The Ramsey Show - App - Don’t Look for a Hack When You Need a Grind

Episode Date: November 19, 2024

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Rachel Cruz, number one best-selling author many times over, Ramsey personality, and host of The Rachel Cruz Show. My daughter is my co-host today. Open phones here at 888-825-5225. You call with your questions about your life. That's what we're here for. The call is free and some say the advice is worth exactly what you pay for it. So we're glad you're here. Rachel, big day today. Another book launch. The third Rachel Cruz kids book is out. Ding, ding, ding, ding, ding, ding, ding. Yes, it is. I know.

I'm so excited. So I'm glad when I can share. So this is the kids book on generosity. And I went with the sharing element because for our little ones, teaching them to open their hand and share is kind of that first step in generosity. But it concludes my series. I did one on contentment, gratitude, and this is the final one for generosity. So this is the three kids book series, and the third one is out today.

And they've all been bestsellers. I'm glad for what I have. I'm glad for where I am. That's contentment, right? I'm glad for where I am is gratitude. Gratitude. And the first one's contentment, and then this one is generosity. I'm glad for when I can share.

And it's a three-book book series and this is the third so it's 1999 at ramseysolutions.com in the bookstore and again Lauren just continued to these world-class illustrations make the book yes Lauren Gallegos is the illustrator for all of them and she just I mean did a fabulous job so. So yeah, it's a really sweet book and it's short. You're welcome, parents. Yeah, for those of you who do bedtime stories, they're nine years long. Yes, this is a short one.

You don't have that here. And on each of these books, I always try to add an element for the adults at the end. So just a sweet reminder, right? When it comes to contentment, there's that. And then this one for gratitude, that joy in life really is the gifts that God has given us from our brothers and our sisters and all of that to understanding that when we give, it is a joy unlike anything else

that money can buy. It's the most fun you'll ever have with money. We had Jimmy Darts on yesterday, who's got the big YouTube channel. Oh, yes. Giving money away. And we were talking about the power of generosity. And we teach you guys, as you know, to live like no one else so that later you can live and give like no one else. And Lauren even snuck that onto the license plate of one of the cars in there. So you'll have to look for the hidden meanings in this book. There's some little Easter eggs in there.

There's a few little Waldos in the book. Call me Taylor Swift, but I have my own Easter eggs. Where's Waldo? Yeah, so there it is. Live like no one else on the license plate. Probably need to get one of those for one of our cars for real. That'd be pretty cool. I never thought of that.

But nobody knows what it means unless they know what it means. Well, it's just letters on that one. Yeah, totally. It's nuts. But yeah, anyway, good stuff. So I'm glad when I can share. It, totally. It's nuts. But yeah, anyway, good stuff. So I'm glad when I can share. It's here. It's on sale.

Oh, just in time for Christmas. And it's $19.99 at RamseySolutions.com in the store. And of course, you can order it anywhere. You can order great books as well. The other two books in the series are only $17.99. So you can pick up all three of them uh for what 50 bucks roughly and um a little a little over 50 dollars and you'd have a wonderful little set for the grandbabies or for the babies whatever it is good stuff and uh speaking as the

grandfather who has a few grandchildren that might be accused of picking out the longest possible book some of those dr zeus books go on for days and they have a way of finding this is the one i want to read papa david translation i want to stall bedtime as far as i can and so uh doesn't work with any of the three of these these three all get to the point and you go to bed yeah they're pretty fast and they rhyme they're very sweet these. These three all get to the point, and you go to bed. Yeah, they're pretty fast, and they rhyme. They're very sweet. Great message. But, yeah, we get to the point.

So you're welcome, parents, for that. Good stuff. Lorena is with us in Dallas, Texas. Hi, Lorena. Welcome to The Ramsey Show. Hey, guys. How are y'all? Better than we deserve.

What's up in your world? Good, good. I just have a couple of questions. I'll start off with that. I feel like I cannot move out of my parents' house due to financial struggles that they're having and I'm also having as well. Okay, so what causes you not to be able to move out because of their financial struggles? Walk me through that. They need your rent? Basically, yes, sir. And so since I moved back in, I've been trying to get rid of my debt and following the baby steps.

But you pay them rent? No, I do not. Oh, how would it affect them negatively if you left? So right now they're in a rental property and um their city is actually planning on demolishing uh the area that they are in is this the house you live in correct how would it affect them negatively if you left because i don't think they could you know uh i don't think they could move into a new house without my help. You're not paying them any rent. That's true.

There's no net loss to them when you leave. It's a net gain. Yes, that is true. Because whenever they do have to move eventually, their rent that they're paying will be up more than what they're paying right now. And then you would start paying rent. Correct. To help them do that.

Okay. Correct. Bad solution. Yeah, so that's why I feel kind of stuck. You're not stuck. Everybody's got to reset their expectations in this. Right. They're in an unrealistically low rental rate on a house that's being demolished.

Correct. So they cannot rent the same house three streets over they can't afford it correct so they need to move to a different area yes sir so that's why i just feel stuck i feel like they're looking at me and it's not you it's them they need to move to an area they can afford to live. They're like grownups and stuff. Right. Yeah. Maybe they need to act like it. I mean, but in a family dynamic, I mean, I think Dave's calling out the dysfunction in

that, that they're leaning on you to help them in their situation. Well, or somebody made you feel guilty. I don't know whether you took it on yourself or they did. Yeah. So that's what I would say to you is you have to be able to release that yourself because that is not your responsibility, even though the dynamic may feel like it is. And there's always a weird element with adult kids when their parents are in trouble to feel like they've helped me, they raised me, they gave me a roof over my head growing up,

so I, in turn, feel obligated and indebted to help them. Is that true? Yes, no, that's exactly what happened. So I, in turn, feel obligated and indebted to help them. Is that true? Yes. No, that's exactly what happened. I had recently moved back five months ago, and since they're not letting me pay any rent, that's why I feel obligated to help them. Because they gave you that gift. Correct.

Right. Well, and that's a false obligation. Yeah, that wasn't the deal. Okay. The deal wasn't you moved back in, and so you're indebted to us for the rest of your life. Right. That wasn't the deal. You move back in, don't pay us any rent, get yourself straightened up.

It's a gift we can give you right now. We can't continue giving you that gift because they're making us move to demolish the house. And so now we've got to move to an area that's not even what we want to do because we can't afford to live here anymore. Right. Correct. Lorraine, how old are you? I'm 26. Okay. Yeah. I just want to give you that permission to have that freedom to build your own life. And what it's going to force you to do as well is to say, oh crap, I don't have mom and dad as a safety net anymore because it's not good for them. And ultimately it's not good for me. So I'm going to have to make hard decisions as well. And that's a tough spot. And I'm sorry. I'm sorry.

It's all coming to a head because of the situation. But I would look at it as a gift in that way. Yeah. Five years from now, when you guys are all emotionally and financially sustained without leaning on each other, you're going to be better people and better for each other. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So, if you feel like the system is working against you, try a biblically-based alternative to health insurance,

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CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget at chministries.org slash budget. Rachel Cruz, Ramsey personality is my co-host today. Open phones at 888-825-5225. Jennifer is with us in Phoenix, Arizona. Hi, Jennifer. How are you?

Hi, I'm doing well. Thanks for taking my call. Sure. What's up? I wanted to see what y'all would do with a pile of money. I'm in baby steps 3B and 4, but then I found myself in storm number one, surprise, I'm pregnant. Oh, well, congratulations. Thank you. Storm number two, five weeks later, I suffered a major medical event, found out I have an underlying condition that will put me at risk for more major medical events.

And we can't really address the problem for a year or two until baby gets here and we can do a lot of testing and investigate it. So I had been saving a bunch of money for a house, but it had been sitting in a high yield savings account, but those rates are declining. So would you guys leave it in high-yield savings, or would you move it into like a brokerage account to maximize the yield? Because I feel like that goal is now three to five years down the road. How much money in your emergency fund and how much money in this fund we're talking about? My emergency fund is $50,000. It's 12 months. And this money is how much?

My house fund is currently at $150,000. Okay. So you have $200,000. So this medical procedure, what's the financial dent that this might make? That's a million-dollar question. Literally a million- million dollar question i don't know well you have health insurance uh yes i do okay and i have very good health insurance but i'm also out of work and currently on unprotected leave because of everything going on so all of that what do you make change i make 140 a year what's your husband make

uh i don't have one of those okay all right um and so you're unprotected you're not making any money you don't have an income right now um that is not a true statement i had a bunch of sick time and vacation time. Oh, I thought you said unprotected leave. I thought you meant your own family leave act with no pay. Okay. So again, what you've got to ascertain, not from a fear base, but just some actual analysis is, is this a $50,000 problem you're facing or a $200,000 problem out of pocket with your health insurance, with your potential loss of income that'll be unpaid once you run out of these other things? And I kind of think you got a lot of savings here.

So I shouldn't tell you about my brokerage fund or my thinking fund. You're a savings maniac, girl. I love it. How much is in the brokerage account and how much is in the sinking fund? The brokerage fund is $80,000. And the sinking fund is $30,000. What's it sinking for? A car, vacation, travel. Okay. a car vacation travel okay all right so now we have three hundred and ten thousand dollars to

weather this i think you're okay breathe right well i think i think the the scary thing jennifer is you don't have a lot of answers and you don't have a lot of answers And you won't have a lot of answers After the baby comes correct Absolutely With the health situation So I'm in no There's no panic to do anything with this money

I would just keep everything We would tell you to pause everything anyway Since you are pregnant There's nothing else to majorly do And I would wait till baby comes you're good run some tests and if and if you're in the same position in 18 months financially you're okay and then you can make some big you know decisions but I think you can take a portion of this and put it in a brokerage account would you tell her to go get a house right

now Dave's kind of smirking I feel like no no i wouldn't i would sit where i am and just you could throw it in a high yield savings and it doesn't matter what you do with this money for 18 months but you weren't going to put this brokerage account down as the down payment on your house were you no that was see come on that was a retirement fund that's not a retirement fund it's a brokerage account well where i worked previously they didn't offer how much do you have in your 401k super saver 500 okay come on okay you need to put you when when this is over and you take your 3B 150K, add the brokerage account to it for your down payment on the house. I want you to put 230 down on the house when this is over.

Right now, I don't want you to do anything. I just want you to lean into the security that you've built for yourself. You are a master saver. You're an amazing saver. But you're taking it too far. But for today, it's okay that it's too far until you get past this storm so when you get past this to storm the storm though um by the house yeah by the house and put all this money towards a stinking house you know seriously after met after the the realization

of the medical expenses and the ongoing yeah whatever whatever's left out of the brokerage account, out of the $150,000. But a 12-month emergency fund, no, stop that. You know, plus a brokerage account just because I didn't have a retirement before, but I got a half million over here. You're fine. You're going to be so rich, it's unbelievable. You can't keep yourself from saving money. You're amazing.

Well done. So, yeah, your challenge, Jennifer, is going to be resting in the piece of what you've created yeah i mean that's it so this so so lower the stress enjoy this pregnancy breathe just like dave was saying like you're good you are good don't make big moves right now have the baby but between now and baby like you're you are you are secure and great yeah let's get the medical thing in your rear view mirror and then let's get the savings trim back down to where it should be. And that's, that's what I would do if I woke up in your shoes. Zach is in Charleston, South Carolina. Hi Zach. How are you?

I'm doing all right. Thank y'all for taking my call. Sure. What's up? So basically I was in a car accident, uh, not too long ago and the guy totaled my car. Um, and the settlement check, um, is about 6,000 and I still have 4,200 or 4,500 leftover on the car. So I was wondering if I should pay off the car and then basically just wait till I can get another car or get another car and then like slowly chip off the the debt you can't they're not going to give you the check unless you give them the title for the total car and you're not going to get the title for the total

car unless you pay the loan off that's a lien on the car well they already gave i already gave them the title and they they gave me they're sending me the check today so i bet it's net of the payoff they probably sent the payoff to the bank oh okay because you got a lean on the car title right right right yeah unless you did something that was not a lean on the car title but either way let's pretend that that i'm that i'm wrong on this for some reason under south carolina law and i'm missing something then when you get the check pay off the debt okay and then you've got like a thousand bucks left or whatever it is 1500 bucks left to go buy a beater car yeah okay and that's what i would do if i woke up do you have any money saved zach

do you have like an extra thousand somewhere no i, I'm very new to all of it. Okay, no, you're great. Yeah, yeah, yeah. The goal would be to get to buy a car in cash. And let me challenge you, Zach. So we're in Nashville and on Sunday, for whatever reason, maybe it's because I knew you were calling in, Zach, and the Lord spoke to my heart.

But I literally Googled $5,000 cars in Nashville. Because we get this call a lot. And people are like, well, I can't get a $5,000 cars in Nashville. Because we get this call a lot. And people are like, well, I can't get a $5,000 car. And I looked up. And I'm like, oh, my. I mean, you just can scroll and scroll. And they're not terrible looking cars. I mean, they may be like 10 years old or something.

But I'm just saying, you have $15,000. I would save up another $2,000. And you can get what? You can get a $2,500. $1,500. $1,500. I'm sorry. That's what I meant. $2,000, and you can get, what? You can get a $2,500. $1,500. $1,500. I'm sorry. That's what I meant.

$1,500. But you can get a $3,000 car. Yes. And they're out there. Here's the trick. They are out there. What was your old car payment? My old car payment was like $400.

Okay. So I would save $500 a month after I buy my beater car so that I can move up in car in six months. Cause I don't want to drive this piece of crap for very long. Right. Okay. Yeah. 500 bucks for six months is another $3,000 and 500 bucks for another six months is another

$3,000. This is how you get rich. You don't pay people car payments. You buy things with cash and don't have payments. That's the goal. And that you're new to this stuff. That's the, that's the bottom line of what we teach brother. Proud of you. Thanks for asking the question. This is the Ramsey show. Hey, you guys, I'm not a fan of the big banks and you probably

already know which ones I mean, but I do like credit unions because they're nonprofit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years, and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join, and Fairwinds partners with more than 5,000 credit union locations around the country so you can bank in person wherever you live.

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you can do it on the Ramsey Network app. Download it. It's completely free. And including the last hour of this show every day. And you can jump in and catch the video and the audio and whatever else. You can search it. There's all kinds of good stuff. And you can ask

questions on the Ramsey Network app. This one is from Todd. Yes. Todd asks, should I consider converting my employer match each year in my 401k to Roth dollars and pay the taxes now? I'm 31 years old and wondering if converting the match each year will benefit our financial future in retirement.

Yes. Yes. Yes, yes, yes, yes, yes, yes. You ought to do it and pay the taxes, of course, out of your pocket when you do that. Especially, Todd, if you're out of debt. If it's going to be a large amount of money out of your pocket because of this, you may not want to do it for a while. Just let it build up and you can go back and do it all at once you can do it anytime you want you let it build up for four or five years and then do it all at once uh at that time i do mine every year because my company that i own is required to match my because i'm an employee

of the company i own which is weird but i get a 401k with the company match and the match is required to be in traditional and i roll it to roth at this time of year every year and that creates that amount of money to be taxed on but then i'm never taxed on the growth after that nor are my heirs because inheriting a Roth IRA is not anywhere near the problem that inheriting a taxable traditional IRA is. And so it even helps later on with your estate planning because I don't have a single thing right now in my name or my wife's name that's not Roth. I have rolled everything to Roth and paid all the taxes in it,

so I'll have no required minimum distributions either at 72 and a half when other people will. So that's an interesting part of the equation. But yeah, yes, definitely, especially if it doesn't affect your get out of debt plan. Now, if it's taking money out of your pocket that you need to use to pay off your car, no, let's wait a year or two and do it later. Do you have to do it all at once? You can do it every year at one time. The match for that year, two and do it later do you have to do it all at once you can do it every year at one

time the match for that year you can do it no i know but if you had a full one and you were converting a lump sum could you divide the lump sum into half and just convert half of it half of it like take it in time so if you had a hundred thousand dollars in traditional and you wanted to roll it but you didn't want all the taxes in one year you could do 50,000 and then next year do 50,000 if you want to do that kind of thing. Yep, yep. And so you can let it build up if you're still getting out of debt and then go back and fix it later.

I mean, you're only 31. So if you fixed it at 36, you're still going to have all the benefits of it growing tax-free for years and years and years and years and years. Gus is in Boston. Hey, Gus, how are you? Hey, Dave, I'm good. How are you? Better than I deserve.

What's up? So I was working a well-paying job, $100,000 a year, and I got laid off. I've been looking for work, something similar, something paying about the same for the past few months, but no luck. I haven't gotten any interviews at all. I believe that it's just the current market conditions. There's been lots of layoffs. This is in the biotechnology sector, by the way. And so right now I'm debating going back and getting a master's degree because I think it would make me more qualified, more likely to land one of these high paying jobs again. However,

I think that I would need to either cash out a brokerage account that I've been saving for a house eventually, um, or take on debt to pay for this. Now I have no debt otherwise, not even a credit card. Um, I've been listening to you for years. And so I guess I'm really nervous at the idea of either cashing out this brokerage account, which I'm making gains on, um, or taking out debt to get another degree. Are you married? No, I'm not. Okay. What have you been living on while you've been laid off for six months or three months? Uh, so I, I have an emergency fund, uh, fully funded six months. Um, but also I've been collecting unemployment.

Okay, and you're living on the unemployment? Yes. Because you're not touching the emergency fund, I can tell by talking to you. Yeah, I know. Yeah, okay. How much longer does that run? So unemployment will go through the end of February, and then I'll have six months on the emergency fund, but as you know, I don't want to touch that unless it's a true emergency. Yeah.

Gus, what's the line of thinking that this degree is the thing that will get you in the job if you haven't had interviews anyways? Is it on the applications like what you're seeing? You're like, oh, I need that advanced degree for sure. Or is this just a, it's going to look better in general and you think that's going to help you? So previously my title was Senior Research

Associate and I got that with a year and a half experience and a bachelor's degree. Now I'm seeing for the same titles, largely same responsibilities, all of the postings are saying bachelor's or master's. And then I got a free trial, a LinkedIn premium, and it's been telling me that, you know, there's 60 plus applicants all with master's degrees who are applying to these same jobs with the same title. So I'm concerned that because a lot of biotechs went bankrupt this year, the market's been flooded with high quality applicants. Gotcha. So what did you, what was your day job what did it look like what did you do as a research researcher um so it was uh operating uh automated liquid handling systems you know like pipetting

um working in a lab lab coat goggles gloves the whole deal um and so specifically it's uh next generation sequencing so it's all sort of furthering research objectives of these large pharmaceutical companies got that dave yeah i did yeah i'm just trying to what i'm looking for and the reason i paused is what i'm looking for is what that is how that is applicable beyond just the narrowness of this field. Something else, yeah. Because the other thing is that we're starting to see some early signs of the economy getting a jump start. And so by first quarter of next year, I think the job market may look considerably different than it looks today.

That's an opinion from your perspective. What I don't know is the world that you're in and what the lab coat goggles and the Bunsen burner, how that applies to other industries other than the specific one you were in. I'm not sure that a master's degree gets you a job let's say for instance that 30 of the players in that nuanced area are now out of business a master's degree doesn't necessarily get you in the door on the remaining 70 because the job market shrunk so dadgum much that what does get you in the doors ken coleman's proximity principle you know somebody that knows somebody there that they'll at least give you a look, and your one and a half years of experience

actually doing the sequencing and actually doing the research is far superior, if I'm the employer, to someone that got a sheepskin, got a master's degree. Yeah, so now I'm at three years experience. Okay, the three years experience is far superior to a master's degree. I don't want someone that was taught to do it by a college professor. I love someone who's actually done it, like for three freaking years. I think your experience is superior to their master's degree is what I'm saying. But you haven't just gotten your foot in the right door to where someone will actually talk to you

and will respect that three years but within that nuanced world the number of people walking around with a master's degree and three years experience is fairly low you might have a bunch of kids coming out of school with a master's and no experience and i think you got them beat i think you're holding a straight flush here so um yeah i i I'm going to work Ken Coleman's system and I'm going to work some other jobs and I'm going to start expanding my idea. Maybe I don't want to be doing this three years from now, five years from now. Maybe I want to apply these skill sets in some other areas of research in the lab, but not necessarily this nuanced area. I want to broaden the scope of my search and how applicable are these skills in other labs and in other situations, even petroleum or something way off the grid.

I mean, where is it that there's a lab? I don't know. And I'm going to try to get in those labs because lab experiences, lab experience, I understand is petroleum would be different than gene sequencing. I get that. But, um, but, but I still, you would know more about going into any lab of any kind than I would. Cause I've never been in one as an employee. So that's, you know, I think you've got some broadening, number one. Number two, I'm going to send you Ken Coleman's book, The Proximity Principle, and I want you to use that to get in touch with people that you know that know people

that know people that get your resume looked at because I think you've got a trump card here. This is The Ramsey Show. There's a time in your life and in the baby steps for renting. But you don't want to do it forever. Because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget. Because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on, Churchill Mortgage. Churchill is Ramsey trusted

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Suite 100. Brentwood, Tennessee 37027. I'm Dave Ramsey, your host. Thank you for joining us, America. Rachel Cruz, Ramsey personality, is my co-host, number one bestselling author. And the new book is out. The new children's book came out today. That means a set of three is now available. I'm glad when I can share. There it is. Teaching Kids Generosity, the last of the three.

So contentment, gratitude, and generosity are the messages of the three books. This is the third in the trilogy and the final book. They're all available at RamseySolutions.com starting today. Great Christmas presents. Elisa is with us in Jacksonville, Florida. Hi, Elisa. How are you? Hi, Dave. Hi, Rachel. How are you guys? Great. How can we help?

So I was wondering how much a mortgage rate should decrease before it's worth refinancing? Well, the weird question is, how long are you going to break even on the savings before you get rid of the mortgage, is the way you look at it. So here's how you do the math. Okay. What is your current loan balance? 256. Okay. And so if you save 1% a year, you save $2,500. If you save 2% a year, you save $5,000. Does that sound right? Yes. Okay. So if your closing cost, if you're saving, if your closing cost is, uh, $10,000 to refinance, I'll just make up a number, okay? Then how quick do you get your closing costs back with the savings that you have from a lower interest rate? And so if you're saving 2% in your case, you're saving about $5,000 a year, you would recoup a $10,000 closing cost in two years,

and everything after two years, you're going to make money. That's gravy on the biscuit after two years. You see how I did that? Yes. So you divide the actual dollars saved with the lower interest rate into the closing costs, and that gives you the break-even point and that should be less than three years typically people say two years you need to break even on the closing costs in about two years so a lot of times it takes a one and a half to a two percent savings

for it to make sense okay the average mortgage right now is adjustable after 10 years when does the 10 years come up um not till 2033 okay so you got a little time to ride the market and again when the market is uh what's your current interest rate 6.5%. Okay. And, um, so, you know, you're, you're not going to get a 2% savings right now. No, definitely not. And you're probably not even gonna get a 1% savings today. You might, but depending on how you structure the loan, whatever, but that doesn't account points. We're not paying points to create a false thing, but the bottom line is the interest, the refinance saves you money on interest and that gives you the money to pay back the closing costs and you need for those closing costs to be paid back in two to

three years for it to make sense and that that's how you run the actual calculation on it and um you'll have that happen long before your adjustable rate kicks in in 2033. I was going to say in that many years who knows what the interest rates are going to look like. So who knows I mean but the average mortgage folks out there across the span of my 40 years of being around real estate and in the real estate business the average mortgage stays on the books only five and a half years, either due to refinance or sale of the property. And so you really don't keep a 30-year mortgage 30 years in reality. So very often, I mean, a few people do. I'm talking about the average. And so you certainly don't want something where the break even on your refinance is 10 years in a world where the average mortgage has gone in five and

a half. So that's bad of course also you would include in that if i'm paying aggressively on the mortgage how quickly will it be paid off am i going to have it paid off before i break even that's another thing you would have to look at so but we're just you're trying to look at the actual dollars saved as a result of the lower interest rate versus the actual dollars in closing costs and that gives you your break-even analysis from a an accounting perspective and that'll help you make the decision very very quickly the good news is rachel that that's now a thing again um that you know rates have softened a little bit they're not up they're you know

they're not they're not way up they're not way down but um there's a lot of optimism out there and a lot of people starting to look at this and four months ago no one was even talking about that they're just frozen right during the headlights that and it's just fascinating the way real estate shakes out because uh we were even talking on one of my shoots the richard crew show shoot yesterday that you 2021, 2022, people were afraid it was a bubble and everything was going to pop because of how quickly prices rose and increased. And now they've just stayed there, which has made the market tough, right?

To get in what you had to have in 2017 looks so much different than what you have to have today. So it is difficult. But if you go to ramsaysolutions.com slash real estate, that's kind of our real estate home base, if you will. And we have so much information because we know this is a big topic for people. So this is everything from talking about agents

to your first time home buying, or if you're looking to move, what the market's doing, there's articles, podcasts, there's so much there. So if you have interest on real estate and more of what Ramsey has to say, you can go to ramseysolutions.com slash real estate and check it out. Check it out there.

Matthew's in Omaha. Hi, Matthew. Welcome to the Ramsey Show. Hi. So I'm looking to basically minimize the taxes my parents are paying in retirement on their IRAs that they're taking distributions out of. That's basically my question. Can't. You can't. No. Required minimum distributions are taxable. You can't get out of them. Well, so we're not in required minimum distribution yet. So my dad's 66 and

my mom's 61. Why are they drawing on it? How are they growing on it? Why are they drawing on it? They need the money? I mean, they're drawing on it basically for, you know, just like they want a deck. So they want to put a deck on the back of their house. So they're thinking about drawing on their retirement fund. They're still making about $140K a year plus around around 20,000 in dividends um so and they've also got a uh they got five real estate properties with about a they're making about 60,000 a year i think they're pulling so they have a 200,000 a year income they can't figure out where to buy a deck

yeah so they're trying to put about an eighty thousand dollar deck on the on the house the residential house nice day and um i'm sorry nice deck oh yeah it will be a very nice deck uh it's gonna have a covering and uh it'll be pretty nice so but yeah so they're they're they're looking to do that but uh it's kind of, they were thinking about pulling $100,000 out, $100,000 out on the house. How much do they have in retirement? In their portfolio, they have about $2.2 million. Okay.

And then they have about a million dollars worth of real estate that it makes rent, and then they have about a million dollar residential house okay i think they've got this figured out i don't think they need you or me um i think they've got the money and when you pull money out of a traditional ira and you got two million dollars in there and you pull money out it's going to be taxable there's not a hack on that man there's no hack it's just taxable period. That's the problem with the traditional instead of the Roth. That's why we want to move as many people towards Roth as we can, because when they get up here, if it was in a Roth, it'd be a no-brainer.

There'd be no taxes on it. Is there any time to pull money out of retirement? If you're still working, you're at retirement age, you can do it without penalty. Is there ever a time you'd say, yeah, yeah, use your retirement for that? They can do it without penalty, and they can pull this $100,000 out of there, and it's $2.2 million. They can afford it, but he's wanting to not pay taxes on it. You can't do that.

You're going to pay taxes on it. There's not a hack for that, dude. It's just taxable, period. And there's not an offset on it. If there's an offset, you know, interesting. um all right interesting so i i'm probably personally not going to do that if i'm in their situation i'm going to budget for the deck they can afford it it's not going to kill them it's not bankrupting them but they don't want to pay the taxes on this it's an ouchie i hate taxes i don't pay the taxes on it either it's an an ouchie. So I'm going to find another way out of $60,000 worth of real estate income and $140,000 to get the rest of this paid.

It's that simple. That's going to be my plan. So that puts us out of the Ramsey Show in the books. Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey personality, is my co-host today, my daughter and number one best-selling author, and the new book, the new children's book, I'm Glad When I Can Share, is out today.

So be sure you check it out at ramseysolutions.com. That's the third of the children's books. That trilogy makes a great Christmas present, so be sure and check it out. I am Dave Ramsey, your host. Don is with us, and Don is in Alaska. Hi, Don. How are you? I'm doing good sir how are you? Better than I deserve. What's up? I have a gold dredging operation that I'm part of and I can expect to gain just about 24 to 35 ounces of gold this upcoming season.

And that is the operation is paid solely in the metal that we collect and no cash or payroll is given. And I'm kind of curious on what would be the best way of selling that gold or capitalizing on that gold, because with the current gold price, that would be right around from the very worst that we could do on averages speaking. I could get around about $50 or so, $1,000 with the current gold price. So that's your pay for a year? Not for a year. It's a three-month operation.

Oh, okay. So in January to April. But it's your pay for your for your for your job for the hours ago yeah it's it's more of a um uh kind of a partnership than it is a job necessarily okay all right so some guys are going out dredging gold you're going to get your cut yeah and it's 50 and it's 50 grand well you may know more about actually liquidating the uh the raw gold than i would know but uh what i would do is liquidate it i'm going to turn it into money okay i'm not i'm not holding it as an investment i'm going to turn it into money and use that money to achieve my particular financial goals, which around here

we would call baby steps. Yeah. And I already have the $25,000 in for what? Emerging fund. Sorry. Good. I was just kind of curious. Are you debt free?

I am debt free right now. You own your house free and clear? I don't have a house. I currently live in employee housing with my current employer in Dutch Harbor. And I would like to get eventually get to the point where I'd have a duplex or a triplex or something of that nature. But current gold prices are, or sorry, the property prices where I call home is a little bit more than I'd be able to save up for, in my opinion. Well, what would a duplex cost? The current one I'm looking at right now is about $499.

Okay. All right. So it'd take a few years of saving up to do that. What else do you do other than this? I'm a commercial diver. I dive for gold, and I also work for a company up here. Yeah, so what's your income on that annually? About $60 a year.

Okay, so your household income, so to speak, you, is $50 and $60, so $110. Does that sound right? Just about. Okay, cool. All right. And you're a single guy with all your housing paid for so you can save a ton of this and just start throwing it in good mutual funds and use those mutual funds to pay cash for a uh a duplex later so the danger of what you of your situation is is that your you and your your buddies your employers are all uh very uh familiar with touching and owning and transacting in raw gold because it's just part of your culture where you are right it's like everywhere it's all around you around you. And so the danger of that psychologically is it causes you to kind of normalize that where it's not normal anywhere else to do that.

But it is right there in your world. And if it normalizes, it causes you not to look at it through the lens of an investment. Instead, it's just kind of part of your life. And so I'm going to step back and look at it as an investment and say, I don't want to do this as an investment. I would rather have my money in good mutual funds and let the volatility of the gold world not affect a young single diver in Alaska. I want you to make a bunch of money and end up with a bunch of it instead of rolling the dice. And when you're playing with metals like gold, you're rolling the dice. You see what I'm saying?

Yeah, it's definitely a gamble. That's what I mean. In the different ways that you can liquidate it. I mean, we're only, since it's 90% pure, it's not the kind of stuff you go buy at Costco necessarily. No. It's 90% gold, 70% silver. Yeah.

So it's a little bit different than what you go and liquidate at a jeweler buy at Costco necessarily. It's 90% gold, 7% silver. So it's a little bit different than what you go and liquidate at a jeweler or go and... Yeah, so how do you sell the raw gold? I don't know how to do that. How do you do it? So there's a few different ways. The first way that a lot of people do, there's a company up here called GCR. I think I got that right. They'll take a small cut of it and they'll refine it.

They'll give you a 50% check right off the bat. And then a couple of weeks later, after the thing is said and done, they give you a check of it. But that check is about 10% less than the actual value of it. So that digs in a little bit to it. The other way that I've been doing it, I will either go to somebody who wants to sell like a truck or something and I'll buy the truck with the metal. I did that. That was pretty fun going off. Got my vehicle. And the last way is some people, especially those folks that do the Bering Sea Gold show, they will do what's called pay dirt bags. They take a little bit of gold.

They take a handful of dirt and put it in a bag and sell it to people that think they want to be all cool and fun and be a prospector for a day. And that's one way I was kind of wondering if it would be smart to do that. That's a business move. You're starting another business now. I'm not doing that. I'm just looking for a way the first way sounds the most logical to me is you're giving up a cut to turn it into money it's that simple and um the only question i would have is there someone uh down in the lower 48 that you can jump on a plane that does the same thing that company does but gives you a better cut

like are they up because they're up there are they are they leaning into this uh in certain cases yes there's uh i mean new york's kind of one of the big places but that's uh quite a large plane ticket to uh get over there and that'd be cutting into the amount that you get back but uh roughly the gcr is kind of the one that you want to go with. Really, it's anywhere, depending on the purity, it's anywhere from 5% to 10%. Yeah, your option is you've got a pile of rocks in the corner, or you go GCR and give up 10% and turn it into cash.

And so I'm going to turn it into cash. I'm going to turn it into cash. I like that. And I'm not getting in the dirtbag business. That's a different thing. Now it's a tourist thing, and you have a new bag business. That's a different thing. Now it's a tourist thing and you have a new business. And it's a business move. We're starting a small business in order to liquidate this stuff.

And so that's probably not the way I'm going either. How interesting. I know. Well, I was going to say. First time I've gotten that call in 32 years. He actually finds the gold. Yeah. Never got the.

It's pretty cool, Dawn. The cold water deep diver in Alaska dredging gold call. Now, Mike Rowe actually knows those guys. And so he's up there all the time. He's been out on those boats. But yeah, that's a different thing. Interesting. Fun way to make some good money, too.

50 grand. Yeah. Pretty cool. Honored to have you in our audience. Very neat what you're doing, Don. Very adventurous. This is The Ramsey Show. Rachel Cruz, Ramsey personality, is my co-host today.

The Ramsey Show question of the day is brought to you by YRfi. Y Refi refinances defaulted private student loans, which are different than federal student loans. Y Refi refinances your defaulted private student loans and builds a custom loan based on your ability to pay. So kick your private student loan debt out of your life by going to Yrefy.com slash Ramsey. That's the letter Y R-E-F-Y dot com slash Ramsey might not be in all states. Today's question comes from Jamie in Minnesota. She said, my husband and I are 51 and 53. We're debt free and have three cars that are fully paid for with a household income of $150,000. We are debating whether or not we should sell one of our cars worth $50,000 and apply that to our mortgage.

We owe about 90,000 on our mortgage and will be paid off in one year if we sell the car versus three years if we do not sell the car. My husband thinks you should not pay off your house early because we can't deduct the mortgage interest on the tax returns and he's afraid we'll owe the IRS. Last year we paid $3,097.66 in mortgage interest. Can you provide some feedback

on that and what your recommendations are? Okay. Well, the mortgage or the tax deduction in general, including mortgage interest, is the biggest piece of mythology in all of personal finance because it requires that people forget how to do sixth grade math. Let me walk you through it. If, Jamie, if you actually itemize, then you can claim your charitable deductions and your mortgage interest rates. By the way, last year, because the standard deductions are so high, almost no one itemized, including you. You probably didn't even itemize. So your husband is completely unaware of how this whole thing works because you didn't take a deduction for your mortgage interest unless you itemized.

Nine percent of Americans itemize. Ninety-one percent do not. If you do not itemize, you do not get a tax deduction for your charitable or for your interest. So 91% of the people, this doesn't even come up with. Right. So that's just dumb. Not you, Jamie, but when people are saying, well, I don't want to lose my money, you're not taking it anyway. You just don't even know how your taxes work.

You're that geek. Plug into it all right now if if you do if you did itemize then you sent the mortgage company three thousand dollars three thousand ninety seven dollars thirty one hundred bucks and that reduced your income your hundred and fifty thousand dollar income by three000. A tax deduction is not a tax credit. It lowers the amount of income that is taxed. So the tax savings is not $3,100. The tax savings is $3,100 times your tax rate, which is 32% in your case, okay? And so you saved $1,000 in taxes if you itemized. So here's how this works. Your husband is suggesting, absurdly, that you send the government $3,100, or you send the mortgage company $3,100

to keep from sending the government $1,000. You're trading dollars for quarters. Dumb trade. So always pay off your mortgage. Never keep it for the tax deduction if you send somebody ten thousand dollars to keep from sending the government three thousand dollars by definition that's mathematically stupid and then i call myself sophisticated because i didn't pay off my mortgage because i had the tax deduction but i don't even take the tax deduction because i'm not

even one of the people that itemized and and I just didn't even know that. That's most people with this opinion around the Thanksgiving table. They just absolutely do not know how to do math, and they don't know the reality of the situation. Now, worse than that, worse than your broke brother-in-law telling you this at Thanksgiving. You're silly. Dave Ramsey doesn't. Worse than him, the one that pisses me off to no end, are people that do taxes for a living. And they tell the small business person, or they tell you to not pay off your mortgage

because you'll lose the tax deduction. Or to run your expenses up on things you don't need to buy, you need to spend some money by the end of the year, otherwise you're going to get taxes. Well, that is asinine. It's ridiculous. You own a hair care place and you spend $10,000 you don't need to spend because your tax preparer is a moron who told you to do that?

That's dumb! let me help you you got two words for these people that give you that advice you're fired the tax write-off it's like the schitt's creek uh episode where he's like well just it's it's a write-off and he's like yeah but who's writing it off he's like I don't know the write-off people it just gets written off it's like this like mystical idea of the tax write-off like it is like it justifies all my stupidity always it's like well I don't know it's a tax write-off it's a write-off who's gonna pay for I don't know the write-off people that's great I haven't seen that episode so listen if your tax person is telling you to run up your expenses or to not pay off debt because you're getting a tax deduction they're telling you to trade dollars for quarters you don't need someone that can't add doing your taxes you need new tax people go to ramsey solutions.com and get with one of our tax people they do not make this mistake believe me we wouldn't they would not have

a ramsey trusted sign on their door if they made this mistake because they wouldn't be trusted by me because they don't trust people that can't do math so there you go that's what we're doing here so guys whatever you do don't fall for the tax deduction myth and the irony of ironies is all of these people discussing it 91% don't itemize in America today that's everybody y'all I mean so because you because for majority of people you get a better deal if you just take the standard deduction anyways that's what I mean yeah that's why you don't they don't need to you don't need to because yeah you're stupid actually under the Trump tax code in his last administration he ran the standard deduction way up yeah you get an automatic deduction just because you breathe yep and your real deductions

don't add up to that so you're better off to take the big one right right exactly the breathing deduction yes from the write-off people that's right from them but they're there that's the standard deduction has changed the game and it's made the tax filings very easy and that's probably up to more in the last what 10 years in the last what 10 years because this used to be 15 years ago if i was talking about this it had been 70 because this was a main point back in the day at our live events back in 20 oh you know 2004 yep this was a big discussion and now it's not you don't hear it as much anymore because the standard deduction was and the number of people therefore that don't itemize is so few.

Yes. It was absurd back then because you're trading dollars for quarters. And we used to cover it in the live events in those old arena events. That's right. That's right. And it was absurd back then. It's just as absurd now for the same reason. But it's doubly absurd because it really doesn't apply to hardly anybody anymore.

Yep. And I'll bet you money Jamie doesn't itemize. Yep. 91% don't. Yep. And so it doesn't even come up so her husband's arguing a theory that he's not even doing uh and then if he was doing it he's trading dollars for quarters yes so don't trade dollars for quarters pay off your mortgage and the other the other argument for not paying off the mortgage is i can make more in the market versus what I'm paying in interest. Yeah said no millionaires ever. Right. The millionaires that we the 10,000 millionaires

that we studied none of them precisely zero said I became a millionaire by not paying off my house and investing the difference into the market. None of them say that. It's always broke people that say this stuff. The broke people that don't want to lean in and do the smart long-term financial plays like getting your home paid off yep so yeah it's it's it's asinine you guys the data just does not back it up the math does not back it up pay off your house people when you get to baby step six finish the baby steps and pay it off. And don't deal with tax people that can't add. Please, God. This is The Ramsey Show. Rachel, do you ever get these sketchy text messages that are like, hey, you need to update

your address and verify so we can get you the package you didn't order? Yes, I have, George. Sketchy and never trust them. And that's why we recommend DeleteMe. They help with that. Yeah, they do. DeleteMe actually goes in and removes your information from data broker websites. And it is an incredible service that everyone needs. And there's a lot of shady companies out there that solely exist to sell your personal data to bad guys. And that means your info, like your email address, your home address, your kids' names, your name, everything is just out there for scammers and spammers to find. That's right. And then once they remove your information,

then they're going to send you a detailed report telling you where they found your information, when they removed it, how many hours they've saved you. I mean, it is incredible. So detailed and it's beautiful. I love these reports. So far, get this, they've reviewed 27,000 listings on my behalf, removed me from 240 data broker sites, and saved me 77 hours of time. It's incredible. Absolutely amazing. And Winston and I now get fewer texts, weird emails, spam calls, all of it. I love it. So you got to be sure to check them out. Ramsey fans get 20% off their annual plans. Just go to joindelete me.com slash Ramsey.

That comes out to less than nine bucks a month. Super affordable. It's amazing. So again, that's joindelete me.com slash Ramsey. Make sure to check it out, you guys. Rachel Cruz, number one bestselling author, Ramsey personality. My daughter is my co-host today. Feel free to drop by and visit us in the Ramsey headquarters. We do this show from one to four central time every Monday through Friday, and it's free to drop in and watch the

show. We do the show on the glass in the lobby, and there's always 50 to 200 folks out here watching the show. There's free chocolate chip homemade cookies, smells like mama's kitchen when you walk in here, and free coffee. So come hang out with us. Watch the show. Whoever's taping it and doing it that day. It's not taping. It's live. But, you know, we're here doing it.

And in the lobby of Ramsey Solutions, when we built this building, we put up the debt-free stage right across from our glass here. And one of our favorite things is to do a debt-free scream on the debt-free stage. The only thing that is more exciting for us than to do a debt-free scream on the debt-free stage is to do it with a Ramsey Solutions team member. And Brianna Moore is with us. She's one of our team members. Welcome, Brianna. Hi. Way to go.

Congratulations. Thank you. I can't believe I'm here. Tell folks what you do here at Ramsey and how long you've been with us. I've been here for four years and I do SEO and content marketing for our amazing real estate department. Shout out to real estate. So Ramsey trusted real estate agents all across the nation benefit from your hard work.

Yes. And you're writing, doing the content on the website and other things to cause content marketer to cause all that to happen yes okay very cool good for you four years you've been on the team all right now we do not this is the one time we don't ask the folks income because um you know 30 or 40 of the people standing around 50 of the people standing around work with her and that would be a wee bit awkward so we're not going to do that but we will ask you this how much did you pay off two hundred and four thousand dollars oh my gosh and how long did it take six years six years wow and what kind of debt was this student loans 164 that was uh the principal then $40,000 of that was interest. So it was all student loans?

Yes. Student loans. What did you get your degree in? Digital media management, so business, four-year business degree. Yes. At a private school in Austin. There you go. Yeah.

And you paid for it. Wow. Oh, my gosh. How great, though. Okay. How long have you been out of school uh six years okay so you started immediately yes and it took you six years to clean it up yep you leaned in four of those years you've been here yes so does it make it more awkward to work at Ramsey while

you're working your debt snowball or easier because I would think all the peer pressure is positive yeah it was definitely easier and more fun and I felt less shame telling people how much I was paying off so that was really fun to be like yeah it's your co-workers are like cheering you on right I mean your team members right they're like yes yes yes yes yes yes okay that I hope so yeah if not tell me who they are I'll deal with it yeah yeah I love it very cool so incredible okay so what happened six years ago? So you graduate college. Yeah, so I think it was towards the end of college, I was realizing what I had gotten myself into.

I don't think before I went to college, I really understood what is a loan and that you have to pay that back. Yeah. And so towards the end of college, I knew, okay, it's kind of a non-negotiable. I can't live with this debt for the rest of my life. So I knew I was going to have to take FPU. So I did as soon as I graduated and I knew I had how did you know to do that

my parents informed me of you and your program yeah they're everyday millionaires and teach FPU so they were able to kind of learn with me at first and become those everyday millionaires and everything too and then we kind of like did it together and they're here with you today right yeah yeah so fun way to go mom and dad you got to be proud very good so that's some of your other cheerleaders other than your teammates yes yeah um but yeah so after graduation took FPU started paying it off and I would actually like cry myself to work um because I hated my job and I was doing it basically because I knew that I had to have an income and do something and I was living rent-free at home and I would listen. Sorry. I knew I was going to cry. No, you're great. You're doing great.

Okay. Where were you living? In Houston with my parents. Okay. All right. Sorry. That's okay. No, you're good. It's been a long journey of doing this. Six years is a long time. It's a lot. You've been fighting this by yourself, Warrior Princess. Way to go.

Yeah. Proud of you. Anyway, so I would listen to the Ramsey Show on my way to work and cry and listen to the Jeffrey Screams and envision myself doing this one day. So it's really cool. And I didn't know I was going to work here. How did you end up coming to work here? Y'all found me on LinkedIn and asked me to apply, and I did.

And then y'all gave me the job. Great recruiting team. Shout out to Aisha. Yeah, that's right. We tracked her down and snagged her out of a miserable job. Pretty much, yeah. So then the rest of the four years has been here, and it's been an amazing journey.

Wow. Oh, my gosh. Okay, so you moved to Nashville. Yes. And it's a fun. Now, wait a minute. You get the call from us, and you're working this plan because of us, and your mom and dad are FPU graduates, and you've been through FPU,

and we call up out of the blue and say do you want to join us yeah I mean that had to be weird it was it was very much a god thing yeah Jesus yes don't call Jesus weird okay all right but yeah oh my gosh okay so I want to know from the moment you so you moved to Nashville and Nashville's a fun city right I mean there's things happening stuff is you know people are going out I mean it's it's an enjoyable town so what what was the pressure like or what was the feeling the sacrifice like the hard of saying no you know to a life like what were the things that you said no to that were really difficult um shopping yeah girl I'm like I like to look cute and I couldn't for a long time um so shopping

definitely um for six years though I did have to budget like some fun in there because I was just gonna go it's a long journey if I didn't so I was able to do some very small like weekend trips with friends and keep it in control like control it totally um and I just really the sacrifices were not having any time to myself I was working up to seven jobs at one point. Oh my gosh. What were you doing? So working full time. I have a photography business on the side.

And then I was doing anywhere from like three to six to seven additional freelance jobs where I had SEO clients on monthly retainer. And so I was doing that for several years. And it was exhausting and miserable and I was just working non-stop I would work here I have memories of working here getting off at four going downstairs and sitting in the cafe and working for an hour on side jobs going to work out and then going home and working until I went to sleep and I would do that for just like five days in a row just straight all the way grinding it out I mean you're making some good

money on the side yeah I was making um on a low year 15,000 all the way. Grinding it out. You were making some good money on the side. Yeah, I was making on a low year $15,000 all the way up to like $30,000 a year inside jobs. Amazing. Which is what helps put a dent in $200,000, right? Of debt. I mean, yeah, that's what had to be done. Yeah, the budget was obviously helpful, but I'm already kind of naturally a frugal person. So for me, having that much and being a single income I just had to get more

money yeah I had to do anything to make more money how does it feel to be free feels good I kind of didn't I haven't really felt what it feels like to be free Murphy hit me two weeks after I um paid off my debt and I got in a car accident somebody hit me and totaled my car so I haven't really felt that free because I've been financially dealing with that too so I'm like hopefully after today I'll feel really that free well it's official you are yes by the way yeah congratulations so proud of you so your mom and dad your teammates cheered you on anybody else was your cheerleader yeah my parents my brother my sister-in-law and then all my friends um Annalise and Alyssa specifically and then all of my awesome teammates and co-workers yeah very cool well done congratulations thank you all right other than getting a job at ramsey and having us

track you down what is the uh key to getting out of debt for all those fpu graduates out there listening um for me it was making extra income definitely and just not there's no other option but to do it and get out of debt and no matter how much you have you can do it i'm i did it as a single person um and i made it happen how old are you 29 that was the other thing i was gonna say i paid it off um three days before my birthday that was my goal yes so i had 30 a little over 30 000 at the beginning of this year and i said okay i want to do this before i turn 29 happy birthday well done i love it i love it i love it well we're proud of you i know your mom and dad and all your friends are way to go all right it's brianna she

paid off 204 000 in six years four of those years working on this team. Count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free! Yeah! So good. Man, she leaned in. She's amazing. That was strong.

So good. This is The Ramsey Show. I've been doing this show for over 30 years. And some of the saddest calls I have taken are from situations that are completely preventable. Yeah. And what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly and they don't have life insurance. When you have to think through how am I going to pay my bills in the middle of next week,

in the middle of all that grief, like it's just it is it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282 or go to zander.com

rachel cruz ramsey personality is my co-host today we tell you around here if you'll pay a price to win you get to win we say live like no one else so later you can live and give like no one else and when you're in baby steps one and two and even three where you're finishing the emergency fund and you're paying off all your debt but your house you should not go on vacation you should not go out to eat you should lean in and knock your debt out as fast as you can but when you get to baby 4, you go from intense to intentional. And that's when you get to buy that new couch or upgrade your car or go on vacation. That's why we named the cruise, the Ramsey cruise, the Live Like No One Else cruise, because it's for Baby Step 4 and beyond. It is almost sold out.

There's a handful of cabins left for march 22 through 29 in 2025 this is a premium caribbean cruise turks and caicos puerto rico saint thomas the bahamas holland america is one of their newest ships it is a high stand i don't listen i don't go on these cheap cruises okay i want i like the nice ones davis bougie with his travel i don't know about my bougie but i i'm not staying in the freaking holiday inn anymore i've worked too hard so and the and i'm not staying in the holiday inn on the seas either so this is a nice ship it's going to be a lot of fun sharon and i will be on the ship the entire time all of the ramsey personalities will be on the ship the entire time. All of the Ramsey personalities will be on the ship the entire time. The comedian Trey Kennedy that makes fun of me will be on the ship.

That's fun. World-class chef from the Food Channel, Manit Chauhan, will be on the ship. Dove Award winner, Grammy Award winner, Stephen Curtis Chapman, and Dina Carter both will be on the ship. And there's going to be others. It's going to be a wonderful, fun, laughing, celebrating, entertaining week, and most of you are not going to get to go because there's just a handful of cabins left. You need to get your cabin while you can. You can put down a small deposit and lock it in, and we would love to have you do that.

RamseySolutions.com slash cruise. If you don't get this done, you're going to have to have fomo or whatever that version is for cruzmo so there you go don't don't miss out on this open phones at 888-825-5225 john's in pittsburgh hey john what's up uh mr ramsey thanks so much for uh for talking to Sure. So in a nutshell, our issue is that our home is more expensive than we probably should have gotten. We are living paycheck to paycheck, and quite often the paycheck doesn't even cover for two weeks. So we are bleeding from our minimal savings and paying for the things with our credit card and only paying the minimum uh to get how much is your house where uh it is two thousand ninety dollars a month and what's your take-home pay take-home pay is about 65 to Sorry, no, that's not take-home. That's total.

Your take-home pay in a month. Sorry, take-home pay in a month is $4,200. Oh, yeah. You have to sell the house, John. That's what we were thinking about doing. You don't have a choice. The biggest expense. Yeah, you can't.

Your house spends 50% of your take-home pay, hon.'t do that that's why you're dying yeah i mean you had a feeling of that but the arithmetic is screaming that you're starving to death so i guess my biggest concern with that is if we're not able to like if we don't have enough equity in the home to cover clothing costs. John, you can't stay in the house. You can't stay in the house. How does that look? Like where does that money come from, I guess? Well, right now you're putting it on credit cards.

Yeah, that's true. Yeah. So I'd rather have $5,000 on a credit card than a mortgage you can't afford. What's the math of the mortgage right now, John? What do you guys owe? We owe $287. Okay, how much is it worth? Or what can you sell it for?

We actually just got it back down to what it was worth when we got it. It was $287,500, but some of the closing costs were rolled into the mortgage. When did you buy it? It was $293,000. It was in November of 22. Okay. Go online at ramseysolutions.com and get one of our Ramsey-trusted real estate agents that are high performers that actually know what the flip they're doing.

Have them come out and look at this and give you a market analysis and tell you what you can do. But you've got to find a way out of this thing. It's not sustainable. That's what you already knew. You just needed someone else to say it out loud. I think you might be right. It's not even close. You're not like on the bubble or anything.

You're over in the deep end of the pool. There's no debating. Now, the only thing that could happen is, do you have anything in the near future, in the next six months, with your daytime career, your normal career, that looks like you're going to have a huge increase in pay? Second job would be the only thing. No, no, no, no.

I wasn't what I was talking about. Second job is not sustainable. I don't want to sign up for something where I do a second job for be no no no i wasn't what i was talking about second job is not sustainable i don't want to sign up for something where i do a second job for 15 years i'll do a second job for a short period of time to get out of a mess clean up a mess right but you don't want to do that your house poor this house owns you you don't own it i'm so sorry and it's um it's going to be a little embarrassing, but you guys, you got married, and everybody yelled at you and said,

young couple, go buy a house, go buy a house, go buy a house, go buy a house. And then we went and found a house we liked, and the idiots at the mortgage company just signed your butt up, and they put you in a crack, didn't they? Feels that way. Yeah.

Do you guys have kids, John? well that that's one of the other things that's costing is we kind of had one that we weren't exactly expecting very thankful for sure but we were not expecting is she is your wife expecting or do you guys already have is do you have the baby oh no she's she's been around for a little while. Okay. Good. How long have you guys been married? Since 2015, so almost 10 years. Okay. So you're like 30 years old? 35. Yeah.

Yeah. Okay. Well, let me tell you a couple things, all right? When I was 28, I went broke and lost everything, and I was in a much more severe situation than you're in, but it taught me some things about situations with stress in this. The number one cause of divorce in North America today is money fights and money problems and money stress. And you got that. So your wife is afraid

and she may not want to leave this house and and you're confused and feel like you did something really dumb, and maybe, you know, maybe it hit, maybe you took a hit in your confidence in that, that would be normal, those things. If y'all are having money fights, and she's very afraid, and you're not as confident as you were before all of this mess, you would be normal. That would be a normal reaction to your situation. Okay. What I want you to do is get away from all that. The destabilization of your marriage, your lack of confidence, her terror, her being terrified. This house is not worth it. It's just a stupid house. There's a house on every corner in Pittsburgh. I've been there. They're everywhere.

And you'll get you another house that doesn't get you. You'll never do this again. You'll never make this mistake. You've got the rest of your life to make other mistakes, but you'll never make this one again, right? Yeah. It's no fun, is it? It's not.

Is what I was saying true? Everything except for my wife. She's totally on board with getting rid of this place okay she's like i want out yeah well it's not fun for her and and the interesting thing john is you know we we have a phrase called financial peace it's one of the books that dave wrote but but that is it is what we want for people is peace. We want peace. And just like you said, Dave, like it's a house, it's just, it's a house and it's not worth the stress and the anxiety and any level of status of home ownership or like whatever the play is for you. It's not worth it. Your peace is worth so much more than stuff. And that's true for cars or anything, but it feels magnified because a house

it is big i mean it's you know it's a three it's a three hundred thousand dollar you know idea and it's where your family lives there's emotional attachment i mean all of it but get rid of it and go rent somewhere and just just breathe for two to three years and save some money and get a down payment and then buy something else based on your income at that time. And you don't take out folks more than a house payment, more than a fourth of your take-home pay, not half your take-home pay. And just because the idiots at the mortgage company will give you the loan does not mean it's a good idea. They will ruin you if you let them. And they'll pinch you if you let them. And they'll make your life miserable if you let them, they don't care.

They don't have a soul. This is the Ramsey show. Live from the headquarters of Ramsey solutions. It's the Ramsey show where we help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey Personality, number one best-selling author and author of the brand new children's book, I'm Glad When I Can Share, the third in the trilogy of children's books by her, comes out today. Check it out at RamseySolutions.com. She's my co-host today.

Open phones at 888-825-5225. Hunter is in Nashville. Hi, Hunter. Welcome to the Ramsey Show. Hello, Mr. Ramsey. Hello, Ms. Cruz. Hey, what's up? Yes, sir.

So I'm 22, and I'm expecting my first child in January, and I just got a seasonal job working at UPS, and I'm fixing to start working about 80 hours until the baby gets here. I just want to know if I'm doing too much, too little, or if I'm right in the middle of where I need to be at, and I just want to see guidance on that. Why are you doing that? I just want to make sure that we've got enough money for whenever the baby gets here, if there's any kind of complications, if she's got to stay overnight in the hospital, if there's anything wrong with the baby or with her. And I'm just really not worried but more anxious. How much money do you have in savings now?

I've got $7,000. We're not married or anything. We are engaged. But until we get married, I've got $7,000 in my account, and she has $8,000 in her account. Okay. Do either of you guys have debt? Just me.

I've got $12,000 left on my car. Okay. I assume you're living together. Yes, sir. Huge tax advantage to get married before the first of the year dude. So the way our insurance works, if we were to get married she would have to drop her insurance and there's a 30-day wait period before she could get on the mine and she has shown signs of early labor labor already and so I'm

just trying to make sure that she is going to be covered and the baby covered whenever she does go into labor. So that's why we are waiting until the first of the year. You mean until the baby comes? Yes, sir. You're waiting until the baby comes because you can't restart the insurance is the problem, right? Yes, sir. Okay.

All right. Wait a minute. She has insurance, right? Yes, sir. We both work at the same place. And it covers, why would it have to restart if you get married? Because we'd have to drop her from her insurance at the plant because of the way that our union and our insurance is set up

is that two people working at the plant can't be on their own insurances. They have to be on just one. So we'd have to drop one of us. Okay. And, uh, so that's what HR told you? Yes, sir. Okay. All right. Um, okay. It's an advantage to you, uh, if you can talk them into an exception on that, because you're going to save a lot of money if you get married by the end of the year. But you don't want to do that and leave her not covered with a child. So I completely agree with that. Okay. So the coverage is important. So, so far you've made the right decision, but I'm going to ask if there's not some kind of an exception that can be made given that she's carrying a child and given that you both work there. Because it's not like you're increasing the cost to the insurance company by doing this.

Yes, sir. So. So I went and talked to HR about it, and they said that they would not make an exception and i even called our insurance company them and went over hr after i got done talking to them and asked them as well and they gave me the same answer okay well well done for your due diligence yeah you're ahead of me all right good job well done okay so uh the only question is are you working too hard for 30 whole more days? No, probably not. So I go in at 4. I'm on Nashville Highway right now trying to get there.

So I go in at 4, and I'd get off at 12, 15, and then I'd leave straight from there and go to UPS there in Columbia, and then I would work from about 1 to 8, sometimes 9 in the morning. If you can physically do it, do it. Wait, until 8 in the morning, like an overnight, and then you start again at 4? He's working 80 hours. Yes, ma'am.

Yeah. But that's not seven days. That's only five days. Yes, sir. Yeah, and if you could push your UPS stuff off to the weekends and spread that out get a little sleep during the week it'd be a good cool thing but uh no i mean you can do anything for 30 days so you know we're talking about 30 days and what you're what you what

you're getting for that in return is a lot of uh financial pad to make sure that your fiance and the baby are taken care of. And so I admire you for doing that. You're a good man. If you need to cut back to, you know, not collapse or something, then you look at that. But if you can physically and mentally pull it off, and especially if you get a little bit more creative, get a little bit more sleep than you're outlining right now that'd be smart but um i don't want you to get hurt or something on the job because you're you know half asleep or something but the the point is the that

that you can do a lot of stuff for 30 days and that's really what we're talking about um and so uh if you can handle it i would do it i have done stuff that was bizarre for 30 days to get stuff moving at the ramsey business or to get um to get something done for my family i've done some bizarre crazy hour stuff for 30 days but i don't want you to do that as a as a life pattern for the rest of your life i want you to be a better husband better dad than that for the rest of your life but for right now for a short period of time i mean you can do anything yep sound like a sharp guy hunter to be 22 you're you're stepping up and i i appreciate that very responsible man yep very well done sir very well done all right sarah's in chicago hi sarah welcome

to the ramsey Show. Hi there. Thank you both for guiding our family to financial freedom and so many others. Our honor. How can we help? So my question is, we have a net worth of around $3 million. Good for you. Well done. Thank you. Thank you. And I'm 44. My husband's 49. And what I'm, what I want to ask is he, his career, he makes around 350,000 a year and he's been there for many, many years and it's, it's becoming pretty stressful and he's looking to maybe go out and do consulting, which will probably be about 150150,000 a year.

Our primary residence is on a farmette, and we're on about three acres, and it's worth probably around $1 million. And we also own a rental property not far to the east of us that's a smaller property, but it's still on three acres. And we have contemplating selling our primary residence and moving to that residence that's worth about a half a million in order to basically take that million dollars and just, I mean, we would invest it, but it wouldn't be necessarily in retirement because a lot of our money is tied up in retirement and just allowing us to live, I guess, an easier lifestyle,

a more stress-free lifestyle. And just wanted to kind of get your thoughts on that. I would run the figures of selling the rental property instead and see if you can't make that work. What do you earn? And then we do capital gains. I earn just about, yeah, okay, because it would be about $ and then we put capital gains i earn just about yeah okay because it'd be about a hundred thousand in capital gain no well you're not that property's only worth a

half a million it's not zero basis well yeah we put it we only only about 200 in it so yeah okay so you got capital gains on 300 i'm gonna run the figures on that. If I can make that work, I'm going to stay in my home. I hate for you to get to 3 million and then give up your home. If I can avoid it, I will. The best way to make the most of your money is by creating and sticking to a plan. It's called a monthly budget. The world's best budgeting app is called EveryDollar, and it makes it simple to plan your spending, track expenses,

save for what matters most to you, all in an easy-to-use app that fits into your busy lifestyle and works with your spouse if you're married. And it does paycheck planning and a bunch of other very cool features that make you able to walk the baby steps the way we teach keep a pulse on your spending and make progress on your money goals with every dollar you can download every dollar for free in the app store or google play or click the link in the description if you're listening on youtube or podcast brent is in lansing michigan. Hi, Brent. How are you? I'm doing good. Thank you for taking my call.

Sure. What's up? So my wife and I were trying to get out of debt. She just recently told me that we pretty much maxed out our current credit limit. So we have about $50,000 in credit cards. We have $40,000 in a truck and a trailer. And then I have about $40,000 in student loans. I was doing really well at work. And then we lost a couple of contracts. My pay got cut in half. And now it's almost impossible for us to be able to not incur more debt as the months go on. I've looked at your system and tried to figure out a way to do it. And we have about $300,000 in a 401k. And I was curious if you would recommend that I pull as much as I can from that 401k of that $300,000 to pay down all that credit debt and then make our monthly bills more manageable.

Absolutely not. No, absolutely not. What do you do for a living? So I am a property manager here in Michigan. Actually, I span from Michigan to Florida. I was making roughly around $50,000 to $50,000 plus, depending on my bonuses. But with the loss of those two major contracts, he's literally cut me in half. It's about down to $24,000. Sounds like you need to look for a job, sir. I have another job that I actually am starting here, but it takes six weeks for my application.

I'm going to go and sell insurance. I was late. I'm a 45-year-old man. I was in a car accident, so I didn't even start working until i was about 42 years old because of the rehabilitation that i had to go through um well i'm just what kind of insurance are you talking about selling um life home and auto for who uh farmers okay so they're going to start paying you day one they're going to pay me day one yep but it's a it's a low base salary and then obviously i make the majority of the income on my commissions are you good at sales brent do you enjoy that i do actually that one of the things that um i like i said i didn't work for 15 years after the car accident, but one of the things I really developed was a heart for customer service,

and so I'm really good with computers as well. So your side job is computers, because, dude, the P&C business that you're talking about going into is a slow burn. You've got two years of hell ahead of you until that book of business gets big enough because you make all your money on renewals. You've got to build the book of business before you make anything. You don't make anything on the day of the sale in that world. You're not going to double your income in two months. You know that, right?

I was hoping it might be different but i mean did you run the figures on what they taught how they told you they're going to pay unless farmer i don't know farmers pay plan but they're a good company but they're but p and c the property and casualty business mostly pays as earned and on renewals and so if you sign somebody up for homeowners and car policy and they pay monthly you get one twelfth of a commission that month for the rest of the year and so as you build that and then you got two of those and then you got 200 of those and then you got a thousand of those that book of business becomes very valuable and sustainable but maybe not but it takes a while

to build it up you see what i'm saying yeah your first month you sell four your next month you sell 10 next month you sell five and and but then every month you're you're as earns or how you're getting paid unless farmers has a different comp plan than most pnc that's how that works so um you're you're not gonna make any money for a while so you're gonna have to crack you're to have to crank some cash on the other side with the computer thing as a side gig if you're going to go that way. But you need to do something different. This property management thing sucks.

Now, your wife, what does she earn? My wife is a teacher. She earns $40,000 a year. Okay, good. All right. So here's what we're going to do. All right. We're going to sell the truck and the trailer.

You can't afford them. Not even close. You're broke. You're going to cut up every credit card tonight, and you're going to call the student loans and put them on hardship deferral. So once the truck and the trailer are gone, the only thing you've got a payment on are some credit cards. And then we're going to put you on a really tight budget

that involves never eating out because you are broke people. And it involves never going on vacation because you are broke people until you get these stinking debts cleaned up because you need ninety thousand dollars once the truck and trailer are gone to clean up the student loan and the credit cards and you got to go scratch that together with your side job your teaching job her teaching job your your farmer's job farmer's pnc job you know you're going to be just scratching and clawing it's going to be 36 months of beans and rice rice and beans no life to clean this mess up but you do not clean out a 401k unless you're almost bankrupt and you're not almost bankrupt you've just made some really

dumb decisions and then your pay cut revealed it yeah how do i convince my wife who is a, she loves points on credit cards. How's that working for you? How's that working for you? It's been such a blessing so far. She doesn't really take those conversations very well. And I'm just trying to do my best. You know, I really don't care. She's broke.

She's a broke point collector. How's that working for you? mean this is ridiculous you guys got to sit down look at this she's bankrupting you with this ridiculous plan of hers she's run these credit cards yeah what's yeah what's the 50 000 in credit card what did she borrow that crap it's well it's you know obviously some of it is from medical expenses from the time um that i was hurt um what did she buy brent well it's we have she's a big christmas person yeah um she she loves buying stuff for the kids so she loves buying stuff she can't afford to buy. And here's the deal, Brent. You guys together, I mean, she's going to have to come to the realization that as an adult,

we have to make adult-like decisions. And if we don't and we keep going off of our feelings and just what we love and what we want, this is the result that we get. And, I mean, honestly, it's like a call spade a spade and it's like what are we doing what are we doing we can't keep doing this now it's not that she can never do this stuff if you don't do it for a while you live like no one else so later you can live like no one for a period of time we have to clean this mess up because it's we're literally going to go bankrupt if we keep doing and going down this this path i mean there's no hope with

it i mean it really isn't you're going to keep getting the same result and so she behaviors and i would brent i would i would pull out everything and i would look at i would have every number out on the table and you guys look at it visually not just talk about numbers literally look at it look at your bank accounts see all of this like right out of budget together do a budget together and just say and then a timeline that within you know if you're making x amount and kind of like guesstimate what you might be making in this new job that in 24 months in 28 months whatever it is we could be out of this but this is what it's going to cost to get there and then from there not out we can have fun and enjoy and spend right so it takes a moment of maturity to realize the reality of where you are and i hope she gets it i hope she sees that this is the ramsey show

rachel cruz ramsey personality number one bestselling author. My daughter is my co-host today. Thank you for joining us, America. Devin is with us in Tampa. Hi, Devin. Welcome to the Ramsey Show. Hi. Thank you guys so much for taking the call. Sure.

What's up? So basically, I was wondering if I could get some financial smart guidance regarding student loans. So I'm currently $85,000 in debt and 68,000 of that is with Sally May, unfortunately. And I am actually going for my master's program, but I'm not paying out of pocket. My employer is paying for me to do that. So my loans are currently deferred. The minimum payment of 25 versus my average payment of 887. I was wondering what would be the best way to kind of tackle the loans that I have. They are not consolidated, so it's four separate loans. I was wondering if I should attack the small ones

first, go towards the larger ones that have the higher interest rate. I was hoping maybe just for some guidance regarding that. What is the interest rate on each of the student loans? So they range from 13 to 11 percent. Okay. All very high. For the most part, I have two loans that are under $5,000. I have one that's $36,000 and one that's actually $55,000. The other two are $31,000 and the other one is $25,000. Okay. Because the reason I ask is student loans are the one type of debt.

We would be okay with you consolidating if you got a much better interest rate. But honestly, between the two, there's not that. I mean, it's not that drastic of a difference so it's not gonna move i gotta move so i would keep them separate and pay off the smallest one first yeah go smallest to largest and the reason for that is that the human brain needs a feedback loop if you're going to lose weight if you're going on a diet you need to lose weight or you'll quit if you're going to lose weight, if you're going on a diet, you need to lose weight or you'll quit. If you're going on a get out of debt plan, you need to have some success or you'll quit. And so paying and people do not stay with a highest interest rate to lowest interest rate plan. They stay with paying off smallest balance to largest balance because they get to, you knock out one of those little fives, you have a little victory.

You knock out another little five, you have another little victory dance, right? And then you step up to one of the next big ones, and you get after it, and you lean on it. What's your income? I make $55,000 currently, but I do also rent. So a lot of my money goes towards that. What will you be getting after you graduate? Because you're getting your master's. So I'm getting my master's in HR management. I'm hoping to hire in the company for about a salary increase of $15,000 starting out.

So closer to the $80,000 mark would be my income after graduating. And when will that be? 18 months. Good for you. Okay. So, yeah, you lean into the master's. You do anything else you can do to pick up extra income. We cut all lifestyle out, and we lean on these student loans and knock them out

the interesting thing is that as a single person if you get really really intense and intentional about this uh meaning you sacrifice meaning you put a lot of other crap on in your life on hold because you want to get out of debt 85 000 is doable here in under three years. Okay. Based on 30 years of doing what I do and the people that do the stuff that we teach. And so, you know, but that's what I just prescribed was you working extra while you're doing a master's. It's a lot of work.

And having no life to amount to anything. And you're doing one thing. You're attacking student loans with a vengeance. You knock out the two fives. You're not going to make a lot of cash flow progress because you're not really paying the payments on these things. Exactly. In 2023, I paid $10,800 in just interest.

Yeah, and so you've got to get rid of them because they're going to kill you. But you can lean into these things and be done with them in two and a half to three years, depending on, you know, when you get this master's done and how quickly it monetizes for you. It was quicker. You get up to 85, obviously, the faster this all happens. But, you know, 24, 36 months somewhere in there, depending on your level of commitment and how crazy you go with this. But, you know we always laugh and say if your broke friends aren't making fun of you you're not on track

certainly certainly yeah like like if your mother thinks you joined a cult you're probably on track yeah okay i have actually been there before so i understand oh no not an actual cult no not for real hypothetically metaphorically yeah yeah yeah well well i totally understand now i do have another question so i have 17k in federal loans that i pay typically about a hundred dollars a month sometimes more if i have extra fees playing around would you recommend taking the extra and putting it more towards the sally may versus pay minimums on everything and attack your smallest debt okay and when that one's gone pay minimums on everything and attack the next smallest debt and when that one's gone pay minimums on everything and attack the next smallest debt there's this weird thing that happens that

you get this sense of hope as those things start being in the rear view mirror your energy level increases because your belief that this is actually freaking going to work increases understood understood and that's that's the the ramsey secret yeah and devin just to encourage you last hour we had we had someone do their debt-free scream with over 200 000 in student loans and she did it it took four six six years six years. Six years. So she had half of what you did. But she wasn't making what you're making.

But it can be done as a single income earner still, right? It does take longer, and it's lonely and exhausting, all the things, but it can be done. Morgan's in Phoenix. Hi, Morgan. How are you? Hi, good. How are you guys?

Better than we deserve. What's up? Thanks for taking my call. My biggest question, my husband and I are on baby step two. We got married in June of 2023, and we started Financial Peace University in January of 24. And it has been great. We are still paying off debt. Right now, we're renting. We're renting on whatever home that we purchase.

Is it better to, I guess, put half down on a home you're going to stay in very long term or pay cash for a home that you would basically like just a stepping stone home, if that makes sense? Yeah. What's your household income? Combined, in 2024, we're on track to make $175,000 combined. And what would the pay cash home price be? Pay cash home, well, our goal would be to have about $400,000 to put down. So I guess it would either be pay cash home for $400,000. How long is that going to take you making 175? Um, once we become completely debt free, um, which should hopefully be by, uh, June of 25, um, it would probably be another, another three to four years in 2025. My husband's scheduled or on track225,000 is what it's projected at.

Okay. All right. So you're going to save up $400,000 either way, and then the question is do we put $400,000 down on an $800,000 house or do we buy a $400,000 house? Is that the question? Exactly. Yeah, that's the question.

Okay. The way I want to look at that is I learned that wealthy people don't ask what feels good now or what feels good in two years. They ask what gets me the furthest in 20 years, which of these two decisions and the decision that gets you the furthest mathematically in your wealth building in 20 years is to buy the 400. Now we've got no payments coming out of pocket at all. We're making two and a quarter or 250 probably by then. And for a few more years, we save like maniacs. The 400

goes up in value. We sell it, put 600 with another five or 600 that we've saved pretty quick, and we pay cash for the move-up. And that's what's going to make you the wealthiest in 20 years. Okay. What is the best place to hold that money, I guess? Well, I know there's high-yield savings. We've watched a few different videos, but I guess from— I would just use high-yield savings. Just a standard high-yield savings.

If you want to take some risk with it, I put some money that I'm playing with short-term in just an S&P 500. But if the stock market turns down, you could lose a few thousand. Sure. Okay. So you've got to be willing to emotionally accept that. I mean, if I had $300,000 sitting there for two more years savings, I might put $150,000 of it in the S&P, $150,000 in high yield, and just let some of it ride on the market, right?

But I'm probably not putting it all on the market if I'm you. I do, but I've got the margin to do that. I can accept the blow if it turns down for a temporary, and I don't have to take the money out. But it would set your goal back, and I don't want to do that to you man you guys are on fire girl keep it up this is the ramsey show our scripture of the day second timothy 215 do your best to present yourself to god as one approved a worker who does not need to be ashamed and who correctly handles the word of truth. Henry Ford said, most people get ahead during the time that others waste.

Ooh, ouch. All right, Jocelyn is with us in Springfield, Missouri. Hi, Jocelyn, how are you? Hi, I'm good. How are you? Better than I deserve. What's up? So, I recently found out that my grandma has a Gerber Grow Up

Whole Life policy on me. She is wanting me to cash that out and send that money to her. I'm curious if that's my best option or if I should take a loan out against the policy to get her her money back and keep the policy. So your grandmother bought a life insurance policy on her granddaughter when she was a baby and and the policy has now grown to have some cash value,

and grandmother wants that money for herself. Yes. Seems weird to me. Why is that not weird to you and so she is facing some financial difficulty she got a pre-cancer diagnosis last year and kind of sold all her belongings to travel and now she's needing a little bit more money while she's waiting for her house to sell. She did help me pay off about $3,000 when I was in college, and that is now the amount that that cash value is, so I kind of feel I owe it to her. Okay. Interesting. Okay.

Well, the simple answer to your question is you cash the policy in and close it. It's a piece of crap. It's a horrible financial product. The last thing we want to do is keep it open in any form. The amount of money your grandmother has put into that is way more than she's going to get out of it. To make $3,000 over the course of your entire life as an investment is like, oh. Yeah, she put in $10,000, $15,000 into this thing. And it's been over a long period of time. Agreed? It's been about 24 years.

Yeah, that's what I mean. It shows that she's been paying about $8.75 a month. $8.75 a month eight dollar eight dollars and 75 cents so a hundred bucks a year eight dollars and 75 yeah 100 bucks a year for 24 years i don't even want to tell you how much money that would be if you'd done that in a mutual fund instead it'd be like 100 Yeah. That's how bad this sucks. Okay. So we don't want anything to do with this. We want to close this. We don't want to keep it open in any form.

They've screwed your family as much as Gerber is going to screw your family. And so we're going to do away with old Gerber here. That's it. What does she do with the, does she give it to her grandma? Yeah, it's her grandma. Well, I mean, yeah, might as well. Give her the $3,000 back, whatever. It sounds like that is settled.

I don't think that's up for grabs. It's not up for discussion. I think I probably would. I mean, Jocelyn's okay with that. She gave her $3,000 to help her back when she was in college. She can give her $3,000 now. Sure, sure. Whatever.

It's not $300, it's not you know right no we don't take out a loan on a piece of crap gerber policy guys listen here's a couple rules if something sounds weird it's because it's weird when a baby food company is selling you life insurance by definition that's weird okay i mean like pampers has now got a mutual fund come on not really you know and so and if your financial products are sold on cable tv on a commercial and the next commercial is a walk-in bathtub or a snuggie ad then your financial products are crap okay come on use some common sense people and so yeah gerber gerber 24 years and they must have had the market share in the 90s oh they still do we still sell this crap well we've got i've gotten more calls on this show i feel like in the 90s. Oh, they still do. They still sell this crap. Well, I've gotten more calls on this show,

I feel like in the last 12 months, about Gerber policy. And people old enough now to go ahead and cash them out. Like, they must have exploded in the 90s. The Gerber babies are coming of age. I mean, I'm not kidding you. I think they are.

I think they're now adults and they're realizing, oh my gosh. My grandparents were idiots. Oh God, we got screwed. Okay, is that normal though to take out a life insurance policy on someone else to then well the idea the idea isn't that for her the lie that is told is if you will invest in a life insurance policy for your grandkid when they get ready to go to college they'll have this big old cash value which is not true yeah tiny little cash value

because they screw you 100 but i i do find it odd that the grandmother took the policy and now wants the money like it's like the investment money back that's weird that's weird that's weird but the uh but it's not unusual for grandparents to open up a college fund for their kid through uh their grandkid life insurance policy but anyway they do it the proper way to do it is not through a life insurance company the proper way to do it just open a open a 529 plan or an ESA with your broker and for your grandbaby I mean that but then it's in the grandbaby's name and you know that's a different yeah all right here we go uh a lot A we go. Aaliyah?

Aaliyah is with us in Raleigh. Is it Aaliyah? Hello? Did I push the button? Three. Go three. Three. Three.

There we go. Three. Aaliyah, are you there? No, I just locked it out. Yes, this is Aaliyah. Hi. I did say it right. How can we help?

You did. Hey, Dave. It's great to speak with you. I am in a bit of a pickle. I am, well, first, just to give you some background, I am a single parent, right? So kind of everything is really on me financially. And I have managed to hold two jobs down last year and I kind of hit my breaking point. I had to take a little break. So now I'm back to one income. But in that time, I was able to save up $20,000, which is the most I've saved in my life.

Now with that, and here's the stuff I know you're going to get on your pouch. I have $18,000 in credit card debt. I have $14,000 in a car loan debt. And I do have student loans there, but those aren't necessarily my priority for this call. What do you make? $56K. Okay. how many babies you got just one what age 13 okay you're a fighter girl way to go have you cut up the credit cards um i've handed them so not not the actual cutting of, but they're in a box, not in my wallet. So I don't carry them out with me.

Yeah. You need to cut them. Yeah. It's called commitment. I gotcha. Get the scissors out right now and go cut them. All right. All right.

Do that. They were kind of mom and dad back in college. That's where it started. Yeah, I know. I know. There's a lot of stuff started back in college that needs to stop, but there you go. Okay. started yeah i know i know there's a lot of stuff started back in college that needs to stop but there you go okay so uh if you're gonna lean in and work our plan we're gonna take you down to a thousand dollars and we're gonna pay off the first twenty thousand dollars of your debt or nineteen thousand dollars of your debt smallest to largest which means we're probably getting rid

of all the credit cards right yeah you have no credit cards but you can't let them grow back honey you gotta get on a budget yeah what was the credit card debt mostly for alia survival yeah truthfully it's one of those things where if you don't necessarily have enough um to cover all of your expenses yeah um you know you borrow what you need and i've always managed to have a really good credit score because I don't pay my bills late ever. So it's always worked in my favor for that way. So yeah, pretty much not moving expenses.

How long have you been resting from the second job? I let it go in, what month are we in? November. I let it go in July. Okay, good. Time to go back rest is over rest is over got to get the car paid off the credit cards are gone then we got to work on the student loans yeah i was going to say but how much is the student loans uh 43 000 okay they're going to be last we're going to get the car paid off no credit card payments and no car payments your life starts to be good again.

You smell it. You got $56,000 after you put some of that towards them paying off your car. Yeah, you can do this. But you got, you know, the energy that you use to get the $20,000 is the energy you're going to use to finish your debt snowball here. And you hang on. We're going to pay for you to go through financial peace and for every dollar. And we'll give it to you as a gift. You're a warrior princess.

I'm proud of you. You keep fighting, girl. That puts this hour of the Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. I'll see you next time.