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The Ramsey Show

We Have a Ton of Debt & No Retirement (Hour 2)

07 Jun 2023

Transcription

Transcript generated automatically by AI and may contain errors.

Chapter 1: What should I do if I have a lot of debt and no retirement savings?

27.233 - 56.61 Dave Ramsey

Live from the headquarters of Ramsey Solutions, broadcasting from the Pods 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. Dr. John Deloney, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. You jump in. We'll talk about your life and your money.

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56.891 - 63.316 Dave Ramsey

It is a free call. Johnny's with us in Boise, Idaho. Hi, Johnny. Welcome to the Ramsey Show.

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64.438 - 66.459

Hey, guys. Thanks for having me on. Sure.

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66.72 - 67.18 Dave Ramsey

How can we help?

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Chapter 2: How can I manage being upside down on my car loan?

68.088 - 88.247

So I'm a self-employed contractor. I'm 46. My wife's 40. We don't have anything saved for retirement. We have an auto loan, a mortgage, a little bit of credit card debt, and we're just wondering what the best plan moving forward is from here. We have about $110,000 in savings.

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89.988 - 94.373 Dave Ramsey

Okay. So how much debt do you have, not counting your house?

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94.513 - 97.015

I have a truck loan. There's about $40,000 left on it.

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97.501 - 99.843 Dave Ramsey

Okay, and that's your only debt other than your house?

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100.964 - 104.127

Yeah, a couple thousand in credit card, but we usually pay that off every month.

104.208 - 107.291 Dave Ramsey

And you have $110,000 in savings in cash?

108.472 - 109.312

Correct.

109.332 - 110.474 Dave Ramsey

Not counting retirement?

Chapter 3: What is the ideal down payment for buying a house?

111.695 - 113.897

I have no retirement. There's no 401s, nothing.

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114.658 - 116.439 Dave Ramsey

How old are you?

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116.459 - 121.344

I'm 46, and my wife is 40, and she stays home. She's not employed.

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121.364 - 124.147 Dave Ramsey

All right. And what's your household income, sir?

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Um... It varies, but I would say it's probably around 90 to 100.

132.218 - 142.585 Dave Ramsey

Good. Okay. All right, Johnny, I get the sense from the words you're using and the way you ask this question that you're fairly new to this whole Ramsey discussion about money.

143.988 - 144.67

I am, yeah.

144.818 - 146.56 Dave Ramsey

Okay. All right.

Chapter 4: What should I consider when deciding on an old pension plan?

146.58 - 164.464 Dave Ramsey

Um, so our whole thing is when I was in my twenties, I went completely broke because I was stupid and I went into debt up to my eyeballs buying real estate. And that taught me a lesson that was stuck with me the rest of my life. I'm now 62. So I have lived 35 years with zero debt.

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166.879 - 194.94 Dave Ramsey

That's awesome. And that has given me the control of my most powerful wealth-building tool, which is your income. And it's easy to visualize this. If you had no payments and you were in control of your money with a written game plan where you're telling every dollar what to do, you could enjoy life and also invest aggressively and not be broke because you make good money. That make sense? Okay.

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195.157 - 196.138

Yeah, absolutely.

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196.318 - 198.62 Dave Ramsey

Because your car payment is what, $800?

198.68 - 200.782

It's about $750.

201.503 - 202.864 Dave Ramsey

Almost like I've done this before.

Chapter 5: Should I sell my condo before buying a new house?

204.085 - 204.585

Yeah, right.

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205.006 - 212.973 Dave Ramsey

And so $750. And see, if you invest $750 a month from your age until retirement, you'll be a millionaire.

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That's awesome. That's what I want.

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216.836 - 237.334 Dave Ramsey

You've got 20 years, so you'd be a millionaire. But instead, you've got car payments. And no plan, no plan. And you just kind of wander along and go, I got some money saved, but what you did a good job, 110,000 in the bank. You're way ahead of most people, right? I mean, that's pretty impressive, but, but you kind of almost, you kind of almost fell into that.

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237.415 - 242.545 Dave Ramsey

Cause it's not like you got some detailed plan going. I'm not picking on you. I just know you. Cause I used to be you.

Chapter 6: How can I effectively use my savings to pay off debt?

242.585 - 243.186 Dave Ramsey

Is that okay?

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Yeah, that's totally fine. Understandable.

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246.373 - 268.936 Dave Ramsey

Okay. And so what we have taught and what Sharon and I did after we went broke is we got on a detailed in-depth plan and we became in charge of the money, making every dollar behave. Sometimes it behaved for generosity. Sometimes it behaved for investing. Sometimes it behaved so we could have fun with it. All right? Okay.

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268.956 - 278.657 Dave Ramsey

And so then what we discovered is, again, your most powerful wealth-building tool is your income. So if I woke up in your shoes, what would I do? I would take some of the $110,000 I pay off your car today.

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Okay. That's what my wife told me.

Chapter 7: What are the benefits of a detailed budget for financial success?

282.365 - 284.53 Dave Ramsey

And then I would get your credit cards out, and I'd cut them all up.

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And I'd pay them off.

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Even though we use one mainly, and then we usually pay it off at the end of the month. You know what?

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291.745 - 299.515 Dave Ramsey

If you use a debit card on your checking account, it does everything your credit card will do, and the money comes straight out of your account, so you don't have to pay it off at the end of the month. It already came out.

300.496 - 303.66

What about the cashback advantage that we get, like the points that we earn from it?

303.68 - 307.544 Dave Ramsey

So far, it's not caused you to be rich. Definitely not.

307.565 - 323.256 Dr. John Deloney

And by the way, brother, they're not your friends, so they're not hooking you up with free money and flights every time you use their card. They're making their money. You spend more money than you would otherwise because you can just pay it off later. And it's psychological. It's research and it's data and it's data and it's data.

Chapter 8: How can I prepare for my family's financial future?

323.596 - 326.859 Dr. John Deloney

We don't tell you to get rid of them because it's fun for us. We just look at the data, man.

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328.021 - 340.333 Dave Ramsey

Yeah. So when we talk to millionaires and we study researched millionaires, we find that they make every dollar behave. They're in agreement with their spouse. They quit borrowing money and they invest and they're generous.

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340.893 - 341.854 Dr. John Deloney

And they pay off their house.

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341.834 - 358.555 Dave Ramsey

And then they pay off their houses the next thing. So I'm going to pay off. I'm going to take $110,000 minus $40,000, which leaves me $70,000. You make $90,000. So I'm going to set aside out of that $70,000, $30,000 in a separate high-yield savings account. We're going to call that your emergency fund. And you never touch it, even if you have an emergency.

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It's just sitting there for really bad days. Okay?

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Okay. Okay.

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And then that leaves us about $40,000, doesn't it?

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It does, yeah.

368.608 - 370.891 Dave Ramsey

Okay. And do you have children?

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