Delayed Gratification Is a Key Ingredient to Building Wealth
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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show. We help people build wealth, do work that they love, and create actual amazing relationships. Ken Coleman, Ramsey personality, number one best-selling author of the book Paycheck to Purpose, is my co-host today. Open phones at 888-825-5225. Leon is with us in San Francisco. Hi, Leon. How are you? Hi Dave, how's it going? Better than I deserve. What's up?
So I've been fortunate enough to amass some money over the years through just working and some very nicely timed company acquisitions. And now I would like to make one of my childhood dreams come true. I like to buy a super car that's worth about $250,000. Cool. Which car? uh specifically the lamborghini um huracan a used one that's a beast yeah usually 250 you're right news what 450 yeah i think so yeah yeah okay cool so what your model would that be Well, looking on some of these websites, anywhere from a 2015 to a 2017, 2018.
Okay, so a 10-year-old has lost $200,000 in value. Yes. That's about right. Okay. And what's your net worth? You sound like you're a bazillionaire or something.
My net worth, so I can break this down. I have a net worth, if you include the mortgage, about $3.66 million.
Okay, and what do you make in a year?
I make about $300,000 a year, which doesn't include a 30% bonus. It's a single income. I am married with a one-year-old child, but my wife is a stay-at-home mom. And how old are you? I'm 39 and she is 41. Okay, all right.
39.
Okay, good. Well, you've done really well. Congratulations. Thank you. There's a couple of rules of thumb. Generally speaking, you do not want to own all the things you have with motors or wheels to be more than about half your annual income. Now, your income is a little wacky because you've made big chunks of money doing a few deals here or there that don't really include your $300,000. So this violates that. You know what I'm saying? It's more than half your annual income. So that's one rule I look at. It's not a hard and fast rule. The second thing is, the main thing I do today, if Sharon and I are doing something that feels kind of, Like a weird large purchase that strangely, or even a large amount of money we're giving away in generosity, the same thing.
We use the burn the money in the middle of the floor thing. If I took this much money and set fire to it, does my life change? If the answer is yes, then it's too expensive. I see. I think you could lose 8% of your net worth. 250 as a percentage of 3.8 million, and probably not miss it. Okay. Because the 250 is going to be worth 150 in 20 minutes. You know that. I mean, we already established 450 turned into 250, right? Right. It's going to go down in value, and the bigger it is, the faster it's going to go. I mean, the good news is most of the loss is gone. The first 10 years, you're going to lose the most of it. And don't get caught up in the illusion it's going to go up in value. They're not. They're going to go down in value.
And let me just tell you, the new ones are better. They don't make them like they used to. Thank God. I got a 1960 Corvette frame up restoration compared to the new Corvette. It's a piece of crap. I mean, compared. It's a beautiful little antique car, but thank God they don't make them like that anymore. We have, like, brakes that work and power steering and all kinds of modern conveniences now, you know? And so, you know, it's... So, number one, if I burn the money in the middle of the floor, does it affect my children, my grandchildren, my wife? No, it doesn't. You can do it. You can afford the car. I think you can afford the car. Then the last thing I do... Leon, is I ask myself some contentment questions, particularly about cars because I'm a car nut. If no one ever sees this car and only I see it and enjoy it, do I still want it? For me, if I'm driving that car, the answer is yes. Because I don't give a crap what you think. I'm going to enjoy that freaking fine piece of machinery, right?
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