The Ramsey Show - App - Don't Poke the Bear! (Hour 3)

Episode Date: September 30, 2020

Budgeting, Career, Relationships, Debt, Investing, Business Tools to get you started:  Debt Calculator: http://bit.ly/2QIoSPV Insurance Coverage Checkup: http://bit.ly/2BrqEuo Complete Guide to Budgeting: http://bit.ly/2QEyonc Interview Guide: http://bit.ly/2BuGnZE Check out other podcasts in the Ramsey Network: http://bit.ly/2JgzaQR 

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us, America. It's a free call anywhere in North America. 888-825-5225. That's 888-825-5225. Chris Hogan, Ramsey Personality, number one best-selling author, is my co-host today here on the air. Morgan is in Minnesota to start off this hour.

Hi, Morgan. How are you? I'm doing well, Dave. Thank you very much, Dave. Chris, it's a total honor to be speaking with you right now. You too, sir. How can we help? So I have a question. I'm 29 years old. My wife is 25. We have two kids. We are both full-time college students. She's studying nursing. I'm studying geology.

And we have very unstable incomes. And we just found each other a couple months ago, so we're trying to cash flow all of our school. My school's paid for from the GI Bill. Good. But we're having trouble creating a budget when this month we might bring in $3,500, next month we might bring in $1,500. Okay, good. And you got stipend as well, right? Correct. And that's $1,500. Okay, good. And you got the stipend as well, right?

Correct. And that's $1,200, isn't it? It's about $1,200, but it changes depending on the semester and whether classes are offered online or now mandated online. So you guys aren't working much?

I'm staying home with the two kids for child care, and my wife is working as a CNA. Okay. And so you're not working at all? I do some online work for the VA. It's about $1,000 a month. Okay. Well, you've got $1,200 coming from the government, and 1,000 is 2,200.

So, I mean, your minimum is probably higher than you outlined originally when you started talking about this. Am I wrong? The only portion that you're wrong is in between classes. So when summer semester ends and fall begins, there's an entire month that I don't get that housing stipend. Okay, but you should be working picking it up for three weeks yeah you'd be working more yeah okay so uh anyway here's the thing you lay out your budget on the minimum that you can exist on and you've got to figure out a way to bring that in every month okay the minimum existence that's food shelter clothing transportation

utilities baby formula right the minimum you can exist on and uh then above that when you make money you've got a prioritized spending list of things we'd like to do, things we need to do but are not absolutely necessary for survival, and that list of what is the, once you make your basic budget, your four walls, then what's the next thing? And then I want you to do that. What's the next thing? And you make a list of as the money does that. And you can just keep that on a yellow pad if you want, and then you can roll it into your every dollar budget.

Chris, what do you think? Yeah, you really can. And Morgan, here's the reality. Because of the inconsistency, it's going to require more structure than you've ever had before. And so in that mindset, whenever there is the opportunity to be able to earn extra or to work, that's the thing you're doing. But what Dave just showed you is you're setting your baseline of knowing exactly what has to be taken care of. So any that comes over and above, we're setting that off to the side because we know we're going to need it eventually, especially come that month where you have the gap.

Sometimes when someone's having trouble budgeting because of an inconsistent income, what they really mean is they're not making enough money to eat on. And so you may need to adjust your ability to earn between the two of you for a period, just to get through these two degrees, because obviously you've got to have enough to eat on. But, I mean, if you had an irregular income that totaled $300,000 a year, you would have never called me. So it's not the irregular part that's killing you. It's the lack of. Right. And you get down below the line of necessity

on a couple of these months and you you know you're in a hole and if you haven't planned for that hole and don't have some money set back for that hole then you've got a real mess and that's that's the that's the pinch that you're feeling so lay it out and go okay here's our rent here's car gas here's lights and water right here's food right okay food shelter clothing transportation utilities in the worst possible month we can barely exist on x right and uh you know in the numbers you gave me that needs to be under 1500 bucks with the numbers you gave me a minute ago because you can you can pretty well scratch together 1500 on almost any month she's a cna you've got some online stuff right and you

know don't get the stipend one month you should be able to scrape together enough to get by that horrible month but then on the bigger months where you've got more than enough then you work your prioritized spending list and you can do it all with the EveryDollarBudget. It'll all work out right there in it. It's designed to help you do that. And you just update it, and update it is all you do. Elise is with us in St. Paul. Hi, Elise.

How are you? Hi, Dave. Hi, Chris. I'm doing well. How are you? Great. How can we help? Well, here's my question.

My husband is the bedwinner in our home, and I'm home with our young son. And he's such a hard worker. He's very dedicated, and he has all of these gifts and instincts that I just believe. He's working sort of an entry-level position right now, but I just believe he's meant to be in a manager or coach or training role. And he's insecure about the idea of stepping into something like that. So I'm just wondering, how can I be a cheerleader and really encourage him to step in that direction? Hmm.

Okay. So he has insecurity, but you strongly believe he's capable. Is that what you're saying? Yes. Yes, I do. I do believe it. Okay. As you look at it, what do you think he's insecure about? Is it the lack of experience or the lack of skill?

It's more a lack of experience. Okay. His college degree and experience is in a different field, and so his common response is that they would likely overlook him and hire someone else with more experience in managerial training. Okay. And so what I do is, you know, as you sit down and you talk with him, begin to talk about the career path. Talk about the trajectory of the goals and dreams you guys have for yourselves, but also your family. Do you all have any kids yet?

We do. We have a son who's about a year and a half. Okay, so you've got a year and a half. And so, you know, it's a matter of looking at this, and if it's helping him with his confidence, that's one thing. If it's helping him grow his skill set, that's going to be another where he's got to be a little bit more intentional to go after whatever that is that's missing in his life. He might need to connect with a mentor. That might at least be an encouraging thing for you to do. If there's a successful business person or leader in your church or in your friend group for him just to

go to coffee with and begin to talk about his path. Yeah. One of the things is this. Anytime you've never done something, no matter what it is, if you're not a little bit scared doing it, insecure doing it, then that makes you a fool. So the first time you drove a car, first time you rode a bike, the first time you do anything that's brand new to you, it should be a little scary. Oh, yeah. That's normal. And so I just talk that through with him and say you know i do believe in you uh but you know you got to get some reps you got to jump in there and give it a shot and that's how you start to get a feel for it that and getting some people some men in his corner

uh one-offs as mentors or maybe even a little bible study group of guys that are that are doing things and that'll encourage him to step out i push some some of my buddies out of the nest. I know that. This is the Dave Ramsey Show. With more frequency than you know, I get calls and emails from people dealing with the recent loss of a spouse or a parent. You can hear the struggle and the heartache that they've been experiencing. And at a time they should be grieving, what breaks my heart the most is the strain and tension that they're going through because of money, especially when it's a situation that could have been avoided. If you have a family, it is your responsibility to have term

life insurance. It's one of the things you do to say, I love you. And yes, this is an ad for Zander Insurance. But since this is one of the most effective ways I say I love you. And yes, this is an ad for Zander Insurance. But since this is one of the most effective ways I have to get my point across, so be it. For over 20 years, I've been telling you about the importance of term life insurance and protecting your family. Listen, you need to check out Zander.com or call 800-356-4282. I can't say it enough. Protect your family. It's what you're supposed to do. Go to Zander.com or call 800-356-4282. Thanks for joining us, America.

We're glad you're with us. Open phones at 888-825-5225. Molly is in Charlotte, North Carolina. Molly, your question for Chris Hogan and me. Yes, Dave. Thank you for taking my call. I had a question on how to approach my 93-year-old father about our family trust. A little back story.

I have three other siblings. My other sibling passed years ago. So there's really five, I guess, survivors of the trust. My mother passed a few years ago. We're not sure my dad is upholding the trust, but we're not exactly sure what the trust says. He sold some property really fast recently. We just don't know how to approach him. We've tried. He's 93, set in his ways. He still works, never retired. We just don't know how to go about this and not seem like we're money hungry because we really aren't. We just want to make sure that my mother's legacy is upheld and that the family

trust is handled in the way that it was set up to be handled. Who is the trustee? To my knowledge, the trust was set up split two ways. One was in half of it my father, half of it my mother. No, no, there's not two trustees. That might be the beneficial interest of the trust is who receives the goodies out of the trust, who receives the proceeds. The trustee is the one that conducts the business. Okay. They cannot be the same.

I believe one of my brothers is likely the trustee um and there was no property sold without your brother signing well there has been because he just sold the lake house under contract that he wrote and sold it to a friend's granddaughter, and we're questioning the legality of that. Well, the question is, the property was titled to your dad, or it was titled to the trust. If it's titled to the trust, only the trustee can sign the deed. The title company couldn't have given her a deed, and if they did a deed without title insurance, they could have done a deed, but the deed is not valid. The girl does not own it.

Right. So if it was in her dad's name, he can sell it. Any idea whose name the lake house was in? I believe it was in my father's name. Then it's not in the trust. Well, but in the trust itself, when they they set it up all of the property was listed because he had other farm property he had other real estate business you know commercial business so who where'd all this money come from it was just him working over the years and building his

own wealth oh so it's his money it's his money yes it's his his money and i believe they set up the trust to protect his their assets my parents had you know some wealth um we're just not sure it's things are just not adding up recently he's been doing things very quickly and selling things and not okay well here let's stop a. There's two things going on, okay? There's a legal aspect, and it sounds to me like the legal aspect is that he probably has a setup where he can do whatever the flippy wants.

So I don't think he's in violation of the trust based on what you're telling me. I doubt it, as a matter of fact. He didn't build a trust where he couldn't control what was going on with his wealth. So he's got control of this one way or another. The second aspect is the moral aspect, and part of that is that this is his money. He can do with it what he wants to do with it because you're not money hungry.

The third aspect is you're worried about him. Is he okay? And I wouldn't worry about the family trust. I'd worry about your dad. Is your dad okay? Because you're saying this erratic behavior is not like him. Right. And so I think the kids sit down with dad and say,

Dad, we're worried about you. Convince us that you're okay. Because of the movement of this stuff, selling this stuff around, and did you sell it too cheap? And it seems very erratic, and you've been so disciplined all these years, you haven't been erratic, and so it feels like off kilter. But I don't think you approach him through the idea that he's disobeying a trust that he put together with wealth he built.

I think you're probably going to get thrown out of his house if you do that. Yeah, that's like poking a bear, Molly. You poke a bear bear they wake up and they do what bear type stuff right you don't want to poke him so how is your relationship with your dad it's good it's really good but i do live like three states away from him okay um i but but yeah we have a good relationship but we also are just a little bit concerned about my mother's legacy. My parents were married 67 years. Your mother's legacy is that she was married to your dad, and the two of them built this

wealth. It was theirs. Right. How long ago did she pass? She died in 2012. Okay. How much money is involved in this truck, in his assets, do you think? Millions?

You know, I would say maybe just over a million. I'm not sure. I really don't know. Well, it's up to you all how much you want to invest in this. He can completely while it away and no harm, no foul. It's not your money. Or the two of you or three of you could go sit down with him in person. That's your best chance to talk to him and just as an act of love say, Dad, we're worried about you.

But I really don't think you're going to. I doubt you've got a legal footing, and I'm not sure you've even got a moral footing, if he's doing what he wants to do with his stuff as long as he's in his right mind. Right. Okay. If he slipped a gear, then you need to help him, you know, but you're not trying to be money hungry. You just don't want him to sell this to the paper boy or something,

you know, like if he sold this lake house for $10,000 and it's worth $500,000 and he sold it to some neighbor's grandkid or something because he thought she was a sweet kid, you know, then that means he slipped a gear. He did sell it to his ex-mistress, granddaughter, and we don't think it was for full value. His ex-mistress? Well, we think there probably was. Okay. Well, see, now we're getting down to why you're really upset.

I knew it. Now we know why you're really upset. That's what's really going on. Okay. So I think you guys need to sit down with your dad and talk to him and ask him if he's okay. And that's your only shot here. Unless you get a hold of a trust that says he's acting out of court with a trust, then you could legally stop him.

But probably before you get that done in court, he'll be gone. He is only 93. So, you know, I think what you're really mad about is the kid of the mistress, might be his kid, by the way, you know, that just got this house. And it's his money. So, you know, I can understand how that hurts your feelings, and I's his money. So, um, you know, that, that, I can understand how that hurts your feelings and I can understand that, but you need to think about what your motivations are in all this. What is it we're really trying to do here? And is it really just help dad or punish him

because you're mad at him over this misbehavior in the past? And that's why you brought up your mother's legacy twice in the conversation. Right. And again, best case of action is still going to be having a conversation with him. It's the only case. Because, I mean, like you said, he built the wealth. They did it together. You could spend $15,000 dragging him into court and getting a copy of the trust only to find out he has complete control of his own assets and his own faculties, in which case you've got nothing.

And he will see to that fact if you do that oh yes he will without a doubt that that's what you're doing if you did that to me that's what i would do yeah so um that's tough dave i mean you know as you look at this that's i guess it's a lot of hurt there it is a lot of hurt but on the other side of it all the more reason to have a trust you know where you have trustees you've got some things in place that can, you know, help protect people from themselves, I guess. Yeah. I mean, I don't own anything. I don't have a single thing in my name anymore.

Even my cars are not in my name. Oh, right. I don't own a single thing. So everything is in an LLC, a trust, a corporation of something, but it has nothing to do with control. Well, a few items are in a family trust for control issues, but it's me controlling it, not them. Because it was, by God, my money I put in there. And so, but it allows, it's a state planning tool is what it is.

Yes, it is. It's not a thing like in the movies where you make someone do bizarre things or something in order to get their share of the inheritance. Yes. So, Molly, I understand your feelings being hurt by this, honey, but I think you either sit down with him and talk it through with him or you leave it alone. That'd be my opinion. This is the Dave Ramsey Solutions on the debt-free stage, Jeremy and Sarah are with us. Hey, guys, how are you?

Hi. Doing well. Good. Thank you. Welcome. Where do you guys live? Columbus, Ohio. Oh, fun.

Welcome to Nashville. Thank you. And all the way down here to do a debt-free screen. Yes. How much have you paid off? $197,000, well, and $274,000. Can't forget that. Good for you. Very cool. Almost $200,000. Wow. How long did this take? Seven years. All right. And your range of income during that time? Started at $88,000 and up to $130,000. Cool. What do y'all do for a living? I'm a senior financial

analyst. I'm a registered medical assistant. Cool. What was the $197,000? So the primary piece of that is $136,000 in student loans, $36,000 in car, and $25,000 between medical, other consumer debt, and a personal loan from my former friend now. Wow. Uh-oh. Yeah, that does that sometimes. Yeah. Sorry. Wow, $197,000. Yes. What started this journey seven long years ago? Well, this goes back kind of to when I was 10 years old. I started working and at a very young age developed an infatuation, a very unhealthy one with money, which led to theft from family.

And then what led to theft from employers. Longer story short, got done with high school, went to college. And at the end of my first year in college, started playing online poker. That led to a seven-year crippling gambling addiction. And for the back half of that, I had met her. And every step of the way, she had been by my side. And finally graduated in 2009 with my undergrad in finance, oddly enough. And then, uh, felt like the Lord was calling me to go back for my master's and I fought and fought and fought, ended up doing it, um, and just pushed through 11 months, got that done. Uh, and then not long after that,

uh, her brother who had previously gone through financial peace, He and his wife put us through the financial peace course back in 2011, which led to 2013 where we paid our first student loan payment. It was $445.82, and I saw that $11 of that would be going to the principal. Found that if we were to pay minimums based on their schedule, I would be two weeks shy of my 98th birthday. Oh. So he got angry. Yeah.

Very angry. Where did the gambling addiction fall off? Right about that time? It was 2010, actually, right when I graduated the master's program in information systems. So you've been dry 20 years? 10 years. 10 years. I'm sorry. Yeah you've been dry 20 years? Ten years. Ten years. I'm sorry.

Okay, good. Well done. Congratulations. Thank you. That's a tough one to break. Fastest growing addiction in America today is online porn. Second fastest is gambling. Everybody thinks about drugs or opioids or alcohol or anything else,

but that's the second fastest growing addiction right now. We deal with it every day in here with our financial counseling. So, wow. Congratulations. I'm proud of you. Thank you. That's very cool. So, so for 20 years, you've been dry from that, but in 13 or in 11, the next year you went through FPU. Yes. And then we got married in 2012. Okay. And then we're game on. And then, uh, yeah, so 2013, we made our first payment, and we're thinking, okay, well, now this will kind of jumpstart that.

Well, 2014 to 2017, we had a medical catastrophe every year. Anyone that you would talk to that knew us knew our luck with that. Either I was in the hospital or she was in the hospital or I was in a car accident. Wow. Something like that. And it was just, it was draining. And 2016 is when I finally reached my boiling point because I was working in my career. And I told her I wanted to get a second job.

So I was a server at Cracker Barrel for about six months in that. And then I ended up working a third job for a while. Ended up being for about two years for a friend's uh retail business on amazon so you were throwing every extra dime at the desk yes every uh bonus that came in um and it was the majority of this happened in four years not seven uh the last i believe it was 130 roughly in the last four. Four years. Yeah, and just got pissed off. There was a lot of money fights. And this woman, I think before we got married, I tried to push her away with everything,

and she just wouldn't go away. And that's a good thing. She's been by my side ever since 2007. Just incredible. So, Sarah, what's this journey felt like for you? It's been long. And you had mentioned earlier that your name being a cuss word in the house, and for a long time, it really was in our house. I was very much so the free spirit. And, you know, I hated having the debt, but it just didn't really seem to be such a burden to me as much as it was to him. He's very much so a numbers guy.

So I was just kind of like, eh, it's there. Like, everybody has debt. It's normal. Like, we're going to be fine. You know, we'll get it paid off one day. And he just was relentless. And when he gets a fire lit in him, he doesn't stop. And it was lit.

So there was no putting it out. And it was easier eventually just to be on board than it was to be off. So, and I'm thankful that I, I jumped on board. So how long ago did you feel like you jumped on board? Oh gosh. Honestly, probably within those last four years. Yeah. That's when it sounds like that's when everything came together.

Yeah. The past was far enough in the rear view mirror and all the other stuff that caused you to have a lump in your throat when you were telling it a minute ago. Yeah. That's just far enough back that you can move past the shame and into the victory and start winning in some of these other things. Very well done, y'all. Yeah.

Thank you. But it's close enough that you can still grab it emotionally. Oh, yeah. And, you know, that's one of those things. You don't want to forget it. You know, I tell people, it's okay to glance back. You've got to focus forward. But there's some stuff you've got to glance back and you know, that's one of those things you don't want to forget it. You know, I tell people it's okay to glance back. You got to focus forward, but there's some stuff you got to glance back and you go that hurt.

I don't want that anymore. Amen. You know, proud of you, man. Yeah, no, I really am.

I really, really am. This is a, you can see it on you that you battled, you went through some stuff and, um, you know, you haven't heard by your side.

It makes a difference. Yeah. Makes a difference. Absolutely. So what advice do you know, you haven't heard by your side, it makes a difference. Yeah. Makes a difference. Absolutely. So what advice do you have to a young couple out there that's facing this kind of debt? What are the steps, what are the keys in that last four years in particular that caused the needle to move for you guys? I think just being intentional with your money and sacrifice. There was a lot of sacrifice. That was honestly one of my biggest reluctances to the whole process

was just seeing everybody else around getting to take really great vacations or just do really fun things with their money and just kind of holding back a little bit and reserve and, you know, not chasing the dream that we wanted so quickly, um, but just taking the time to get there. Um, so I think just, and also. Who were your biggest cheerleaders outside the two of you? So I think first my brother and sister-in-law that they put us through that before we even got married.

It was just a great foundation to be laid. Um, and then honestly, I feel like he was the biggest cheerleader for me just because there was so much reluctance on my part you know that he'd be like look like it's working we paid this off you know and he'd be the one doing the budget showing me that yeah you get that anger based laser focus ain't no stopping it I love it it ain't gonna stop well done good job you guys thank you we got a copy of Chris's book for you everyday millionaires and uh you're definitely on your path to be one of those without a doubt congratulations thank you very proud of you heroes very well done you took control a whole bunch of areas of your life all right jeremy and sarah columbus ohio counted down 197 000 paid off in seven years the majority of it in the last four years, making $88 to $130. Count it down. Let's hear a debt-free scream.

Three, two, one. We're debt-free! Yeah! Oh, boy. Woo-hoo-hoo-hoo! You can hear the chains fall off. Yeah, baby. I love it.

That's awesome. They went through Financial Peace University because their brother-in-law put them through it. And Financial Peace University is now a part of Ramsey Plus. And you can be a Financial Peace University coordinator, a virtual coordinator, and get a free one-year membership a whole year for Ramsey Plus by leading a Financial Peace University group as a virtual coordinator. And this is a brand-new group as a virtual coordinator. And this is a brand new thing. It's exploding. We definitely need your help.

Text the word LEADFPU to 33789. Text LEADFPU to 33789. If you're a virtual coordinator for Financial Peace University, you get a free whole year of Ramsey Plus, the massive all-access online program. This is the Dave Ramsey Show. our scripture today proverbs 19 21 many are the plans in the mind of a man but it is the purpose of the Lord that will stand. Robert Waterman said, organizations exist only for one purpose, to help people reach ends together that they couldn't achieve individually.

Ooh, that's strong. Ashley's with us in Binghamton, New York. Hi, Ashley, how are you? Good day, Dave. Good day, Chris. How are you? Great. How can we help? are you? Good day, Dave. Good day, Chris. How are you? Great. How can we help? I've got a question for you. I'm maxing out my 401 and my catch-up contribution and my HSA, but I earn too much to go into a Roth.

Is a backdoor Roth my next step of saving for retirement, or is there a better plan you could give me? Backdoor Roth's awesome. I do them every year. And all it is is you open up an after-tax IRA and then instantaneously roll it into a Roth. There's no tax consequences whatsoever because you're not tax-sheltering the money to start with. And so I max that out every year with my wife and I both. It's not a ton of money, obviously. I mean, you can just do the $6,000, $7,000 if you're 50 years old or older. And so we put $14,000 a year in, Sharon and I do, doing that.

And that's, you know, it's nice to do. The other thing you can do is, do you have any self-employed income? No, I don't, but I do own a business or part-owner business along with my primary income. Now, that's not paying me yet. It actually owes me money, the loan. But that might probably start paying me for about four years is the projection right now. Okay. Is it paying the loan back first?

Yeah. Well, it's paying back a bank loan first, and then it'll pay me back, and then we'll get a three-way partnership, which will split profits after that point. I would take a portion. Let's say say i'll just make up a number let's say your portion once the bank loan's done is 40 or 50 000 bucks take some of it as repayment of your loan and some of it as income and then you can take that income as self-employed income and uh do a sap on it it'd be 10.99. And so you could do a self-employed pension

plan. That gets some more shelter if you want to do some more shelter. You'll get your loan repaid slower, but you'll be able to invest more over a longer period of time by twisting that around and doing it. So I'm charging the business. I mean, I pulled this money out of

my HELOC account, so I'm charging the business back what it's charging me. So it's going to be like a, will we backdoor that, or will we put on the books and work it out when the time comes? But is that still the best path forward based on that? Yeah. I mean, you can repay the loan and then take income off the business.

That was your original plan. Either one's fine. I didn't realize you had an actual debt. I thought you had loaned that business money, but now you've got debt outstanding. I want to clear up that debt before I do anything. Absolutely, Ashley, because it's using your home, right? You use your largest monetary asset for this, and so don't shut down that HELOC. Get you a fixed rate loan. Get it on a 15-year fix. Get that thing out of your life. Or get paid off, and then let the business pay you back.'s right you don't have to have the outstanding corresponding debt right that would be my first goal before i tried to do additional sheltered income so kyle is in

billings montana hi kyle how are you good how are you better than i deserve what's up hey i've been working for a lumber yard for about 15 years now. They've been around about 30 years. And just recently, they have offered to sell it to me and the bookkeeper who works there currently. We're not too worried about being able to make the business run and be profitable from it. But the down payment for it is where we're really struggling with. It's a $3 million to $4 million company, and we're working through an SBA. We're going to want 10% down.

I guess where I'm struggling is I have a profit sharing through the company that once it sells, it'll dissolve, and I'll be able to get some of the money out of there. Then also I could take a key lock out of my house, but I guess I don't know if those are the best options for me to get a down payment. Okay, when you say $3 million to $4 million company, you mean that's your top line gross? Well, that's what it's going to cost us to buy the company. Oh, to buy it. So what's the net profits on this business annually?

It can be anywhere from $700,000 to $800,000. Okay. All right. That's a pretty hefty price. But, you know, they're willing to work with us. They're actually, the lease, the property is half the cost of the whole thing, and they're going to lease us that property for as long as we need to until we get the other loan paid off.

Okay. But we're looking at a hefty down payment that we don't necessarily have the funds to rebuild it for. How much is in your profit sharing? I have about $85,000 in there. Okay. I would structure this deal differently or I would walk away. I know this has been a dream of yours, but I don't want your dream to become a nightmare.

I do not run into people who have enjoyable experiences with SBA loans. I run into people who have horror stories with SBA loans. You're leveraging into this. Number one, I would break this apart into a piece of real estate that you are leasing with an option to buy at a set price. A 10-year lease with the right to buy it for X, million, two, whatever it is, million five, any time during that 10 years. So that gets that off the books.

Now we've got a million and a half purchase price on something that's netting 700K. Now we've got a million and a half purchase price on something that's netting $700K. Now we've got a good deal. This is a good buy on this business. Okay? Yeah. And what I would do is say, what do you make now? What's your salary?

About $53,000. Okay. I would tell the owners that I will run this business for $60,000 a year and give you 100% of the profits above that until we reach a million and a half. And they'll get all their money, 100% of their money, in two or so years, if you told me correctly, right? Right. And you don't need to get a raise.

You've been living on 53. You put zero down. You have zero debt if there's zero profit. Did you understand? Right. They get 100% of the profits. Let's just pretend a pandemic hit and they quit selling lumber. Like something like that could ever happen. Yeah. And then you've got an SBA loan, and you've got payments in your houses in foreclosure, and your business is in foreclosure, and the land that the business sits on is in foreclosure, because you've got the SBA, which is the DMV of small business, running down your back. Right. Believe me.

Can you tell in 30 years I've worked with people in that situation? Can you feel it in my voice? Yeah. You don't want that. You don't want that. You don't want that, my brother. So now here's what we do. Okay. In two, two and a half years, you own the business free and clear in my scenario if it does what it's supposed to do,

if it makes the kind of money you think it's making. Okay. And then guess what? Two, two and a half years later, five years into the plan, you now own the real estate free and clear because you optioned it at a million and a half. Yeah. And you write a check and pay cash for it because you saved up because you continue to live on $60,000 to $100,000 a year and put in the bank and get this done.

Now, eight years from today, six years from today, you own a piece of real estate worth a million and a half and you own a business cash flowing 700 000 and you have no debt at all dude you think you're going to be wealthy now i think you're going to be wealthy now yeah or you get to drag butt this crap out for the next 20 years screwing around with the sba go with Kyle. You know, and here's the thing, buddy. You sitting down with the owners and really having a real life conversation. You guys going to dinner, sitting down talking about this thing. I'm going to give you all the money. I'm going to everything. You know, that is not the scenario I was thinking, but that's brilliant. Of course it is.

Kyle, let me go back to talking to you. Let me talk to you. But having a real conversation and also a real negotiation, as it gets serious, you need to see the books, you need to see the numbers, and this is all things that would be drawn up in a legal process, but this is a beautiful scenario for you, my friend. Let me tell you what. When they start getting 100% of the profits above X, all of a sudden, they start telling you the truth about the profits. Yeah.

Yeah. There is no exaggeration. There is no, oh, well, you know, we pay taxes on this, but the real numbers are this, which always comes up in a small business sale, which means you're just full of crap. That's what that means. And so you got to get to what the real numbers are, and you'll get there real fast if they're getting their portion out of that and don't get paid otherwise. Hey, man, you go get that business.

It's a great business, but don't do it in a way that costs you your whole life. It ain't worth it. That puts this hour of the Dave Ramsey Show in the books. Thanks, Chris Hogan. Thank you, sir. Thanks, James Childs and Kelly Daniels. Good job. This is the Dave Ramsey Show.

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. This is James Childs, producer of the Dave Ramsey Show. You can listen to Dave, Rachel Cruz, Chris Hogan, or the rest of the Ramsey Network anywhere with the Ramsey Network app on your smartphone. Catch all of our full shows, browse by topic, or send clips to your friends. Head to the App Store and download the Ramsey Network app today.