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[00:00:22]

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollars Car Rental Studios, it's the Dave Ramsey Show where debt is dumb, cash is king and a paid off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us, America. It's a free call anywhere in North America.

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Triple eight eight two five five two two five. That's triple eight eight to five five two two five.

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Chris Hogan Ramsey, personality number one, best selling author, is my co-host today here on the air. Morgan is in Minnesota to start off this hour.

[00:00:59]

Hi, Morgan. How are you? I'm doing well, David, thank you very much, Chris. It's a total honor to be speaking with you right now. You too, sir. How can we help? So I have a question I I'm in I'm 29 years old, my wife is twenty five. We have two kids. We are both full time college students. She's studying nursing, I'm studying geology. And we have very stable incomes. And we just found as a couple of months ago.

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So we're trying to cash flow all of our school. My school's paid for from the GI Bill. Good. But we're having trouble creating a budget when this month we might bring in thirty five hundred. Next month we might bring in fifteen hundred.

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OK, good. All right. And you got a stipend as well, right? Correct, and that's twelve hundred and it's about twelve hundred, but it changes depending on the semester and whether classes are offered online or now mandated online.

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So you guys aren't working much. I'm staying home with my two kids for child care and my wife is working as a senior. OK, and so you're not working at all. I do some online work for the VA. It's about a thousand dollars a month.

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OK, well, you got 100 coming from the government and a thousand is two is 200.

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So, I mean, your minimum is probably higher than you outlined originally when you start talking about this. Am I wrong? The only portion that you're wrong is in between classes, so when summer semester ends and fall begins, there's an entire month that I don't get that housing started. OK, I'm working it out for three weeks. Yeah, you'll be working more. Yeah, OK. So anyway, here's the thing. You lay out your budget on the minimum that you can exist on and you've got to figure out a way to bring that in.

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Every month, OK, the minimum existence, that's food, shelter, clothing, transportation, utilities, baby formula, right?

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The minimum you can exist on and then above that, when you make money, you've got a prioritized spending list of things we'd like to do, things we need to do but are not absolutely necessary for survival.

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And that list of what is the if you want, you make your basic budget, your four walls, then what's the next thing? And then I want you to do that. What's the next thing? And you make a list of, as the money does, that and you just keep that on a yellow pad if you want, and then you can roll it into your every dollar budget.

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Chris, what are you you really can. And Morgan, here's the reality. Because of the inconsistency, it's going to require more structure than you've ever had before. And so in that mindset, whenever there is the opportunity to be able to earn extra or to work, that's the thing you're doing. But what Dave just showed you, you're setting your baseline of knowing exactly what has to be taken care of. So any that comes over and above, we're setting that off to the side because we know we're going to need it eventually, especially come that month where you have the gap.

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You know, sometimes when someone is having trouble budgeting because of an inconsistent income, what they really mean is they're not making enough money to eat on.

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And so you may need to adjust your your ability to earn between the two of you for a period just for just to get through these two degrees, because obviously you've got to have enough to eat them. But I mean, if you had an irregular income, the total 300000 a year, you would have never called me.

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So it's not the irregular part that's killing you, it's the lack of right, and you get down below the line of necessity on a couple of these months and you know, you're in a hole. And if you haven't planned for that hole and don't have my set back for that hole, then you've got a real mess.

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And that's that's the that's the pinch that you're feeling. So lay it out and go. OK, here's our rent. Here's car gas. Here's lights and water. Right. Here's food like food, shelter, clothing, transportation, utilities.

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In the worst possible month, we can barely exist on X, right.

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And you know, in the numbers you gave me, that needs to be under fifteen hundred bucks with the numbers you gave me a minute ago, because you can, you can pretty well scratch together fifteen hundred on almost any month.

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She's a C and A you've got some online stuff. Right. And you know, you don't get the stipend one month you should be able to scrape together enough to get by that horrible month. But then on the bigger months where you've got more than enough, then you work your prioritized spending list and you can do it all with the every dollar budget, it'll all work out right there in it. It's designed to help you do that. And you just update it and update it is all you do.

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Elise is with us in St. Paul. Hi, Elise. How are you? Hi, Dave. Hi, Chris, I'm doing well, how are you? Great, how can we help? Well, here's my question. My husband is the breadwinner in our home and I'm home with our young son. And he's he's such a hard worker. He's very dedicated. And he has all of these gifts and instincts that I just believe he's he's working sort of an entry level position right now.

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But I I just believe he's meant to be in a manager or coach or training role, and he's insecure about the idea of stepping into something like that. So I'm just wondering how can I be a cheerleader and really encourage him to step in that direction? Hmm, OK, so he he hasn't security, but you strongly believe he's capable. Is that what you're saying?

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Yes, of course I do. I do believe it.

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OK, as you look at it, what do you think he's insecure about? Is that the lack of experience or the lack of skill? It's for lack of experience, his his college, his college degree and experiences in a different field. And so his common response is that they would likely overlook him and hire someone else with more experience and managerial training.

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OK, and so what I do is, you know, as you sit down and you talk with him, begin to talk about the career path. Talk about the trajectory of the goals and dreams you guys have for yourselves, but also your family. Do you all have any kids yet?

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We do we have a son who is about a year and a half. OK, so you've got a year and a half. And so, you know, it's a matter of looking at this. And if it's helping him with his confidence, that's one thing. If it's helping him grow a skill set, that's going to be another where he's got to be a little bit more intentional to go after whatever that is that's missing in his life, he might need to connect with a mentor that might at least be an encouraging thing for you to do if there's a successful business person or leader in your church or in your friend group for him just to go to coffee with and begin to talk about his path.

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Yeah, one of the things is this. Any time you've never done something, no matter what it is, if you're not a little bit scared doing it, insecure doing it, and that makes you a fool.

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Hmm. So the first time he drove a car, the first time he rode a bike, the first time you do anything this brand new to you, it's it should be a little scary. Oh, yeah, that's normal. And so I just talk that through with him and say, you know, I do believe in you, but, you know, you got to get some reps. You got to jump in there and give it a shot.

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And that's how you start to get a feel for it. That and getting some people, some men in his corner, one offs as mentors are maybe even a little Bible study group of guys that are that are doing things and that'll encourage him to step out. I push some of my buddies out of the nest. I know that this is the Dave Ramsey Show. People all over the country are discovering a faith based and budget friendly way of meeting health care costs through Christian healthcare ministries, Christian health care ministries, or CHF, is a nonprofit organization that helps members carry one another's burdens with health care expenses.

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And they have successfully shared each other's medical bills for nearly 40 years. CFC HSM is right for you by visiting S.H. Ministries c h. M is a proud sponsor of Dave Ramsey live events. My co-host today on the air, Remzi personality Chris Hogan, number one, best selling author. So, Chris, 25 years ago, it was February the 19th. That's what it feels like.

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Feels like a decade or two. Does the like a couple of decades have happened since February? Yes.

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And the stock market on February 19th with the S&P 500 closed at a record high on February the 19th, the economy was booming.

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The sun was shining. 20-20 had started off to be, by and large, an incredibly good year.

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Enter covid. Enter. Porn, fear, fear, pornography. People so afraid that it's like they're addicted to porn, they're in their homes, huddled and sheltering 40.

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Million people lost their jobs. The stock market dives.

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Mm hmm. The Dow was at almost 30000, it goes down below 20000, lost a third. Of its position, people are calling us like they always do in the middle of a crisis, screaming and carrying on, that they're about to lose all their money. I'm scared. I'm pulling all my money out of the market. I'm not I can't believe. Oh, my God. Oh, my God. Oh, my God.

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You remember that. I do remember, Dave, we spent the entire month of March and April. Yes.

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Months of March and April trying to convince people to not cash in their money. But Ramji personalities did 458 media hits in those two months. That's right. In the primary message was stay calm. Don't pull your investments out.

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That's exactly right. Did a ton of. Things were bad, they they were scary, it was tough. We tell them to stay true, follow the process, we've been here before, this, too shall pass. This, too shall pass. We've been here before. We don't get hurt on a roller coaster if you don't jump off in the middle of the ride. That's right.

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We went back and talked about 9/11, talked about the SARS epidemic, those seven 09 depression, recession, Y2K, Y2K. We gave them history.

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Black Monday, 1987, the days that the stock market fell and the people were screaming and carrying on. That's right. And we tried not to shame them or make fun of them during the times that they were the most scared.

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But just calm them down and say, don't take your money out, because if you sell at the bottom, you're going to feel stupid when this recovers and it's going to recover and it's going to recover this fall. We did.

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That's what I said. No, you can go back and pull the podcast. Dave Ramsey said it. I will be back in the fall. That's right.

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And you're going to feel stupid if you took your money out.

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I remember you saying it. What have you found out? You seem to know something.

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Well, we're sitting here both looking the same article. I know something. Come on. S&P closes at a record, erasing all of the last pandemic losses, the S&P 500. Capture a furious fifty one point five percent rally that began in late March and set a new record today, recovering over 100 percent of any losses that it lost during the pandemic since February 19th.

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So from February 19th down into March into late March, it dove and over and over and over and over and over.

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And by today, and it's not even fall. No, 100 percent recovered. Wow. So far. Will it go down again? Yes, yeah, sure will. Sure will. Will it go up again? Yes, it changes the only thing you can count on. Hmm. And this is where investing comes in. It's you know, it's requires being a grown up and not a crying little sucking your thumb. A little kindergartner in the corner.

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That's OK. If you're a kindergartner, it's not OK for an adult. That's for work. No, you're right.

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And this thing you have got to have a vision where there is no vision, the people perish. You've got to look out into the future and you've got to say, is the pandemic or Y2K or nine one one nine one one recovered in 57 days?

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Haven't counted up a number of days yet.

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But from the bottom of this, probably not far off. Mm hmm. Oh, about fifty something days, maybe 60 something days. And I had to go back and look at when the bottom was, but that's about what it was.

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But the fear I want you folks listening to remember how tight your throat was, how your stomach was halfway up into your chest, how your heart was beating, how you were checking your 401k balances every morning like you were checking covid cases and like you were looking for a tornado to come at your house. You're looking on the Weather Channel at the number of covid cases in your state, the number of covid cases in your county, and you're looking at your stock market go down and you were addicted to fear.

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Yeah, because that's what you were sold.

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Mm hmm. For a lack of vision, the people perish. And I'm not I'm not making fun of you, I'm just saying I told you so. And so you've got to learn these lessons. Part of maturity is being able to look past what's going on and take what looks like a disaster and say it is temporary. Yes, it is temporary. Yeah, it is temporary. It is temporary. It could take two years to come back. It could take two months to come back.

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But will the pandemic completely destroy the U.S. economy? Is the logical, critical thinking skill you have to develop?

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No. Well, it didn't. It's a 100 percent back. As of Tuesday, the S&P 500 closes at a record erasing last of pandemic losses. Wall Street clawed back the last of the historic frenzied losses unleashed by the coronavirus as the S&P 500 closed at an all time high Tuesday, the benchmark index notched up a modest point two percent gain to beat its previous record highs set on February the 19th, before the pandemic shut down businesses around the world and knocked economies into their worst recessions in decades.

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Well, that's an overstatement. It's not the worst recession in decades. It might be one of the shortest recessions in decades, but it's not the worst.

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A worse one is one that goes on and on and on and on and on and on and on and on and on.

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We lost 40 million jobs. 20 million of them are already back to work. And some of the ones that aren't back to work don't want to be. For different reasons right now, reflectance of that government money by not working, right? Yeah, yeah. And so, you know, we got the government interference in our economy and you see what happened with that. So, guys, there are lessons to be learned in these kinds of things, their spiritual lessons, their emotional lessons, their financial lessons, their wealth building lessons.

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And you've got to start looking at this stuff and go, really, where are we to day?

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Yeah, and we kept saying what we say. Dr. John Allen said, facts are your friends. You do not you do not make good decisions when you're drunk and when you're afraid.

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Well, it's really important to remind yourself as you look at this and see this article and to hear this and to know it. And I think, you know, the lessons that we go through, we get a chance to learn from them. And when you apply wisdom, it becomes knowledge, right. And wisdom for yourself. But just hear this and understand it and then start to grow and understanding this process of investing of what's going on. But for goodness sakes, don't rely on the media to give you your reality.

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You've got to keep your hand on the pulse and know what's going on.

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Well, the reality was the stock market was going down, but the what the media was telling you was that the world is coming to an end. Chicken Little is here. The pandemic is going to ravage the planet. It is Ebola. Everyone's going to die. Two million people are going to die. They don't teach math in med school, apparently. No. So there we go. And, you know, it's just the whole thing is, you know.

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Huh? Well, I'm so happy that these companies have recovered because that means the jobs are coming back and that means the folks that need a job and want a job and are willing to work are going to have a place to work. They have a place to go. Yeah. Once they get out of their home. Right.

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And once their economy starts to open up and so forth, I'm still I'm in such a bubble because we've been back to work here where the thousand of us in this building for months, we were off for about we were off we were working from home for about five weeks.

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And since then we've all been back. We've not had a positive case in the building since July the 19th. And so about a month. And now without a single positive case, out of a thousand people, we had 17. So one point seven percent got the cold and flu. But at one time or another, zero deaths. And we're all at work and we're you know, we're with each other every day. Our cafe is open, you know, and, you know, we're not being completely recklessly unless you do it by some of your standards.

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Who are people and some of you haven't left your home yet. So and yes, I am making fun of you. So it's time to come out of your cave. It's time to come out of your cave. America, this is the Dave Ramsey Show. Finding the right pair of sunglasses on a budget is difficult. They're either too expensive or they don't hold up. But recently I got a great pair of sunglasses from a company called Shady Raise.

[00:19:26]

They are a game changer. Chagres offers premium sunglasses that protect your eyes and are completely affordable. I'm talking the best overall value in sunglasses. Plus, they also replace your shades with a brand new pair if you lose or break them. And I do that all the time. Right now, you get 50 percent off two or more pairs at shady res dotcom with the promo code. Ramsey Qadi, Razr Dotcom Code Ramsey.

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Well, folks, let's get real, some of you are getting close to baby step four where you start investing and you're freaking out because, you know, you're going to say 15 percent of your income for retirement, but you don't know how to do it. You don't know about investing. No shame in that at all. Learning about something new is always a process. And that's why you need to have someone that has the heart of a teacher in your corner teaching you.

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We do not recommend financial people who tell you what to do and you do it blindly without learning. Hmm. You're supposed to learn what to do. The trick is to work with an investing professional, like a smart investor so they can answer your questions in English. Don't sound like Charlie Brown's teacher. Wah, wah, wah, wah, wah, wah wah.

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Because when it comes to investing, you've got to know what you're doing. And then like we were just talking about in that last segment, something like a pandemic or a downturn in the economy, for whatever reason happens, then you're not freaking out because you actually know a little bit about the history of the stock market.

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And, you know, it comes up and, you know, it goes down and you really expect it. You don't expect a direct trajectory through the roof.

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Nothing does that. And the stock market certainly doesn't. So don't freak out about baby stuff for just begin the process of learning and find someone with the heart of a teacher. Go to Dave Ramsey, dotcom smart investor, find a smart investor.

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Vesterbro in your area. Nolan is with us in Riverside, California. Hi, Nolan. Welcome to the Dave Ramsey Show. How can Chris Yogananda help?

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Hi, Dave and hi Chris. Thank you for taking my call. I just had a typical question and advice. If you guys can help me, I'll try. OK, so I'm going to finish up the college next year. So I have one year left within my program and once I'm done, I'm going to be about forty eight thousand in debt and can with everything, all of my student loans and I'll be the only guy that I'll have. I was just curious, what's the best way I can do once I graduate to quickly and effectively pay it all off?

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Hmm.

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Well, Nolan, I would tell you this, buddy, that the best way is to go ahead and start to really look at it, identify it. And then as you graduate and you start working, you want to keep expenses down very low and throw all extra money to tackle these debts using what we called the debt snowball. So you're going to attack them. Small is the biggest keep in lifestyle down, making minimum payments on everything but the small one and throwing extra money at it.

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That's that's how you're going to do that, not struggling with it. This is attacking and getting very serious and intentional.

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Like like if you don't get it done that you're something bad's going to happen. Right. You got to do it real fast. Yeah.

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Like with great intensity, focus and intensity and then working them all, smallest to largest is the secret of how we've led literally tens of millions of people through out of that.

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And Dave, I'll never forget, we were just alone together just a couple a week ago and we talked to two medical co two doctors that they paid for it, paid cash for medical school. So, you know, and attack the student loan debt over 200000 and got it out of their lives. So I don't want to hear people tell me you can't do it. Tell me you won't. But don't tell me you can't because you can.

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So not on. The trick is don't go buy a bunch of stuff. Don't raise your lifestyle. Keep keep living like a college student. Yeah. And let's say you get a job making sixty and you put 24 of that 60 a year. That's twenty dollars a month on your 48. You're done in two years. Pay them just like that, just punch it in the nose and knock it as fast as you possibly can. Jeans in Portland, Oregon.

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Hi Jean. Welcome to the Dave Ramsey Show.

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Hey. Hey, Dave. I and so I'm not excited because me and my boyfriend have been together for two years and my friend went to school for eight years, but unfortunately, with no degree, he couldn't really make up his mind what he wanted to do. And now he's forty seven thousand dollars instead on. But his dad also took out another fifty thousand in a parent plus loan. So right now, I mean, my boyfriend would love to buy a condo, but I'm just I'm not sure if or when ever we're going to be able to do that.

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He now works at a bank and he makes thirty three thousand dollars a year. I've gone from job to job and I'm trying to figure out what I want to do still. And if I go back to school, though, you know, I'm going to have to probably take out loans as well. But I don't I just don't want to do that. You know, I have saved up seventeen thousand dollars in my bank account right now, right?

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Mm hmm.

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But OK, let's stop a second. Yeah. Are you guys are you guys planning to get married soon? I'm like, no, no, not. OK, so I mean, I could just tell by the way you started answering the question, so if you're not planning to get married soon, you do not buy a house together. Very, very, very dangerous for you to own a house with your roommate. Where's your room? Right up and leave.

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Mm hmm. I agree, if your husband up and leaves the I'll make him pay for the house, not your roommate. And so very unwise, relationally, very unwise, financially, very unwise legally to buy a house with a guy you're shacking up with, it puts you in a very vulnerable position.

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And so until you're married, quit looking at your lives through the lens of wee because you're not a week yet. You're just you're just a dating couple. OK, and you don't own you legally do not own anything together, you legally have not combined anything. And so you have to work on your career path and your debts. And he needs to work on his career path and his debts. If you're getting married, once you're married, then we'll talk about combining these goals and combining the ownership in the house.

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But, Jane, let me tell you, here's what I've run into for 30 years of doing what I do. The number of times stuff like this has happened, shacked up couple buys a house together. They're partners. From a legal standpoint, there is no partnership agreement because they were playing house. Acting like they were married, but they didn't have the legal benefits of having been married. He gets killed in a car wreck. Now you own a house with his mother.

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Because you're not the air. You have no legal standing in this situation whatsoever unless there's a will. And but if there's not, then his heir would be his parents. Mm hmm. And so now you and his mommy are partners in a house. This is a recipe for a life that sucks. Yeah, I agree, and this is the kind of thing happens or he gets disabled or something happens to you and he has to deal with your mother, I don't know what it is.

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Or maybe it's the father. I don't know. Or maybe it's the crazy brother, which is the only er I don't know. But there's crazy and screwed up stuff in every family and you get to play with all of that as a partner.

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No thank you. Instead of as a no thanks.

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So you need to take your 17000 dollars and decide what you're going to do with your life and get about your business of living your life.

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That's right. And listen, don't just fall to school as the next thing to do. Oh, well, that's good. I mean, you can't and too many people have done that. And we've got young people that have signed documents. They don't understand repayments they can't afford. So you start to think about what it is you're going to do, what it is you want to do as you work. And I'm proud of you for having some money set aside.

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Be intentional and don't let that slide through your fingers. Do not need student loans.

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No. Pick out a field of study and a place to study that is consistent with what you want to do. It's not a fallback. It's not the next thing to do. That's why it's an intentional series of actions that are going to take you to successful living.

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You can no one wanders accidentally into wealth. No one wanders accidentally into high quality relationships. No one wanders accidentally into success. That's right. They never interview the guy at the end of the Super Bowl and go, how'd that happen?

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And he goes, Oh, no, I just got off the bus. No, that's not what happens. It's a series of intentional acts that cause people to win it things. And so, Gene, what's missing out of all the different parts of this with your boyfriend and the parent plus loans in the forty seven thousand dollars and eight years in school, there's no intentionality. He's wandering around chasing his tail. You said, I don't know what I'm going to do.

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You guys really need to sit down and start to think about individually and or together. Right. We're going to get married. It's going to be the life we live. We're going to pursue these careers. We're going to pursue some things. We're going to stand some things up and knock some things down. And but you're not going to wander into happiness. It's not going to work. You're not going to wander into a level of success, a level of fulfillment.

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And for God's sakes, don't buy a house for somebody you're not married to. This is the Dave Ramsey Show. Our Scripture of the day, Proverbs 19, twenty one, many are the plans in the mind of a man, but it is the purpose of the Lord that will stand. Robert Waterman said organisations exist only for one purpose to help people reach ends together that they couldn't achieve individually.

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That strong actually is with us in Binghamton, New York. Hi, actually.

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How are you, Chris? Elijah. Great. How can we help? I've got a question for you.

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I'm maxing out my fourth one and my catch up contribution. They might say, well, I don't see much to go into. A Roth is back toward lost my next step of saving for retirement. Was there a better plan?

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You could get me back to a Roth saw some. I do them every year. And all of this as you open up an after tax IRA and then instantaneously roll it into a Roth, there's no tax consequences whatsoever because you're not tax sheltering the money you start with. And so and, you know, I do I-Max that out every year with my wife and I both.

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It's not a ton of money, obviously. I mean, you can just do the six thousand seven thousand dollars if you if you're 50 years old or older.

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And so we put 14 a year and Sharon and I do doing that.

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And that's, you know, it's nice to do. The other thing you can do is do you have any self-employed income? No, I don't, but I do own a business or a business along with my primary income. Now, that's not paying me. It actually owes me money as a loan. But that won't stop paying me for about four years is the projection right now. OK. You're paying the loan back first. One time back a bank line first, and then it'll pay me back and then we'll three way partnership, which will split profits after that point I would take a portion, let's say I'll just make up a number.

[00:31:51]

Let's say your portion. Once the bank loans done is 40 or 50 thousand bucks, take some of it as repayment of your loan and some of it is income. And then you can take that income as self-employed income and do a slap on it. Bit9 on income. And so you could do a self-employed pension plan that gets some more sheltered, if you want to do some more sheltered, you'll get your loan repaid slower, but you'll be able to invest more over a longer period of time by by twisting that around and doing it.

[00:32:23]

So it's a lot of charging business. I mean, I pulled this money out of my account, so I'm charging the business back what it's charging me. So it's going to be like a fully back door that we put on the books. Look at the time comes. But is it still the best path forward based on that?

[00:32:41]

Yeah, I mean, you can repay the loan and then to take income off the business. That was your original plan. Either one's fine.

[00:32:48]

I didn't realize you had an actual dad I thought you had loaned that business to. But now you've got debt outstanding. So I want to clear up that debt before I do any absol, actually, because it's used in your home.

[00:32:58]

Right. You use your largest monetary asset for this. And so don't don't shut down that he lock, get you a fixed rate loan, get it on a 15 year fixed, get that thing out of your life or get paid off and then let the business pay you back. That's right. But you don't have to have the outstanding corresponding that right. That would be my first goal before I tried to do additional sheltered income. So Kyle is in Billings, Montana.

[00:33:21]

Hi, Kyle.

[00:33:22]

How are you? Good, how are you? Better than I deserve. What's up? Hey, I've been looking for a lumber yard for about 15 years now, they've been around about 30 years, and just recently they have offered to sell it to me and the bookkeeper who will say something we're not too worried about being able to make the business run and be profitable from it. But the down payment for it is where we're really struggling with it's a three to four million dollar company and we're working through an SBA.

[00:33:55]

They're going to want 10 percent down. I guess what I'm struggling is I have a profit sharing through the company that once it sells, it'll dissolve and I'll be able to get tons of money out of there. And then also I could take their key lock out of my house. But I guess I don't know if those are the best option for me to get a down payment.

[00:34:14]

OK, when you say three to four million dollar company, I mean, that's a top line growth. Well, that's what it's going to cost. That would have been contested by the company to buy it. So what's the net profits on this business annually?

[00:34:29]

It can be anywhere from seven to eight hundred thousand. OK. All right. Oh, that's pretty hefty price, but and, you know, they're willing to work with us. They're actually the lease. The property is half the cost of the whole thing. And they're going to lease us to that lease of that property for as long as we need to till we get the other loan paid off. OK, but we're looking at a hefty down payment that we don't necessarily have the funds to really know how much is in your profit sharing.

[00:35:02]

I have about 85000 in there, OK.

[00:35:05]

All right. I would structure this deal differently or I would walk away. I know this has been a dream of yours, but I don't want your dream to become a nightmare. I do not run into people who have enjoyable experiences with SBA loans.

[00:35:20]

I run into people who have horror stories with SBA loans. You're leveraging into this. Number one, I would break this apart into a piece of real estate that you are leasing with an option to buy at a set price, a 10 year lease, right. With the right to buy it for X million me into whatever it is, me and five any time during that 10 years.

[00:35:44]

So that gets that off the books. Now, we got a million and a half purchase price on something that's netting 700 K. Now we've got a good deal. This is a good bonus business, OK? Yeah. And what I would do is what do you make now?

[00:35:59]

What's your salary? About 53000. OK, I would tell the owners that I will run this business for sixty thousand dollars a year and give you 100 percent of the profits above that until we reach a million and a half. Mm hmm. And they'll get all their money, 100 percent of their money in two or so years, if you told me correctly, right. Right. And you don't need to get a raise, you've been living on 53, you put zero down, you have zero debt if there's zero profit, did you understand?

[00:36:36]

Right, they get 100 percent of the profits, let's just pretend a pandemic hit and they quit selling lumber. Like something like that could ever happen. Yeah, and then you've got an SBA loan and you got payments in your house in foreclosure and your business is in foreclosure and the land that the business sits on is in foreclosure because you got the SBA, which is the DMV of small business running down your back.

[00:37:01]

Right. Believe me, can you tell in 30 years I've worked with people in that situation, can you feel it in my voice? Yeah, you don't want that. You don't want that, my brother. So now here's what we do in two, two and a half years. You own the business free and clear. In my scenario, if it does what it's supposed to do, if it makes the kind of money you think it's making, OK.

[00:37:21]

And then guess what? Two, two and a half years later, five years into the plan, you now own the real estate free and clear because you optioned it at a million and a half.

[00:37:31]

Yeah, and you write a check and pay cash for it because you saved up, because you continue to live on 60 to 100000 dollars a year and put in the bank and get this done. Now, eight years from today, six years from today, you own a piece of real estate worth a million and a half and you own a business cash flowing 700000 and you have no debt at all.

[00:37:54]

Dude, you think you're going to be wealthy now? I think you're going to be wealthy now. Yeah. Or you get to drag.

[00:38:01]

But this crap out for the next 20 years, screwing around with the SBA, go with option A..

[00:38:09]

You know, and here's the thing, buddy. You sitting down with the owners and really having a real life conversation. You guys going to dinner, sit down talking about this thing. I'm going to give you all the money.

[00:38:20]

I'm going to everything. But, you know, that is not the scenario I was thinking. But that's brilliant.

[00:38:26]

Of course it is. Kyle, let me go back to talking to you. Let me talk to you. But but having a real conversation and also a real negotiation as it gets serious, you need to see the books. You need to see the numbers. And this is all things that would be drawn up in a legal process. But this is a beautiful scenario for you.

[00:38:48]

My friend may tell you what, when they start getting 100 percent of the profits of ex, all of a sudden they start telling you the truth about the profits. Yeah, yeah. There is no exaggeration.

[00:38:56]

You know, there is no oh, well, you know, we pay taxes on this, but the real numbers are this, which always comes up at a small business sale, which means you're just full of crap.

[00:39:05]

That's what that means. And so you got to get to what the real numbers are and you'll get there real fast if they're getting their portion out of that. Yeah. And don't get paid otherwise. Very. Guyman, you go get that business. It's a great business, but don't do it in a way that cost you your whole life and it ain't worth and that puts us our The Dave Ramsey Show on the Bucks.

[00:39:22]

Thanks, Chris Hogan. Thank you, sir. Thanks. James Giles and Kelly Daniels. Good job. This is The Day Ramsay Show. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial beast, and that's the Walter of with the Prince of Peace Prize. Jesus. This is James Childs, producer of the Dave Ramsey Show. You can listen to Dave, Rachel Cruise, Chris Hogan or the rest of the Ramsey network anywhere with the Ramsey network app on your smartphone, catch all of our full shows, browse by topic or send clips to your friends, head to the App Store and download the Ramsey network app, feel like you're in a rut and living life, just going through the motions, build confidence in yourself and learn to trust the God who created you.

[00:40:06]

Check out the Christy Wright Show, where Kristi inspires you to break through your limitations and create the life you're proud to live. Hey, all, I'm Kristy, right? You know, it's so easy to feel stuck. You live life just going through the motions, doing dishes, doing laundry, carpool lines and a whole list of commitments that bring you no joy. Why do we live like that? That's why I want you to check out the Kristy Wright Show.

[00:40:30]

Each episode will help you build confidence in yourself and the God that created. You hear more from the Ramsey network, including the Kristy Wright Show wherever you listen to podcast.

[00:40:43]

Hey, it's James, producer of The Dave Ramsey Show. This episode is over, but check the episode notes for links to products and services you've heard about during this episode. Thanks for listening.