The Ramsey Show - App - Business Debt Is the Same As Personal Debt (Hour 2)

Episode Date: December 12, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Starting off this hour is Josh in Ohio.

Merry Christmas, Josh. How can we help? Hey, Merry Christmas, Dave. Thanks for taking my call. Sure. What's up? So my one thing I want to ask for a young married couple. Okay, you're going to speak directly into your phone you're

breaking up can you hear me fine now yes sir okay my wife and i were a young married couple we've been married about a year and a half and i haven't went through financial peace or anything yet but i've just now been listening to your podcast probably for like six months. And so obviously I've really picked up on the strategy of financial, you know, peace. And obviously being a young married couple, I want to secure that in our life. And we have a great opportunity right now. We've been in a meeting, and obviously we're like a lot of young married couples. We want to buy a home, but we want to do it the right way. And we're about to move into the church's parsonage.

They're going to give it to us as a youth cash flow for free rent utilities. So what I'm wanting to know is, obviously, we don't want to be ignorant with this opportunity. We want to take advantage of every time that we can save. So what do you advise what we should do with that money? Instead of now having to pay rent and utilities, that is like an automatic $800 a month savings. That's wonderful. That is wonderful. Yeah, so how much debt have you guys got?

None, none. We just have a small little medical bill in place, and we're taking care of that right now. When things do lose, we have the quality. Do you have any emergency funds saved? Yes, sir. We have not at $5,000. We've not. Okay.

I would raise that, and then I would start putting 15% of my income away for retirement, and above that, I'd start putting money in a separate mutual fund to buy a home with later because the parsonage is not always going to be there. And there will be a day, four or five years from now, that something else will happen or you will be in a different church or take a senior pastor's role or something, and you'll be buying a home at some point. And so let's start saving beyond 15% of your income going into retirement

and beyond your emergency fund. Let's start, let's open a mutual fund just, and we'll just call it the house fund and build up as much money as you can build up in there. You can't have too much money in there because you can just pay cash for a house if you got like crazy, right? Wow, that'd be crazy. But right now, now you know the first goal is the emergency fund the second goal is start putting 15 away for retirement and then the third goal is uh build a house fund in a mutual fund because you'll have to replace that parsonage there at some point julie is with us julie is in w. Hi, Julie. How are you? Hello.

Good to talk to you. I just first wanted to tell you my pastor recommended I call you, and I've had a son-in-law that has taught your course numerous times. The reason I'm calling is because I have an appointment with a lawyer. I got married again two years ago. My husband passed away about three years ago. And anyway, me and my new husband are going to drop a will. Good. And I'm finding it's a little bit more complicated than what I expected in that.

He's got children and I have children. I was blessed. My husband left me debt-free after we sold all assets and sold have children. I was blessed. My husband left me debt-free after we sold all assets and sold the farm, and I also have a considerable amount of money put away. My question to you is I have listened to some of your videos online, and I guess I don't know how to handle my family responsibilities. I have three adult children. I did, right after we got married, I did split the land up.

I had roughly 700 acres of land, and I split it four ways, myself and my three children. And anyway, I guess I'm just looking for some advice as to how to go about this. And, of course, how to treat my husband with the love and respect that God would want me to treat him. And so, yeah, I just want to know what are my rights, freedoms, and, you know, according to the Bible. Okay. Well, it is not a right or a moral obligation for you to leave this money to anyone in particular, especially if they are misbehaving in their lives,

and therefore you'd be funding their misbehavior. In an extreme situation, you've got a grown kid doing heroin, and you leave them a million dollars, you pretty much sign their death warrant. Right, right. And so you wouldn't do that. It would be irresponsible. And they've lost the capacity to be a good manager of God's resources. And so you would not pass it to a child that is misbehaving in some way

because you would add to their misbehavior. So when you get money, what happens is it magnifies whatever's going on, good and bad, in someone's life. Exactly. If someone's a jerk and they get money, they become a colossal jerk. If someone is compassionate and loving and jerk and they get money, they become a colossal jerk. If someone is compassionate and loving and giving and they get money, they become a philanthropist and they build orphanages and hospitals. You get to see more of who someone is, good and bad.

That's true of all of us, the good and the bad that each of us have, right? So whatever your kid's good parts are, you're going to see more of them when you leave them some money, and your kid's bad parts, you're going to see more of that when you leave them some money. So just kind of keep that in the back of your head as you're putting this together. It sounds like you were married for 30 or 40 years. 30 years, yeah.

Yeah, okay, I was guessing that. And then this remarriage is yourriage after your first husband has passed is a wonderful blessing. You can do whatever you want to do. Just based on the number of years, you know, probably you're going to lean towards the majority of this going to your children. That would be normal, again, unless they're misbehaving. Right. I will mention the fact that one thing my first husband said all the time we were together

and farming was that his desire was to see that the land went to the children, and I agree with that, you know, and I would honor his wishes. But I also want to be respectful of my second husband. I will also point out that he in no way, shape, or form married me for the situation I'm in and would never want that. That's fine. And so, you know, I always recommend, I don't recommend prenups unless it's a situation like yours where there's a huge amount of money involved,

because the huge amount of money makes things weird. But I would allocate some of the wealth to make sure that your new husband has a good, nice life and probably the rest of it to your children. And if you move that acreage into your kids' names without some tax advice, you need to go get tax advice tomorrow. You might have just made a multi-hundred-thousand-dollar mistake in the way you did that. You can't just move a fourth of 700 acres into somebody's name without exposing yourself to gift tax. So make sure this estate planner can walk you through how to use the Unified Estate Tax Credit. This is the Dave Ramsey Show. I just love it when companies we work with make it a point to be outrageously generous, especially during the holiday season. Once again this year, Zander Insurance will donate 25% of all sales from their ID Theft

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Visit Xander.com or call 800-356-4282 to give the gift a peace of mind this holiday season. There's no better way to protect your loved ones while helping those who protect our freedom. Thank you for joining us, America. We're glad you're here. If you're starting to panic about getting all your shopping done, if you missed Black Friday and Cyber Monday and Green Monday, well, the Green Monday deals are still with us. It's one of the biggest online shopping times in December. Check out DaveRamsey.com

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888-22-PIECE, 888-227-3223. The Green Monday week deals end tomorrow. Don't miss it. I love how these things are named after a monday and they go all week won't you just call it green week black week black friday all weekend makes no sense at all but it's an excuse for us to give you a good deal so there you go don't gripe about it. Jessica's in California. Hi, Jessica. How are you? Great, Dave. Thanks for taking my call. My pleasure. How can I help? So I'm calling with a quick question. My husband bought an unexpected Christmas bonus.

Yay! Yeah, I know. Yeah. So he changed jobs in October. So we figured with the length of service, a bonus wouldn't really be coming, but they very generously surprised us. So we're happy about that. But my question is, we're in steps 456. And so I'm wondering if we should bring the money home at a heavily taxed rate, or he has the option to contribute the amount, some or all, to his 401k pre-tax. Okay. Well, let's first stop and just say that bonus is not taxed at a heavier rate. It is withheld at a heavier rate. It has the exact same tax on it. The IRS requires an employer to over-withhold on bonuses, but the withholding does not mean that that's what you actually end up paying in taxes.

So that changes the calculation, changes the discussion. So it would just be your normal tax rate. And so I would stay right with where we are, and that's 15% of your income going into retirement. Where are the kids' colleges? So we have one child. She's a one-year-old, and she has a pretty hefty college fund already, and we are contributing as we go. What's hefty?

It's about $27,000 right now. That's hefty at one years old. Way to go. Yeah. You're probably almost done. Okay. so how much was the bonus uh four thousand okay um in general this is kind of like you said found money okay and you're not in baby steps two or three if you were in either one of those we just put a hundred

percent of it on wherever you are right so you've a choice. You can put it all on the house. That's where you are, your home mortgage. Or you can kind of live the rhythm of life, which you should be doing. Baby steps four, five, and six is not gazelle intense. The foot is off the gas just a little bit. And so there's three things we teach people that everyone should always be doing with money. You should give it, you should live it, and you should invest it. Okay?

Okay. And so I probably would give some, enjoy some, and put some on the house. Okay. And you decide what that is. And should we put 15% of it into the 401K? Oh, yeah, always. 15% of everything goes into retirement right okay and then that that's period and then but then we're gonna you know you decide if there's an item you've been

wanting to buy or a trip you've been wanting to take and there's some of it you want to live that's fine i wouldn't live all of it i wouldn't give all of it i wouldn't throw it all at the house i'd probably do some of all three it's always good to get in the rhythm of that, to get that, that, those muscles, keep all three of those muscles built because you want to learn to enjoy money. You want to learn to be generous with money and you want to learn to invest money. In this case, our investing is called, um, you know, putting it on the house mortgage. That's what it amounts to. So good job. That's fun. Way to go. Good times at your place.

Brenda's in Indiana. Hi, Brenda. Welcome to the Dave Ramsey Show. Hi. Thanks for having me. Sure. I just have a quick question. Okay.

So during the recession, my mother bought four houses and kept one aside for each of us, which are her children. She gave me one my senior year when I got married, and that was the time that my high school class was teaching us about you in a personal finance class. And after we moved in together, we solely focused on repairing and fixing the house and flipping it to rent it. But a little bit later, my sister decided she didn't want her house for whatever reason, and I offered my mom to finish paying the equity while she kept receiving the rent on that house if she would gift me that second house. The equity she took out on the house was to make her business, but I know that equities have high interest rates, and we are currently on baby steps three and i wasn't sure if this next

year we should focus on saving for a car and school or if we should tackle the equity loan already because of the interest rate okay is the house in your name um it will be as of january but when she gifted me is she is paying for the one I live in. Even though she gave it to me free, she's paying it. It's in my name, but she pays the equity, which is about $27,000 on the one she gave me. I'm sorry, so there's a loan on the house you live in? Yes. Okay, and there's a loan on the house she's giving you?

She gave me both houses, one for free because she's paying for it, and the other one I asked her to give. It's not paid off. No. That's confusing. And so what's the home you're living in worth? It's worth $100, and she owes $27, and she's paying for it, even though it's in my name.

The mortgage is in your name? The mortgage is in your name? The house is in my name. How does she have a mortgage in her name and a house in your name? That doesn't work. Well, she pays for it. It's just in my name. The mortgage is in your name? Yes.

Okay. That's logical. Okay. You can legally do that. you can't legally do the other stuff see what's confusing to you is is that um you don't realize that you have all of this liability if she just decided for whatever reason maybe she died to not pay this bill you still have twenty seven thousand dollars that you owe a mortgage company it's confused you because she's promised to pay it and you've you're acting like you don't have the liability you do have the liability you owe twenty seven thousand dollars on your home that you own that's what the law Now, it happens to be that your mom is paying the bill for you for now.

And this other property she wants to deed to you as well? Yes. And whose name is that mortgage in? Hers. Okay. She's going to have trouble doing that because that mortgage will be called due. Mortgages have a due on sale clause, and when you sell a property, transfer the deed to a property, it activates the due on sale clause, and they're going to call her loan due in full if they figure this out.

Okay. So that's going to cause all kinds of crap to fly. Oh, what a mess. Okay. So that's going to cause all kinds of crap to fly. Oh, what a mess. Okay. Okay. So you guys, your personal household income is what? About $3,000 a month. Okay.

I think I'll pass on the second house. Okay. You don't want the liability right now. You guys have a little tiny mortgage that you need to get paid off, and someday you can do some other stuff. But the weird way your family is viewing all of these transactions, as if the law doesn't apply to them, is going to get you caught in a crossfire if you're not careful.

And it's as if you guys think you can just decide who owes the mortgage and who doesn't owe the mortgage. And it's actually who signed it is who owes it. And that's who will get killed if this thing goes sideways. So let's just break up all this stuff here and start living your life as a standalone life separate from your mom. This is the Dave Ramsey Solutions on the debt-free stage, Chandler and JC are with us. Hey, guys, how are you? Good.

Welcome, welcome. Where do you guys live? Jacksonville, Florida. Fun. Welcome to Nashville. And here to do a debt-free scream. Yes, sir. How much have you paid off?

$86,000. All right. Very cool. And how long did this take? Two years. Two years. And your range of income during that two years? Anywhere between $80,000 and $100,000. It kind of fluctuated. Gotcha. And what do you guys do for a living? I was working in a production factory, but now after we finished paying off all of our debt, I actually own my own lawn care company in Jacksonville. Good for you.

Well done. And before I did clerical work, and now that we paid the home off, I stay at home with my daughter. Killer. So this transformed everything. Yes. That was our goal. Very cool.

What was the debt, the $86,000? Our mortgages. You paid off your house? Yes, sir. I'm looking at weird people. How old are you two? I'm 22. I'm 24.

And you have a paid-for house in Jacksonville, Florida? We did it when I was 21, and he was 23, though. Oh, yeah, that makes a difference. Oh, my gosh! Yes, sir. What is this house worth? We bought it for $107,000. My mom actually sold it to us.

It was the house I grew up in. It's worth a lot more. She kind of did it for us as, you know, she's our mom. And so while we were engaged, we saved up money. We saved up 20% and put that down prior. Wow. It's worth about $160,160 now with all the renovations. I love it.

Yes, sir. You're not even 25 years old. Un-freaking-believable. You guys are amazing. Well done. And you got a little baby. How old's your baby? Seven months old.

Oh, how fun. Yes, sir. Wow. Life is good. It is. What in the world? So you've been married a couple of years you've been working on this the whole time so what in the world inspired you to say oh what about the time i'm 25 my house is gonna be paid for oh my gosh well when we started dating

my brother-in-law gave me or told me i should check out your book and so i started looking into it at that time i had i had some consumer, side-by-side truck, all the toys and stuff. So I kind of got rid of all that, cleaned it up pretty quick. And then from there, she's never had any debt other than the house. I was just ready to sign up for a credit card, and my brother-in-law was like, y'all have got to read this book. And I'm like, okay, we'll read it. And it just changed our lives and we knew

we didn't want to go in marriage stressed wow he started you off right he did that's cool so we we saved for a year while we were engaged and just we we had no consumer debt at that time so we just kept chunking it away until you get married and you do a you see you did forty three thousand dollars a year out of an eighty to,000 to $100,000 income. Yes. You're still on rice and beans. Yes. I mean, but you wanted this bad, didn't you?

Yes. We paid it off the month as early as we could. Like, if we would have paid it off sooner, they would have given us a penalty, the mortgage company. Yeah. Did you have any idea how i mean this this is gonna the amount of wealth if i start running the calculator as young as you are if you just save a house payment how many millions of dollars you're gonna have tens of millions by the time you're 70 just this one thing you did if you don't go screw up something now oh my gosh

y'all are awesome we're set the rest of our lives because of it yeah you really if you don't go screw up something now oh my gosh y'all are awesome we're set the rest of our lives because of it yeah you really are you this is absolutely amazing you are incredible so other than i mean obviously your brother-in-law and your mom she's in on this she gives you a good deal in the house right so she's encouraging so you got cheer you got cheerleaders there i'm sure absolutely uh did. Did people, though, around you guys go, you're nuts? I mean, because, honestly, I just can't think of a whole bunch of 22-year-olds lining up to go, oh, yeah, pay off your house. Right. Not very many.

Yeah, nobody says, like, oh, you're nuts. Like, you know, they're probably thinking it. Not to your face. Right. But when you tell people, like, oh, we're going to have our home paid for in two years, it's like, oh, you know, cool. And then we're like, oh, our home's paid for. And they're like, really? I'm like, yeah, we've been telling you this. We weren't kidding you. Yeah.

Yeah. So. You know, they're all like, oh, that's sweet. They'll find out reality later. Right. You know, and then you do it and you're like, how do you like me now? Exactly. I love it. Yep. How in the world does it feel you i mean you've never really been

burdened down by big piles of debt so there's not this release unless you just intellectually have grasped how well you've done it feels amazing every month we don't have no no debt just like four bills that electric water and stuff like that and some internet and stuff i still think we should cancel i think you're doing okay yeah i think you're doing okay i think your business is going to prosper because you've got a whole different way of looking at things you don't you don't have anything pulling at you absolutely there's no there's no desperation driving you to do something stupid and you make a choice to be home with a baby and not even think about it. Yes, sir.

It doesn't even come up. That's so fun. There's so much peace around that, isn't there? Very much so. Yeah. So what do you tell people the key to getting out of debt is? A budget. Saying no.

A bunch. Yeah. You have to say no. Stick to the budget. Don't sway from it. You know, communication, the budget don't sway from it you know communication the basic stuff um that you know you teach but you have to put it you know in your life perspective and and do it yeah that's real yeah so i kind of get the feeling from listening to you all that uh jc you're more

the nerd the fruit the tightwad the not spender and know, you're the spender? Not the spender. You're the spender. Oh, okay. He is the spender. Because he had all that debt to clean up. Well, I was only 17. And when he said budget, he kind of flinched. Yeah. Well, I was only 17, so I was like, should I get a credit card when I turn 18?

What should I do? And we were just fixing to do it. And then when we started budgeting, I mean, he was like strict. And I'm like, oh, my goodness. And, you know, I knew that there was a light at the end of the tunnel. But, you know, it's hard. And that's everybody, you know, I think everybody knows in their mind it's hard, but it's worth it. And I think that's, you know, that's what it's all about.

You two are special. It takes a lot of discipline. Yes. It really does. It really does. Winning at anything does. Yes. Yeah. You guys are special it takes a lot of discipline yes it really does it really does winning at anything does yes yeah you guys are special you're gonna do a lot of really cool stuff in your life very very well done very proud of you very proud of you so other than your mom and your brother who were your cheerleaders his parents um our parents and siblings were very

supportive the whole time grandparents grandparents yeah i betparents. Yeah, I bet they're proud. If you, you know, tell the family, no, we can't go on vacation or no, we can't do this. They're like, oh, you know, it's okay. You know, you got a goal. Keep pushing. So they were all very supportive. No guilt tripping or shaming then. Oh, no.

Yeah, that's good. Way to go. Very cool. You guys are something else. I love it. Absolutely incredible story. Very cool. You guys are something else. I love it. Absolutely incredible story. Absolutely inspiring. And the future is just so bright.

Wow. Well, we've got a copy of Chris Hogan's book for you, Everyday Millionaires. You're going to be one in 20 minutes at this round. Yes, sir. Man, oh, man. You are on the way. That's the next chapter in your story for sure. So very well done.

We're very proud of you here. Thank you. You're an inspiring story. Thanks for coming all the way to Tennesseeennessee to share it absolutely all right so one more time you're how old 22 24 22 and 24 and you started this two years ago so you were 20 and 22 when you started it and you're 100 debt-free house and everything chandler and j.C., Jacksonville, Florida, 86,000 paid off in two years. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free. Oh, my goodness. Wow. Wow, wow, wow, wow. I love it. Absolutely fabulous. Incredible.

Incredible. Every time I meet a millennial couple like this, I just know that this nation is going to be okay. It's comforting to old people like me to run into smart young people wow wow absolutely incredible this is the dave ramsey show Thank you. Amanda is with us in Oklahoma. Hi, Amanda. Welcome to the Dave Ramsey Show. Hey, Dave. Thank you so much for taking my call.

Sure. What's up? So I had a quick question. I wanted to know what you would do in our situation. So my husband and I, we're both 28, and we're on steps four and six because we don't have kids. And we had a fully funded six-month emergency fund, and we were planning to take a trip three days before Christmas to go to New York City and, you know, see it all lit up for Christmas because it's been like a dream of mine since I was a kid.

But this past week, we took about a $3,000 hit to our emergency fund, and we can still get our money back from what we've booked with New York City, which would be about $700. And we're wondering if we should cancel the trip and put it back into the fund or if we should go. What's your household income? Last year it was about $76, but my husband switched shifts, and so I'm thinking it's probably going to be 65 this year.

And how's your budgeting going? It's going great. I mean, we've been following your stuff for two years now, and so we have our every dollar budget. We do it every month at the beginning of the month. We have been saving since August for this trip. You're saying we? Me and my husband.

Yeah, I know. But you're saying we. He's really doing it with you? Yeah, yeah, yeah. We both work three jobs, the two of us. And you said you're 28. And you've been saving. It took you from August to save $700?

Well, on top of also saving for Christmas is when we started saving in August. And so we were doing budgeting for Christmas for gifts for our whole family and then New York City. So we were just throwing aside like $300. If you go to New York, how long will it take you to put the $3,000 back? I don't know, a couple months probably okay and if you don't go to new york it takes you almost a couple of months yeah we only so we'll be out a hundred dollars for a tour that we booked yeah i'm not worried about that i'm just trying to just say yeah the point is

that canceling new york does not move the needle that much. Yeah. It doesn't help that much. It's not that big a move, okay, in the situation. The thing that is more important is the fact that the two of you are working together. You are actually living on a budget. You actually know where you are on the baby steps. You're not trying to trick them.

You're not trying to figure this out. You had three to six months of expenses saved at six months. Now you have three months saved. Yeah. And so you're not using your emergency fund to go to New York. It was already booked and done. You just have a reduced emergency fund. So there's no indication anywhere in this entire conversation since you got on the phone with me

that you're anything except disciplined and wise and careful and smart. And it's also even buttressed further by the fact that you even asked this question to start with. Yeah. So go to New York. Man, that makes me so happy okay thank you so much that's what i would do and the reason is is that you're going to come home and you're going to put that money back and everything in that or you're not going to put that money back you're going to put the emergency fund money back and everything in this conversation tells me that you're going to

do that in two months because you have been living your entire life correctly around this subject. You see what I'm saying? If you gave me one little hint that you were misbehaving, out of control, your spouse wasn't plugged in, you're trying to cheat some baby step because you're whining about your childhood dream to see New York, I would have said stay home. Yeah. You didn't give me any of that this was a

completely grown-up discussion here i'm so proud of y'all very well done this is your first time to go to new york yeah yeah we tried uh two years ago but i ended up in the er the night before we were supposed to leave and so um how long are you how long are you going to be in the city? From the 21st to the 23rd. Okay. So just like a day, two days, really. Do not miss the 9-11 Memorial. Okay. Do not miss that.

It's down on the southern tip of Manhattan by Battery Park there, and it's where the towers were, and it is breathtaking. Okay. And, of course, you need to go um and to rockefeller center and see the ice skate classic ice skating rink and the lights and so forth up in that town it's all it is a block from it yeah that's perfect ecstatic that's perfect it is truly magical and if you haven't if you haven't seen the rockets and you can get in that makes your first trip to new york a Christmas experience, perfect.

Yeah, I'll look into it. Yeah, it's not super bad expensive. It's not as bad as some of the plays and stuff are. But it's a little tough to get in this time of year is the only problem. But absolutely incredible. And 28 years old to go see all that stuff for the very first time is very, very cool. Proud of you. You're doing good stuff, Amanda.

You're going to be good. And 10 years from now, you guys are going to be in an amazing situation because of the way you're living your lives. Congratulations. I'm proud of you. Lance is with us in Florida. Hi, Lance. How are you?

I'm doing good, Mr. Amzie. How are you? Better than I deserve. What's up? Well, my wife and I came across you about a week ago. We've read Total Money Makeover, and we are a little confused on where to start because we have our own business, which has a few debts, and then we have our personal life, which has a few debts,

and then we already have a really good savings account. So we're trying to figure out how much of the savings to actually keep, how much to put towards which debt, personal or business, and kind of where to start. How much money is saved inside the business? Inside the business is about $40,000. And what's your annual gross on the business? In between $150,000 to $40,000. And what's your annual gross on the business? In between $150,000 to $200,000. Okay.

Outside the business, how much money do you have saved that's not retirement? $25,000, somewhere right around there. Okay. I'm going to apply that $25,000 to the baby steps that you talked about. You need to keep retained earnings in the business. Because if you don't keep liquidity in the business, it'll turn into debt when you have an issue. Okay. So you need to keep that there.

So I'm going to apply the 25 down to $1,000 towards your debts. How much debt do you have, not counting your home? Not counting the house, it is $65,000. Including business? No, that's just the personal. How much on the business? $70,000. Okay. The law says that that is not business debt. It's personal debt. You personally guaranteed every one of those? Yes. No one loans $150,000 gross business money. So they loaned you money, and you categorized it as business debt. So you have $70,000 and $60,000, $130,000, and we've got $24,000 to apply to that. Did I understand that right?

Correct, yeah. And two of those are one is the work truck and the other is the family car. Okay. And what's your household income? Your taxable income on your tax returns, I'm sorry. Oh, 36 to 50. So your business doesn't make any money? No, that's personal.

The business, the taxable is around $150,000. Okay. This business is owned as an LLC or a sub-S or a sole proprietorship. 100% of it flows through onto your personal? It's an S-corp. Yeah, it's an LLC taxable as an S-corporation. And it doesn't pay taxes? Correct. 100% of it flows through to your personal return. So your personal return is showing $180,000? $35,000 plus $150,000? No. No, no, no, no. Sorry. It's showing about $70,000,

$75,000. Okay. Because I thought you told me you grossed $150,000 on the business, right? Yes. You know the difference in gross and net, right? Huh? I got confused on that, yeah. That's okay. Okay. So you're grossing $150, netting $70 on the business, and your wife makes $35. The $35 I was saying is what the business pays us that's already the taxes that come out of that. Oh, I see.

I got you. Okay. So the only income you have is $70,000, and you have $130,000 in debt. You got some work to do, brother. And I think one of these cars might be gone. It's awfully expensive cars, given you have a household income of $70,000. So that kind of gives you some clarity, though. You run your debt snowball as one debt snowball, because that's how the law looks at it.

It's one. It's all one set of that, smallest to largest. Hey, thanks for calling in. I'm glad you found us. Merry Christmas. Hey, guys, it's Blake Thompson, senior executive producer for The Dave Ramsey Show. This hour's over, but you can find more great content on our YouTube channel.

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