Imagine someone offering you $1 billion, no interest, and ten years to pay it back. All you'd have to do is drop it into Treasuries paying 5% and collect a risk-free fortune. For most investors, it sounds like the kind of offer you'd be crazy to refuse. For Dave Ramsey, it wasn't even worth considering.
On a November 2023 episode of the "Iced Coffee Hour" podcast with Graham Stephan and Jack Selby, the final question of the interview was designed to spark debate. What would Ramsey do with free money at a scale few could imagine? His reply was immediate and absolute.
"No. No. Easy question. No question. Even though you could put it in treasuries and pay off after the 10 years lock in 10… or 5% — no. No. It's not worth it. No. I don't borrow money."
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The hosts had barely finished the hypothetical before Ramsey batted it down. Even when they reminded him that the spread could be guaranteed, that the risk was nonexistent, and that the payoff was obvious, he waved it away without hesitation. The math didn't matter. To Ramsey, the problem wasn't yield. It was debt itself.
A few months later, his co-host George Kamel pressed him again during a segment called "Millionaires in Cars Getting Coffee with Dave Ramsey." Kamel wanted to know why the answer was so automatic, why there wasn't even a flicker of temptation in a scenario where most people would sprint toward the money.
Ramsey's explanation revealed the conviction beneath his refusal. "It would hurt my soul to just have that amount of money sitting out there that I owed. That's exactly what it is — the borrower is slave to the lender. I'm not going to be locked in to where someone else is calling the shots in our life ever again. I've been there and it wasn't fun."
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For him, it wasn't about Treasuries or spreads. It was about control. The reminder of his past loomed large. In his twenties, Ramsey was the poster child for leverage. He borrowed heavily, followed the playbook, and for a while it worked. But the crash came hard and fast, and the debt that once built success ended up tearing it down.
"I was a firm believer in borrowing all you could. I did it. I did it. I did everything the book says to do, you know, and it absolutely did not work. It did not bring joy. It did not bring success. It brought temporary success, but it caught up and then brought failure because leverage is a two-edged sword. It cuts both ways."
That experience left scars, and it shaped a philosophy he now repeats like gospel. No amount of arbitrage is worth losing peace of mind. Even a billion dollars at zero percent, even with ten years to play the spread, even with guaranteed returns — in Ramsey's view, free debt still carries a price too high to pay.
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