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Chapter 1: What is the main topic discussed in this episode?
Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. We help people build wealth, do work that they really love, and create actual amazing relationships. We're glad you're with us, America. Thanks for being here.
Christina Ellis, Ramsey personality, number one best-selling author, is my co-host today. Open phones at 888-825-5225. Daryl starts off this hour in California. Hi, Daryl. How are you? I'm doing fine. Good. How can we help?
I'm wondering why the... Saving for kids college is part of the baby steps. I don't know. I don't quite understand why I should hand my kids that, um, that luxury, just give it to them. I feel like if I build in the expectation that they can work at it, do it themselves. then it'll mean more, and it'll actually get them further in their life and their career.
So I don't understand why that's in the baby steps.
Okay. Well, I don't disagree that a lot of what you're saying is true. But I will put out – you can teach people, yes, if you work your way through and if you learn self-reliance, and you and I are cut out of the same kind of cloth. I don't disagree with your sentiment at all.
The other thing, though, is I've actually proven that paying for your kids' college doesn't ruin them because I paid for mine, and mine are all three very productive, very ambitious – scratch claw, have good work ethic, good character, love God, love their spouses, take care of their kids, and so on. All three turned out. So I didn't ruin them by paying for their college.
But obviously I installed the things you and I are both concerned about into their walk as their dad along the way so that by the time they got to college, I didn't do that. But are you under a moral obligation to pay for their college? No. That's not why it's in the baby steps. If you don't want to under the auspices of what you're saying, I wouldn't disagree with you.
I think you're fine doing that. But I would disagree to say it's the only way they turn out is if you make the road hard for them. That's not true. No, I agree with that, yeah.
Well, we meet so many parents who are, you know, they have students in high school and they wish that they could pay for their kid's education, but they didn't think about it in advance. So this really kind of gets people thinking early on if that's a desire for them to pay for their kid's college education. It gets them thinking early on, you know, how are we going to do this financially?
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Chapter 2: Why is saving for college included in the Ramsey baby steps?
But it's not there to guilt trip you and say you're a bad dad. It's not to say you're a bad dad if you don't.
Well, and there's no shame in saying you can't. I mean, that's what my mom said to me is like she just couldn't afford it.
But even if I could, should I? No, not necessarily. It is not a moral obligation. And to your point, it's right. Now, I will tell you this. If you're going to be the dad or mom that says, I can, but I'm not going to because I want you to. be able to hoe this row, so to speak. I want you to be able to push through this. I want you to learn hustle. I want you to learn grind.
And the lessons you're going to get from being able to pay for it are as valuable as the things you learn. If you're that dad or mom, which is how you started out the conversation, Daryl, and I, again, one more time, don't disagree with you. What you do have in that situation, the moral obligation as a parent you do have is you need to show them how they can do it.
Talk to them about getting good grades so they can get scholarships. Talk to them about choosing a college that's affordable, not a super expensive college that they can't afford. Talk to them about studying something that matters. Don't get a degree in left-handed puppetry and then end up as a barista with $200,000 in student loan debt.
Talk to them about hard work and working and working and working and working and working and working. I worked 40 to 60 hours a week for four years while I went through school. And I didn't die from it, and it's not child abuse. Exactly.
Yeah, and that was, I'm right there with you, Dave. That was one of my thoughts is just one of the best gifts that my mom gave me when she told me that she couldn't afford my education. The fact that she sat down with me after that and said, okay, so this is where we are financially. I can't pay for your college, but- She's a coach and a cheerleader. Exactly. She walked me through it.
She gave me ideas. She helped challenge me. Good luck with that. Right. Sorry about your luck. Or she didn't wait till senior year and then say- Sucks to be you.
Yeah, no, it didn't do that. Yeah. Yeah, you got it. You got to walk with them and say, OK, listen, here's the reason I'm doing this. I want you to get some calluses on your hands. Here's the reason I'm doing this. I can't do it. Here's the reason we're doing this. It's good for you to learn how to problem solve. Now, I'm going to walk with you. I'll help you with the problem solving.
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Chapter 3: What are effective strategies for saving for college early?
He pulled the whole thing together. Director Mike Rowe is in it. Our friend Mike Rowe from Dirty Jobs is in it. Seth Godin, one of the best marketing minds on the planet, is in it. And a bunch of real cases. And so you need to watch Borrowed Future tonight. But anyway, we ended up, I didn't know what it was, but now I do because it's really heavy and it's important. And we won. The Webby Award.
Yeah. So Borrowed Future is award winning. We got the number one documentary in long form, Borrowed Future, right there. And so there's the Webby Award. It's a big old spring. Pretty cool. And very heavy. I picked it up knowing, whoa, that thing's ridiculous. So pretty cool, though. I didn't know they existed and I didn't know we...
But we're up for an award and then all of a sudden we are an award. So there you go.
Chapter 4: How can parents avoid burdening their children with student loans?
I like it. That's incredible. So it was the number one documentary for weeks on Google Play. It was the number two documentary on Apple TV. And it was the number five documentary rent or buy category on Amazon Prime. A lot of viewership on it, and we're very, very proud of it and encourage you guys to check it out. Not because you need to help us or something.
I mean, it's like $3 to watch it, and we get 27 cents or something. So it's not like we're getting rich off the thing. You don't make any money on these things, but it's not a moneymaker. But it is a thing where we wanted to poke into this toxic culture and stir up a ruckus. And, buddy, it stirs up a ruckus.
We have pissed some people off with this thing because these student loan people, man, they're freaking evil. The stuff they are doing behind the scenes is straight up. It's out of some kind of book or something. I mean, it's hard to believe people actually do crap like that. To 18-year-olds. To 18-year-olds, yes. It is a filthy, filthy business.
And you and I, the taxpayers, are guaranteeing these loans, which makes these goobers out there, these crooks, able to do this stuff. It's unbelievable. The Navient people, the Sallie Mae people. Oh, you got to watch this thing, man. It'll blow your mind. Yeah. So, borrowed future. And the message overall is this.
Number one, the message of borrowed future is student loans suck and the people around them suck, so avoid this thing, okay? Number two message is you can go to school debt-free. It is possible. And it has a whole lot to do, most of the time, with school choice, choosing one you can afford. And, you know,
Very few people ask when they're hiring you or when you're doing work with them or anything else, what, uh, where you went to school. And, uh, you know, I, I don't know where my doctor went to school. I don't know where my lawyer went to school. I don't know where my tax guy went to school.
I know that they have been academically trained because they're licensed in those areas, but I really don't know where they went to school. All I want to know is, can you fix this? It's broken. That's all I want to know. And that's, you know, and if you can do that, then I don't really care where you went to school. My tax thing is, you know, screwed up. You got to fix it. Okay.
You know, I said estate planning, whatever it is. I, there's all these people and, and, you know, but people walk around acting like where they went to school. It doesn't, nobody cares. Nobody cares. It's a joke.
Well, they're just I think that's one of the big myths or lies around higher education that has become ingrained in society and is a huge reason why people are taking on crazy amounts of debt. They think, you know, I got to go to the college at all costs. And that's just not true.
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Chapter 5: How can parents teach their kids about financial responsibility?
Go buy one at a junkyard, man.
Well, I guess, okay, I might have to do that as well. My real question, the reason why I called is, do I save, do I spend the $2,000 to fix it, or do I, it's really like rental car army, not used cars right now are much more than $2,000 right now, or do I save a little bit more, but also knowing that my check engine light is on and it's kind of dangerous to be driving with that.
So I just want to pick your brain and see how you try to manage that situation.
Yeah.
How is this car otherwise? Has it given you many problems in the past?
It has. I put a door on it, and I closed it after I got it, and it's my driver's door. The door doesn't open anymore, so I have to get in through the passenger side. But it takes me to where I got to go, and there's no complaints. I've had cars like that.
This is one that needs a name right here. Okay, so if the car was running, if everything was doing okay, what can you get for the car today? I could probably get like $700.
There's so much rust on it. Yeah.
Okay. I don't think that's true. I think you could probably get $1,500. So let's call it that. Okay. If the car was running right, if you had the catalytic converter on it, it does not increase the value of the car that much. Because if it was all fixed up and everything was running just right, it really still wouldn't be worth much more than that, would it? You're right.
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