The Ramsey Show - App - Fire Your Accountant… He’s an Idiot

Episode Date: June 2, 2022

Dave Ramsey & Rachel Cruze discuss: Why you shouldn't buy an expensive new car for a tax write-off, Being a good steward of a large financial gift, How to win financially after beating a gambling addiction, When it makes sense to sell a rental property. Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the 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. We help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, number one best-selling author three times over, and Ramsey personality, and my daughter is my co-host today. Open phones at 888-825-5225. That's 888-825-5225. Mark starts off this hour in Chattanooga. Hey, Mark, welcome to the Ramsey Show.

Hey, how you doing? Better than your phone. What's up? That's better, Mark. Yes, that's better. Sorry. So my question is, I'm doing baby steps. I'm on number two.

I'm self-employed. It's just me me sole proprietor and um my accountant is telling me that i'm on track this year to end up on the irs from between five and six grand he's saying if you're thinking about buying a truck for your business this is the time to do it so you will have that as a write-off instead of paying it into the irs but he doesn't really explain it in a way that i can understand it he's a good accountant but he doesn't really explain it in a way that I can understand it. He's a good accountant, but he can't explain anything very well. So is this a good move or not?

That's a great question. Were you planning on buying a truck, Mark? Not really. I have a truck. It is getting old, but it's still good enough. Okay. Mark, I've got really bad news. You need to fire your accountant.

He's an idiot. Okay. Let me tell you why he's an idiot. Here's the math. If you buy a $30,000 truck and ride it off over three years, you get to ride off $10,000 a year. If you're in a 25% tax bracket, that saves you $2,500 in taxes in year one, two, and three. Okay? And so you just wrote a $30,000 check to offset a $2,500 expense.

And oh, by the way, you have a $5,000 expense. So you'd have to buy a $60,000 truck to offset 5k this year this guy's a moron okay okay that's dumb okay you follow me that's just dumb now if you need a sixty thousand or thirty thousand or ten thousand dollar truck for your business because you can make more on your business as a result of having invested in equipment that is the only time in business that we buy things. We do not ever buy things solely for the write-off because a write-off is a tax deduction, not a tax credit, meaning that if I do a $10,000 expense and I'm in a 25% tax bracket, it saves me $2,500.

I'm trading a dollar for a quarter. Not a good trade. Okay, Mark, I feel the wheels turning. Go back to what you just said at the very beginning, Dave. Go slow in that. When you said you'd have to buy a $30,000, because it's not a credit. It's not like, oh, you can use, you have to write off $5,000 so you could go get a $5,000 truck and have it paid for for the taxes you were getting. You know what I'm saying?

Your taxes never pay for the item, ever, because you get a tax deduction, which means the amount of money that you spend on the item in business, if it's a business expense, comes off of your taxable income. So if you spend $10,000 on an item for business, then that means you don't pay taxes on $10,000 of your income because you just expensed it. You did not make as much profit, in other words. You follow me? Got it.

And so what it does is it saves you the taxes on the $10,000, which would be about $2,500, $3,000, something like that. It does not save you $10,000. So there's no time in the equation ever that you put out $10,000 and it saves you $10,000 in taxes. There's only one time that happens, and it's 1% of the time it's called a tax credit, and it never applies to these situations that we're talking about here. And so anytime your accountant tells you people out there in the world that have a business that you need to go buy something to save on taxes, he or she is saying, please, it is my advice for you to go trade a dollar for a quarter.

Okay. Now, if you want to need to buy something for your business, again, separate discussion, not taxes, but if you want to spend money on your business and it's going to make you more than it costs you, that's called an investment, and that's what we always do in business. And I spent more than ten thousand dollars probably in the last few minutes here and i don't even know what i did with it around this place but and mark too i would say earlier too when you mentioned that he can't explain stuff to where you can really understand that's an issue too and that's true with your investment professional that you're

working with that's true with your insurance tax I mean, anyone that's in these really niche parts of your life and your money that save or cost you a lot and handle that part, you really want to know the ins and outs. So the fact that he keeps talking over your head and you can't just use layman terms to sit there and explain it to me, that's a big red flag, too. flag too so the kind of investment you do is you go okay if we had an extra truck uh we could make another hundred thousand dollars a year because that truck would generate that much revenue the fact that we had that truck would help us generate revenue if you can make an extra hundred thousand dollars a year and you want to spend twenty thousand dollars and you have twenty thousand dollars in cash and buy a truck well you do that all day long okay can i ask you this so i was on instagram i know i know i know we're about to go down this rabbit hole prepare your hearts everyone and it was on uh like in your algorithm there's like a

part that it's just like feeds you content right that you just look up and it's just random stuff other stuff you've looked at so it's sending you crap because you had previously been to crap sites i don't know maybe or it says oh they like this so this this this okay so one of mine came up and it said on the screen and it was a reel so you could see it was a video and it said something like the smartest the smartest purchase um rich people make and it's a private plane on the reel so i was like oh that's fascinating so i click on it and basically the the guy was saying one of the smartest ways for people one of the smartest and i don't know if you use the word investments, purchases for rich people to make are private planes because they can ride it off within their business.

It's not the luxury end. It's not the convenience, but they can ride it off. So, again, I know we're talking about a truck. And I just jumped to a private plane. Yeah, you jumped to a jet. I jumped, like, way ahead, I know. But same philosophy. Would that be? And I just jumped to a private jet. Yeah, you jumped to a jet. I jumped like way ahead, I know. But same philosophy.

Would that be? No, because you can only write it off to the extent you use it for business. And so if a rich person has a business and they buy a jet. Yes. Okay. And the only thing they do is fly their family on vacation. They cannot write the jet off at all. Yes. But if they use it for business. A hundred percent for business, they cannot write the jet off at all. Yes. But if they use it for business.

100% for business, they can write it off 100%. Okay. But it's the same thing with a truck. Yes. It's the same thing with a computer. Yeah, but to save on tax, but you're still buying an extreme price tag. There are a few items in the current tax law that's shifting very rapidly that can all be written off in one year.

Okay? And a jet happens to be one of those. So is my guy right on Instagram? No, he's not right. Because in the same vein of the truck. Still, if you spend $10 million on a jet, and you use it 100% for business, and you write off 100% of the $10 million, you still only saved, if you're in a 40% tax bracket then, you'll still only save $4 million.

Not the full $10 million. You still spent $10 and saved $4. Now, the check costs you a little less after taxes. Sure. Just like the truck would, but proportion-wise. It's not free. You need to go spend more money to save money is mathematical horse crap. Whether you put millions on it or $10,000 on it. That's what we needed. That's the bow we needed, America.

There it is right there. Mathematical horse crap. But I'm sure what that is. But all right, this is The Ramsey Show. I just saw a study that really made me sad. It showed that families owning life insurance in the U.S. was at its lowest point since the 1970s. After what we've been through the past few years, I'm just lost on how people don't make this more of a priority. How are you going to make sure your family needs are met if something happens to you? This is why getting term life is an absolute necessity. Rates have never been cheaper, and the whole process to apply is pretty simple, with many companies not even requiring an exam anymore. This is why I send you to Zander Insurance, and I have for almost 25 years.

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you'll save even more use the promo code ramsey to get the best possible deal today's question comes from angela in south car. My husband and I are closing soon on the sale of 27 acres that my parents gave us to avoid taxes on the 1.8 million that we will receive at closing. We are looking at these options, buying an Airbnb or rental property, or putting the money in real estate, in a real estate investment trust company, or adding it in our Roth accounts. We have a financial advisor. However, we listen to the show and know that you have much wisdom to offer.

We want to be good stewards of the money. What should we do with this money? 1.8 million. I hate it when that happens. Man. That's awesome. Very cool. that happens man that's awesome very cool so a 1031 tax deferred exchange is section 1031 in the irs code and it allows you to sell a piece of property into a 1031 uh escrow account

it's a special escrow account it costs you about 1500 to set it up you need to do it before you close on the property and uh so you're gonna to spend $1,500. You're going to park the money in there. You have 45 days to identify the properties that you're going to purchase with that money. And you have 180 days to close on the properties. It has to be real estate properties that you're going to purchase with that money. That would move the entire amount into other real estate investments with zero taxes. Now, you will pay taxes someday when you sell that other property, but if you sell it while you're alive. But I'm in the midst of doing one of those transactions right now. I sold a piece of real estate that we had and I closed it into

a 1031 and I'm looking for what I'm going to buy with it so that I don't have to pay the taxes on the gain. In your case, the gain is going to be a lot. It's not the whole 1.8, but it's a lot. It's going to be a lot. Yeah. Because your basis on the property is whatever your parents that gave it to you paid for it. And so if they paid $ to you paid for it and so if they paid a hundred thousand dollars for it and you sold it for 1.7 then your gain or your and you sold it for 1.8 then your gain is 1.7 it's almost the whole stinking thing in other words so yeah tax at their tax bracket would be taxed at their tax bracket or is that a different capital gains

rate 15 15 capital gains rate but the uh the thing is this what i would do is uh buy other real estate with it because you the way she phrased this is that that was comfortable to her right uh putting part of the money in real estate or real estate investment trust i mean you can do you cannot put it into a roth the roth is not-kind. Putting in a Roth doesn't achieve a single thing. So you don't need to do a Roth at all. What's your feeling about investment companies that you put money in and you own properties all over with a group of people? You don't do that personally, I know. But, like, are you?

Well, there are several different kinds. The ones that are safe, and I don't know if that qualifies for a 1031. You'd have to ask your tax on this. Because when you're doing a 1031, it has to be a like-kind exchange. Yeah. So you had to sell a piece of ground, a piece of real estate, and buy a piece of real estate. I'm not sure if you bought a real estate investment trust, if that's going to count. If that's the same.

So what a REIT is, R-E-I-T, is basically it's a mutual fund for real estate. It's the way it functions. There's a whole bunch of people who put money into this mutual fund, and they buy real estate with it. So they may buy apartments. They might buy, you know, God help them, shopping malls. Probably not. But, you know, office buildings, whatever. And every so often, one of those properties will sell.

But it all just stays inside of that REIT. And if you can put the money in that, then that's a – the REITs in the old days were heavy on fees, and the net on them was not as good as a regular mutual fund and certainly not as good as real estate. These days, the REITs are strong. Why? The marketplace just demanded they quit feeing their butt off. And so they got their fees down to where they're reasonable to run this multi-billion dollar you know trust and um so they're they're they're actually very they're getting good rates of return as good as as good

as growth stock mutual funds are better in some cases if you just shop around your advisor can probably help you with that so for someone like angela that may not want to fool with a rental property yeah like if they're like oh we don't want to deal with i mean you're going from airbnb which is about the highest hassle yeah drive you crazy type of rental property yeah because you have a renter that's in there for two freaking days you know and so that that's like the worst in terms of hassle factor but great rates of return if you want to screw with it all the way over to rental property and then all the way over to a reachIT. So she's got all three types on there. Like no hassle to the worst hassle on her list here. So I'm thinking she can find something in there that's reasonable rates of return with that million dollars. I mean, you can go buy a little office building, a little strip center, and manage it.

It's not that hard to manage. I'll put a property manager on it and not pay the taxes. I really would. Since she's not averse to real estate, I would look at a 1031. And no, that's it. I would not do Roth. It doesn't work. It doesn't fit.

And I'm not sure the REIT qualifies. You'd have to ask and find out. And it's not for your personal residence. not sure the REIT qualifies. You'd have to ask and find out. And you can't, it's not for your personal residence. This is investment property transactions. All of these are investment property transactions. Your personal residence does not qualify for a 1031 because when you sell your personal residence, married,

filing jointly, you can make a half a million dollars profit without having any taxes and everything after that is taxed, period. And so that, you cannot get around that. It's part of the deal. All right, open phones at 888-825-5225. Daniel is in Pennsylvania.

Hi, Daniel, how are you? Hi, good. Thank you for taking my call. Sure, what's up? I need your help on how to move from a bad history of acquiring debt um failing to keep up with those payments due to an issue with gambling and now moving into a point of ownership and understanding my responsibility as a father and as a husband to lead my family into a prosperous That sounds like a story. How long have you been dry? Well, it's going on over a year now, a little over a year,

that I finally said, called it, quit. How did you quit? Did you get some help, or you just decided you're not going to gamble? It was kind of cold turkey, but I had to remove myself from those situations by self-exclusion. Did you join Gamblers Anonymous or anything? I did not. Okay. Good for you.

It's amazing. What were you betting on? Usually tables, mostly tables. Online, too. Online is very dangerous. Yeah, it's very dangerous. Second fastest growing addiction in America today, online gambling. It's destroying families.

We're seeing it everywhere. And the sports bet, you know, it's not a moral judgment. It's just destroying families. We're seeing the sports betting is blowing people up. A good friend of ours the other day that just blew up their whole marriage. The whole thing's gone. Just lost everything betting on stupid games. So, Daniel, for you, is there...

Way to go. Way to go, man. I'm proud of you. Amazing. Is there current debt that you're having to pay off? Yeah, there's quite a bit of debt. I'm sure some debts I don't know about. I would estimate 50 to 60.

What do you make? Between my wife and I, probably about 60 per year. Okay. How much debt have you got? I'm guessing between 50 and 60. Okay, good. We can get you out, brother. We want to participate in your healing. We're going to put you into Financial Peace University. You and your wife go through that as our guest. Hang on, and Austin will sign you up, man, and you call us back and let us know how you're doing. I'm proud of you. You're breaking a big time cycle there.

You can do this, but you do need to put some systems in place to do it. Rachel Cruz, Ramsey personality, is my co-host today. Join us at Ramsey Solutions. We have a nice visitor center here in Franklin, Tennessee, just south of wonderful Nashville, Tennessee. And Franklin's even better than Nashville, by the way. So come on out and visit either one of us. The lobby here is quite an experience. You can watch the show from 1 to 4 Central Time. We do it live every day for 600-plus radio stations and about 20 million of you in podcasts

and YouTubes and so forth out there. And the coffee is free. The entrance is free. The homemade chocolate chip cookies are free. And the debt-free stage is right in the middle of it. And that's where Devin and Regina are. Hey, guys, how are you? Not bad.

Good. How are you, Dave? Good to have you guys. Where do you live? Springfield, Missouri. Oh, fun. Welcome to Nashville. How much debt have you paid off?

$113,803 and some change. Good for you. How long did this take? Around 20 months. Good for you. Wow. And your range of income during that time? $100,000 to about 140 good what

do you guys do for a living i'm a surgical technologist in springfield and um devon well i own a i own a lawn care company but during the debt free during the debt free journey did multiple side hustles so oh cool what was best side hustle, the one that made the most money? Probably, at the time, I was working full-time, so probably the lawn care, but that's what I took full-time. So after that, I would have probably been driving Uber and Lyft.

Okay. That's awesome. Good. Very good. Good for you. Well done. What kind of debt was your $114,000? We had a little bit of everything.

We had a lot of medical bills. I had a surgery. He had some things done. And then our oldest daughter has epilepsy. And so through testing and this and that, we had a lot of medical bills. A couple cars, a HELOC, a mower. She looks at him. I noticed that.

You know, a couple small credit cards. Oh, normal. Yeah. Normal sucks. And a stupid tax with a timeshare. Oh, just put the icing on the cake right there. That's a whole other story. Yeah, that's a whole nother story yeah that's a whole nother episode yes legalized fraud called time shares unbelievable way to go you guys all right

so what happened 20 months ago that set you on fire um kind of like you say i was sick and tired of being sick and tired um i had had a surgery and um things were building up and we had a decent income coming in but we had no idea where it was going um and i knew i was tired of living paycheck to paycheck but the surgery kind of jolted you yeah i had a little bit of time on my hand uh yeah you had an extra bill that you didn't have before that and you you're like, oh, my God, we've got to fix this. Yeah, and so I knew that he wasn't real happy at his full-time job, and he had a desire to have his own business. And one day I was just sitting there, and I was like, the only way we can do this is if we become debt-free.

And so I broke it to him. You broke it to him. So what did you say, Devin? I was on board. I mean, we'd been Davis, you know, in the past. And then the kids were born and we had the medical bills and we kind of fell off. And then when she said it, I was like, I know it works, so let's just do it and get it done. So you get out the old total money makeover book and dust it off or what?

Yes. Exactly. Literally. Okay. Go back through Financialusted off or what yes exactly literally okay go back through financial peace university or what we didn't we just um just did the book we we knew you knew what today yeah just had to get that but now it's time yes now it's time just game on exactly yeah i love it well done good way to go congratulations Congratulations. Thank you. Amazing. Amazing. Okay. So how long have you guys been married? 12 years. 12 years.

Okay. So what does that look like now? And with your kids, how many kids do y'all have? Two. Two. Two girls. So what is that as a family doing this? So it's like you've been in a habit for a certain period of time, right?

In marriage and with your family. And you guys 20 months ago shifted the way that you're doing life. So how was building those new habits and saying, okay, we're going to change the way we've been handling money? How hard was it? How did that feel with your family dynamic? Because a lot of people listening have been married for your time and have kids, and they're fearful to step into change.

I'll say it was tough at first, but knowing that we could do it, I mean, knowing the plan works. And I just saw on the YouTube channel there um we wanted to take our kids to disney and we wanted to do that debt free not bring that home with us and so we you know we told the girls like hey this is what we're going to do and if we if we accomplish this then we're going to disney and so we went to disney in march and we did that completely love itfree. Love it. Came home, and it didn't come with us. So they're holding you accountable big time. Oh, for sure.

Absolutely. I mean, they were with us every step of the way, and I'd pay off a bill, and I'd let them know. We celebrated. We celebrated after everything. That's awesome. And after we paid off the last one, and they knew it they're like we go to disney this weekend it's like no now we're gonna save for that this weekend but now we do get to go yes

i love it very good all right so what do you tell people the key now that you've done it you pay off 114,020 months that's that's legitimate what's the key to getting out of debt a budget i mean it's that simple um we had no idea where our money was going and i sat down and i tried the spreadsheet thing i tried you know the phone apps and i needed a pencil and a paper and i sat down he made fun of me a lot. I would come home and be like, you know, because every night she was looking at that, and I'm like, you know, it's not going to change overnight. Yes, it does.

It did. It did. And so, you know. You know who the nerds in the free spirit are now. Yeah, we can tell. Yeah, that's good. I like it, though. It's good.

I know the budget was huge. Uh-huh. Now, you knew how to do a budget before what do you think i mean something after the surgery he's tired of living paycheck to paycheck the extra bill comes in you say enough's enough how how do you tell people out there that are kind of they've been going along ramsey ish and okay now it's time to get off the center they know how to do a budget too right but what is it that moves you from ish to game on? What happens down inside of you?

You just have to see that big picture, you know, and that's what I did. I saw going to Disney. I saw going out on my own, you know, owning my own business and just seeing that bigger picture. That just really changed me. I wanted just to be able to make a future for our family yeah again yeah a vision a big picture yeah yeah you got to have something bigger than i'd like to be out of that and that you know i'd like to be out of that won't do it right

but something that it did for our relationship too though um i would like get sick to my stomach because i wouldn't know like okay we've got ten dollars until you know we get paid again and she didn't she didn't want to tell me that you know i mean a lot of shame yes i and i kept it all in it's like okay we can't and so i'd end up i'd send him, hey, don't go purchase anything today. And so when we started this budget and started the plan, I was very open. I felt like, okay, he knows what we're trying to do here. And we were able to talk a little more about it. You quit carrying the whole thing on your back. Absolutely.

Both of you are carrying it now. That's huge. And the freedom of it, the isolation that you feel right of just it's all here and i can't i don't want to say it out loud because i don't even want to know the reality like right when you say the words it's like oh but now that it's out there there's like a freedom to it i love that and you guys working on a team working as a team together yes so proud of y'all way to go thanks dave rock stars we got a copy of baby steps millionaires for you that's the next chapter in your story.

How ordinary people built extraordinary wealth. How you can as well. And, of course, a copy of Total Money Makeover. And we're going to give you a Financial Peace University one-year subscription to Ramsey Plus. Get you into FPU and into EveryDollar Plus. If you don't want any of that, you can always give it away, pay it forward. Because people are going to be asking what happened to you. Your faces have changed.

Life is good. I love it. All right. What are the kids' names and ages? We have Delaney is 10, and Kenley is 6. All right. And they look like Disney veterans to me. All right.

$114,000 paid off in 20 months, making $100,000 to $140,000. Count it down. Let's hear a debt-free scream. Okay. Three, two, one. hear a debt-free scream. Three, two, one. We're debt-free! Those girls' lives

are changed because their parents are heroes. It changed everything, man. And nobody fixed it but them. Nobody's coming. You've got to fix it. It's your job. Be a grown-up. This nobody fixed it but them. Nobody's coming. You've got to fix it. It's your job. Be a grown-up.

This is The Ramsey personality, is my co-host today here on the Ramsey Show. Dustin's with us in Phoenix, Arizona. Hi, Dustin. How are you? Hey, I'm well, Dave. How are you? Better than I deserve. What's up? So I have a unique situation. My wife and I got together a few years ago. At the time, we're both in our 30s, both owned homes. And both homes weren't worth a whole lot, as far as as much as we'd make for them. So we decided to rent one out.

But, you know, market's going crazy here. We are on baby step two, and we are trying to pay off debt. And I know I'll never be able to get a rental property again for as little as I paid for what we have right now. We didn't really set out to be landlords or anything like that, but we were just wondering, is now the time should we sell it? Go ahead and pay off debt, pay off our house, and just kind of completely skip step two that way. How much can you sell the rental property for? Roughly net, I make about $240,000.

You'd make that, okay. And how much is your debt? With car and credit card debts, we got about $57,000. The leftover mortgage on the house we're currently in is about 153 000 and how much do you guys make a year combined uh around uh 176 000 100 and what 76 70 oh dang yeah you're killing it well done oh man okay so dustin the way we answer questions around here is knowing what I know after 30 years of doing this and living these principles myself. And Rachel growing up on them and writing and talking about them all over America.

What will we do if we woke up in your shoes? Okay. I love rental property. I'm a real estate guy. So that's self-declaimed or disclaimer there. Okay. I'm a real estate guy, so that's self-declaim or disclaimer there, okay? But if I woke up in your shoes, I also love being debt-free, and I actually love that more than I love rental property because being debt-free allows me to save up and pay cash for rental property

or save up and pay cash for whatever I want to do because if you make $176,000 and you don't have a payment in the world, and you actually live on a budget, and you live with intentionality like a grown-up, and not like you're in Congress, right, spending. But I'm talking about really write it down. Know where your money is going. You and your spouse are in agreement, and we have some goals with the money. We have some generosity goals, some investment goals, and some enjoyment goals,

and they're all part of that. You've got so much stinking money coming in with no payments in the world you can buy another rental property fairly quick that's what we kind of figured if that's the route we even want to go you know exactly yeah for sure for sure and you're not even sure you love this it's by default as you said it wasn't by plan yeah it wasn't you know we just knew we weren't going to make much of it at the time so hold on to it um at the time i currently had a family member that was um in need of a place so we just said okay go ahead and start paying rent yeah um and uh and now i feel like kind of the time to do it because if we don't do it now, I'll probably have to pay capital gains on it. But I'm still within the two-year window right now. So it's

kind of like now or never, you know? Yeah. Oh, that's great. Yeah, you can take the personal exemption. I can pay no taxes. Oh, this is wonderful. Okay. So Dustin, my only word of caution, because yes, I think sell it, pay off debt, all of it. So there is something to be said though, about the debt-free journey that people go through. It's like this couple that just was on the segment before 20 months of sacrifice and all that. So when I hear people go through a journey like that, more than likely they're not going back in debt because they felt the pain of the sacrifice to get out you guys in a wonderful blessing uh are going to get paid it off with you know selling this rental property which is

amazing but i was like you found a genie and you said give me three wishes right one of them's like free right yeah and you get to be it so just don't go back to your bad habits because nothing's going to break those bad habits of the time of sacrifice you you know what I'm saying, of like a debt-free journey that we hear a lot on the show. So you and your wife together, you guys have to like pinky promise in writing, black and white, we are not going back into these habits. And we're going to take $176,000 and write it down every month where it's going on purpose. Yes. And stick to that.

I don't care where it goes as long as both of you are in on it and both of you do it on purpose and because you're not going to do stupid on purpose stupid is always an accident it's always like i was just driving by the car lot and there's a porsche who knew you know and so you know stupid is never but if you save up and pay cash for a porsche i mean then that's okay right and so you've got the money to do whatever you want but but don't let bass boats jump into the driveway, you know, and they will. They'll just pop in there. I've seen it happen. And so it's a problem. And so on paper, on purpose, before the month begins, the rest of your life,

if you can make that promise to yourselves for the good of yourselves. And no more debt. No more debt. Cut up the credit cards. Be done. Be done. If you can do that, then debt. Cut up the credit cards. Be done. Be done. If you can do that, then yes.

Yes, I would sell the rental property and I'd be debt free tomorrow. It's amazing. And you're going to have this sense of peace that you had no idea was going to flood over you. You're going to wake up and go, wow, I feel like I just lost 300 pounds. I just feel like a different person. And they get to pay off their current house, too. I mean, they're paying off their mortgage, everything. They're jumping. And then you're going to use some of that for an emergency fund too justin or dustin i'm sorry uh i mean you guys are you'll be skipping basically right to baby step

seven with this it's amazing exactly well done alan's in tampa hey alan how are you hey mr dave miss rachel how are you? Great, what's up? Well, I'm looking to change careers, and it's going to cost me about $10,000 to do an online course to do this. And I recently sold an extra vehicle that I had. I'm in baby step two. And so I have the cash to do this course, but I'm really tempted to just throw it at the debt instead. And then they have a month to month option on this course. It's not financing. It's if you don't't pay, they just pause the program until you have the money to continue it. How long does it take to do it? Nine months.

Okay. So $11,000 a month. What's your income? My income is my take-home on my full-time job is on a 40-hour week is right at $8.15 a week. And then my second job is right at $300 a week. And then with overtime, which kind of comes and goes, and recently it's been coming more than going. And so I've been averaging right around 1,000 a week at my full-time job take-home. But like I said, that's not always.

1,000 in addition to your base or 1,000 total? 1,000 total, I'm sorry. Okay, so you're making about $5,200. Does your wife work? I'm divorced. Oh, you're single. Okay, all you're making about $5,200. Does your wife work? I'm divorced. Oh, you're single. Okay, all right. And how much debt have you got? Yes, sir.

Now, as of right now, I'm sitting at right around just a little bit over $37,000. And if you take the $10,000 course, what can you make? What's the new job pay? I've been told that entry-level position is $80,000 a year in the state of Florida. What is it? Software engineer. And you don't do any coding now? No, sir.

I'm starting from ground zero. Yeah, you'd be dev one. That's what you'd be coming out of. You're going to code school, right? Yes, sir. Yeah, okay, good. I like it. I want you to do the code school. Right. You're going to code school, right? Yes, sir. Yeah. Okay, good. I like it. I want you to do the code school.

I want you to do the code school. It's a great upside potential for you. If it fits your personality style, I would go with it for sure. How much debt did you say you had again? I'm sitting at a little over $37,000. How much of that's your car? 18. All right. How much of that's your car? $18,000. It doesn't matter.

Go to code school. It doesn't matter whether you pay it monthly or whether you pay it other. You're going to get out of debt exactly the same period of time. The thing is, you're probably going to have to lower your income while you're going to code school because you're not going to be working as much. Taking that into factor, yeah. Yeah, you're going to have to drop off some of your OT and or your side hustle, so that's going to go down.

But your income's going to drop dramatically. You may end up needing to sell the car before it's over. But I'm going to code school, and then I'm going to work my way through this as fast as I can. This is The Ramsey Show. Hey, it's Rachel Cruz, co-host on The Ramsey Show. If you want to do your debt-free scream live on the show, visit ramseysolutions.com slash debt-free scream. We'd love for visit RamseySolutions.com slash debt-free scream. We'd love for you to come to Nashville and tell Dave your story. That's RamseySolutions.com slash debt-free scream.