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The Ramsey Show

Is $1.4 Million Enough To Retire On? (Hour 3)

06 Jun 2023

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: What financial advice is shared after leaving a toxic job?

27.908 - 53.896 Dave Ramsey

Live from the headquarters of Ramsey Solutions, broadcasting from the pods of Moving and Storage Studios, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Thank you for joining us, America. Jade Warshaw, Ramsey Personality, is my co-host today as we answer your questions about your life and your money.

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54.357 - 65.596 Dave Ramsey

Open phones here at 888-825-5225. Thank you for being with us. Jose starts off this hour in Fayetteville, Arkansas. Hey, Jose, how are you?

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66.938 - 69.242 Jose (Caller)

Hey, Mr. Ramsey and Mr. Jade, how are you all today?

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69.262 - 70.504 Dave Ramsey

Great, man. How can we help?

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71.581 - 80.973 Jose (Caller)

Yes, sir. Well, I just want to start real quick by thanking your entire team. I met most of y'all at the SPAR conference for your grand opening, and what a fine event. So thank y'all for what you do.

81.253 - 83.856 Dave Ramsey

Well, thank you, man. Appreciate you coming over to Nashville for that.

84.998 - 86.84 Jose (Caller)

Thank you, sir. It was a great, great trip.

88.122 - 89.163 Dave Ramsey

Cool. How can we help today?

90.345 - 117.014 Jose (Caller)

Yes, sir. So I'll start right off the bat. So I just left my 9-to-5 job. And, uh, as an assistant manager and, uh, just due to poor leadership. And, uh, I went ahead and, uh, started my own remodeling and handyman services company brought off, uh, back to back within a week. So I'm just calling for some wisdom. Um, you know, I, I just need to, you know, get some do's and don'ts from you.

Chapter 2: Is $1.4 million enough to retire comfortably?

281.928 - 306.788 Dave Ramsey

And then the trick here is, of course, to manage the estimating process. And, man, I'd pick me up some software to do that, some estimating software, and build it into an accounting system if you can. It's not real complicated to do so that you track how closely and accurately you do that. And you charge all of your tools and all of your purchases to a job. Job costs everything.

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307.932 - 309.174 Jose (Caller)

Ah, okay.

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309.194 - 330.801 Dave Ramsey

That's great. And that way you say, okay, that job was, you know, I had to buy an extra tool that was X number of dollars to do this job. And this job bought the tool. And I still made a profit. Okay. That way you don't end up taking all your money and buying tools. Because in your business, you can just buy tools for everything. You know, I mean, you buy tools for days.

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331.945 - 345.14 Jose (Caller)

Yeah, last night I was at Home Depot, and, of course, I'm pretty sure you've seen the Milwaukee packout system, and I'm like, I need to go home, just relax, think about it, and then I'm like, well, I don't need to spend, you know, a thousand dollars right off the bat.

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345.16 - 360.096 Dave Ramsey

Yeah, let a job buy that for you. Some job where you'll actually utilize that, because that's a great system, by the way. I love the Milwaukee stuff, but I'm a tool on that. But, yeah, jump in there. But let a job pay for it, and that way you're not just a boy collecting goodies.

361.105 - 363.067 Jose (Caller)

I see. Okay.

363.087 - 387.67 Jose (Caller)

Um, last, uh, I guess last, uh, uh, question would be, uh, uh, you know, I do listen to the entre, uh, entre leadership and, uh, for leadership purposes, uh, I'm trying to, you know, grow as a, uh, grow a better leader just so that when the day dudes does come when I need to hire, um, just, you know, uh, of course, uh, you, you said, uh, really great, uh, examples there at the, you know, rising solutions.

388.105 - 393.846 Jose (Caller)

So just, you know, a couple, you know, pieces of wisdom that I can use for muscle build.

394.18 - 416.765 Jade Warshaw

In your situation, it sounds like the first type of hire probably wouldn't be like a full or part-time person. It'd probably be just a contracted worker. It's a handyman business. So you might be hiring a guy that does a specific task and you're just hiring him to do that task for that job. And maybe you've worked out something where he's coming back to you just to do that type of labor.

Chapter 3: What should I consider before consolidating my debt?

496.989 - 501.493 Dave Ramsey

So I just decided I'm not going to treat other people like I got treated. So treat other people like you want to be treated.

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501.513 - 502.234 Jade Warshaw

Golden rule.

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502.214 - 525.943 Dave Ramsey

The golden rule. I mean, it's not hard. And so just be kind and gentle and courageous and firm and truthful. Treat other people like you'd want to be treated. You tell them you're going to pay them, pay them. You tell them they need to do something, make sure they do it. You know, treat other people like you'd want to be treated. And to be unclear is to be unkind. This is the Ramsey Show.

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532.69 - 556.682 Dave Ramsey

Jade Warshaw, Ramsey Personality, is my co-host. If you're a business leader, there's something you need to know. All the best leaders spend time and, yes, some money investing in their own growth. As our friend John Maxwell likes to say, leadership ability is the lid that determines a person's level of effectiveness. You've got to invest in yourself if you want to grow.

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557.102 - 576.319 Dave Ramsey

And what better way to do that than to attend the premier leadership conference of the year. Entree Leadership Summit. We just finished the one that we did this year, last week here at the Nashville Gaylord Hotel. And next year, we're going to be in Dallas. You're going to be challenged and motivated by the top minds in leadership.

576.78 - 600.947 Dave Ramsey

People like James Clear from, oh man, from Atomic Habits is going to be speaking. Craig Groeschel, Pastor Craig, pastor of America's largest church, arguably, and one of the founders of the YouVersion Bible app with a half a billion downloads now. Craig is an incredible leadership speaker and a good friend. Mike Rowe from Dirty Jobs and Deadliest Catch will be there.

601.368 - 607.217 Dave Ramsey

Carrie Lorenz, America's first female fighter pilot. And is she inspiring?

607.237 - 607.317 Bruno Satin

Wow.

607.337 - 622.711 Dave Ramsey

I'm telling you. Some guy named Dave Ramsey will be there. So you never know about that guy. But, hey, the rest of them, probably going to be pretty good. And next year's Summit's 10-year anniversary of this, we've been doing it, and we're taking it to the Gaylord Texan in Dallas to celebrate.

Chapter 4: How much tax will I owe when cashing out stock?

722.705 - 726.992 Jade Warshaw

Does that feel right? If you feel like yes, then great.

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726.972 - 727.914 Dave Ramsey

It'll last forever.

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728.034 - 730.638 Jade Warshaw

It'll last forever because you're never touching the principal. Yeah.

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730.658 - 731.96 Dave Ramsey

It'll keep laying the golden eggs.

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731.98 - 744.06 Jade Warshaw

That's right. And that's really where you want to be. You don't ever want to have to touch that money. But if you're looking at that and you're like, oh, I don't know, living on $140,000, I've been living off of $200,000. If you've got a house payment, there's so many things to consider.

744.16 - 750.431 Jade Warshaw

But that's ultimately, at the end of the day, what we want to be looking at is living off the interest and if that's possible for you.

751.052 - 776.275 Dave Ramsey

Yeah. Yeah, and here's a simple equation, and it is probably overly simple, but just to kind of give you an idea. All right. Inflation, not counting lately or counting lately, actually, for the last 75 years has averaged 4%, 4.2%. Okay. Now, lately, we've been closer to 10. Sure. And in the 70s, we were at 12. But the average... Over the last 75 years is 4.2. All right.

776.295 - 804.716 Dave Ramsey

Now, the average stock market rate of return is 11.8 since the stock market began. That's the average annual return if you had invested in growth stock mutual funds across the stock market. Okay. Now, so if we just use rough numbers, let's say 12% rate of return, which my personal mutual funds have averaged that for decades now. Averaged. Some years not. Some years a lot more. Average.

804.736 - 805.056 Jade Warshaw

That's right.

Chapter 5: What steps should I take to start my own business?

939.665 - 948.46 Dave Ramsey

They run all these numbers out in great detail on math, and they do not grasp that life will never end.

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948.71 - 972.338 Dave Ramsey

ever happen the way they laid it out so the way we just laid this out do you think that that you got the chances that guy's 1.4 million that he's going to live on exactly 140 or exactly eight percent of that right which would be more like a hundred okay is he actually going to do it exactly that way are those mutual funds going to earn exactly a market rate of return are they going to make a little more or less that's right

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972.318 - 991.533 Dave Ramsey

What's going to actually happen is he's probably going to live on less than that. And this money is going to grow. And there's some other factors that we haven't even considered in this, like his life and his health and his marriage and, you know, an inheritance comes or doesn't come in addition to this. There's all kinds of other crap that's going to happen.

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991.834 - 1010.07 Dave Ramsey

And so these guys, when they're writing these financial articles, act like, well, I mean, if you miss this by 0.2%, you're not going to make it. You can't estimate this. You can't forecast it within 0.2%. Unless you're God, you don't know what's going to happen. And I promise you, God is not writing financial articles.

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1011.215 - 1037.83 Dave Ramsey

on tic tac okay it's definitely not happening so i can tell because the people doing it are idiots and god's fairly smart so the point is these guys are become such math nerds they think all this stuff operates in an exact little vacuum and it never works out that way i mean can you imagine if today with you know i've got hundreds of millions of dollars worth of real estate today that was none of that was in my equation right

1038.873 - 1039.434 Dave Ramsey

None of it.

1039.454 - 1039.654 Bruno Satin

Yeah.

1039.934 - 1049.545 Dave Ramsey

I mean, so, I mean, all you do is like be one piece of real estate off. That's right. And the whole thing changes. So, you know, you're in one way or the other, one business that you sell.

1049.805 - 1050.126 Jade Warshaw

Yeah.

Chapter 6: How can I effectively manage my business finances?

1188.566 - 1198.381 Dave Ramsey

Yeah, well done. Very cool. Oh, and go ahead. Now I get the helicopter on the T-shirt. Okay. Yes. $740,000. Now, how much of that was the rental property?

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1199.082 - 1200.284 April (Caller)

It was $425,000.

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1201.145 - 1203.188 Dave Ramsey

Okay. What are you going to do now that you've retired?

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1203.32 - 1220.603 April (Caller)

Uh, I took a year off. I had a, um, I'm taking a year off. I'm taking a gap year. Uh, I had a best friend get married. My son graduated college in high school last month. And, uh, so I'm going to, I'm going to do my debt free scream and then figure out what I want to be when I grow up. Wow. And I can do that now.

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1220.583 - 1243.958 April (Caller)

very cool i'm proud of you very good well we're honored to have you here and what an incredible story you are so okay so you sell off the rental properties what started all this how'd you get started on this uh so um 2018 i was uh passed over for the second time for a major and uh in the military when you're an officer and when you get passed over two times uh you're uh get kicked out in seven months

1243.938 - 1265.338 April (Caller)

So for the first time, I wrote down all my debts. What kind of job, what kind of salary do I need in the civilian world? I'm a single mom, so it was very important to me. And at the first time, that's how much I realized I was in debt. And I always wanted to get into criminal justice. So I needed, obviously, a six-figure job. And starting in criminal justice jobs wasn't that simple.

1265.318 - 1286.699 April (Caller)

There killed two dreams. And then I was worried that I might have to claim bankruptcy, which my parents claimed bankruptcy when I was growing up. And I vowed to never do that. And so I decided to do one of those debt consolidation things. And then I was talking to a friend of mine from flight school who is an Apache pilot in Colorado named Lena. And she was passed over as well.

1286.879 - 1306.96 April (Caller)

And so we were kind of bonding over it, that we were getting out and we were getting stressed. And she says, well, hey, I'm going to start doing this Day Ramsey plan. I'm like, what is that? So I looked you up online and saw you had books. And I saw the website. And I'm like, I'm not buying. I'm not giving him my money right now. So I went to the library, checked out the book.

1307.1 - 1329.73 April (Caller)

And I read it that night. That night was April 21, 2018. And I was hooked ever since. I bought every book since then, and I was doing it on my own until, turns out, so the Army needed us to stay, so they offered me Celcon, so they were gonna let me finish to my 20, which got me to July 1st, 2022.

Chapter 7: What are the common pitfalls in retirement planning?

1378.142 - 1402.684 April (Caller)

Wow. Yes, sir. Actually, it was two years to the day. April 21st, 2020 is when she called me back. And actually my free call ended up being like three or four hours. We just talked and bonded over that. She talked me into going to FPU. I'm a self-learning. I like to read. And I was like, I already read it. I can't get nothing out of FPU. Put it in FPU. I've taken FPU 17 times since.

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1402.664 - 1428.655 April (Caller)

17 yes sir and i taught it twice oh my gosh thank you for teaching it so what did uh was she right obviously if you went 17 freaking times but what do you get from fpu didn't get from reading um i i say it's kind of like my aa meeting i you know i i show up and that way i'm in i have a group of people that are like me because when you go around uh to work saying get rid of your credit cards and and uh

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1428.635 - 1452.06 April (Caller)

no one really it's so weird no one really wants to accept that yet so i feel alone at work for a while you got to get a group of people that are doing the same thing you're doing yes it's the tribe yes sir and after after a couple of times of going and i just love watching people grow over how's it feel to be completely free Oh, it's such a weight lifted. You're such a precise person.

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1452.18 - 1461.223 Dave Ramsey

Every date is memorized. I mean, Blackhawk pilot, you don't miss any detail. Everything's dialed in. But have you dialed in the feeling and like...

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1461.946 - 1488.713 Dave Ramsey

that wasn't in the checklist in the baby steps sir i'm a checklist person it's a flight it's a flight checklist okay at baby step seven when you have no debt and you can breathe you're supposed to breathe oh okay there's that part yeah breathe you need to add that into fps okay man i love it you're so intense so very well done yeah now how does it feel

1489.165 - 1505.959 April (Caller)

It feels amazing. I like that I broke my family curse. And then I have a legacy behind my son. Actually, I tricked them into doing the high school foundations. I bought it for him for Christmas. And I said, hey, when you finish this course, there's $100 waiting for you.

1505.939 - 1518.913 April (Caller)

He waited until the last minute to do it, but once he did it, he has a notebook full of notes on the course, and then he said he wanted to be FPU. He said he went and got a part-time job and started his own IRA at 16.

1519.253 - 1521.916 Dave Ramsey

Oh, dude, well done.

1522.016 - 1522.296 April (Caller)

Wow.

Chapter 8: How can I ensure financial stability during retirement?

1578.553 - 1579.254 Jade Warshaw

Speaking for a friend.

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1579.274 - 1584.561 Dave Ramsey

She's got details. I'm just saying. Got a plan. You're amazing. You're amazing.

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1584.581 - 1585.402 Bruno Satin

Very well done.

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1585.763 - 1595.896 Dave Ramsey

I feel if there's a few more of you out there, I think we in America are well protected. Oh, my goodness. B.A. Wow. Unbelievable. Blackhawk. Thank you for your service.

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1595.936 - 1596.457 Bruno Satin

Thank you, sir.

1596.477 - 1620.638 Dave Ramsey

Thank you, and thank you for your incredible story and your inspiration. You're an inspiring young woman. And to say thank you for serving and to say thank you for leading Financial Peace University twice and going through it 17 times and walking with your coach, we want to offer to train you to become a Ramsey coach. Would you do that if I pay for it?

1622.059 - 1624.101 Jade Warshaw

Absolutely, sir.

1624.435 - 1628.501 Dave Ramsey

All right, we're going to pay for it for you, all right?

1628.521 - 1630.424 Jade Warshaw

That's it, that's it, that's it.

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