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Chapter 1: What financial challenges are discussed in the beginning?
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So we're here to help you transform your life. From the Ramsey Network and the Fairwinds Credit Union Studio, this is The Ramsey Show. Jade Washall, Ramsey personality, number one best-selling author, is my co-host today. The phone number is 888-825-5225. The call is free, and some say the advice is worth exactly what you pay for it. Brad is starting us off in Denver, Colorado. Hi, Brad.
How can we help? Hi, Dave. Thanks for having me. I love your show. Well, thank you, sir. How can we help? So, yeah. So I've been listening. I'm actually a new listener. I've been listening for about a month now. I got hooked on YouTube. You just have such good financial advice and personal advice. I'm like, it's hard not to listen to you.
But I started listening and I realized I thought I was being successful, but everything I'm doing is almost opposite of what you're saying. So I had to do a little self-reflection, and I have some questions on how I go forward in the future on this. But essentially what's going on is I make a decent amount of money, W-2, in software, and my entire financial mantra is to build wealth.
rental real estate. And the reason for that has been, I want residual income. So I want, you know, to have an amount of money that where inflation doesn't matter. Everyone right now is worried about inflation. I could care less. I want it to last forever because I don't know how long I'm
things to me are my safety net but to do that i've drained 401ks i live paycheck to paycheck i have credit card debt car debt you know the whole nine yards um it's worked out now that i'm 47 and a little bit older now um but my whole thing is can i just keep those properties and enjoy life And if I can, that's finance success for me. But now as I move forward, I'm listening to you and coworkers.
You know, they're all telling me some different things. So I'm just wondering if you have some advice on how I might shift this to work with your program and my program. That's interesting. Nice call. Thank you. I love that. And so you said W-2 software income. What's your income? Uh, 500 K a year about I'm, I'm commissioned as well, but it's pretty consistent around 500. Oh, good for you, man.
You're killing it. That's amazing. And, um, do you still have the drained 401k and all the credit card debt and the car debt? No, so I got rid of the credit card debt like a couple years ago. We lease a car that's expensive, but I paid off my other car. So my actual – and then we bought an RV.
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Chapter 2: How should I approach my employer about unpaid work?
But actual like debt as far as that goes, I would say it's overall pretty low. So your debt consists of right now an RV and a leased car other than your home and your rental properties. And rental – they're all not paid off, but they're all low balances. But that's right. I have $1.7 million in total liabilities.
How many are there over the 1.7? How many properties?
There's seven, including my primary. Okay. That's not bad. All right. And you said the 1.7 million is the debt on them or the value of them? The debt. Oh, I see. And the value of the seven properties would be what? Is 5 million. Okay. Very good. Excellent. Excellent. Okay.
So the negative things that you mentioned you've almost done away with, and that's the drained 401K and the use of consumer debt while you were running up these rental properties, because those things are obviously destabilizing your original plan. And you realized that without ever having heard of Ramsey, it sounds like. And it sounds like you were already moving away from that.
So that's wisdom. So I don't know why you couldn't work our baby steps from this point forward, clear up the RV and the car lease quickly and make sure you have a good emergency fund, and then make sure you're starting to fund your 401K aggressively. And meanwhile, I'm going to start using $500,000 a year
to pay down these rental properties, I'd probably work me a little rental property debt snowball up in baby step six.
Yes, I love that idea.
Would you sell some to get rid of debt just to be debt-free, or are you okay with having some of that debt? I would, but I wouldn't prescribe it for you as your first step.
Unless there's one that you know is not flowing well.
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Chapter 3: What steps can I take to manage my debts effectively?
But I'm not going to try to get you there today. You're three YouTube videos in, man.
Right.
My wife's always wondering what I'm watching. I said, come over here and listen to me. It's good stuff. But she has a finance degree. So she agrees with you on a lot of this stuff. I kind of drive her nuts on a lot of these things.
And I also think that you've latched on to a really important part of what we teach, which is day-to-day dealing with debt and consumer debt. Because my guess is after this, when your lease is up, you're probably not going to lease a car again. You're probably going to go, I could take some of my $500,000 income and I could buy something in cash.
And that's something that's mine and I never have to do the payment thing again.
Yeah, or, you know, and this is another question, but do I get aggressive and keep trying to buy, like, another property and keep leasing and doing that stuff? I would not lie. Maybe calm down a bit. It's a real simple thing. Debt equals risk. More debt equals more risk. Less debt equals less risk. It's a simple formula, and that's 100% true. There's no exception to that proven property.
Now, and so if you got it down to where you had $500,000 worth of debt and you had $4 million worth of properties, you know, you've got virtually no risk. But you do have more risk than me because I got no debt, you know?
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Chapter 4: How can I align financial goals with my spouse?
And the difference is that there's still a tiny little knot in your stomach. They're still there. You still feel it. And you still look over your shoulder a little bit when somebody coughs and says, wear a mask.
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Okay, so I just need some advice on how to approach my employer about something. I've been with my job almost seven years, six and a half to be precise, and I've realized over the years, two to three hours at times of volunteer work turned into over 1,000 hours of unpaid work, and I'm an hourly employee.
So I just don't know the right way to approach my employer because it's really taken a toll on me that I've worked all these years or all these hours unpaid, even though I technically chose to do it.
What do you mean by that when you said a few hours of volunteer work turned into unpaid work? Explain that.
Okay, so I work in retail, and I would clock out, but then I would see my coworkers get busy. Like, let's say I would leave at 2, 3 o'clock, and they'd get busy, and I would maybe stay until 4, 35, even 6 o'clock. Did they ask you to do that? A couple times, but at times I just chose to. Then they don't owe you a thing.
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Chapter 5: What are the key points about dealing with financial realities versus myths?
When you actually deal with facts instead of internet mythology, your life will change, I promise you. The Ramsey Trusted Program is the only way to find a top agent you can trust that we trust. And they'll make your home a blessing or buying a home, not a burden, and be a blessing because you'll be dealing with reality, not internet mythology.
See, if there is a reason for you to be worried about something, I will tell you. I believe in it. I'll tell you bad news. I don't mind. But I'm also not going to allow the hope stealers out there to steal your hope falsely. I mean, if you make $40,000 a year and you live in Los Angeles, you're not going to buy a home. That's the truth. You can't afford it.
That's right.
Okay? That's the truth. You have an affordability problem. But most people aren't in that situation.
Okay?
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Alrighty, today's question comes from Paul in Ohio. He says, I'm debt free and almost have my emergency fund in place. Once that's done, I want to upgrade my vehicle and I'll pay cash. How do I handle a dealer that I know will be pushing financing even just for a short time so they can get a better profit margin? I'm determined to walk in with cash and take it home the same day.
I love this question. And I think it's great. You're going in there, you're paying with cash. And I think the first thing is you've already decided that you're paying with cash.
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Chapter 6: How can I effectively negotiate when buying a car?
So there's no way you're getting into financing. So you've already drawn that line in the sand. And I'll tell you, for me, I think the best way to handle it is I don't and I've done it the wrong way before, but I don't tell them that I'm paying in cash until we've negotiated the price. Because if you walk in and say, well, I've got cash and this is all I've got. I've got $30,000 and nothing more.
They kind of lose interest in the deal in many ways, especially if you've made it very clear that you're not financing. Because you're right. They're not making as much because financing, there's a kickback. There's add-ons that they get. They earn more off people who finance the car. So I wait. And I say, let's just talk price and let's get the price to where we both agree and where I agree.
And then I can let loose saying, by the way, I'm paying cash. And they usually don't like that very much. And they're going to try to push for you. You know, even if you just finance this much, you could pay it off next month. They're going to do all those things. And you're going to say, no, thank you. And then they're going to act like they need 10 people to approve your check. And they don't.
And it's just a lot of rigmarole that you just have to say, this is the way they're going to act. This is the way I'm going to act. And like I said, before you even tell them that you're paying cash, that's the time where I'm trying to negotiate. Can you take the document fee off? Hey, can you? I don't want the extended warranty. I'm telling them everything up front. We're locked down on the fee.
And then I slide the cash over and it's a done and done. Dave, what do you think?
That will work. There's nothing wrong with that plan at all. The more expensive the used car, the closer I would stick to that strategy. If you're buying a $5,000 or a $10,000 used car, they're not making a lot on the financing. And I would just say, you know, I have $9,000 and you're asking $12,000 and here's $9,000. And if you want to take that, I'm leaving with the car.
If you don't, I'm leaving with my cash. Do you want the car or do you want these Benjamins? I mean, it's that simple, right?
Let it. Put it close enough for them to smell them.
Smell it, right? It's right there. Open the briefcase and go, do you want this?
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Chapter 7: What strategies can help maintain financial transparency in relationships?
You know, I'm kidding, but not much. And so that's a cheaper car, right? Now, if you're buying a brand new car that's not a specialty vehicle, it's a standard model, if you work it carefully, you can buy those for usually $500 over invoice, right? And just go in and say, I'm looking at that car. Will you sell it to me at $500 over invoice? Just leave it at that.
And then they will show you the invoice. Now, after that, the reason they will do that is, or sometimes they'll sell it to you at invoice, because they get manufacturer rebates that they put in their pocket, okay, in that process. And then I just go, I'm going to wire you the money.
And that's out on that.
Now, if you're buying something that is an M, there's a shortage on that vehicle. It's more of a specialty high-end vehicle of some kind. They may be marking up above MSRP on that, like the Raptor that I drive, that Raptor R. That thing, they only get a handful of those, and they often sell for more than sticker.
Right, because there's more demand.
Because they get two per dealership or something. They can easily get that. But that's an expensive, specialty, rare vehicle. Very unusual deal. So there are a lot of different ways to approach this. But yeah, if you just say, if you nail it down on invoice, you get the exact same treatment you're doing. And you go, and no, I don't need them. I don't need the ceramic coating bull crap.
I don't need all the bull crap. Man, they can shovel. A car dealership can shovel more bull than anybody I've ever seen in my life. And I got a lot of good friends that are car dealers. And they laugh at me, and we joke when we're hanging out together, Ramsey, you're the bane of my existence. But, you know, because nobody will lease a car because of you.
And I'm like, that's because I'm doing my job better than you're doing yours. So there you go. Shots fired. Jay is with me, with us in Los Angeles. Hi, Jay. How are you? Good. How's it going? Better than we deserve. How can we help? So the reason for my call is I am self-employed. I'm a contractor, and I make decent money.
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Chapter 8: How do successful individuals view car payments and debt?
I've only been doing this for going on two years now, but I've been in this line of work for a long time, so we've picked up work pretty quickly. But I'm having trouble getting my wife on the same page. I would like to eventually buy a house and pay off debt, but we've been arguing a lot lately. What are you arguing about? Well...
As money comes in, she has all these ideas of what she wants to spend on. And sometimes for the sake of not fighting, I'll kind of let it go. Ideas like what? You mean she wants to buy food? Well, she'll buy food. Well, she eats out for every meal. Okay. Um, like she's, we have, uh, our house looks like an Amazon warehouse. Um, it's like tons and tons of stuff. Yeah.
And then, I mean, it's like friends, birthday parties, friends, kids, birthday parties. Let's get them this. Let's get them that. It's my mom's friends, um, graduation. How long have you been married? Yeah. Two years as of last week. About the time you went in business and started making money? Yeah. What does she do? She's a stay-at-home mom. We have two kids together. Yeah, okay.
And what are you bringing in from the contractor deal?
What's your net profit that you pay taxes on in a year? So last year, net profit was about $187,000 this year. I'm on track to make about $450,000, but we don't have anything. I made $30,000 gross in the last two weeks. I took home about $16,000, and we're down to about $2,000. Okay. Well, I mean, obviously you have a marriage problem. You don't have a financial problem.
And so the two of you need to sit down together and say, honey, I can't live like this. You're killing me. We're going to have to get on the same page. We're not in Congress. We can't spend like we are. And we're going to have to get on the same page. And yes, you need to buy some things, but I am unwilling to make $400,000 a year and be broke. I'm not going to live like this.
And so if we can't sit down here at the kitchen table and work it out like two adults, then we're going to have to sit down with a good marriage counselor. When you've worked hard to buy a car the right way, you paid cash with no payments hanging over your head, the last thing you want is to worry about it every time you drive it.
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