Dave Ramsey, CEO of Ramsey Solutions, joins TheStreet to discuss how he got himself out of bankruptcy.
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00:00So you mentioned you hit rock bottom and you had to file for bankruptcy.
00:06What was the first step? Because there's somebody watching who says,
00:09okay, I've hit rock bottom, but they don't know how to move
00:13from the bottom to get to where you are.
00:16So walk us through that process.
00:19Well, it hurts when you hit, because it is hard.
00:23It's not a soft landing. It's a splat.
00:26One guy said, how did you bounce back?
00:28I didn't bounce. I splatted.
00:31It hurt. It hurts bad.
00:33And so if somebody's at rock bottom and they're watching, I'm with you.
00:36I understand. It hurts.
00:38And what I had to do is just what Sharon and I did.
00:40We just took inventory.
00:42We said, okay, what about us personally and what about our behaviors
00:46and our habits and our decisions and our values was wrong
00:52that brought us to this moment?
00:54Because we weren't victims.
00:57We caused it.
00:59No one did anything to us.
01:02It was evil or nefarious.
01:04It was us doing it.
01:06So we had to say, all right, what does stupid look like?
01:09And let's stop doing stupid.
01:11And so we said, all right, we don't borrow money anymore.
01:15And I've never had a credit card since then.
01:17And I don't borrow money.
01:19And so we were driving an old beat-up car.
01:21It was awful. It was a lot worse than what we were talking about a while ago.
01:24It was horrible.
01:26But it was so bad that I was highly motivated to save money to get out of that car.
01:31So we saved a bunch of money really fast.
01:35I worked like an animal.
01:37And so, yeah, you start writing it down, write down where your money's going.
01:41You do anything you can to get your income up and keep your outgo down.
01:45And you get an agreement with your spouse and you lock arms and you say,
01:50the rearview mirror is smaller than the windshield for a reason.
01:55What happened in the past is in the past.
01:57I don't have to live like that anymore.
01:59I can make a decision to change and go.
02:01So we're going to do a budget.
02:02We're going to increase our income.
02:04We're going to stay away from the things and the decisions that brought us into this mess in the first place that caused the splat.
02:09And then when I started doing that, people started asking me, what are you doing?
02:13Because your life seems to be turning around after that horrible, stupid thing you all did.
02:18And I said, well, I'm staying out of debt.
02:20And I write it down.
02:21And my wife and I are in agreement.
02:23And we saved money.
02:24And they said, that's it?
02:25You ought to tell somebody that.
02:27And so we've spent the next 30 years telling people that.