America's trusted voice about money and business Dave Ramsey stopped by The Bobby Bones Show. Ramsey is a personal money management expert and has seven best-selling books that have sold more than 11 million copies combined.
Raymundo asked Ramsey about engagement rings. He told him that he has $100 saved in his ring fund, but then asked how much of his salary he should spend on an engagement ring. Turns out Ramsey only says 1 month, despite jewelry stores saying 3 months. Ramsey also confessed that diamonds are much like furniture, they never go up in value only down.
Bobby asked Ramsey about buying houses. Ramsey says in terms of how big of a house you should buy: the most you should buy, where your payment is no more than a 1/4 of your take home payment on a 15 year fix. That's because you want it to get payed off. You don't want to keep a mortgage forever, that's not how you start saving and get to wealth.
Bobby also asked him about things with motors. Ramsey says you shouldn't own anything with a motor that is over 50% of your annual income like cars, boats, four wheelers, etc. He says that things with motor drop in value fast. Keep your total of all of your things with motors at the most 50% of your annual income combined.
"The best vacation is the one that doesn't follow you home" says Ramsey. He says that one shouldn't be going on vacation if it's going to come home with them after in the form of bills or payments.
Amy asked when parents should start saving for their college funds. He says you should start saving when you can because then you can choose to be a blessing and use that money towards college rather then saying 'this is only for the kids' college.'
Lunchbox asked whether a fancy lake house or a fancy boat is better to invest in. Ramsey says you have to be able to afford to take the hit because both go down in value. Ramsey says you should only be getting a vacation or second home if your first home is paid off to stay in wealth. Not only that, this 'toy' should be payed in cash and there shouldn't be a mortgage on it.
One of the biggest things we came away with was when Ramsey said "You gotta pay the price to win at anything." He was saying that you have to pay the price to become a millionaire or have wealth. You have to live small to get big. Ramsey says it's true in careers, finances, and marriage.