The Ramsey Show - App - Getting Out of an Upside-Down Car (Hour 2)

Episode Date: January 23, 2024

Девочка-пай 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 amazing relationships. I'm Ramsey personality, George Camel, joined by my esteemed colleague, Ken Coleman. Esteemed today. Very esteemed. And we are so pumped to take your calls about money, about work, about your life. 888-825-5225. If you've got a question about that job opportunity, the job you feel stuck in, what you're really meant to do, what you're wired to do, Ken is the man for those questions, and he can expertly guide you through that. If you need to just make more income, we talk about

how your greatest wealth building tool is your income. And if you need more shovel, because you got the big hole, you're in some debt, and Ken can help you make more money and find some opportunity for you there. So we are here for you to serve you this hour at 888-825-5225. Lydia is up first in St. Louis. Lydia, what is happening? Hi, thank you for taking my call. I just had a question. My husband and I currently have our own business, and in addition to that, he just took up a part-time job at our church. Now that he's on staff, they have offered us a free house to live in, you know, as long as he has a job. And so we do currently own a house. We've got a really good interest rate on it, like 2.4%. And so we kind of hate to let it go, but we do not have savings other than a thousand dollars in emergency funds.

And, um, we currently have $20,000 of debt. So we're trying to figure out what the smartest move for us would be. Is this our chance to, um, just, you know, pay off all of our debt and just kind of get it in a better situation and then just save the money that we make off of the sale of the home to eventually buy another home when we're in a better financial situation? Is it worth taking the risk to rent our house out without any savings? Just what would be the smartest move? How much equity do you have in the home? If we sell it right now, we would make $30,000.

And that's after fees? Yes. Okay. And that would pay off your debt and give you half an emergency fund, most likely? It would pay off the debt and we would have $10,000 left over. Okay. And I'm guessing three to six months of expenses for you guys is in the ballpark of $15,000 to $20,000 based on your expenses? It would be $30,000 probably. Okay. So it would definitely speed

up your progress along the baby steps. And I do agree with you that you're adding a lot of risk by becoming landlords here while having zero in the bank. That's going to be real stressful making that transition. And so I understand you don't want to let go of the lower interest mortgage rate, but you're just going to add stress on the other side. And so I understand you don't want to let go of the lower interest mortgage rate, but you're just going to add stress on the other side. And so I do think it's a clean slate for you guys just to live in this house, get some financial footing, and there's always going to be another house down the line. But you're going to be in a different financial position. You're going to have way more to put down.

You're not going to be as worried about the interest rate because you're going to be able to pay that house off really early. So I like this plan of just getting rid of this thing and moving on with your life and figuring out down the line. Now, this free housing, is there a stipend if you don't take it, or is it just free housing or you don't take it? It's completely free, and if we don't take it, then we just don't take it. There's no additional benefit. Got it. And does it cover utilities as well? Everything. Wow.

Yeah, that's hard to pass up. Yep. I would do it. I would list the house this afternoon. That's for a part-time job at the church they're offering this? Yes. Goodness. That's amazing.

So my other question then, if we were to sell the house, are you saying that we should take the money that we would make off of the sale of the house and put that just directly toward debt? Or we're projected to pay off our debt by the end of this year as is, or should we just keep paying our debt as we are and then after that? As soon as that money hits your account, you're never going to see the money, essentially. It's going to go towards the debt, and whatever's left is going to go sit in a high-yield savings account as your starter emergency fund as you continue to build it. Yeah. And, Lydia, let's walk through the numbers you just gave us. If you pay the $20,000 off, you still have $10,000. You said you're on track to pay the twenty thousand off by the end of 2024 and you said thirty thousand was the number so that means we're debt-free instantly and then by the end of

the year we have a fully funded emergency fund that's the order that's the way we that george and i would do that do you understand yes that's great You're getting to freedom and stability faster by doing it this way. Okay. And I don't think it's worth the risk of renting this place out. You're not going to make much spread probably because of the mortgage and what you're going to rent it for. On top of one thing going wrong and you guys can't cover it, putting you further into debt. Because the first time they do something or you can't prove they did it or something happens guess who pays for that repair of course sell the house immediately immediately upon deposit as george said pay off the 20 000 put 10 in savings and keep going on the debt plan except now that's going into savings

to get us to three months of expenses or three to six, whatever it is. And then now you guys are rocking and rolling and just keep stacking cash in the form of Baby Step 4. Once you get to that stage, while you're getting that free housing, come on. This is a great situation. All right, let's go to Alexander in Dallas. Alexander, welcome to the show. Hello. I was calling to ask you a question. I'm trying to pay off my car.

I'm not exactly sure if I should just keep chipping away at it or not or if I should do some other drastic move to get rid of that. I currently owe $20,000 on it, and it's worth about $8,000 or $9,000. Okay. That's almost all the debt i have i have like 300 other dollars in debt all right what car is this it's a 2015 subaru forester and have you checked kelly blue book private party value yes uh private party value is about $12 or so, and the trade-in is about $8 or $9. Yeah, that's my issue, is trade-ins, you're not going to get high dollar for this. And so the closer we can get to the amount of loan that you owe, the better.

So how much money do you have in the bank right now? I currently have $1,000 or something like that's all it's uh set aside for expenses and stuff and what is your income uh it's about 40 000 so about um 4 000 a month you bought a lot of car for making 40 000 yeah i bought it when i was making... Yeah, we need to get rid of this thing, but you're going to need to come up with the difference that you're underwater on. So you've got two options to do this. One is you can go to your credit union or go to the place that holds the loan and say, listen, you've got some bad collateral here because this thing's worth $9,000.

I owe $20,000. Can you give me an $11,000 loan to make up for the difference and I get rid of this car? Now, obviously, you need another car. So you probably need to save up for the difference and I get rid of this car. Now, obviously, you need another car. So you probably need to save up a few thousand dollars before you do this. The other option is you go out and save up six, $7,000 to cover the difference yourself with cash, which is a great option, but it may take a little while as you continue chipping away. But there's no fun way to do this. Either way, this car has got to go. I would not hang on to it. All right.

Sorry for the bad news, Alexander, but those are your two options. So I would try to get that personal loan to at least eliminate some of this debt and get out of this underwater car. But either way, it's going to involve some sacrifice, and it's an expensive lesson to learn. But, man, car loans are killing people with these underwater situations, Alexander. I hate to hear that you're going through it. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Ken Coleman. Hey, if you

enjoy the show, we'd love if you do us a favor and share it subscribe wherever you're listening hit the follow button leave us a review and just tell people about it maybe that's a text maybe you hit the little share button and send a link to a certain episode or clip that you loved but you guys are the best marketing plan we could ask for and it's one of the reasons we hit number one out of all podcasts on apple podcast earlier the The fact that my mom figured out a way to hack the system and clicked on the thumb a lot. That's amazing. Yeah.

Barb. I need to ask Barb how she accomplished that. I don't know. I don't know. She wanted her boy to hit the big time. Just her and May Camel. Just really hitting that like and subscribe button. How is it that Barb and May have not met?

They need to. They'd get along. They really would. Mellifluously. Is that a word along. They really would. Malifluously. Is that a word? Is it ever? Malifluously? You're welcome.

No, malifluously. Malifluously. Yeah. Boy, I got to tell you, you've been working hard because I don't ever remember you pulling a word out that I don't know what it is. If I can teach an old dog a new vocabulary word, I'm doing something right. All right, I'm going to look that up on the commercial break, but Jordan awaits. What are we doing right now? Are we doing a little, do we have a little 401k thing? Yeah, I have a little teaching segment. I'm just excited right. All right. I'm going to look that up on the commercial break, but Jordan awaits. Or what are we doing right now? Are we doing a little,

do we have a little 401k thing? Yeah, I have a little teaching segment. I'm getting excited right now. Oh, I apologize, George. Teach away. Don't jump the gun here. So here's the deal, Ken. We get this question a lot and I wanted to address it because a lot of people are going through this right now. They're leaving jobs. We've seen a huge migration of just people moving around, switching jobs. What do I do with my 401k? What do I do with the 401k? That I left behind? Yes. Oh, this is a big question. So it's a big one and it's an important one that has a lot of zeros on the end. So I want to walk people through the thought process when it comes to rolling over the 401k. So of course, you have a bunch of options. Number one is cash out your 401k, which is a terrible idea because you're

going to pay taxes and penalties if you're not of retirement age. The other option is do nothing and leave the money in your old 401k. Also a terrible idea, probably in second place in the terrible idea list. The other two options are you can roll over the money into your new employer's plan. So if you have an old 401k, you got a new job, you can roll it directly into the new employer's 401k. And then finally, the last and probably my favorite option is you can do a rollover into an IRA, which is outside of an employer. And so I like that one the best, Ken, because it gives you the most control over your investing options. The IRA basically has unlimited options, whereas your 401k has a fewer, more select options.

All right, so let's play this out. Excuse me. I leave company ABC, and I have a 401k there. And so I take a job in another company, and they've got a 401k plan. I'm going to go to my smart investor pro, the person who handles my retirement, I'm going to say, all right, I need to take my old 401k, I need to roll that over into an IRA, and I'm going to jump right in immediately with the new 401k. And so that 401k from the previous company is going to grow. You're just not contributing to it, but it's going to sit in that amount in the IRA. Or can you choose to contribute to it in the IRA form? So that's called a rollover IRA. And so that is an option where that money continues to grow, you can continue to contribute. And so that is a solid option because of the amount of control

you have over your investments. And I like that one the best because as a bucket, when you think about your retirement plan, it's good to have different buckets. Right. And if it's, here's the big thing though, people don't think about. If you had a Roth, if you had a traditional 401k plan and you decide, hey, I'm going to do a rollover to a Roth IRA, you don't want to do that because there's going to be a Roth conversion that you pay. That's right. And the only time you should do that is when you're in baby step seven. You have a paid four house.

Now this is extra money you have laying around and you can pay the tax burden to basically convert that to tax free money. There's no purpose in taking a 401k and putting it in a Roth because you're going to pay a tax. And that's the whole purpose of having a Roth is to get it out later with no tax. You want that money to grow tax free. So there's a time and place to do that, but you're going to pay a hefty fee in order to do that. And that's why we do the IRA. You want to do a direct rollover. So let's say you have a traditional 401k, you want to do a direct rollover to a traditional IRA. If you have a Roth 401k, you can do a direct rollover to a Roth IRA. So you want to keep them equally yoked, if you will.

I like that. To keep it biblical for you, Ken. I know you like that reference. Thank you. Thank you for the reference. So if you've got the old one, it's time. And you got to do something. Don't just leave it sitting out there. You don't have control over it. The fees are now eating up what was left of your nest egg there. So do something. Roll it over to the new employer or roll it over direct.

Roll it, roll it, roll it. Direct is what you want. Not indirect, Ken. Direct. Yeah, direct. To avoid any fees. Equally yoked. You don't want to see that money. Yeah. That is what you want. Not indirect, Ken. Direct. Yeah, direct. To avoid any fees. Equally yoked. You don't want to see that money.

Yeah. That's the important part. So if you have questions about this, you can, of course, ask your employer and HR department, but you can also get an investment pro in your corner. And if you go to ramseysolutions.com, our SmartVestor program can get you in touch with someone who can help you with this rollover process. That's something I did, Ken, when I worked at Ramsey. I had an old 401k from my Apple retail days. And so they helped me roll that over into an IRA. And that money's been growing ever since

from a Roth 401k, direct rollover, Roth IRA. I love it. And it's been growing with my control. I love it. No reference to my rolling, rolling, rolling, nothing. I didn't want to acknowledge it to be honest why it was that an old walmart ad no it's not an old walmart ad it's just an is it an old walmart keep those prices wrong i heard a limp biscuit reference it's not limp biscuit joe joe knows it's an old song uh rawhide uh like a western it was a western rawhide yeah like an old... I mean, George, you wouldn't know what it is because you don't even know who John Wayne is, but I digress. Yeah.

No, it is Raw Hide by Frankie Lane. We got Walmart, Lip Biscuit, and Raw Hide. We just went the whole range there, but that's what I do. I like to create good conversation over absolutely nothing. I think that tells you the zeitgeist that we were born into, Ken. You're mentioning songs from 1961, and I'm thinking of an old... Oh, did you pull it up? Yeah.

Well, give them the full reference now. People want to know. Rawhide by Frankie Lane. Rawhide by Frankie Lane. Released in 1961. See? This is... You're smarter now. You're smarter. I don't care if you like it or not, but let's help Jordan out. Can you admit your references are a bit

dated? Well, there's no question they're dated, but that's the spice that I bring to the show. You and Rachel don't know about anything since like 2000 so we don't know what deloney knows what's going on inside his head is just it's dangerous you don't want to i gotta bring a little bit of culture a little bit of uh knowledge i bring some vocab you bring some culture and we meet in the middle i love it nobody's complaining about the ra reference. Plus, I think people want to hear me sing more. Oh, gosh. I could be wrong about that one.

Nope, we want to hear from Jordan in Missoula. Love that place. Jordan, what's going on? Hi, thank you so much for taking my call. I appreciate it. Sure, what's going on? First of all, I enjoy the banter between you both. It's pretty comical.

See, James, people like it. See, James? James is always honest about the banter, and Jordan likes it. So there you go. Well, Jordan, we like you. Well, thank you so much. So my question is, I've been following the Baby Steps stuff for quite a while, and I'm considering upgrading my truck.

My question is, should I just cool my jets and be patient and content with what I have, or based on where I'm at financially, is it reasonable for me to consider an upgrade? Just a quick background. No debt other than my mortgage. My house is worth roughly $450K, and we owe $180K on it, a 15-year fixed-rate mortgage. I make $120K a year gross, and my wife is a stay-at-home mom. Our other vehicle is a paid for Honda Pilot that's worth roughly 30 and I would consider spending 30 on this new truck. My current truck is 20 years old. I can maybe get 10 grand for it.

It's starting to show a little bit of signs of breaking down. So considering just keeping that thing until it just completely dies or maybe splurging and getting something a little nicer. So we're talking 20k. We'll get you this truck. Exactly. Yeah, I'm doing it today. Yeah, I agree. Well, that was easy. Yeah. Well, listen, you did it. First of all, you did a really good job of laying out the facts. Every Ramsey Show caller should study your model. That was fantastic. You laid it out perfectly. You've got the money.

You've got the value. You've lived like no one else. And so now you went from intense to intentional in baby steps four, five, six. You've got this mortgage you're chipping away at diligently. But it's okay at that point to go on the vacations and splurge and upgrade the car. You're doing it with cash, and you're right there in our parameter where the total of all things with motors and wheels adds up to half of your annual income. So between the Pilot and this truck you're getting, you're right there at about half of that $120 at $60.

And so you're doing it the right way, Jordan. What kind of truck is it? What is it? So I probably would get a Toyota Tundra. I'm not totally sure. Still in the researching phase. I like to nerd out and look up a bunch of stuff like that. I just rode in Winston Cruz's Toyota Tundra. Oh, you did?

Let me tell you, Ken. Name dropping. I think I'm a truck guy now. So way to go, Jordan. Love that for you. You're doing it the right way, man. Living like no one else and now driving like no one else. Yeah.

Paying cash, selling the other truck. It's going to be a 20k gap. He's got the money. This is what we like to see, America. Smart decisions. Very exciting. Nice new truck. And we're off the air. 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, Christian Healthcare Ministries. CHM is a health cost

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That's chministries.org slash budgets. This is The Ramsey Show. I'm George Campbell, joined by Ken Coleman. The number to call is 888-825-5225. Up next, we've got Bill in New Haven, Connecticut. Bill, how's it going? Hi, thank you for taking my call. Sure.

My wife and I are in a very difficult situation. I'm 71. I'll be 72 next month. My wife is 66. She teaches at a private school. We moved from a state where the salaries are considerably lower than they are here in Connecticut, and the cost of living completely. And it's going to cost us almost $14,500 to get a new furnace and everything to replace the one that went out. And we have a state program here. I can finance it. It'll be about $175 a month for 10 years. Additionally, my wife took out a parent loan for our daughter to go to college. I was adamantly opposed to it, but her philosophy is she's my baby and I love her, so I'm going to do it.

And due to being in forbearance twice, once due to getting sick and having to take off work during the school year in the other state, and then moving up here to Connecticut, she went into forbearance each of those two times. And what that means is that you don't have to make a payment, but the interest accrues. As a result, she still owes over $100,000 on that. Yes, our daughter went to a private school in New York. And yes, it's like I've been fighting a losing battle financially all these years. And I'm 71 now. I'll be 72 next month.

And I have to go back to work. I took an early retirement a few years ago, but all I'm getting is a small social security check because my salaries were always low i have a a small army reserve retirement thank goodness i stayed in that for over 20 years and then i have a very very small state retirement from our most recent state. I worked for the state retirement system for a few years. So what is the household income add up to right now? Our total income, our AGI is less than $100,000, including everything.

And my wife is 66, and she would like to start receiving Social Security when she can get the maximum dollar amount. And I would like her to do that, too. starting to receive Social Security as soon as she can, which I believe is about another six months or so, something like that. And it would be considerably less. And she teaches at a private school now. She's happy there. The salaries at private schools are very low. But she says at her age, if were to get a connecticut teaching certificate nobody would hire her because who wants a who wants a uh 66 year old woman buy that one well that's what

she says and uh plus she she loves where she is. She was in a miserable teaching situation in the previous state. That's why she went on sick leave, because the superintendent drove her to that, to make a long story short. And then we moved up here. And so due to those two situations is why she went on the forbearance because we did not have any money coming in to make the payments now i'm looking at at going back to work whether it's full-time or part-time preferably full-time because like i said i need the money how much do you guys have that's liquid. Liquid cash. Oh, nothing. We have bills up to our eyeballs.

You have more debt than the Parent PLUS loans and this 14-5 HVAC? Yes. What else? Yes. Credit cards, of course. And it's about $70,000. Goodness gracious. Yes, I know. I know. It's horrifying. Is your wife concerned about this or is it just you? Oh, absolutely. Yes. Both of us are concerned. And what other debt? Well, the house. What's left on the mortgage?

Oh, gee. Probably about, well, two hundred and something thousand something thousand okay what's the house worth uh i don't know we're not sure about that it's about what'd you buy it for i'm trying to remember we bought it it for $300,000 and something. Okay. Now, like I said, I'm looking at going back to work, and I know that some of the places I've come across mention in their ads that they offer 401Ks. Some mention that they offer 401Ks with a match. Some do not mention a 401k at all. Now, my understanding is that

you have to begin withdrawing from a 401k at a certain age. And I'm wondering if at my age, would I even be allowed to put money into a 401k? And if I did, what would I do? Put the money in the 401k and get the employer's match and then start withdrawing the 401k? Well, truthfully, Bill, I don't want to be there bare bad news, but we got a ways to go before we would even begin investing. So we wouldn't recommend you do any investing until you clean up this mess. Even with the employer match. Even with the employer match. You guys are so underwater on payments, you don't have a dime to invest.

Exactly right. So we need to clean up this debt. And so I'm going to start with the smallest balance, the largest. I'm going to try to... Can your daughter make the payment on these student loans? She won't do it why she says it's the parents responsibility to pay for the child's education i paid for all my education who taught her that mom uh how did you guess oh my goodness well okay so bill here's the reality you've been catered to her whole life, this is as much a marital problem as much as financial. Yeah, you've got some resentment towards your spouse.

Yeah, you've got a marriage issue, and George and I can't solve the marriage issue. Unfortunately, the marriage issue has created a mountain of money issues. And, Bill, look, here's the bottom line. We teach the baby steps for a reason, whether you're 71, 51, or 31. And right now what you have to do is $1,000 as an emergency fund. And, unfortunately, you had a massive emergency in the form of an HVAC system. You've got to take care of that, George. That's a tough situation.

You can't use credit cards to do that. But you guys are going to have to scramble and work. And it's time for you and mom to have a conversation with the daughter. And it's time for her to grow up. That's going to be a difficult conversation. If your wife is as concerned as you said she is, then it's time for her to have some hard conversations. This is a mess. Yeah. I mean, you're looking at $200,000 outside of the mortgage that you guys owe if you're taking on these Parent PLUS loans while making $90,000. And you're already almost $72,000, Bill. And so we've got to make some big decisions.

You've got to go make $25 an hour at least, 40 hours a week to help. But you need your wife on the same page first. You're not going to make any progress when you're trying to do this on your own. And you need to have that hard conversation with your daughter and say, listen, mom and dad are broke. And unless you want to be taking care of us for the next 20 years, we need to clean up our mess and you need to clean up these student loans. But again, the legal responsibility is on you guys, which is the worst part about these Parent PLUS loans, Ken. High interest rates, forbearance, the kid doesn't pay. It's on the parents and Thanksgiving dinner is real awkward. Bill, I'm so sorry the kid doesn't pay, it's on the parents, and Thanksgiving dinner

is real awkward. Bill, I'm so sorry you're going through this, man. I hope that you can clean this up and one day retire again, but this time the right way, with some dignity, with some peace, with some patience, and with a pile of money. This is The Ramsey Show. I'm George Campbell, joined by Ken Coleman. This is The Ramsey Show. The number to call is 888-825-5225. You call in. We'll talk about your money, your work, and your life.

We'll help you take the right next step. Daniel is in Raleigh. Welcome to the show, Daniel. How are you doing? Hey. Thanks, guys, so much for having me. I'm a big fan. We appreciate that. What's your question today? Of course. So I'm 18. I'm a freshman at UNC, and I'm studying business and entrepreneurship.

Cool. I own my own business, and I've been having difficulties being able to do a good job both running my business and also doing a good job in school. What's your business? We are an event entertainment company. We specialize in balloon animals and space paint. Cool. Are we talking like kids' birthday parties, carnivals? Like what are your main gigs? We do some kids' birthday parties. We do lots of festivals, restaurant work. We work with some of the sports teams in North Carolina,

like the Panthers and the Hornets. Cool. Yeah. All right, and how successful has this business been, and how much time are you putting into it? It's been pretty successful. I started it when I was 12, and for five years I was practicing and getting to be the best balloon twister I could. And I've hired up a team to help me run this while I'm in college. Last year, in 2022, we only made $2,200, but this past year we were able to make over $25,000.

Great. And that's net profit? Yes. Wonderful. And you're saying, hey, this is a lot for me to run while I'm in college. Yes, sir. Yes. Okay. And how many classes are you taking? How many hours are you devoting to school, and how much free time do you have right now? I'm devoting about probably 30 to 40 hours to school and another 30 hours to my business. And it's just kind of a lot while I'm also trying to be social and have a good time in college.

So the question I have is, is this a long-term business play for you or is this something you kind of started? It's throwing off the cash and you kind of enjoy it i mean what's the strategy here with this business as it is today i i i'm enamored with what i do i i love making balloons for a living it's a lot of fun i want to do it for life um this is a business i want to own and grow to hopefully be a national change someday. And we've been growing really well this year and last year, and this is what I want to do with my life. And I'm going to school for a chance to learn how to better grow my business while also getting to have fun while getting an education. Well, so you've got, you mentioned three things. You've got school, you've got the business, and you've got a social life. It doesn't sound like you can

do all three of those to the level that you want. So you've got to start going, okay, let me reverse engineer this. What's most important long-term? And that's going to determine what's most important in the short term. And I'm not trying to be coy with the answer, but it's like, okay, maybe I don't take as many classes. I can still pursue the and i i'm not trying to be coy with the answer but it's like okay maybe i don't take as many classes i can still pursue the degree i'm not in any way telling you to drop out of college but i'm saying something's got to give or you do less gigs with the business yeah that's the other or you're less involved that's right the business stays where it is for now meaning it doesn't grow until you have more time to give to it. Something has to give way here.

That's true, yeah. Can you delegate more to the team? I can. I've hired up a manager that will start. I'm training him in sales right now, and that's a big thing I've been dealing with is sales for the business and taking the sales calls, and hopefully I'll have more time to focus on other things, whether that's higher leverage opportunities for our business or more time towards school.

I'm not sure yet. What is the thing that you're most valuable in in the business right now? You just mentioned one aspect. You've been doing sales. What's the thing that only you can do right now? Right now, it's sales, but hopefully soon it won't be. I'd say I have a lot of the strategy for the business. I'm the one that makes the instructional videos on how to learn balloon twisting since we train our own balloon twisters. So just, I guess, HR and growing the team

as well as finding the customers and making the right decisions to get customer leads. Okay, and who's paying for school right now? Right now my parents are. They're paying for the first year or two. And I will be able, I, I won't have issues paying for school afterwards either. So you have no debt and you have a pile of money in the bank and you're also putting money away that you're making from the business. Yes, sir. I save almost

all of my income. Incredible. Cause that's an important piece of this equation is not going into debt. I want to see you finish school. if that's a goal for you to get this degree that will help you flourish in business. And it sounds like you want to do this long-term, full-time, as soon as you're out of school. So this is a temporary, you got what, three more years or are you in the first year? I'm in my first year. I'm a freshman, yeah. So the other question is how do we expedite college? Can you take on more credits and just crush through this so you're 21 years old graduating to pursue this business? That's true. That might mean you slow down in order to speed up.

And so that might mean delegating. It might mean the business just doesn't go for a season. And you've got to be okay with that because you're doing a lot at once right now. And I don't want to see your grades suffer while the business suffers and you end up not making progress on either that's that's true that's that's a good point i appreciate it yeah um so i'd sit down with the with the folks that you have see what kind of hires you need to make while making this business sustainable because you don't want to eat into all the profits trying to just keep this business afloat to where it's not really accomplishing anything for you. Yes, sir.

So that's some big decisions to make at your age. I'm proud of you, man. You've done really well. Thank you. I really appreciate it. Thank you. Best of luck with the future. Anything else we can help with? Yeah. So I've been following you guys as Baby Steps, and I'm now on Baby Step 5. And I mean, I'm 18 years old. I don't have a wife or kids, and I don't even have a girlfriend. So it feels a little premature to start saving for my child's college fund. What would you recommend doing once I make it to Baby Step five and I'm not sure how to move forward? I would focus on a home down payment fund. And that might just be a general high yield savings account. And you put every extra dollar you can into that high yield savings account, and it's sitting there making you four to 5%. The other thing you could do is open up a Roth IRA and contribute to that. And max went out for the year based on your stage and based on the fact that you told me you're going to graduate debt free. So I think both of those are wise for your future goals. Because when you

graduate, adulthood is going to hit you like a ton of bricks with bills and you're going to want to do stuff and buy a home one day. And so to be ahead of the game with no debt and a pile of money in the bank, dude, you're going to be light years ahead of your peers. That's the plan. Thank you. Right now I have about half of my money saved in a high-yield savings account and half of my money saved in the stock market, specifically with VU and RSP. How do I know how to allocate money to reinvest in my business versus allocate money for the stock market? How do I know where I should be investing more of my money? Well, I would look at what the last year of business expenses has looked for you, what's coming up in the next year for hiring, and we got to upgrade our equipment. And so that's the amount

of money I'd be starting kind of a sinking fund and reserves for. But outside of that, you've got the money set aside in your savings account. And so worse came to worse, you could kind of rob Peter to pay Paul in a sense to cover any business expense. But if you're running this thing debt-free and you've got some money to cover those equipment, expenses, rentals, whatever your needs are, you're in great shape as far as the business. And so unless it's making a new hire, which hopefully they're going to produce enough revenue to offset what they cost you. So that's going to be the goal running this business. I'm going to send you a copy of Dave's book, Entree Leadership as well, Daniel. That's our playbook for how Dave built this thing from a card table in his living room to the Ramsey Empire with over a thousand team members in this amazing campus. And I think it will encourage you

along the way as you're actually hiring people at 18 years old. I mean, what an impressive kid. This is an adult and his parents did a great job raising him well. He's asking the right questions. Yeah. I mean, certainly at 18, looking long-term like this and having to make these kind of tough decisions, very entrepreneurial. You love seeing that in this generation and really interesting to see. And I never want to push anybody to drop out of college, but at some point, what business training do you need versus a true four-year degree? Maybe even looking at more business classes, business training, small business things like that. That's what I'd be looking at. And Daniel, if you ever come by Ramsey Solutions,

I'd love to twist me a little camel balloon. I think that'd be fun. What do you think, Ken? Yeah, I would actually love to see that. That puts the Sour of the Ramsey Show in the books.