wanting to save the money. you save the money when we were going through the debt journey and I was wanting to spend it, and then, uh, once we got debt-free, I was like I'm a hoarder.

now I want to save all the money, and that's like I want to buy something. yeah, we're finally out. he's calling me about a $10 expense at Walmart and I'm like just buy it. yeah, we have the money you.

congratulations, we're proud of y'all.

that's. that's perfect. that's the way it should be. I love it, the YouTube.

you are on track to do that for sure the total money makeover book and, of course, the financial peace university membership. we want you to enjoy all of those things or give them, depending on how you want to do it. it's the live and give box. congratulations again. thank way to go, very cool.

did you have people telling you you shouldn't be doing this, that you're crazy? people thought we were nuts. yeah, we had people that just kind of didn't understand the urgency. not that they didn't support it, it's just they didn't understand, like the urgency of getting out of debt, because we're, so we're still young. so I had so many people telling me don't pay off your student loans.

they're gonna forgive it. they're gonna forgive it. I'm. I've never trusted the government for anything. so I'm like.

these are people that would never say that about anything else, but they say it about that. that's what's strange, right? yeah, well, how do you like me now. huh, there we go, Toby Keith, right, exactly way to go. you guys, excellent stuff, all right.

Seth and Sierra, Clarksville, Tennessee. a hundred and ten thousand dollars paid off in 36 long months, making 38 to 120. they're free. count it down. let's hear a debt-free scream.

that's how it's done. I know how to work. that was a lot of talent. it's a.

you guys, it's gonna be a great help to you. we're just pumped for you. Jacob is with us in Macon, Georgia. hi, Jacob, welcome to the Ramsey.

but I also spent everything I had in my savings, everything that we had made together. I mean I unloaded just about everything into it. we still got $14,000. you know, between savings and checkings I got $5,000 in cash. I need a tractor to be able to take care of my property.

I know you are 100% against. you know any kind of financing. but a new tractor these days, between, you know, 50 and 60,000, be able to have the right size to do. you know our property, so I don't know. you know, is financing okay, especially at 0% for 60, 60 months or?

I am laid off from my job and so I'm, you know, going off my wife income at the moment and she's a women's health nurse practitioner. so what does?

you may have a few cattle, but you don't even need a tractor for cattle. have somebody run a bush hog over there ever so often, or something, maybe? but especially if you're to decide to stay at home and cut your income almost in half right, why don't you go back to your, to your old career, even if it's not with the company that?

we're both in Georgia. now she's back to make it. yes, that's where she's been. I went to Ohio to work construction. oh, I see, and that's.

okay, I mean you could, but but you might not make as much as you used to make if you work construction in your area, right? yes, sir.

Wow, so you paid off other stuff then. not that she. the house was almost half a million dollars. and then I paid off her car also, and then my other house in Kentucky is paid off. what's the house in Kentucky?

it's one I bought while I was going to school. it was something I bought online. what's it worth? I did 200.

right, it's very random in your life now. I understand how you got there, but I would sell it and pay off your mortgage and use your fabulous fact that you have no payments in the world to save up and pay cash for a used tractor. not 60, maybe 30, but pay for it.

I mean, dude, really okay, I I don't think I can help you, man, but that's what I would do if I woke up in your shoes. I would sell the house in Kentucky and I would solve a lot of my problems by doing that and get the house that you're living in paid off. I think I heard you could pay it off. I thought it was paid for and then I thought he said he owed 130. so now I'm confused.

I kept learning.

but um, that's okay. and by the way, 42 acres is a gentleman farmer, that's not a, that's not somebody making a living. so anyway, yeah, you do what you want to do, but if I were in your shoes, I would get a job in construction and I would sell the house in Kentucky and I would buy a used tractor for cash and I would pay off my house. that's what I would do. but you're gonna do what you're gonna do, but thanks for calling, appreciate you interesting.

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, author of the brand new book breaking free from broke, is my co-host today. this hour is a baby steps millionaires theme hour, if you don't know what that is. several years ago we started taking calls from people who are actual millionaires or greater and asking them things about their life so that you could actually parallel them and be one of them and put aside all the mythology that is out there about wealth in America today.

number one myth that's out there that the hope Steelers out there, that the characters the lefty, crazy communist say is you can't become wealthy in America today because all wealth is inherited. line number one line number two all wealthy people are crooks. that's how they got their money. line number three all wealthy people are famous entertainers, sports figures, rock stars, etc. number three line number four they are brilliant.

all millionaires have 4.2 GPAs. they're all rocket scientists. nope, we will prove that to you today by talking to real millionaires and have done that for many, many years now. that led us into doing what became the largest study of millionaires ever done in North America. we did it a Ramsey research, with outside research firms looking over our shoulder to make sure there was no confirmation bias.

make sure that our research methodology was accurate and perfect, because we knew you lefties out there wouldn't go along with it, and because you wanted to say that America is the dream is dead and that you can't win, the little men can't get ahead. there's systemic problems with the economy and all that bullcrap that some of you pedal out there. and so we knew that that would come up and that you would accuse our research of being inaccurate. and so the air, the research methodologies, airtight and double-check, did double-check. did that's good, double-checked?

and so if you don't agree with the actual conclusions of studying 10,000, 167 millionaires, you're what's known as wrong, and we're gonna unpack some of that for you and talk to real millionaires. today we have to start with a basic definition, because I heard a United States Congresswoman the other day people are dumb. how do you even elect these people? she says he's not a millionaire, he doesn't make a million dollars a year. yikes, this is a congressman unbelievable.

how in the world did you get out of the sixth grade who voted for these people, people that didn't get out of the sixth grade. oh my gosh. so let me. the definition of a millionaire is not a feeling, it's not a moral construct, it's a math thing and there's nothing to do with your income. a millionaire is someone who has a net worth of a millionaire of a million dollars.

a net worth is assets, minus liabilities equals your net worth. some of you have a negative net worth because you owe more than you own, but a millionaire has at least one million dollars on the bottom right hand corner of the spreadsheet. when you take what you own minus what you owe, regardless of your income. you can make a million dollars a year and not be a millionaire because you spend two million dollars a year, like you're in Congress. there you go, so that that's the whole thing.

so we've got a. you know, that's what a millionaire is. if you are an actual millionaire, we don't care how you got your money, whether you inherited it. maybe you were a crook, maybe you're a famous person, maybe you have a 4.2 GPA. I don't care if you got, if you want it in the lottery.

if you're a millionaire and your net worth what you own minus what you owe is greater than million dollars. we want to talk to you this hour. the phone number is 888-825-5225. our first millionaire is Erica in Austin, Texas.

what's the worst year and the best year of your?

feel right now what you get.

what do you blame?

very well done. millionaire. 36, first case in point. how much did they inherit? zero.

how much of did they steal from other people? none. did they have a 4.2. no, no, doctors. not lawyers, not athletes.

do they play in the NFL? no, do they play in a rock band? no, maybe on the weekends, there you go, this is the Ramsey show. hey guys, it's Rachel Cruz. when it comes to teaching kids about money, moms tell me all the time just how overwhelming it can feel to get started.

that's why I'm so excited to tell you about financial peace kids. this toolkit was designed to make learning to save, earn spend and give money fun for both you and your kids. the best part it only takes 10 minutes a day. yep, just 10 minutes. you've got this.

pick up financial peace kids at Ramsey solutions, comm slash store. that's Ramsey solutions, comm slash store. we're taking calls from real millionaires. people who did it, not your broke brother-in-law who votes wrong. this is the phone number.

triple, eight, eight, two, five, five, two, two, five. we want to learn from you how it is really done if you're a real millionaire or greater a millionaire again. George George was saying at the break that people were saying you're not a millionaire because you count your house on YouTube comments, which is proof that people's parents or cousins that are in the YouTube comments well they'd like to.

if you take an accounting class and you learn about balance sheets and net worth, this is not something you get to make up based on your little hurt, but feelings. it's not a moral construct. if you have antique cars that are assets that are worth four hundred thousand dollars, that counts towards your net worth. I don't care. if you like antique cars, I don't care if you think they don't run.

well, none of this comes up in the discussion, moron. the actual thing is a definition, God.

I want to. I'm gonna figure out a definition where I get to be a loser, and it's okay and the.

it doesn't give me fuel, it gives me indigestion. Dave is in Indianapolis, Dave, what is?

I'm 60. good, how much of this did you inherit? well, actually, two years ago I got $200,000. okay, were you already a?

I was in health care. both of us are. I was a radiation therapist and she is in healthcare administration. okay for your degree. mine's a four-year degree and hers is masters.

okay, all right. and what was your GPA? I was a 3.8 and she had a 3.5. awesome, very cool, all right. so if.

you got to stay out of debt and kind of distinguish between your wants and your needs. and the third thing I would say is your start, taking advantage of your work. 401k started doing that as early as possible, and the other thing I did was, once I hit 50, I took, you know, that extra you could put in as a catch-up, and I just put as much in the 401k as I possibly could. way to go, excellent.

Luke, what's your net worth? hi, Dave, our net worth is 1.1 million. very cool, I give me a little breakdown on that by category most of.

we've got an HSA in mutual funds about fifty, one thousand and two paid for vehicles at a little less than forty six thousand. and then a little bit of cash and checking and emergency fund. how old are you? I am 34 and my wife is.

so how long you been making serious bank like this? mainly the later 20s, later 20s, early 30s. the first few years were really lean, but most of yours is sitting.

I'm looking at the math, I'm thinking through the curve here on it it you're not a millionaire because you make 400, because that's not happened long enough.

yes, what are they making these?

hey, I got two in a row or took two of them that are youngsters. I like it, giving everybody hope. that's what this is. it's facts. you know, facts have a way of cutting through all the garbage out there.

this is the Ramsey show.

so let's deal with the last three high GPA, not true? the data tells us the average millionaire has a 3.0. the real estate that I'm sitting in is worth somewhere around 600 million dollars. this one campus it's paid for with a zero debt, so that would be part of my personal net worth. my personal GPA is a 2.97.

three one hundredths short of a 3.0, which still pisses me off 40 years later. can we redo this? there might have been beer involved, but yeah, I think it's increased since then. yeah, so in IQ, does it go up over time? no, you can't.

you can't fix it, it's just. it's like. it's like a bad tattoo. you're stuck with it. oh so, yeah, so 3.0 is the average millionaire.

that were our GPA. we don't find many that get a 1.2. I mean you can't really be stupid or dumb and do this. I mean you know they do have good intellect and generally or work hard enough to get a grade right. but they're not prodigies and geniuses.

no one percent. one percent of the 16 million millionaires in America are public figures that you would know their name. one out of a hundred, one out of a hundred. they are sports figures, rock stars, country music stars, whatever you know, actors out of Los Angeles or whatever. but honestly, people in the limelight are notorious for being we work with them, for being on one end of the spectrum of the other.

they're either common sense, very careful, got a good business mind, or they're dumber than a rock when it comes to their finances and you've heard all the stories of the dumber than a rock. so they may make TV shows out of them and they've been on sports 30 for 30 and all that kind of stuff. it's in terms of their finances. I mean a personally stupid they might be, but you know they're really good at picking a guitar and it ends there. you know, I mean that's, that's, that's what we run into in Nashville.

I mean I've got a bunch of friends, country music, people that you guys know out there, and some of them are really good business minds and some of them they're just good music. some of them, their wife, can manage the checkbook. I mean that's it, her husband, you know it's it. so yeah, bad news. so the last one, not the last one that we're gonna talk about in this segment is they're crooks.

see, that's the dumbest one to me. I can understand how you'd think it takes a lot of intellect, or the famous people are millionaires. that makes sense, but crooks doesn't make sense because here's the way it works. okay, if you own a business and you screw people, you mess them over because you're a crook. do you do?

do your customers then tell everybody to come do business with you? no, they tell everybody to avoid that person. they're a crook. so crooks in a capitalistic society, especially where social media is there and you can jump on Instagram and say such-and-such a place ripped me off. crooks have a tendency to not prosper versus prosper.

you can't find enough new people to steal from that. no, don't know any of the other people you stole from to run a business based on crook and people. it doesn't work. so that's just absolutely asinine. made off and Ponzi.

go to jail, do not pass, go. they go to jail, they pull it off for a little while. but it's not sustainable wealth building. so this idea that you know all the people that ever have any money or crooks, that's just your redneck backwoods idiot friend who's jealous, who can't find his butt with both hands, and the only way they can describe it is outrageous to rip everybody off. that's how they got their money.

now you're just dumb. okay, it doesn't work in a capitalistic society that doesn't work.

that's just ridiculous. so it doesn't work, doesn't work, Katie. Katie is in Detroit.

and then the remainder is in non-retirement, mutual funds, our kids, college savings and cash. good, very good. how old are you? I am 30, my husband is 38. Wow, way to go.

how much of this 1.2 did you guys inherit? so I did receive a small inheritance of $20,000 when I was 17. okay, but the rest was all us. did you invest that and that?

your best year working in your work. you're working and you're 30 years old. way to go, yeah.

good, very good. and what is your careers? I work part-time, I work in finance and my husband is an engineer. no good, okay, all right, and.

good, good, well, if he's an engineer, I hope so. I don't want the bridge to fall right. so there we go right, right, good, and so his degree is in.

why do you think the dream is not dead? what was that? why do you think the American dream?

you didn't do any day trading or sports betting or.

yeah, way to go.

interesting, I thought.

he did get rich quick and got out just in time. but that wasn't crypto that was playing margins. yeah, this is the Ramsey show, our scripture of the day, Romans 12, to do not be conformed to this world but be transformed by the renewing of your mind that you may prove what is. prove what is that good and acceptable, perfect will of God? Albert Schweitzer said a good example has twice the value of good advice.

this is a baby steps. millionaires theme hour. we are taking calls from real millionaires. the last lie that is told is that it's impossible to build wealth in America today because the wealth is already held by the wealthy families and the only way you become a millionaire is by inheritance. and that is a statistical lie.

here are the. the facts are disturbing things when you believe wrong things. this is a fact. having done the largest study of millionaires in North America 10,167 of them here's the number 79% inherited 0, 5% inherited a small amount like 5 or 10,000. one caller this hour 20,000, but not enough to mathematically cause them to become a millionaire if your granny leaves you 5,000.

you did have an inheritance, but it doesn't make you a millionaire unless you live to be 200 years old. ok, so it's not an inherited the set. the third thing is another 5% received a substantial inheritance after they were already millionaires. we also had that this hour. the guy with a 3.2 million dollar net worth city received two hundred thousand dollar inheritance after he was already a millionaire.

so he did not become a millionaire because of inherited money. so let me help you with the numbers 79%, 0, 5%, small about 5% after they were already millionaires. 79, 5 and 5 is 89. that's 9 out of 10 of America's millionaires are first generation rich. they are not millionaires because of inherited money, simple.

so anyone that says that is either lying or just wrong, or both, it is simply not true. ok, that that's you can't make it any plainer than that. and, by the way, that matches up with 30 years of doing this and meeting people all over America that are millionaires. I kept running into them and I ran into very few that inherited the money and and almost not. I mean it's less than one out of 10, or just right around one out of 10, and I don't care.

if you inherit money, that's fine, it's, and it doesn't make you a bad person. we talked to a guy earlier in the show today that inherited a million one from his grandmother, and he was 22 years old. that's wonderful. I got no issue. that's fine.

it's not a moral problem, it's just simply not a fact. and when you tell people that they can't do it and they believe you, you're not only wrong, you're infecting other people's hope and you should be ashamed of yourself stealing hope. it's awful it, especially when you're wrong. hello, you're wrong, you're wrong. dial that one in for a second, ok, because I've got the airtight research to prove it.

so oh, by the way, to the five top careers that came up in the study, the number one career that came up most often was engineer number two, accountant number three, teacher number four.

business executive number five attorney lawyer doctors didn't even make the top five teachers did.

yeah, yeah, yeah, I'm a teacher and I don't make any money and I'm broke. listen, I don't. you can whine all you want. why it doesn't change the fact that teachers appeared as the third most likely group out of 10,000 to become a millionaire? why is that?

because all five of those share processes they have to use a process and become. building wealth is a process. they're all five process people. engineers use a process to build a bridge, or doesn't fall? accountants use a process called gap generally accepted accounting principles.

there's only one way to do accounting. there's not six. you don't get to be creative about it. there's not the contemporary version and the traditional version. there's accounting.

that's it. teachers use a process for teaching is called a lesson plan. ok, business executives use a process for managing a project and, of course, lawyers use a process in front of the judge or the judge shuts them down. it's called contempt of court. ok, so you have a process in the law that you use.

these are process people. they follow a proven process, like a baby steps process that we use. that's why they have a likelihood of building wealth because they're process people. so you can, you can decide to do that, even if you're an artist, even if you're not a process person. by the way, artists don't show up anywhere on any of it, and it's not because you're dumb or something like that, but you just make up your own rules as part of the beauty of art trying to live free.

but you, when it comes to your money, you better be a process person, regardless of what your career field is. Kelly is in Kansas City, Kelly. what's your net worth? 3.9 million, Dave. way to go, give me a little break.

you think this?

thing with your budget saving early and often started saving the first year.

hey folks, Dave Ramsey, here you know, budgeting doesn't have to be boring. you just need a budgeting app that's made with you in mind, and that's every dollar. the every dollar app has helped millions of people work the baby steps and take the stress out of planning and managing their money. start budgeting with every dollar for free. right now.

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