QUESTION: Bernadette in Fresno has a little brother who needs to rent an apartment. He needs a co-signer and has asked Bernadette and her husband. Dave says no way.

ANSWER: No. One hundred percent of the time you co-sign, you have a problem. You’re going to end up having a problem with your brother, and your husband’s going to end up having a problem with your brother. This will last for 15 years, and when your brother is married and has three kids, he still will not be coming to Christmas when he’s 38 years old because you co-signed an apartment for him when he was in college. Don’t do this. It’s going to be a problem.

What I would do is try to help him get into an apartment, and guess what? There are apartments you can move into if you’re in a college town and you don’t have any credit and you’re a college kid. Because you know what? They rent to college kids. Duh! If you have an apartment complex or a duplex or a house or whatever that you rent in a college marketplace, you’re well accustomed to dealing with young men and young women who don’t have a co-signer and don’t have credit. Maybe he doesn’t get to live in the particular apartment he wants, but so what?

Not being able to get an apartment is just not true. It’s not an accurate description of what’s going on.

You don’t have the money to pay his rent. When he doesn’t pay it, you won’t have the money to pay it. If you wanted to do something and help him a little bit financially—like a little bit with a deposit or something—not a lot of money, but you’re not really in a position to do much because you’re broke and you’re digging your way out of debt, and you make $48,000 a year. You have debt. You have no money. If he doesn’t pay this rent, you’re not going to have the money to pay it. That’s what the co-signing sets you up for. If you wanted to throw $500 to help your little brother get set up in college or something like that and have a garage sale and scratch that up, help him find a job so he can make some money, those kinds of things, I want to encourage him. I want to help him. I’m not trying to abandon him, but I’m not signing up for him. That will get you into a mess. Proverbs 17:18 says, “One who co-signs for another is stupid.” That’s what it says in the Contemporary English Version. New King James is, “One lacking in sense signs surety for another.” Every time I have co-signed for someone, I got in trouble. And two times a guy co-signed for me, and I went broke and he got in trouble. You just don’t want to get in those situations. It’s a mess.

QUESTION: John in Indiana wants to know when to fire an employee. He has a guy who’s a rock star most of the time but has let things go this spring. John thinks the real problem is arrogance. Dave helps him with the approach.

ANSWER: Have you ever been fired? I have. It’s a bad day in most cases. Sometimes you get fired, and you think, God, I should’ve quit earlier, but most of the time, it’s a bad day. What I always do is try to walk in the other person’s shoes for a few minutes and say I would want to have given someone every chance and have been very clear. I wouldn’t want to be surprised. He wouldn’t be surprised because you’ve just gone through reprimanding with him.

You’re really frustrated with him. For you to be unclear with him about where he stands is to be unkind. This is not a time for you in the name of being nice to not tell him where he stands.

I think you’ve got to take him for a cup of coffee and go, “Listen, here are some things you do right. I really like you as a person. You’re a good guy, but I’ve got to be real clear with you. I’m starting to have conversations in my head and with my wife about letting you go. I’ve got to be real clear with you. I’ve got to tell you this is where you stand, and here’s why. This is not a game with me. I have to have this stuff right. I have my name on this business. I take pride in the outcome. If you can’t do that, then we need to talk about why, and we need to talk about if today’s the last day or not. I need to let you know that. Is there something else going on? Is there some kind of a problem at home?” And then if he says everything’s fine, you say, “If everything’s fine in your life, then it’s getting ready to not be because you’re getting ready to not have a job. This meeting is what’s known as your final warning, and you need to bring it. If you don’t want to do that, I’m good with that. We’ll still be friends. But you can’t work here anymore, because this place is a place of excellence. You’ve got to bring it. It’s game on. We’re in the Super Bowl every freaking day. Strap on the helmet. Knock it out, baby. And if you cannot do that, it’s okay. We just need to figure that out now, but you need to know that the next time I have to babysit you after you’ve been doing this a year will be the last time, because I’m not running a babysitting service. And I’m not running a business in a half-butt manner.”

It doesn’t need to be any longer than what I just did. That was a minute and a half. I timed it. Don’t camp out on it and just beat on him. But just be very clear and very direct. If you remember in the book EntreLeadership, we talk about the one-minute manager model of the proper reprimand. You compliment the person and remind them that they are of value, you destroy the bad behavior, and then you come back and compliment the person. It’s called a reprimand sandwich. The meat in the middle is very uncomfortable. It’s not about you being a bully, and you’re not going to raise your voice. You’re not going to use any slang or swear words. You’re going to just be very kind and very firm and very, very direct. If you don’t see his body language shift in the chair, you were not blunt enough.

That’s being kind to him because that’s what I would want somebody to tell me. “Dude, if you don’t bring it, you’re gone.” That’s what I’d want somebody to tell me, and then I’d know what the rules are. Then if I don’t bring it, I’ve fired myself. It’s natural consequences of crappy behavior.

I tell the story in the book EntreLeadership, and I tell the story all the time. I had a kid here who was killing it in sales. He just couldn’t manage to get to work on time. I’m old-school. You’ve got to come to work on time.

I think if you set a formal situation where you’re having a cup of coffee in a quiet place without a bunch of people listening in and not embarrassing him in public or something like that, but you’re also not standing out on the job site. This is a sit-down, final, eyeballs-looking-in, very uncomfortable meeting. Then you’ve given him every chance, and fire his butt. If he doesn’t respond to that, let him go right then. I’ve done that too. I’m not mean about it, but that just means we’re not able to work together. That’s all that means because this is the level I play at. It’s pedal to the freaking metal, dude. I don’t play any other way. I don’t play halfway. I’m so brutally honest that no one on the team is scared of me because I’ve got some side agenda. They know exactly where we are and where we’re going. It’s easy for all of us to communicate. Some of them communicate back to me that way, too, and I’m fine with that. I don’t mind if they go, “Hey, man, that pissed me off when you did that.” That’s okay. We’ll talk about it. Let’s do it. That’s how we process stuff. But all of this behind the scenes thing and …

I used to get so frustrated, John, because I was always trying to be nice. I was always trying to be nice. I was always trying to be nice. Meanwhile, I’m about to explode. Then finally I would—not explode in anger—but the frustration would just boil over, and I would just fire somebody. It was like, no, you can’t do that. That’s not how you work because then everybody’s scared all the time. If someone leaves our organization, everyone in the organization knows that that person was given every chance to turn it around with the exception of bizarre things like if you steal, I’ll just fire you right then. There’s no second warning. I’m not going to teach you to not be a thief. You’re just gone. We don’t do that. I’m talking about performance issues. That’s where you are.

You’re in a right-to-work state—an employment-at-will state—and so you don’t have any issues with legalities.

QUESTION: Latrell in Nashville and her husband plan to purchase a home within the next year or so. Her credit is bad, so they’ve decided to work on her husband’s credit in order to qualify for a mortgage. She has $104,000 in debt, and $92,000 of that is a student loan. He has $13,000 in debt, with $7,000 of that being a repossession on a car he co-signed for. Can she file bankruptcy for just her debts?

ANSWER: You don’t get to file bankruptcy for just certain things. By the way, student loans are not bankruptable. You will still have all the debt. Almost all your debt is student loan debt.

I want you to get a house, but I don’t want your house to get you. I want the house to be a blessing for you and not a curse. Neither one of you have done very well with money. If we take out your student loan, which is a big mess, then you guys are fairly equal in terms of the amount of debt that you have.

What I would beg you to do is you need to lay a stronger foundation in your life before you buy a home and that means both of you need to get your debts cleaned up. To be as kind as I can be, I think you’re asking the wrong question. I don’t want to look for a way to escape this situation through bankruptcy, I want to clean up and get a good, organized plan in your life where you have control of money. Buying a house when you are broke and deeply in debt is going to do nothing but bring you problems.

Instead, buy a home when you get yourself cleaned up and have learned to live on a plan and have a sense of power, a sense of dignity, a sense of having control of your money for a couple of years. Neither of you have ever had that, and I didn’t either during the old days. I know what stupid looks like. I’ve done stupid with zeroes on the end.

I would just beg you to say to yourself that before you try a marathon, let’s run around the block a time or two. Buying a house is a marathon, and the trips that you guys have made around the block haven’t been successful yet with money.

QUESTION: Patty in Winston-Salem says her son is about to graduate from law school. She and her husband allowed him to get a student loan, but they paid for two years. The loan is about $76,000. They could pay it off for him, but her husband is hesitant. Dave says it depends on how hardcore they want to be.

ANSWER: I would want some concessions were I to do this at this stage of the game. Number one, I think it’s perfectly okay for a young lawyer to go and earn a living and pay off his lawyer debt. There’s nothing wrong with that whatsoever. There’s no deal broken here. It’s not going to kill him. He can roll up his sleeves and clean up the mess that he participated in making.

If you choose to pay it off, I don’t think that’s a bad thing either. But I don’t want you to think you’re obligated to do that. You’re not. This should be a gift. It should be accompanied by two things on his part. One is a signed letter of agreement that he will never borrow money again the rest of his life, thereby you have changed his life. You can decide how hardcore to be.

Never borrow money again. You called Dave Ramsey, remember that? That’s the number you dialed.

In other words, I want some permanent commitment that I changed my family tree. I want his kids to be affected by this decision and this gift. That’s the first thing I want from him. The second thing I want from him is unbelievable levels of gratitude—worshipful levels of gratitude.