The Ramsey Show - App - Getting Your House In Order Is The First Step To Financial Success

Episode Date: February 4, 2025

This is the Ramsey Show, where we help you win in your life, specifically win with your money, win in your profession, and win with your relationships. Excited to be with my pal, George Campbell. I'm Ken Coleman, and we're here for you today, America. The phone number is 888-825-5225, 888-825-5225. Let's start it off with Randall in Homer, Alaska. And Randall, we're here for you today. What's going on?

Hey, Ken. Hey, George. Thanks for taking here for you today. What's going on? Hey, Ken. Hey, George. Thanks for taking my call. What's up? Yeah, so unfortunately I just wrecked my father-in-law's car by hitting a moose up here. Oh, no. So much going on in that sentence. Is that like

a Tuesday in Alaska? Like, how often does this happen it we literally have a sign on the side of the road that has a number counter saying how many times the moose has been hit right wow you know i uh i have added a number to that okay and uh did you kill the moose uh i broke its leg and then the cops had to come you know put it down unfortunately that's how it goes up here terrible all right it's the last frontier that's for sure hey i gotta tell you george you may not know this about me but back when i was in my early 20s i worked on a senate race in alaska and spent a summer campaigning in alaska i did not know that and so you would see moose at nighttime just

chewing on people's trees in their front yard like we see deer are they a real nuisance over there randall oh yeah they they really are actually i had i had four of them in my front yard the other day and somebody else hit one of them and and totaled their car so it it happens on a regular occurrence well we're very sorry about that and i gotta tell you that does the father-in-law know yet are we the first yes yeah boy okay he knows he knows but it's the insurance that's making things tricky well so tell me about this what's happening what's the deal with insurance this isn't this isn't the uh first car i totaled his but it was his car that he owned i know i'm a terrible son-in-law maybe you should stop driving his cars let's start. You're the common denominator here.

I'm not even blaming the moose anymore. I think you guys might be right, but this instance, it was a little tricky because two years ago he bought the car because he was going to come up and visit me and the wife and the kids, and he used it for two weeks, and he hasn't been back in the last two years. And so he told us we could drive the car as long as I maintain it and I pay insurance on it. All right.

But we put the car and titled it under my name and registered it in my name because I'm up here in the state. And if anything were to happen, I were to handle it. And so I have this insurance policy, and I expected this clunky $3,500 car to only get like a $3,000 payout, but for whatever reason, the insurance came back with a $10,000 payout, and so it's a lot higher than expected, but I don't know who that money should go to. I kind of want the money, but it's kind of my father-in-law's car. But at the same time, I'm the title holder and I'm the insurance policy holder.

Which makes you... I'm not quite sure what to do. Yeah, this is sticky, but I mean, legally, it's your car. That's kind of what my thought process was going on. What was the agreement when you guys made this deal? Was it, hey, I'm going to pay you this much money eventually or what? It was if I pay the insurance and maintain the vehicle, I can drive it. And then we just kind of laughed and went on with our way. We didn't

really communicate about it. Well, wait a second. At some point, he had to sign the title over to you. Well, when he bought the vehicle, he never signed it over into his name we just went to the dmv and signed it into my name he paid for it in phone yes what did he pay for it 3 500 bucks okay all right so what's the conversation been with him now because i appreciate all this detail was this alone was it did he say hey i'm gonna need this money back but you're gonna pay the insurance. It'll be in your name.

No, no. It was just essentially a gift. Unfortunately, he's not much of a communicator. He never said that it was ours and it was a gift, but he said we can use it. We've used it like it's ours, and we've used it for two years, and he's used it for two weeks. Yeah, but what is he saying now? We've established how this all happened but what is he saying now? We've established how this all happened. What is he saying now?

Yeah, now he is saying that he's the owner of the vehicle, and if I wanted a payout, then I should have bought the vehicle, but that's actually the scenario I tried proposing to him, is let me just buy the vehicle from you right now. And this was before I knew what the insurance payout was. Let me just buy it from you and make it a payout. He is not entitled to the payout. If you want to give him the $3,500 that he put into it, that's fine.

And let that be off your conscience. But I'm not going to give him a check for $10,000 while you're out of a car. You're going to be back in the situation again. That's kind of what I was thinking. He's going to buy you a car that you're going to have to maintain and own, yet he has these weird purse strings attached. I don't like this. Let me ruffle your feathers some more, George.

I'm ruffled. He started contacting the insurance agencies so that he could get updates and try to get the total amount disclosed to him behind my back. And he's the type that will cut off Ty's relationship. Don't they have to, like, verify identity? How does he even have access to talk to your insurance folks? I'm not 100% sure, but the insurance has been sending him emails and, you know, discussing this policy with him. So I don't even know if this is kosher.

Well, first of all, this is a relationship mess. Right. And I got to tell you, I'm very excited. George is ruffled. I'm fired up. And I'll tell you why. I always wanted to be one of those judges on TV. You know what I mean?

When people come in and it's Judge Ken. And this is a Judge Ken kind of dream scenario to try to figure out. Because you've got, on one hand hand george the father-in-law does buy the car with his money in and i'm going to make this up and in natural law that's his car but all right he goes to the dmv and he literally lets randall sign the title as though it's his. So legally, under the real law, it's Randall's car. Now, father-in-law wants the money. He sees a little windfall.

It's my car. I'm letting you take care of it. He was the best of both worlds. I'm a good father-in-law. I got my daughter, sweet daughter. It's like you buying a car for me as loser husband down the road. Oh gosh. I don't want to think about that. But Randall, you aren't a loser at all. I don't think. Just kidding, Randall. So now you've got the situation where he does his favor for you guys, but he wants you to handle the insurance. Now he wants the money. This is manipulative

in every sense of the word. And Randall, this is a problem, but I'm bringing all this up and kind of laying it out here because you have one response. This is not your car legally. You let me use it. He's going to say, yeah, but you know what i did and i bought it and blah blah blah blah blah and so you're gonna have to come down to not what is right in the grand sense of the word but what is right for your relationship going forward unfortunately and i think there's got to be a meeting in the middle george in order to make thanksgiving that's what i think the compromise is i'm going to give him the money he paid in. That gets him out of this. Don't care what he feels

like he's deserved. I agree. That's what I would do, Randall. But has your wife weighed in? What does Randall's wife think about this? What does your wife say? She's too much like her father, and I told her she's not allowed to talk to her parents right now until I figure it out, because she might

make the situation worse. You told her she's not allowed to talk to her parents right now until I figure it out, because she might make the situation worse. You told her she's not allowed to talk to her parents? This is a soap opera. Until we figure it out. No, you don't tell your wife she's not allowed to talk to her parents. Well, I meant about the situation. I'm not going to refuse her from FaceTiming with Grandma and the kids. Oh, that's kind of you.

We set our pace. This is The Ramsey Show. Welcome back to The Ramsey Show. Alongside George Camel, I'm Ken Coleman. And George, we were just talking about it during the break. I'm very excited. Been working on a new show format for some time, and it's now out. It's called Front Row Seat. So pumped for you. And this is a conversation show. For those that have been around a long time, if you've been in your 30s or 40s, 50s, you'd know the show Inside the Actor's Studio. And you also know MTV, Unplugged. It's got that feel to it. Legendary. It's intimate. Intimate. We have an audience of 12 to 15 people that surround me and a guest.

And we have a deep dive conversation designed to help you get better personally, to move up professionally, and to lead effectively. And so that's what the show is all about. And so we're often running on YouTube and wherever you get your podcasts. So you can check it out. New episodes every Tuesday, again, on YouTube. It looks fantastic. The team did such a great job. You've seen the set. I have nothing to do with that at all. No credit to you there. None.

The content is also amazing. So it's front to back, soup to nuts. This thing is just perfect. Back to my roots. When I joined Ramsey 10 years ago, I was an interview specialist and for years hosted the Entree Leadership Podcast before I handed it off to you. That's why I first saw you, Ken, what, 13 years ago now? 14 years ago. At a leadership event. Yeah. And you, I've always said, Ken is the best interviewer, maybe on the face of the earth. I don't know. You're being a little too kind. That's too, too, too kind, but I appreciate it. But anyway, it's called Front Row Seat. Check it out on YouTube. Some great guests you've got that have already launched that are coming up. Oh, we got some big names coming. We launched with Nikki Haley, former presidential candidate.

Oh, yeah. And that was interesting. Not political conversation. Don't worry. Those of you who immediately got your apples. Oh, she did this and she said that. Now look, when was the last time you sat down with somebody that you agreed with on everything? You didn't. You haven't. So we like to have conversations across the board designed, again, to help you get better.

That doesn't mean you're bringing a better version to work so you can move up. And for those that are moving up, you're going to lead at some point. So it's for professional development and growth. So check it out. Oh, yeah, go subscribe on YouTube and podcasts. Front Row Se seat with Ken Coleman. All right, let's get to the phone. Steve is in Richmond, Virginia. My old stomping grounds, George, Steve, how can we help? Hey guys, thanks for taking the phone call today. Sure. What's up?

So found out in the last week or so that my parents' house is in the process of getting foreclosed on. And my question is, should I buy the mortgage out and find out some rental agreement for them to continue living there? I just think it would be easier twofold. One, it's a decent investment opportunity, and second off, I think it's an easier process as they're aging to stay in the house they've been in for 30 years almost and not worry about moving and trying to find a place and everything else. They're comfortable where they're at.

Well, what's going on with them financially to where their house is about to be foreclosed on? So that's another story I'm trying to unravel. I will say my dad has been plagued with identity fraud for the last three or four years. I mean, it's like he'll get a debit card in the mail and then within three or four days, he's got charges from California from california and colorado and mexico and everything else so something something's weird going on i know you know

my sister had a boyfriend living in the house with them and then they you know allegedly he had hacked the system and put a virus in it i don't know i'm working with um some specialty companies trying to figure out if that's what's happening or I don't know they're just not making haven't made the best financial choices in their lives and they're getting you know they're both turning 65 this year so they can start collecting some security which isn't much money but it's something I know George I was already nervous I was already nervous about you just buying a house we would run the numbers and George will walk you through that as to because this is like buying another house. We would run the numbers, and George will walk you through that, because this is like buying another house that you're going to lose money on

because your tenants are broke, and I don't think they could pay you rent. This is a disaster waiting to happen for you. So far, the disaster has evaded you. Right. So I can say I've been very blessed. My husband and I don't have any debt other than a small auto loan that I just had to buy and wasn't part of our investment portfolio. So we would be able to pay cash for the remaining balance of the house, which is about $120,000. The house is worth about $350,000 to $380,000.

It's in a decent neighborhood. It's where I grew up. So what price would you pay for it right now? I'm trying to figure out, George, do you have a mortgage? Because you said you were blessed, and I didn't hear amazing blessing in the form of crazy numbers that would set you up to buy this house. Oh, no. We don't have any debt except for an auto loan. We have no mortgage. We have another investment property that's paid off. Our annual income is about

$350,000 a year. Okay. Now we're getting some numbers. All right. And you're saying you could afford to pay cash for this property? Yes. And buy it before they go into foreclosure? Hopefully. What could you buy it for? I'm not sure what stage they're at. My dad just sent me the payoff letter, and like I said, it's about $113,000 left on the house, and then late fees and taxes and all this other stuff, they roll into the payouts for $120,000.

But they're not going to sell it to you for $120,000. Why would they sell a $380,000 house for $120,000? No, actually, both of them are very on board with doing this they don't have money they need the equity in the house what are they going to do uh because now you own the house they're going to live for free is what's going to happen steve they can't afford to pay rent they have it's a lot but there is yeah my my grandma passed away two years ago um and they got some money from her and the issue is they maybe could pay off the house with that but then they have nothing to pay live on so i'm like well if i pay the house off you have enough money to pay your electric bill your insurance and everything else along with the...

For how long? Yeah. I mean, they should have about $80,000, so I would hope they could live on that for Social Security and, you know, odds and ends of jobs and my dad... Let's play this through. Let's say they continue financial misbehavior and blow through the $80,000 that you left alone, and now they're broke, living off Social Security, barely enough to feed themselves. Are you okay not taking any rent and just floating their bills for the rest of their life?

I'm okay with not taking any rent. um okay just know that you're not gonna evict your own parents if bush comes to shove and so i'm i would rather just not get involved and say hey mom and dad let's find you a place that you can afford to rent with the money that you do have i don't want to artificially prop up their life because that's going to turn into entitlement on one side where they just go well steve is a nice guy he's going to cover our expenses forever and And so anytime we need something, we're just going to go to Steve. It's now bank of Steve. Or it's resentment, more financial misbehavior. You resent them. You want them out. You regret getting into this. And now you're stuck in a conundrum because now you're the landlord. So when they don't take care of the house,

it's on you to fix it all. And so if you're saying you're financially able to do that and willing to for your parents i got no problem with that just know that what you're getting into and it's don't couch it as well this is an investment i agree you'll get it one day that's right and on paper george is right steve i mean you this is a good investment for you you're a good son but i'm afraid it is going to turn into um because you bailed them out on this, you're going to bail them out on other stuff. The bigger issue needs to be, I'll bail, like if, okay, I'll just say this, George. Steve, if I'm you, and I was wanting to do this, I wouldn't do it unless they allowed me, that's you, to get into their finances and once and for all put some type

of protections in place so the fraud's not happening all the time he's just being careless at best if what you're describing is happening all the time so i would at least put some protections in there for you to say this has got to stop i'll buy the house it's an investment for me you'll live live rent-free until the day you die. Fine. But that's it. And on top of that, I've got to know that this isn't going to happen anymore. Because I think George is right.

I'm afraid Bank of Steve is like, I think that's a reality. And I don't think you want that, do you? No. I'd rather you help them sell this thing and help them downsize into a place with cash. Me too. And you stay out of it and teach them how to manage the money they do have coming in. That's the better scenario to help them live an independent life where they're not

reaching into your purse strings every day. This could really ruin your life. I'll just say this. Not financially, but emotionally. I've never seen something like this work out great for all parties involved. Well, he's trying. Steve's a good person. Good son. But he's trying to fix a situation he can't fix and that's what i'm

concerned about it messes his life up but hey we've spoken quick break we'll be right back this is the ramsey show hey you guys i'm not a fan of the big banks and you probably already know which ones i mean but i do like credit unions because they're nonprofit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join and

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Alongside George Campbell, I'm Ken Coleman. You've joined the Ramsey Show where we help you win with your money, win in your work, and win in your relationships. 888-825-5225. 888-825-5225 is the phone number. Let's go to Chris in San Francisco, California. Chris, how can we help in San Francisco, California. Chris, how can we help today? Hey guys, thanks for taking my call.

I'm coming into some inheritance. I've already gotten some. Right now I have about $400,000. This next week I get another about $300,000 and then there's somewhere around 500 to 700 more coming down the line. Um, yeah, so, uh, yay for me, but, um, I just, I don't really have a good plan of what to do with the money. Um, my only debt right now is a, uh, my, my primary, uh, residence, uh, about 70,000 on a pretty good loan. It's only like 2.25%. So it's really not cost us a lot. So I haven't paid that off yet, but I'm wondering one, if I should pay that off with this next round of inheritance that comes in and then, um um kind of what else to do with the money

all right who who passed away uh parents wow was this recent um uh this last year my mom yeah it's all thank you it's all essentially coming from property sales. So multiple properties that'll... Have you looked into any tax implications of the inheritance? As far as I understand from our accountant that was helping us before my mom even passed away, that we're not getting taxed on any of it, which is very surprising to me, but yeah. That's a good place to start there. And then the first order of business is take a deep breath.

This is a lot of money, and we want to manage it wisely and steward it wisely. And most people, you're not the type, but most people would go, ooh, windfall, time to go get some toys, give some money, buy this, buy that, and just pausing for six months and just storing that money in a high-yield savings account, just let it sit for a little bit before you make any decisions is wise. And then filtering it through the baby steps, your house sounds like it's next if that's your only debt remaining.

And I know it's a low interest, but I don't think we're worried about interest rates at this point of our life. You're about to have so much wealth, you're going to free up a mortgage payment that you can now use to invest. And so it's going to be a wash, but the peace of mind will be totally worth getting rid of that debt regardless of the interest rate. Yeah. And we, you know, before the money, my wife and I, we, we have a pretty good income. We're pretty, we're pretty, uh, uh, comfortable. Um, we, we, our first house, we made like almost 300,000 on. And, and, um, when we move, we, we got set up pretty, pretty comfortably with only having the, excuse me, the home loan. So, um, what's your current net worth?

Um, well, I guess with the house, um, and that somewhere a little over a million right now. And that's, again, I don't, uh, next week, um, a house closes and that's somewhere around 300,000 that comes in, maybe, maybe even like 325. Awesome. So you guys are already millionaires. So this is, you know, this is a lot of money. You're doubling your net worth overnight essentially. And so now, now we go, okay, what does the future look like as we want to build wealth and leave an inheritance to our children? And what kind of life do we want to set up for ourselves? What does retirement look like one day?

And what kind of work do we really want to do now that money is not an issue? And so there's a lot of life changes that could be happening. Are both of you working right now? Yeah. Okay. Do you guys have kids? Yeah, two. Okay, awesome. uh yeah okay do you guys have kids yeah too okay awesome so you know looking at this from a high level perspective we want to go all right we got a primary home paid for let's make sure that our

retirements are fully funded we're maxing out retirements now we're going to go the kids college let's fund that let's put a portion of this in a 529 plan then then it becomes, do we want to invest in real estate or just mutual funds? And how do we look at giving? Let's increase that. Let's increase our spending a little bit as well and enjoy some of this money. So a good way to look at it is just not getting a flat tire where you're hoarding all of it in savings, or you gave it all away, or you spent it all and didn't save any of it. And so it's a good way to just filter it through giving, saving, and spending goals. Yeah. Yeah. I don't disagree. I think having a long-term plan, sitting with somebody and now you guys actually have money. A lot of young couples, we would say, as soon as you get out of debt and you begin to move into baby step three, then 40, go, okay,

you sit down and as you begin to invest every month, what's that long-term play? You guys are there. So this is So let's get this money working for you, like George said. And man, how exciting. What a blessing this is for you. I mean, you guys should be very, very wealthy by the time you're 60. Very. I hope so. How old are you now? 44. Okay. I thought, you know what? I'll be honest with you. I thought you were a little younger

than that. He sounds like in the early 20s, mid-20s. Yeah, he's about your age. Yeah, I'm a little older. I'm being generous to Ken. Yeah, you're being very kind. But Chris, you're still going to be very wealthy, you know what I mean, by investing this and getting this working for you now. So just leapfrogs any goals you had and probably time to reassess and get a team of experts

on your side. If you don't already have a good financial advisor, jump on ramsay solutions.com. Same for a tax pro. You mentioned an accountant. If you like working with them, that's great. An estate attorney would be wise at this point. Maybe a real estate expert if you want to get into real estate. And then make sure that you have the right coverage now because you've a bigger target on your back if something were to happen. So I would reassess all of your insurance coverage. You definitely need an umbrella insurance if you don't already have that. And our friends at Zander can help out with all of that to make sure that you are maxed to the gills on your home insurance,

your auto insurance. I would get all of the liability coverage way up. Great call. I love that. I would call our friends at Zander. I know Jeff personally, guy's been around forever, friend of Dave's. They'll take very good care of you. That's a great call. I love that. I would call our friends at Zander. I know Jeff personally, the guy's been around forever, a friend of Dave's. They'll take very good care of you. That's why we recommend them. That's very smart. Yeah. As you gather and build wealth, you also need to protect the wealth that you're building. And that's where all of the different insurance products come into play. The right ones, not the crappy ones. And that's where our friends at Zander will steer you correctly. Love that. All right. Let's go to St. Paul, Minneapolis area. McKenna is there. McKenna, how can we help? Hi, thank you for taking my call. Sure. What's up? So my husband and I have completed Baby Step 3 last fall. We've been

kind of cash flowing to weddings we've been going to since then and investing in retirement. And at the end of this month, we're going to get ready to start thinking about our next home. We have a mortgage on a town home currently. So my question would be, at the end of this month, we're going to start shelling out some money into a savings account. We just don't really know if that's like a money market account, a high yield, or if that is investing in the market. If we're not planning on moving for another five years, if that's enough time to like ride in the market if we're not planning on moving for another five years, if that's enough time to ride out the market. Yeah, five years would be the minimum for me to be investing in the market versus a shorter term goal where you have your money parked in a high

yield savings account because you increase your chances of making money versus losing it when you start to extend the timeframes out. The bigger question is why not just pay extra on your mortgage and then sell the property, roll all the equity over to the next house? That's sort of a foresight. That was the other thing that we were thinking of. Yeah, what's the town home worth? We looked at the amortization schedule,

and it was, so it's about worth probably $265,000 to $270,000. We have $239,000 remaining on it, and according to an amortization, it would be about seven years to pay it off. Okay. Well, I'll tell you what my wife and I did. We got a townhome at the time it was $300,000. The loan was, I think, $165,000. And we just aggressively attacked that and we got it paid off and rolled 100% of the equity into our next home. And we just kept doing that. And so I'd encourage you to do the same, to create a forced savings plan, because when you don't, here's what will happen. You'll call back and say, hey, we're thinking about keeping this

townhome as a rental and taking on an even bigger mortgage for the next home with very little down. That's the temptation that happens when you don't just force the savings plan into the mortgage. So that's the way I would do it. I feel like you've taken that call before because you went into a head voice there. Oh, wow. I didn't realize that. You did an imperson you've taken that call before because you went into a head voice there. Oh, wow. I didn't realize that. You did an impersonation of what that call might be. Yeah. You're a little whiny, a little whiny. They love the idea of keeping it as the rental. That's always the move, but I'm telling you. You had a little disdain in that. I just think there's a time and place for it. I think you're right, by the way.

Taking on two mortgages. I think you're right. I just like how you went there. I think you've had that call one too many times. It gives you a little indigestion. It lives rent-free in my head. You don't like it. I want to evict it. Do you cover that in your book, Breaking Free from Brooke? I do, actually.

Thank you. Get it wherever books are sold. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you,

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These are different than federal student loans. And Y-ReFi refinances those defaulted private student loans and builds a custom loan based on your ability to pay. So, if you want to kick your private student loan debt out of your life by going to yrefy.com slash Ramsey, that's a good idea. That's the letter Y-R-E-F-Y dot com slash Ramsey. It may not be available in all states. Today's question comes from Hayden in Washington, D.C. When purchasing term life policy, the monthly premiums are affordable. However, while still paying off debt with gazelle-like

intensity, it seems that those premiums should be used to get out of debt faster. Any advice on, quote, adding a monthly cost in the form of a premium while also trying to get out of debt quickly? Yes, lots of advice here. Namely, this is not an added cost. This is insurance. And this protects you as you get out of debt. It protects you as you build wealth. So the same would go for your health insurance. We would never tell someone to forego health insurance and auto insurance and homeowner's insurance to get out of debt faster. These are prerequisites to life as an adult. You need a will, you need term life, you need auto, you need home, you need health. All of

these things are requirements. And therefore, here's what you do. You get the term life policy through Zander. Let's say it's $240 per year. You can set up a sinking fund line item in your budget of $20 per month that gets added in there so that by month 12, you have $240 saved, ready to pay that yearly premium if that's how you pay. That's how I do it for my family. And that's how I would recommend you do this as well. And I don't see insurance. I used to be very negative about insurance, Ken, when I was younger and go, oh my gosh, I got to pay the insurance premium. Now, when I see that life insurance premium come through in particular, I just go, thank God. Thank God that my wife is going to be okay. Because you got two special ladies in your life. Yes. And that's peace of

mind. I remember the same thing. I remember every time I paid it or every time I would, you know, if I got a better rate, I was just, it wasn't about the money. It was about, I know that if something happens to me, Stacey and the kiddos are going to be provided for. And that's what this is all about. Yeah. And if you want proof of how important this is, go listen to some of the Ramsey Show calls where a spouse passes away without life insurance. Now they're really in alerts trying to pay off debt, losing that income. And so that's the goal of term life, to replace your income if something should happen to you for the people that you love. You want 10 to 12 times your income in that policy. 15 or 20-year term policy should do it because if you follow the Ramsey plan, you'll be self-insured by then. Paid for house, you've been

investing for 20 years, your family's going to be okay at that point. But in the meantime, you need to transfer that risk to the insurance company and Zander is the folks we trust for all of those. So go to Zander.com and get that done and start your EveryDollar budget and add it as a line item and thank me later. I agree. The EveryDollar budget right there will help you see, oh, all right, I can move money from somewhere else, but that is a non-negotiable. By the way, you can get EveryDollar in the App Store or Google Play or the link in our show notes. Clifton is up in Raleigh, North Carolina. Clifton, how can we help? Hey, guys.

First, thanks for taking my call. Sure. Been listening to you guys for about a year now, and me and my wife are completely on board with this. We paid off about $230,000 in debt so far. Wow. Congratulations. That is no joke.

How long has it taken to pay off $230,000? 18 months. Wow. Congratulations. That is no joke. How long has it taken to pay off $230,000? 18 months. Wow. What? Did you find gold? Did you strike oil? No, no, no. My uncle retired from the family-owned business and passed ownership to me. It's a business that's been in business since 1965, and we do really well. And I've managed, just because I'm younger and can work harder, I've managed to triple the revenue from the last few years that he was getting in. Wow. Congratulations.

Yeah, it's going really well. And my wife's a DNP, so she makes really good money, too. Oh, wow. And we move fairly frugally. Yeah, you guys are just crushing it on all fronts. Right. But that does not get rid of the anxiety and stress I have with the debt that I have left, which is the reason for my call. We built a house two years ago. I'm not really concerned about that. We sold our old house and built this one on a property we bought. The business, though, as soon as I took over the business, I reformed as an LLC, got the S election so that I'm not taxed so heavily, and I paid myself a salary from that business, which, of course, is taxed as personal income.

There was a loan that my uncle made to me, basically gave me the business, but I had to buy the complete inventory. And he was very, very nice to me and gave me that on a seven year loan at two and a half percent interest. Um, and, and, uh, I've paid that down to about 240,000 is what I have left out on it and five years left to pay on it. So this is my question, though. I'm paying myself a salary, so I get that every week. The rest of the money, because we're taxed as an S, is being kept in the business as retained earnings.

Yep. And it's pretty significant that the business, I think, retained earnings this year alone was close to 200 in retained earnings. Awesome. And this is the question I'm concerned about, just taking all of that money and paying the debt at once, because then I'm kind of missing that safety that a business needs for a few months of operating expenses that things before. I'm kind of paranoid, right? Because I've had the business for two years, I'm concerned that at any moment work could dry up

and I owe all this money, right? Well, you got five years. Do you have any other debt? No, the other debt I told you I pay for, we cut up our credit cards as soon as we started listening to you. We cut up our credit cards. We have no car notes. The only thing we have is the mortgage and the business debt. Okay. All right, so Clifton, a question I have for you. So what are your quarters? Are you on a traditional first quarter, second quarter? When is your first quarter done?

As far as like for tax purposes? No, just in your business, like with your books, like your profits. Business starts January 1st each year. So of that retained earnings, it's currently $240-some thousand. How often do you put money into that? Is it every month? I put all of the business money into that except for what I pay myself. I know, but I'm saying do you do that on a monthly basis, a quarterly, or annually?

No, no. Well, I guess you could say it's done daily. I'm not understanding the question, but one product, they go to a savings account for retained earnings after the bills are paid each month. Okay. I was asking it one way. I've confused you. Let me come at this. What I would do if I were you, George, push back on this, but you've got $240,000 roughly in retained earnings. You don't want to empty it just to pay off the debt at once. And I agree with George.

You've got five years, but I think where I was trying to go with this is, what if you right now, starting today, the $240,000 or whatever it is you've got in retained earnings, what if every month or every day or every week as you're putting those in i've from this point forward i would put it all towards uh the debt so in other words and if or or let me say this if if the amount like what is a year's worth of operating expenses for you total expenses what's a year's worth probably 500 000 okay so... That's cost of goods sold and everything. Okay. My point is you got a good chunk. Leave the big chunk in, but now instead of adding to the chunk, George, I'm saying he should start... Now the retained earnings don't go to the account,

they go straight to the debt. I like that. What's your household income that you're taking home? I pay myself... Well, between me and my wife, it's right at $200,000. Okay. So based on the $200,000 and you paying off $230,000 in 18 months, is there a similar trajectory? Could you pay off the $240,000 in less than 18 months? I think so. Well, okay. My wife has a very small part of the debt we've paid off already with student loans from when she went back to school to get her doctorate. And I think I have $21,000 left to pay on that, but it'll be paid within 30 to 60 days. Yeah, but that's personal.

The question is, on this business debt. That's my question. There's a difference here between personal expenses. I can begin taking the margin that we have in our personal budget and applying it to the debt I own the business to. Yeah, exactly. Plus, like Ken's saying, with your future profits coming in, instead of adding to the giant pile you have, let's also add that to your debt.

For instance, George, if he could put $20,000 a month towards the equipment line. Oh, yeah. That's one year. And speed this thing up. He pays it off in a year. It's done. That's the idea. Just put all of your debts in the debt snowball. It's all tied to your name.

So there is no business debt versus personal debt. You're just going to snowball this thing and be done in a year, year and a half. Good call. Good hour, George Camel. This is the Ramsey Show. This is the Ramsey Show where we help you win in your life, win with your money, win in your profession, and win with your relationships. Alongside the snappy-attired and also witty-brained George Campbell. You're too kind. I'm Ken Coleman. I had to give you two compliments. All I keep thinking of is you used the word magnanimous earlier, and I can't stop thinking about it.

Such a great word. It's a fun word. We should have a word of the hour. You would love that. Maybe we'll kick that around in a program meeting. Probably we'll educate some viewers. Yeah, we'll do that. But nonetheless, we're here together for you.

I'm Ken Coleman. He is George Campbell. George will coach you up on the money, what to do with it. I'm going to coach you up how to make more money. How about that? Make more money, keep more money. Those would be our names if we didn't have our name. That'll help you through the baby steps. I think it will. So let's get started, shall we, George? Seattle, Washington is

where we go. Michaela is there. Michaela, how can George and I help today? It seems kind of silly, and I'll try to keep this short, but I'm a pretty long-winded talker. I know that. I am too. My ex and I, I'm 28. We got married when I was 24. You know, we did all the right things. We got married. We bought a house. We got the toys to go along with it. We had a daughter and he's really struggled with alcoholism. And

because of her safety, I ultimately decided to leave. Um, he does not pay child support in our divorce. I said, you know, 200 bucks a month, I'll take care of it. You know, at that point I had been doing it by myself for so long that I was like, you know, it really doesn't matter. My main thought at that time was I tried to give him, I think, more grace than he probably should. I wanted him to be able to get back on his feet. He was living with his mom and, you know, the truck that we had bought was $30,000. We got a loan, put five down, he owed 25 or we owed 25. And I just got a statement from them, and this has been a couple of years now, that there is still $25,000 left. And so what happens is he doesn't make any payments.

They threaten to take it. He makes a big payment, you know, to give him off his back. And I've talked to the lender and said, you know, what can I do? And they're basically saying nothing unless he refinances, which he has no interest in doing. So between the truck getting behind and then like he doesn't pay child support, I think he's paid it once. Last December, he paid me the $200. Who told him it was optional? London. Well, so we don't have it enforced. I haven't gone through the child support division. We just put it on paper in our divorce, but I can make the

call today to do it. The courts actually said his child support would be about $800, but again... Yeah, I was going to say it sounds low. I was just going to focus on keep the truck payment current and we'll kind of go from there because the truck is in your name as well yeah and so i'm just kind of wondering like if there's anything i can do to kind of get off that and if i should call and get the child support just taking out my fear is whenever i've got this up to him he kind of withdraws and stops taking our daughter. And I just, I know it's not my responsibility to keep their relationship good, but I

do feel, you know, an obligation because she's so young to at least buy some time for her to make the choice on how their relationship progresses. She's two. Yeah. Is he stable? Is he stable now, at least from an employment and living on his own, or is he still with mama?

He's still with mom, and he's actually never taken me off of the joint account we had. So I don't use it, but I can see it. I imagine there's some cash coming through that I don't see because I've never seen a payment to his mom. I've never seen any sort of large withdrawal from the account. I mean, it's literally all, I'm sorry, it's alcohol. It's $30 at gas stations here and there, the occasional gas stop. Does he have a job? $100 at Walmart.

Yeah, yeah, he has a job. And from what I can see, he gets about $800 a week through that job. What is his job? He doesn't help. I think he's working construction now, doing concrete. And he just, I mean, he doesn't do daycare. He sees her on Monday and Wednesdays for a couple hours, and then he sees her, he gets her for an overnight on Friday. And if he were to be paying you, if he were to be, sorry to interrupt, but if he were to pay you $200 a month, would it make that much difference to you?

Well, that's why I'm kind of like torn because I'm working through the baby steps on my own to just try to get ahead. I've got two credit cards, but I mean, my debt's less than $5,000. My car, I paid off when we sold our house. Like, I'm doing okay. And that's why I'm kind of like, is it even worth ruffling the feathers? But at the same time, I'm like, it's been, you know, a year and a half, and you haven't done anything, and you're flaking on taking her all the time. So if you're not going to at least feel it.

Mikayla, you're the sweetest person I've ever talked to. You have spent your whole life trying to avoid feathers getting ruffled. You're very kind. At some point, you can't let people walk all over you like this. What's that? Say that part again. He's a good friend to his friends. He's a good, you know, but he's just not a good partner, and he's not been a great dad up until... You can be a great drinking buddy and be a terrible husband. Yes. Well, I would say this. Yeah, and that's kind of... If you were my sister,

and that's how I'm going to react to this, if you were my sister, I would be saying, I would be putting up strong boundary because my concern is the alcoholism and the time. Like, my number one concern is not the $200.

I'll get to that in a second. My number one concern, if you were my sister, would be that's my niece, that's your daughter, and I don't like her with an alcoholic father. I don't care how nice and sweet he is and how many stuffed animals he buys. There needs to be a boundary there. And he needs to hit rock bottom.

And as long as he's staying with mom and he gets to see your daughter, he's not hitting rock bottom. So I would be dealing with that. If it were just the $200, I would say forget it because it's not worth the fight. And I'm not sure it is. And I'm still on that note of it's $2,400 a year. Sure. It'd be great for you to get it to George's point. He owes it. But George, I'm more concerned about the alcoholism, the custody, and I might use the $200. I might go to the court and go, I need some help with this. And you let him know. Give him some fair warning. Hey, listen. Oh yeah, I'm very transparent with him. I sent him a long message last week. I said, here's kind of where I'm at. I need you to think about this because we can't continue what we're doing. Did he respond? I do have solace. Yeah, he just kind of

says, okay, you know, I'll see what I can do, but I know nothing will come. I have comfort when he, because he's living with his mom and I know her mom and we have an okay relationship, but my daughter's at least safe while she's there because they're there, you know? So I'm like, I have, part of me is like, don't move out of your house. Well, then I wouldn't mess around. I mean, George, what do you think? I just feel like, did you go through the courts for this? Was there a decree?

Yes. So everything was actually finalized this month on the 18th. So why did the judge not finalize and say, hey, he's got to refinance, sell, or pay this car off and force it as part of the deal? So they did. So on paper, it does say that he's responsible for that because, I mean, I gave him everything He's responsible for what? For the truck loan, but the lender is saying, well, you signed the loan, so you're not off

the hook. Well, they need to force, the decree would then force a refinance in order to get your name off of it. And so you need to go, it's not going to be fun. You got to go back to the courts and say, here's everything on paper, which, by the way, is now the law of what he has to do. And he's not doing it. And as long as you keep letting him not do it, he's going to keep not doing it. And so I would not have as much grace as you. I'm going to fight this on behalf of my own family and my own financial future. If I were ever a governor of a

state, one of the first things I'd do is a deadbeat dad policy. And I'd put them to hard work, hard labor until they shaped up. This is the Ramsey Show. Rachel, do you ever get these sketchy text messages that are like, hey, you need to update your address and verify so we can get you the package you didn't order? Yes, I have, George. Sketchy and never trust them. And that's why we recommend Delete.me. They help with that. Yeah, they do. Delete.me actually goes in and removes your information from data broker websites, and it is an incredible service that everyone needs. And there's a lot of shady companies out there that solely exist to sell your personal data

to bad guys. And that means your info, like your email address, your home address, your kids' names, your name, everything is just out there for scammers and spammers to find. That's right. And then once they remove your information, then they're going to send you a detailed report telling you where they found your information, when they removed it, how many hours they've saved you. I mean, it is incredible. So detailed and it's beautiful. I love these reports. So far, get this, they've reviewed 27,000 listings on my behalf, removed me from 240 data broker sites,

and saved me 77 hours of time. It's incredible. Absolutely amazing. And Winston and I now get fewer texts, weird emails, spam calls, all of it. I love it. So you got to be sure to check them out. Ramsey fans get 20% off their annual plans. Just go to joindeleteeme.com slash Ramsey. That comes out to less than nine bucks a month. Super affordable. It's amazing. So again, that's joindeleteeme.com slash Ramsey. Make sure to check it out, you guys. Welcome to The Ramsey Show. I'm Ken Coleman. George Campbell is alongside. We're glad you are with us. 888-825-5225 is the phone number to jump in. Kristen is up in Billings, Montana. Kristen, how can we help?

Hi, thank you for taking my call. My husband and I have a slight disagreement. I have most of what our income is, is rental houses. And in 2023, we purchased four new houses. That puts us up to 24. And we've already paid one of them off. We still have three outstanding mortgages. And the total for all of them combined is right about a $420,000. And I have a stock portfolio that has $506,000 in it.

His idea is that we go cash it out right now and go to pay off the mortgages. I'm like, no, that's kind of my, that was my plan for retirement in case everything else went south. The way things are sitting up, we're scheduled to have all three of these other mortgages paid off by the mid of 2028. And I don't see what would be the point of cashing out all of my stock portfolio to pay them off now if we're literally going to have them paid off in the next couple of years. Well, I don't think anyone's in the wrong here. I don't think anything is on fire. I do think we might need to get to the motive and heart behind it. And then we can look at math and go, okay, what mathematically should and would happen? We pay off the mortgages, we free up those payments, which we can now

invest, right? So there's one side of it. It also reduces your risk, gives you more peace. We don't know what the next three years hold. I hope it's all sunshine and rainbows. The world is a wild place, right? We don't know what's going to happen with the tenants and all of that. And so it's going to give you a little more peace, a little less risk. On the other side, you have the stock portfolio. Is this your entire nest egg? For the most part, it's literally, that is mine aside from, I only work 26 hours a week doing home health care. And so then I also manage our 24 rentals.

But so I only have 7,000 in a 401k of my own. And then he $7,000 in a 401k of my own, and then he has $22,000 in his 401k. Okay. But other than that, that's really... Is this stock portfolio non-retirement? Just in a taxable brokerage account? And what is it invested in? It's in a combination of mutual funds,

independent stocks as well. I've had it managed by the same gentleman for the last 20, I'm 41, and he's managed it, and he gets somewhere between a 13%, 14% every year return, even when the market took a crash in 2023. Okay, so you trust this person. So I think he knows what he's doing yes okay and i just i don't know if it would be worth pulling it out to pick because we bring in on a if you average how we always have one or two tenants who is either late or misses a month but we bring in about 21 and a half thousand every on rent. So it's not like if we were to

have to worry about... There's enough to cover... And what are the total mortgage payments that you're making right now? The three of them combined, the minimums would be $3,800. We're putting $10,000 a month on the other one, on one of the three. So if you take $3,800 a month and invest it instead, you're going to be okay from $41,000 to $60,000, right? Do you see his point? I'm just trying to, I'm playing devil's advocate to show you the other side on top of the interest savings of not paying interest on these mortgages for the next three years, having them paid for. So again, I don't think there's anything wrong with following your plan and going, hey, I'm going to just, we're going to pay these off in the next three years. I think it's a great plan to have a fully paid off rental portfolio. You guys have done really well. Nothing is on

fire. Nothing's going to put you in crazy risk, but I can see his point. and I don't think it's as bad as you think. I know you want a nest egg portfolio. The rental properties are part of your nest egg. You have 24 paid-for rental properties. If you need money, you know where to get it, either from the cash flow or you can sell one if worse comes to worse. What's the total worth? Did you get that number? What is the total? All 24.

What's the value? Well, our market here has been absolutely nuts. So I have the tax valuation is $4.2 million. I don't want the tax valuation. Like if you were to sell all 24 today, a modest projection on what you could get for them. Not a fire sale, but you get market value. What is the worth of all 24 roughly? I would say it's probably closer to $5 million.

Okay. See, that's the point George is making. I was kind of waiting to go, who cares about the $22,000 over here and the $24,000 there? The $5 million is the number. And you can cash out of those at any time and invest that. I mean, that's just a whole different ballgame. So I could see both sides as well. I really can't. So is there a compromise where maybe we go, alright, once every year I'm going to cash out enough to pay off one mortgage. Split the difference.

That would be entirely doable. There we go. I think that makes him feel a little better and it does reduce your risk. It causes you guys to make a little more progress than you would have. And it causes you to slowly deplete this portfolio. And remember, you're going to free up a payment that you can now invest on your own volition as you please.

That's right. And so either way, this is a good problem to have. You guys are doing really well. No, we're not wringing our hands for you guys. You guys are in really good shape. I am the least worried about this, but I do think just some compromise would get you guys to an agreement and cause you to move forward because this is living in your head rent-free right now. It doesn't need to. No, that's good.

Thanks for the properties to manage. Yeah, absolutely. Way to go, Kristen. That's incredible. Well, thank you very much. I appreciate the help. Yeah, $5 million. At 40 years old, you could do worse.

She's right. She's talking about that area of Montana is going bananas. People wanting to get out there. You and I should have seen that craze. Should have done it. We should have went out there and bought ourselves. We would have been cowboys. You and I, could you imagine with our big cowboy hats and boots?

Living off the fat of the land? Yeah. It's always been a dream of mine. Yeah. I see one of us having a blister and the other a splinter. You know what really bothers me? You never see a cowboy with glasses on. What's going on? It's always been a dream of mine. I see one of us having a blister and the other a splinter. You know what really bothers me? You never see a cowboy with glasses on.

What's going on? You know what? You make a very good point. They all have 20-20 vision out there. I'm trying to think of the last major movie or television show that had cowboys in it where they were wearing glasses. Who said that you can't be a cool manly cowboy and have vision impairment? I'll tell you what I'm thinking. I'm thinking Jason Priestley's character. He's from 90210.

You don't even know that show. You're dating yourself. He had a character in Tombstone, and his character wore glasses, but he was a wimpy guy. There you go. This is what I'm saying. So I'm with you. I'm done with it. You know what?

Hollywood needs to cast a cowboy with some glasses is what I'm saying. So I'm with you. I'm done with it. You know what? Hollywood needs to cast a cowboy with some glasses. And I'm available. America's ready for it. You think so? Yeah. A Middle Eastern cowboy with glasses? They call me the Costco cowboy, so I'm already halfway there. Who is they?

The people. Is this a thing? Yeah. Has one person gotten in your DMs one time and called you the Costco cowboy? The amount of times people send me just Kirkland signature related content would blow your mind, Ken. Well, you've made a big deal out of it. That's my fault.

That is on me. So there it is. I love it. Oh, fantastic. Can we get to a social question? Do we have time for one? Do you have yours? I've got them ready.

I was looking for one, actually, as we were talking about you being a cowboy oh this is a great one for you go for it johnny from tiktok johnny during what point in the baby steps is it best to start a business what say you uh baby step at what during what four that's when you're debt free with an emergency fund yeah we've got an emergency fund and now we're able to, we have enough margin to do baby step four, which then tells me, all right, I've got enough margin to start something on the side. Now, the way the question was worded, it says, when is it best? Is that correct? During what point is it best? Is it best? That's ideal. Ideal is you've got the financial foundation. I'm not going to get mad at somebody if they are able to start a side hustle, for instance, with very little cash,

capital outlay, and it helps pay off debt. In other words, you know, I've talked about this. People have started trash can washing businesses, a lawn mowing business. So it's okay if it's that to help us get through the baby steps faster. But something that's like, I want to try to live on this and this is my future. I don't like you trying to do that during baby step two and three. And the more the startup costs, the more we say, hey, you need to wait until you are dead free with an emergency fund, my friend. So baby step four is when it's time to start going, okay, what could this look like? Good question though. Johnny from TikTok.

TikTok. You've got to love TikTok. They also call me Johnny TikTok. They call you that? Yeah, nickname from high school. I could combine those and call you the Costco cowboy, Johnny TikTok. This is the Ramsey Show. We'll be right back with more of those dad jokes.

Welcome back to The Ramsey Show. I'm Ken Coleman, and George Camel is joining me this hour. 888-825-5225. 888-825-5225. You know, George, before we get to the phones, I thought it might be fun to talk nerdy. You know I love talking nerdy. I mean, you talk nerdy about as well as anybody I know. Well, you know more big words than anyone I know.

So we both relate in that way. So this is a fun little segment where George nerds out on the fine print, if you will, as the former host of the fine print. Do you still do those? You don't do those. No, I miss it. Turns out, on the fine print, if you will, as the former host of the fine print, do you still do those? You don't do those. No, I miss it. We kind of switched it up when I did my YouTube channel, which is a version of the fine print

podcast. But it's the same thing. I want to break down these money concepts that can feel overwhelming, complicated. I never fully understood it, and I want to break it down quickly for the benefit of the people listening and watching. I can't wait. What is the topic today? Refinancing.

Ah. So you've heard of financing. We're talking about re. We're refinancing. Coming back to the table. Booyah. Okay. And we're going to specifically focus on refinancing a mortgage.

Oh, man. So if you bought a home and interest rates were high, you may be wondering if refinancing might save you some money now that rates have dropped a little bit. Well, it can, but it also depends. So what is this? Mortgage refinancing, very simply, it's when you replace your current mortgage with a new one. Why should you do it? Why do people do this? Well, number one, to get a lower interest rate. All right, so you got to make sure that refinancing will save you money in the long run more than it costs you. Number two, people do it to reduce the loan term and become debt-free faster. So you go from a 30-year mortgage or an adjustable rate mortgage to a fixed

rate 15-year mortgage, for example, and that can get you a lower interest rate, shorter mortgage payoff, get your house paid off sooner, double win. Another reason people do it is to get rid of PMI, private mortgage insurance, and that's a great way to pay less on that monthly payment because you're not paying the lender anymore. And it really just protects them in case you foreclose. And lastly, like I mentioned, you're switching the loan type. A lot of people have an adjustable rate mortgage and maybe they want to go to a fixed rate mortgage. That would be a good time to refinance as well to avoid those rate fluctuations. So for everyone out there, here's the questions to ask yourself. How much will my interest rate go down? How much will it save me? And what will I pay in closing

costs? And closing costs can run about two to 6% of the total amount you're borrowing, depending on your situation, where you're at, all of that. So here's the deal. Simply, only refinance if it gives you a lower interest rate and saves you more money than it costs. So an example, if you save 2,500 bucks a year refinancing, but you have 10 grand in closing costs, it will take four years to break even before you start saving money. So refinancing is only a good idea if you plan to stay put long enough to save money. So that's kind of where you got to weigh it and go, all right, you know, we do plan on staying here long enough to get the ROI on this. So it's that simple.

Here's six steps. If you're ready to do this, crunch the numbers to see if it makes sense financially. Number two, you've got to shop around for the best interest rate. Three, you've got to choose a lender. Don't forget to ask about those closing costs, the fees, the prepayment penalties. A lot of them will lure you in and go, oh, we're going to give you a great rate. But then they ding you with all these fees on the back end to make up for it. Don't fall for that one.

A little bait and switch. You love that term. I was looking for it. You helped me out. I got there faster. I'm quick to the draw. You are. Cowboy camel here.

That's it. And number four, you got to lock in the rate. Five, you'll go through the underwriting process, just like you did when you got the original mortgage. And then six, you close on the new mortgage. Good for you. So here's the deal. If you need help, you got questions with this about refinancing, do what I do.

Reach out to our Ramsey-trusted friends at Churchill Mortgage. They are experts in this. And you can go to ramseysolutions.com slash mortgage or click the link in the description if you're listening on YouTube or podcast. Quick and painless, Ken. This is why I like when you talk nerdy. I mean, we all need a little nerdy talk. Some people fell asleep at the wheel. I don't think so. In that segment. I think you laid it out beautifully. Some people were so riveted. Yeah. I loved it. I thought it was very

helpful. So there you go. And by the way, he mentioned it very briefly. I got a call back to it. This is why you want to go to George Campbell's YouTube channel. He's got all kinds of really fun and it's made for you. We break it down. You break it down. You make it fun. You make it palatable. No matter what it is, we make it palatable. That is true.

Joseph is up next in Dallas, Texas. Joseph, how can we help? Hey, how's it going? Good. How are you, sir? Good. It's just a real privilege to be on the show. It's kind of surreal, so thank you very much. I feel very honored. Appreciate it. Well, we're honored to talk to you.

What can we help with today? Well, so I just recently started a job going on six months ago. I do enjoy my job, and my bosses are great. It's a good company. I mean, I think they really do right by their patients. And the trouble I'm having is I am making less than I was expected when I started because I am on a pay-per-visit scale. So my base salary is $73,000.

But what I was initially told was on average, if I see a certain amount of patients a week, I would probably get around $85,000. But over my time working here, I haven't been seeing that, unfortunately. And it's not because it's not their fault. It's just external factors like patient cancellations and such. What business are you in? Oh, sorry, I guess I should have mentioned that. I apologize.

I'm a physical therapist. Oh, okay. And so if I understood you correctly, the anticipated number of 83,000 that you got excited about when you signed on hasn't been met because you've not seen the amount of patients that they said you would need to see in order to hit that number. Correct. And what is it that you think you should be making?

Because you led off by going, I'm not making what I should be. So what is that number? Yeah, I mean, about 85,000 is what I anticipated making. Okay. Well, but you anticipated it based on them saying, you'll make roughly this if you see this many patients. So what options do you have? Are there other physical therapy businesses that have hired foot traffic?

There certainly are. I chose this particular setting just because I would work with the neuro population and it was, um, I liked what the company was about, but for me as well, I'm also just, I have a lot of student loan debt and this, you know, I'm just trying to make sure I make that right decision. So, um, well, the right decision right now at this point in your career, how old are you? I'm 27. Okay.

At this point in your career with a lot of student loan debt, and do you have other debt outside of student loans? I do have a car payment, but that would be it. Okay. So what's your total amount of debt? It's $247,000. Yay. yay. Okay, the answer is really easy.

We're not staying at a place because we really like it. We need to make money, and you need to make as much money as you possibly can. Now, this is doable. George, you've coached a lot of people to do this, but if your call is – your question was, should I stay? Is that what I'm getting at? Yes, just because I've only been – I mean, I've been there a short time. Doesn't matter. Doesn't matter. Can you get a job right now where you can get a $15,000, $20,000 bump?

You think that's even possible? Oh, that's definitely possible. My man, we get the best-paying job possible in order to attack this debt with everything you have. And there's more than one great company in America, and so you will find it. But you need to be making six figures in order to pay this off in the foreseeable future, Joseph. And that might mean you get that new job and you take on a bunch of side hustles and work overtime and, and, and for the next three to four years in order to knock this out. What's the car loan? What's left on it?

$7,000. Okay. So the majority of it was PT school? Yes. Yes. Just PT school. Do you have any savings? Yeah.

I do have some savings and I did have a sign on both. So I'm trying just not to use that. How much savings do you have? The majority of the savings. $4,000. George, tell him what he does. Well, you got a bunch of loans out there, right? Probably 15 to 20 different student loans. You're going to attack that smallest one and free up a little payment. What that's going to do is

give you a little light at the end of this tunnel that you're actually going to get out of this thing. So the longer you hang on to all of the savings, it's going to give you a little light at the end of this tunnel that you're actually going to get out of this thing. So the longer you hang on to all of the savings, it's going to give you a false sense of relief because, my friend, there's an avalanche on the other side, and we have to start attacking that thing one bite at a time. That's the baby steps. So hang on. I'm going to send you a copy of my book, Breaking Free from Broke,

to give you the step-by-step plan, give you the motivation to climb out of this thing. I'm also going to send you Ken's book. Which one should we send him, Ken? What's going to be most helpful to him? I think the proximity principle, because he needs to be leveraging relationships as much as he can to move up the ladder as quickly as he can to be able to take that income and do what you just told him to do. So hang on, we'll give you the proximity principle as well. All right, quick break. George has to gargle with saltwater, and then I'll check on him, make sure he's okay, and we'll be back.

This is The Ramsey Show. Welcome back to The Ramsey Show. Alongside George Camel, I'm Ken Coleman. 888-825-5225 is the phone number to jump in. Oh, boy, George, I was looking the other day at the calendar, and I thought I got to get with my tax pro. You were dreading it. Not dreading it, but just the very word of tax gives me indigestion.

A little anxiety. It's what I like to call a Tums moment. Meanwhile, I just scanned some tax files for my upcoming appointment at the printer, and I was stoked. Yeah, Stacy is gathering all of our documents. I am Stacey in this situation. We will meet with our tax pro and anyway, nonetheless, hey, it's coming around the corner and one of the best things you can do is to have a good tax pro in your corner. And again, I'm telling you, I'm going to say hi to David.

He's local. He listens. So he'll hear this two days from now and I'll get an email from him. David, Stacey and I love you. We appreciate you, sir. He takes good care of us. He's our tax pro. I'm not kidding around. I sleep very, very well at night knowing David is on the job. And so they help you.

He helps us. I mean, he helps us think about so many different angles. Deductions. Life changes. Oh, he's the deduction king uh he's amazing go to ramsey solutions.com slash tax pro to find a cpa and enrolled agents that have been vetted by our team at ramsey it's ramsey solutions.com slash tax pro do you do your own uh no i've got a tax pro because again it's one of the it's like getting you don't do a shout out for your tax pro

well i love my tax pro more than you love your tax pro. Here's the thing. I don't want other people to find them, and now they're booked up. I just did a first name only. I still don't. I got trust issues. They have a very unique name. All right.

Can't give it away. Whoever George's tax pro is, I tried. I tried. He's not willing to give you some love. Once you got a good one, you don't give it up. But you can find a trusted one in your area at Ramseyaysolutions.com slash tax pro. And here's the deal. Our tax pros aren't going to be like, have you ever thought about getting a G-Wagon to write it off as a business? No, no, they're not going to give you trash tax advice for some write-off.

Do you think I would look good driving a G-Wagon? Would you look good? Yeah. Who doesn't look good? You know? Well, I don't know. I mean, some people shouldn't probably drive a G-Wagon. Yeah. I did see a pink Cybertruck the other day. And I thought, wow, it could get uglier. I didn't think... I have not seen those. That had to be like some kind of Mary Kay situation.

I don't know what was happening with that pink Cybertruck. It's a dark time. You won't shout out your tax pro, but you'll give Mary Kay some love. That wasn't love. I'll tell you that much. You know me. Oh, we're having fun, folks. What are you waiting on?

Levi's up in Las Vegas. Viva Las Vegas. Levi, how can we help? Hey, Ken. Hey, George. Thanks so much for taking my call. Sure. So I'm getting ready for about $100,000 in expenses at the same time that I'm going to be losing my income.

My wife and I are getting ready for graduate school. We're both going to be starting grad school this year. I'm going to get a doctorate in physical therapy, and she'll be getting her master's in dietetics administration. And, I mean, eventually we'd love to start a business together where we can kind of help people improve their health through diet and exercise. So we've known this has been coming for a long time. We've been married for four years, and we've been preparing since the moment we knew that we wanted to start this career.

And so if I'm understanding, let me jump in real quick just for us and then the folks following along at home. So that's with you both going full-time to grad school, that's why we're losing the $100,000 income. Yeah. So, well, I also, my current job, I take care of a kid with autism and he graduates in May. So it just happens to work out really nice that I don't, there's no more need for my job. So I lose my job. And then the next two weeks later I start school. But what was your plan to cover living expenses while you both were in grad school? So we've been saving a lot of money. We've been blessed in so many different ways.

So we have about $70,000 in a high-yield savings account. We're closing another investment account that's got about $30,000 in it. And we're going to transfer that money into our high-yield savings account. And then we've got about $20,000 in another investment account and about $20,000 in cash between our savings and checking accounts. Okay, so you have $140,000 that you will have liquid. You need to cover, you use $100,000 to cover grad school for both of you? Is that what you were saying? So my grad school will cost $90,000 and hers will cost $20,000, but her family has graciously offered to pay for her tuition. Wow. Okay. Good for her.

So you'll have $40,000 left over after grad school is covered and you got a baby on the way. So let's keep a big portion of that saved up as an emergency fund. Do you guys have any debt? Yeah. No, we have zero debt. We own a house and we've got three bedrooms and we rent out two of the bedrooms to friends and they pay $550 a month. And so really after taking all our living expenses and our rental income, we only have to pay about $12,000 a year for our housing expenses. Wow. Okay, and you guys are living pretty frugally, it sounds like. That's good. So we've got most of this figured out. What's the question? So my big question is we want to be good parents.

We didn't think that we'd be able to have a child, and now the due date is the week after my wife is supposed to start graduate school. And so I'm worried that the money that we do have won't quite stretch far enough through grad school. And I'm also worried about how can we buy time with our child. We don't necessarily want to do daycare or anything like that. How long is your program? Three years. So you won, how long is your program? We're not three years. So you won't be working for three years. So I'll be out of a job for three years and my wife will

not be able to work for the first year. Her program is accelerated, but we're also, um, how is that? You don't have the money. You do not have the money right now to make it you know that right for three years so i'll tell you what i would do i'm gonna throw this at george because he's crunching the numbers over here um if it were me i would um i would have your your wife continue to work and have her pause grad school have her pause grad school, have her pause grad school, her two-year program. Well, I didn't ask. Hers is a lot less money, and we know that. How long is it?

It's one year. I would push hers and knock yours out so that you guys can, again, have some income coming in. I know she's going to have a baby, but—and what about health insurance? Yeah. Health insurance will be covered through my graduate school. Okay. And Medicaid for me not having a job. George, I just think we're trying to do a lot at once here. I almost want to push his back another year.

Yeah. What's the game plan? If you're not working for three years, she's going to keep working. She's going to take a maternity leave for a few months i imagine and then is she planning going back to work because you said you want to also have time with the baby if she's not in grad school if we do the plan that i'm suggesting where we wait for her to go to grad school after you're finished and she but she has the baby what kind of income does she bring in so if she doesn't go to grad school after you're finished, but she has the baby, what kind of income does she bring in? So if she doesn't go to grad school right now, she's making well under $20,000.

This year she made less than $10,000 this year. That's not even real money. That's like a part-time babysitting job. Yeah, she's a full-time student and president of lots of clubs at our university. But if she gets her master's degree, then could potentially be earning yeah but you guys are gonna starve you called us and asked us what we thought we don't think you got enough money to do this so i would delay either her and she goes and gets a 40 50 000 job at minimum to be able to to make up the difference and that means somebody's watching the baby while she's working.

I mean, you guys got to figure this out. She can't be a full-time mom at home with the baby and full-time at work pursuing this dream. You may have to push your grad degree off two years. You go get a good job. Push it off a couple years. Have baby. I would have a come-to-Jesus-reassess conversation with your wife tonight

and go, hey, listen, we both had these dreams. They'll happen one day. Right now we've got to delay one of these dreams so that we can eat and provide a home for this baby. I'm with you, George. And Levi, I'm talking like I'm old enough to be your dad, so here you go. Plenty old enough. Thank you, George.

I would, the baby is the number one dream right now. Yeah. And let's, you've done very well to put that money away. And to stay debt free. You are not hurting your professional, listen to me Levi, you are not hurting your professional chances and your potential by delaying

this a year or two. Okay. Let's get the wife out of school, part-time job or full-time mama, and you're working full-time. We'll keep stacking cash. Please take your time on this. Don't rush this.

George, thoughts on that final word? No, I'm with Papa Ken over here. Thank you. This is the best thing for you and your family and the careers. If they need to take a back seat for now, I'm okay with that. Yeah. That education will still be there.

Trust me. All right, George. Good hour. Good stuff. Appreciate all of you for listening. Thanks to our crew for keeping us on the air. This is The Ramsey Show. Welcome to The Ramsey Show America, where we help you win in your life,

specifically winning with your money, winning in your profession, and winning with your relationships. I'm Ken Coleman. George Campbell is alongside. The phone number for you to jump in and get coached is 888-825-5225. 888-825-5225. All right, let's go to Bridget in Salt Lake City, Utah. Bridget, how can we help?

Hi, I'm calling because I am really worried for my brother and for my parents. My brother is in his late 30s. He has a wife and several kids. They're living in my parents' basement, and they have been for a year now since he lost his last job. Before that, he was out of work for a while, and then he lost another job. And the cycle is that he gets really, really sick, like bedridden, can't move. Hold on, I'm sorry.

What happens? Yeah. So I think that he wins the wrong career, and he gets anxious and overwhelmed, and then he gets really sick. He gets bedridden, he can't move, he can't do anything, and he loses his job. Okay.

But he thinks it's because of things like mold and COVID, which is hard to prove and hard to disprove. My parents paid a lot of money for some treatment, and that seemed to fix it for a while, but then got another job, lost another job. What was he being treated for? It was kind of a quack thing, like these intravenous vitamins. No, no, I'm saying, were they treating him for like OCD, some type of anxiety disorder? No, he's never gotten mental health treatment at all. He and his wife don't believe in it. Yeah, well, I can just tell you as a complete, you know, novice here, that's what's going on. He's got that, it sounds like some type of debilitating depression or some kind of mix of anxiety, the way that this is being described.

I agree 100%. But here's the problem. If he doesn't believe in it, then he's not going to allow himself to get treatment. And if he doesn't get treatment, this is a really, really destructive cycle, which leads us right back to where we started. So how can we help you? So the only leverage is my parents letting him live in their basement. He's been there for a year. He says that he is looking for work, but he will only accept work in kind of a business field that he's been trying before and failed at.

And he says that he will only accept work in a very specific state, which is humid and has a lot of mold, even though he says that mold is the problem that's causing his health issues. So it doesn't make sense. And he hasn't been able to find any jobs for a year now with this very, very narrow job search. And he has another job that's more active, but doesn't pay as well. And he's doing fine at that, but it doesn't pay as well. And he hasn't moved out and nobody is talking to him about moving out. My parents are, they always tell us to be independent and strong, but on the other hand, they don't want him to get

sick and die. And it's not a good situation for them. It's really stressing them out. My brother and his kids, they're kind of destructive, and they're stringing along my parents. They're always saying, oh, there's one. I've got another opportunity. I've got another interview. I just feel like it's spiritually killing my brother to be allowed to stay there, but my parents feel like they can't just get him to move on because maybe

he'll get sick and almost die again. By the way, you've nailed it twice. What's really going on is not that he is stringing them along. They are enabling him. In other words, they are not the victims. Now, I know that it looks that way to you, but they are allowing this because they're terrified if they kick him out that he will self-destruct more than he already has and their fear is is that it would be their fault and so they are they are actually trapping themselves. They can't help him. It's too late. And this is brutal to say. I don't like saying this, but they cannot help him. He is going to have to help himself by allowing himself to get help. And his wife is on the hook for this in the sense of she can plead, but she can't. It's not her deal either. And so this is a situation where I agree with you, at least the sentiment that I'm

hearing, George, is that Bridget's going, hey, my parents need to stand up to him and push him out and just deal with it. But until they get mentally healthy enough to have the space to even truly consider it to the point of doing it, nothing's going to happen. So I think it's less about helping brother and it's about helping mom and dad. Okay. Which is going to require a tough conversation. Mom, Dad, he is using you. You are enabling him. You're not helping him. You're hurting him.

You're teaching him that he doesn't have to be responsible or deal with this by allowing him to use this as a hammock while his family suffers. There's no way they're living a high-quality life in this situation. And if his wife has given up on this, sounds like she has. She's on his team here. Is she also enabling him? I think it pushed him into this worldview. His wife is a major problem here. She won't let him even consider a mental health angle. She doesn't believe in any of that. Okay. She doesn't believe in the human brain. Very much him and the wife. Now this got worse.

So here's the deal. You're stepping in to be sweet sister. The truth is we don't have any control of the situation. Like Ken said, you can influence your parents to put a boundary there. But even then, you can't force the parents to do anything other than show them what's really happening and show them a better way out. But I know how frustrating it is because you are sitting here going, am I the crazy one? Why can't anyone take this seriously? They're all just allowing this to happen. And that's a frustrating place to be. So the part I would caution you against is putting your whole life into this to where you become so resentful towards all of these people

that it destroys the relationships. You need a boundary on it. Are you familiar with Dr. Henry Cloud's book, Boundaries? Yeah, I heard about it from my mom, actually. You could push me over with a feather right now, honestly. No. That tells me. We all are good, sane people. It's just that this situation is so tricky. They're terrified.

Can I just say this, Bridget? I want to make sure you hear this from me. I hope this helps you. I understand what your mom and dad are thinking and feeling. Without going into any kind of my personal story, I have a lot of empathy and understanding towards your mom and dad. They're terrified. They're terrified that if they kick him out of the nest, they will be the reasons that he spirals down. Yes. And by the way, that's not true. However, you can make a pretty good case for that, right? If you say, hey, you're out, and then he can't, and he just doesn't take care of himself,

then that's something they're going to have to learn how to live with, and I don't know if they're there yet. In other words, they're going to have to choose two pains. The pain of fighting this false regret, like they did what was right, but it still led to him destroying himself quicker than he would. By the way, he's going to destroy himself whether he's in their basement or not, unless he changes. That's the harsh reality. Do you agree with that? I too. I'm so sorry. But this is the finality that we've got to get to. As George said, for you, you've got to get to the point and go, I can't stop my brother from destroying himself.

I can pray for him. I can get down on my knees and pray my guts out. And I believe God hears those prayers. Outside of that, I think you've got to talk to mom and dad and go, which is the bigger pain for you? Because he's destroying their life too. So George, this is a really tough one. Choosing reality. This is it. Yeah. Tough stuff. We'll be right back. This is The Ramsey Show. Welcome back to The Ramsey Show.

I'm Ken Coleman. George Campbell is joining me. 888-825-5225. George, you like the Ramsey Network app. You like to go over there and get all the best stuff. Mostly the questions that come in from the users. Yeah, we got one from Eddie here. 35 years of age, and he's been a firefighter since he was 20. He says, I have about 10 years until I can retire.

Three years ago, I started a side business that has done well. I recently signed a $30 million contract. Eddie, you think it's done well? He snuck that up on me, George, as I was reading it. He signed a $30 million contract for this year and will result in $20 million in profit. That's eye-popping. He earns about $50,000 a year as a firefighter. I have no loans on my business or any expenses.

My only debts are $10,000 on my truck and a $90,000 mortgage. My question is, should I stay in my current job as a firefighter until I qualify for retirement while working on my business that is expected to make $20 million? What should I do with all the money I'll be getting? Sorry, folks. Wow. I don't know how they made it through there. Okay, I'm going to make $20 million this year. I make $50,000 as a fireman.

Should I stay as a fireman, risk my life and limb, slide down the pole, get the skin burns, the whole nine yards. Yeah, for another decade of that? To get the retirement? While working on my business. What is there to work on? I guess he has to fulfill the contract. He better do something if he's going to collect $20 million.

I got to know. Is this a lump sum immediately? He could retire, I guess, after this year if he banks $20 million. George, what would he do with his that money well number one is in comparison to you pay off your hundred thousand dollars of consumer debt mortgage debt that leaves uh let's see here ken 19 million nine hundred thousand i mean to retire on you don't need to qualify for retirement you just created it with this amazing side business sometimes i wonder for being punkeded. I don't know. I couldn't make this question up. I'll tell you that much. Yeah,

that's what I mean. He just starts it and he signs a $30 million contract. Show me that business, folks. Yeah, that is wild. Working on people's doors. Hey, how you doing? I'd like to talk to you about what I do. If you still want to do it, you can be a volunteer firefighter on the weekends if you really love it and serve your community. I like that. I would focus on the side business and you've got options, man. You can get into investing in real estate, mutual funds, give, be a philanthropist. I mean, that's serious money. That is some world-changing money. Good for you. Way to go, Eddie. Especially if he's single. He's now a very eligible

bachelor. You see that a very eligible bachelor. See that in the dating profile. We could call him Fast Eddie because that's what he has done. Fast and furious with that wealth building. Wow. James is up in Asheville, North Carolina. James, how can we help? Hey, no way.

Way. I have a $220,000 left on my house, but it's a 2.3% interest rate. Sorry, I'm a little nervous. No, you're doing great, James. My wife moved out at the beginning of the month. She's in an apartment that she can't really afford. She's going back to school. She just got a job. But I want to stay in the house. So we don't want to sell the house. We want to keep the kids here. Um, but do I, do I refinance the house and have a higher interest rate, um, in order to just

pay her out and move on or keep it at the 2.3 we wanted to just sell it eventually and then both get the equity down the road but it sounds like i mean first of all i'm so sorry that your wife has just moved out like you just breezed right by is this in separation phase as are you guys done and this is over man it, it's separation phase right now. Well, then let's slow down in all honesty. Do you want to, if you could fix this marriage, would you? If it were up to you to just snap your fingers and fix it, would you do it? Yeah, if I could do that, yeah.

I feel like I'd take a miracle. Okay, James, but listen, I believe in miracles. But the reason i asked the question was not to discuss miracles the reason i asked the question is let's walk through this thing first let the i appreciate the question but now is not the right time for that question i want george to address it as to what he thinks the smart financial move is if in fact you guys do get divorced. I want George to address that.

But, George, you would agree right now the last thing he needs to be thinking about right now, you've got kids involved in this, your heart's broken, you're probably confused out of all get out, you're probably scared. All of those things would be very normal. And trying to figure out what we're going to do on this is the last thing you need to be thinking about. Okay. Do you understand what I'm saying? Yeah, I guess. Yeah, there's a lot going on.

How old are the kids? Six and three. Yeah, there will be a time to handle this. George, am I right? I don't know what the timeline is for this how long things have been going on you know there's a lot of context we don't have here but are you foreseeing a future where by the end of this year there's a finalized divorce and we need to make a move on this house yes okay so we can play out the scenario just for the benefit of the call and go, here, what are the options? If the decree says, hey, you need to get her off the mortgage, you're going to need to do a refinance and you'll need to afford it on your own.

Is that going to be feasible for you? Even with, you know, let's say the rate is 6% by the time you refinance at the end of the year. Can you handle that payment? If I refinance it at 6% or 7%, it would bring the mortgage to about 33% of my take-home. Okay. So not on fire. You'll survive. Hopefully, we can get your income up to where that's a smaller portion of your take-home pay over the next several years. And that allows the kids to stay in the home. You said, was that paramount for both of you, that the kids have stability in this home,

or is that less of an issue? We really don't want to shake things up too much more, but yeah, we really want to hang out in the house. Okay, by we, I mean it's you. There's no we. Because she's not a part of this house at that point, right? So the kids would be with you half the time and her half the time? Yes.

Yeah, but let's go back to the house. Hang on to the house. I know, but it's your house. If you do what George told you and you refinance it, it's in your name. There is no we. True. And you would need to do a— But that's a—by the way way we haven't gotten into divorce settlement

and all that that still all has to be done which is why i was saying man we we need to fight for our marriage fight with everything you got is what i think and and if she won't fight and there is no saving it then we can figure out the finances but and i'm guessing i mean you need to buy her out if if things go how they're going you need to buy her out her portion of the house, which means you either need to have the cash or you need to do a cash out refi in order to pull the money out of the house to give to her. Correct? Okay. Yeah. How much equity would you have if you sold the house today? About $150,000. What's your income? uh about a hundred thousand what do you do i run a window cleaning company okay brother um and the business is worth like a hundred thousand okay well again i here's what i think i would do if i were you i if this if this is going to divorce and there's no stopping it I think I would sell the house

George straight up it's the simplest cleanest option that's what I would personally do I mean the kids are going to spend half their time in a new house anyways right well let me just say this if you guys divorce not blaming anybody or judging but you are going to wreck their life is wrecked. Staying

in that house doesn't make it less wrecked. I hate to tell you. Yeah. I understand the sentiment, but the trauma that the kids are going to experience, it's not like staying in that house is going to lessen it significantly. And I think from a financial point, I'll give it back to George. He knows why I'm saying it. It's just cleaner, fresh start, and it's easy, easier. Yeah. And that allows you to not have a financial burden of, hey, I got to do a cash out refi. Now the mortgage is way more than I can chew. And now it's a 6% rate. And man, this payment's killing me. Adding that stress to your life during a time that's already stressful is not going to help. And so that's where you're going to have to crunch the numbers. I would sit down with a financial advisor, a real estate pro and go, okay, if this is headed the way it's headed, we need to make sure that we're both protected, that there's

equity here. We're doing the right things for our family going forward, that we maintain some semblance of a relationship because we're going to need to see each other and try to protect the kids. That's number one to me. That's right. But that has nothing to do with keeping them in the current home. That's right. James, we're sorry about this, brother. Fight, fight, fight, and make the best financial move for you going forward in those kiddos. We'll be right back. This is The Ramsey Show. Welcome back to The Ramsey Show. Hey, there's a lot that goes into buying and selling your home, and those decisions can obviously be very overwhelming, and you shouldn't have to go through it alone. That's why we created Ramsey's Real Estate Home Base. It's a place where all the tools and resources you need to get prepared to buy or sell your home live. Calculators, start to finish guides,

how-to articles, a podcast, a book, and even a video course. If you're ready to take the next steps, don't sit there and study the interest rate. If you can afford it now, move on it now. As we've said before, marry the house, date the rate. And that's what we can do to help you out. RamseySolutions.com slash real estate. I'm Ken Coleman. George Camel is with me. And we go to Adam now in Boca Raton, Florida.

Adam, how can we help? Sure. I just recently just paid off about $30,000 in credit card debt in the last two years and finally credit card debt free. Yes. My only debt now is my mortgage, which I have a 350K equity in the house with a payment of $2,200 a month. My problem is now I away from retirement, and so compound've got $2,000. I have to go back to the mortgage payment this month. My emergency fund, I have $43,000. My savings, I have $48,000.

And liquid in my business account, I have $80,000. Wow. You've got a lot of money sitting around. What is all of it for? That's my problem. I was always taught to save in my account, and no one ever taught me how to invest. So I don't know where to put money. So you have a good savings muscle. We just need the investing muscle because we can't save our way to wealth.

You're not going to keep up with inflation at that point. And so we've got to put this money to use. Anything beyond the emergency fund, we should be investing. Do you need the 80K in the business? Is this like a retained earnings? It is retained earnings. The only really what I would need to do in the business would probably be able to keep out 40K, 40 to 50K just to have for my normal expenses in the business, just in case if people don't pay on time. Okay. And is this your full-time job,

this business or are you? Yes, It's my full-time, yeah. And do you have any retirement accounts set up through the business, like a solo 401k or a SEP IRA? No. I have a taxed stock account that I just set up recently with about $1,500 and a Roth IRA private that I just set up with Fidelity. Okay. And who is working in the business? Is it you, just you, or do you have a team? Just me. Okay. So you should look into something called a solo 401k. It's going to have much higher contribution limits, and that's going to allow you to stack a lot of money away and help you make up for some lost time. Because you said you have $7,000 in retirement right now?

No, $3,000. $3,000. And what's your monthly income? $15K and I paid myself $8K. $8K. Okay. And your mortgage is $2,200 of that. How much money could you realistically put toward, you know, could you do 15% of your household income right now toward those retirement plans? I mean, yes. I mean, I just, instead of leaving some of the money in the business account, I can always pay myself more and do it that way. Okay. So let's say you take $100,000 as your gross

income, 15% is 15,000, right? So now per month you would be1,250. So starting, I'm going to just crunch the numbers for you just to give you a real picture here. And we're going to assume a 10% rate of return. That's the average we've seen over the stock market in the last 30, 40 years. You would have a million dollars. S&P 500? Yes. That's just S&P 500 if you just do the index. If you don't even beat it with a mutual fund, 10% to 12%, I'm going to go conservative on the 10% side. From 44% to 64%, if you invest $1,250 a month, you would have about a million dollars sitting in that one account. Okay.

Now, that's if you do nothing else. You never get a raise. You just stay at that level, $1,250 every single month. It gives you a million just there, plus you'll have a paid-for home. And so I hope that gives you some semblance that you're going to be okay, and I think we can do better than that, right? I think so. Could you invest more than that?

I think I can squeeze a little bit more, yes. Okay. You're great at saving. So the next goal after the 15% would be to get the house paid off. What's left on the mortgage? I owe about 225. Okay. So I would sit down and set a goal. You can use our mortgage payoff calculator on our website and go, all right, I owe 225. I'm going to invest 15%. How much is left over that I could throw at

the mortgage as well? That might be a thousand bucks a month and you might be able to pay off the mortgage. Very low interest rate too. Okay. I'm regardless of the interest rate Very low interest rate, too. Okay. Regardless of the interest rate, it'll help to have a low interest rate because it's going to lower your payment, help more go to principal. But I would look to get that paid off, let's say, by the time you're 50. You get a paid-for house. Now we're maximizing investing.

We're investing 30%, 40% of our income. Now we can make up for lost time on top of catch-up contributions once you hit 50 years old. So I feel real good about this contributions once you hit 50 years old. So I feel real good about this, but you've got to get investing. So are you saying put $1,250 into the retirement plus put an extra to the balance of the house? Exactly. And I'm just throwing out, I'm spitballing numbers here.

You sit down and go, okay, my gross income is this per year. I'm going to invest 15% of that. Any money outside of that I can throw toward the the mortgage and that'll really set you up. So you've got a great spot because you're debt-free, you got 20 years of a working career, you know, being conservative and your income's only going to go up from here. Okay, great. Cause I was, that's my, where I was afraid of, you know, of, you know, not being able to be able to retire with money and being, you know, working at Walmart when I'm 80 years old. That's a good word. I get the fear.

I don't think that's going to happen. But, you know, I got to be honest. If I'm 80, George, and I got nothing to do, literally nothing to do but sit around the house. And Stacy wants you out of the house. She would. I could see myself being a greeter. Do they still do the greeters? I don't know.

I haven't seen one in a while. Somebody wants an old guy with a little bit of charm and, you know, a little fun comment to make everybody happy. I want to be able to sit. Why don't we let the greeters sit? Well, it's not good for them to be sedentary. They're old. They're already old.

They can't stand up all day. They can't be good on the joints either. No, they need to stand up. All right, let's go to Cole in Austin, Texas. Cole, how can we help? Hey, can you guys hear me? Yes, loud and clear. What's going on? Hey, yeah, so I'm in a situation where I've been blessed in my life, and we own a home. We owe nothing on it. I have no debt. I make good money. My wife stays home. We owe nothing on it. I have no debt. I make good money. My wife stays home.

We have two boys, and I am just curious on what is the best way to save money for them. I'm a firm believer that I think giving money to your kids at a younger age, like helping them get into a home, is probably more helpful than giving it to them when they're already 60 and you're 95 and die. So I just want to get your thoughts on that. What is the best way to build money for them in, you know, say in a 20 year stand? Yeah. I mean, you got some time on your hands. Of course, you got college funding. So a 529 plan, setting something like that up, it's going to have great tax advantages. And whether or not they go to college, they may not use it. You can roll over 35 grand to a Roth IRA with the new Secure 2.0 Act rules. You can use that, change the beneficiary to a grandkid one day if they don't go. And then on top of that, you can set up a taxable brokerage account for yourself and put money away in that. And you can

use that however you want to gift to them. And maybe that is a down payment on a house or a house in cash. Who knows? That's up to you. The one thing I would caution you want to gift to them. And maybe that is a down payment on a house or a house in cash. Who knows? That's up to you. The one thing I would caution you is to also give them a work ethic to where they don't need the money. It's a blessing to them. And they already have, they don't have a sense of entitlement to anything as they get older. Oh, absolutely. Yeah. I don't want, I'm not trying to raise entitled kids. I just know that, I mean, I've been blessed and that's because, you know, I say very gracious. My father, how gracious he's been. It's really the Lord, right?

Yeah. So, I mean, I'm blessed by that. That's amazing. But I just didn't know, is there a certain plan, like the 529, if I don't know if they're going to go to college or not. I would still fund it. Is that a good idea to do that one? Or do you think it's a better idea to do a different version?

I'll tell you what I do for my family. My daughter's got a 529 plan, and I'm going to set up a separate investment account outside of retirement to fund a wedding, maybe a down payment on a house. And I'd love to bless my kids that way. Yeah, yeah, I agree. I think the 529 gives you the educational options. By the way, a lot of uses for that money.

So get with a smart investor pro if you need some advice and guidance on that. And then, again, anything else outside of that, do a separate fund, which I think is great. I love it. All right. Can't believe it. We've got to take a quick break. George is going to polish his watch, and then we'll be right back. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell is with me. And our scripture of the day comes from Proverbs 28, verse 1. The wicked flee when no one pursues, but the righteous are bold as a lion. And our quote of the day from Ronald Reagan, my favorite president, when you can't make them see the light make them feel the heat ha ha ha ronald reagan but he said by the way he said stuff like that with a smile you know it wasn't a threat no just kind of sly casual he would kind

of tilt his head one way and a little wink there's a young couple out in the lobby and they're going who's ronald reagan i have no do you know that's a compliment i think you're young enough to not know who ronald reagan is and then there's a lady there she's very kind you know who ronald reagan is thank you very much who was first president when you were born who was the president uh that would have been gerald ford oh that's a good one yeah i. I think mine was Bush Sr. Huh? 89? Does that track? That is correct. He was elected in 88. Take me to trivia night already.

I'm telling you, folks. I'm telling you. I know the U.S. trivia. You want me around when you get into U.S. history. That's all I'm saying. I don't leave the house without Ken in my pocket for trivia night. That's very concerning. Kim is up in San Antonio, Texas. Kim, how can we help? Hi, George and Kim. Thank you for taking my call. I'm 65. I've got about $30,000 in credit card debt and a low income, and I'm wondering if you have any pointers on how to pay this off. All right. What kind of income do you have? My income, I'm self-employed, my income is either feast or famine and feast would probably

be famine to most everybody else anyway. But last year it was $22,000 and this year I'm doing, I'm doing better. I had started my life over about five years ago, and I'd never been on my own and never been responsible for generating income. And that was right at COVID. The whole world was shut down. And then when I tried to get a job, I couldn't get a job. So I just kind of relied on the things that I do. What do you do? One of the things.

I'm a painter. I'm an artist, and I started working for a friend of mine that had an art gallery, and I just kind of got back into the art world. And I had been homeschooling my daughter prior to that, and she went on to graduate school, and it worked out really well. But I'd been at home, you know, I hadn't been working in the workforce. I lived on a ranch and I worked on the ranch, but that doesn't show real well for my job resume. So, yeah. Well, let me encourage you on something. First of all, you're talented enough that, I mean, you make $22,000. I wouldn't make 22 cents if I tried to paint something. So, I mean that I understand you're not charged. charge Ken if he gave me one of his paintings. I think that's right.

You'd have to pay me to take that. And I would pay because I would feel so guilty because we're talking like kindergarten level painting. So I want to encourage you on that. But I would also tell you that if you are physically healthy, I think you need to give it a shot. I'm not saying stop painting, but I think you need to give it a shot to try to get back into that creative space. Maybe you're an art teacher somewhere at a private school or you are, I mean, I'm thinking of things to get that income up in the 45, 50 range, maybe tutoring lessons. I don't know. And I'm not trying to even just pick something for you, but that creative bent in you and the ability to do what you've done this far, I think you need to

be aggressively at this point thinking, what can I do in the next year to two years to double my income? And if that were to happen, and I believe it's doable, Kim, and I'm going to give you, by the way, I want to give you my book, The Get Clear Assessment. It's find the work you're wired to do. And I just would love for you to take the assessment just to get a sense for what a great looking job description would be for you. And it will open up your mind to ideas. And I think in the artistic community, you don't have to have some long resume, but I think there's a lot of value, George. But if we could get her to 45,000, let's just say that off the 22, walk her through how she

could pay 30K off. So Kim, when we look at the Ramsey baby steps, we find that most people end up paying off all of their consumer debt in 18 to 24 months. And so when we find that it's going to take someone a lot longer, we've got to pull some levers here to go, what can we sell? How do we get the income up, expenses down? And for you, that would look like $2,500 a month going towards a credit card debt to pay it off in two years. So you'd be 67 with no debt. So that would be my personal goal for you if I was sitting down coaching you. And so the next question is, where do I get 2,500 bucks? Well, you've got to pay your expenses, right? Your bills, food, utilities, housing, transportation. What does all of that cost you per month?

Yeah, that's a great question. You know, I haven't even sat down and written that out because I'm just, I'm living hand to mouth and I've been paying things, you know, as soon as I get some money in, I'm paying something. And, and I have to tell y'all that I'm actually, I'm on that trajectory. I am really close to getting to that just in the last few months, because I never intended to go into entrepreneurship, but because I couldn't find a job and I had a killer work ethic and I know I'm very talented, I just kind of dug my heels in. And that's what happened with the credit card debt because I was working trying to build

up a business and I, you know, oh man, Dave Branson would just call the police on me because I never did it. I always followed what he said to do and I didn't go into credit card debt. I owned my own vehicle. I paid cash for things. My daughter got out of school with not an inch of debt. And so now I was trying to live and just pay bills and build a business up, and I kept thinking money and thinking it's going to get better.

It's going to get better. And I really wanted to share that with people who are maybe in my position because it doesn't get better, it's going to get better. And I really wanted to share that with people who are maybe in my position because it doesn't get better. You know, I mean, just don't do it because now everything I make is going into paying off these ridiculous credit cards. Exactly. At 29% APR. So here's your step number one. Will you cut up the cards today? Oh no, I cut them up a year ago. Yeah. No, no, no. When I realized what was happening, I said, that's it. I am not going any deeper into this. So you haven't went further into debt in a year? Right, right. So you've been sitting with this credit card debt for a year, racking up

interest. For one thing, we know Kim, George, she doesn't know what her budget is, so she doesn't even know where she can cut fat, because it feels like she's living hand to mouth and she might be. That's the next step. What's that? I have no fat. She's got no fat to cut. She's got no fat. She's in great shape. I can tell. Must be nice, Kim. Okay, here's your next step. You cut up the cards. We're not using them anymore. We're going to make minimum payments on those cards, cover our expenses, and if the credit cards can't get paid because you need to eat, that's fine. Right now you need to survive before we can thrive. And the next step is to figure out your real financial picture. And that's by doing a budget. So I'm going to gift you our every dollar budgeting app,

the premium version. It can connect to your bank account. It'll bring all the transactions in. You can track them right in front of you on the desktop computer, on a smartphone, using the app. And that's going to help you get a real picture for what your expenses are. Because you can't make progress when you don't know where you're at. That's right. What kind of painting do you do? I do, well, Western art is my first love. And I also do coastal art.

I'm in two different galleries, one's on the coast and one's in San Antonio. What's the most Antonio. What's the most expensive? What's the most money you've ever gotten for one of your paintings? It would be upwards of $10,000. Wow. Let me tell you something, Kim. Now this changed my advice. Okay. I was telling you to go out and get like a, like some teaching job or whatever. Let me tell you something. I don't know much about art, but I know if someone paid 10 Gs for your painting, you're really good.

You know what you need to be focused on? Because you said you had big work ethic. You need to get outside of the mindset of, I'm in this gallery here, I'm in this gallery here. You need to find wealthy people where you live that love art, and you're in the art community. And I'd find out who are the biggest whales in in where do you live outside of san antonio or in san antonio

yeah i'm in the country you're talking about the proximity principle come i'm talking about the proximity principle i would find out who are the top 10 uh artasers, I don't know what else to call them, people who buy art, in your area? Purveyors of fine art. Thank you, George. You're such a man of the world. But, Kim, are you with me? I would find out who are the whales. And then we want to find out how many of them like coastal stuff or western stuff.

And I would paint stuff and literally get it to them and go do you like this? This is a one of a kind. And maybe get some commissioned art pieces where they're asking for it That's my point but I'd take it to them. They'd like enough and say that'll cost you $20,000 $3,000 paintings you're out of this consumer debt. Get out of debt Kim!

Start painting and start selling. Give her a proximity principle book. She gets it. George, good job. Good stuff. All right. We're going to go get a snack. This is The Randy Show.