The Ramsey Show - App - How Can I Be Investing Right Now? (Hour 3)

Episode Date: November 18, 2022

Ken Coleman & George Kamel discuss: When to stick with a high-deductible health insurance plan for the HSA benefits, Investing while in college, Buying a house before paying off debt. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

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🎵 🎵 🎵 🎵 🎵 Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Movie and Store studios, this is The Ramsey Show. It's where we talk with you about your life, your money, your work, and your relationships.

I'm Ken Coleman, joined by George Campbell this hour. The phone number for you to jump in is toll-free, and it is 888-825-5225. 888-825-5225. We'd love to hear from you. And just a reminder, George is here, obviously, anchoring your money and financial questions, and I'm here to weigh in on your work life.

Are you stuck? Do you feel like you're getting overlooked? Not sure where you want to go? Are you worried that you won't be able to make any career moves or changes while in the baby steps? Anything work related, I'm here to weigh in on that as well. I would love to take your call. So let's take your money calls and your work calls this hour. Let's start it off with Scott in Indianapolis, Indiana. Scott, how can we help? Hi, thank you guys for taking my call. I'm looking forward to seeing you guys here in Indianapolis here in February.

Oh, I'm glad you'll be making it to the Building Wealth event. That's awesome. Absolutely. I already have my tickets. Woo! I didn't have to give them away then. There you go. Yeah, so I have a question about health insurance.

So I am self-employed, 32 years old, healthy. I am in baby steps four and six. I'm hoping to be baby step seven, paying off my house in the next year and a half or so. Wow. Right now, I have a health savings account plan. I have never used that health insurance plan i just never go to the doctor really um consider yourself blessed that is awesome yeah uh the uh the premium right now is three to twenty five dollars a month i'm self-employed uh so not offered through an employer um but But with it being open enrollment

season, I was talking to my insurance agent a couple weeks ago, and that same policy is going to be going up to $400 a month, which is a pretty heavy increase. So pretty much all the HSA-eligible plans are going to be around that $400 a month range. She also threw out another option, which is going to be an $11,000 deductible plan, no HSA eligibility, but it will be $112 a month. This one has a $5,400 deductible, but again, I don't really use my health insurance. So it's just for catastrophic. Um, I heard you guys a couple of seconds ago in the, uh, Instagram, uh, flash questions talking about how you don't really recommend invest using the HSA for investments until baby step seven. But even then, once I get to Baby Step 7, at what point does the high premium make it not make sense for continuing to do HSA investments?

That is a great question because you're saying, hey, I'm going to save, what is that, $288 a month if I switch over to this other plan, which is $3,500 a year. How much do you make? This year, it's been a really good year, hoping to make over 200,000. Oh my goodness. That's incredible. Well, I mean, the truth of the math is that this is a drop in the bucket for you to have an increase of 75 making your income. And it still stinks. You're like, well, I'm not really using it. So the question is, with the higher deductible, you have that money in the bank, I assume, because you're following the baby steps. So if you needed to hit your max out of pocket for the year, it wouldn't tank you, even going to the 11. Now, the part of the HSA that I do like is that you can use it as a great retirement tool.

And so if you max out that HSA from 32 to 65, well, there's a really cool rule that once you hit 65, you can actually just use it for retirement, not even towards medical expenses. So there's some really cool aspects of the HSA that I don't want to throw away just to go, well, we're saving $3,000 a year, when that could mean some buku bucks with compound growth over the next 30 years if you invest in that. So I would sit down, number one, with your insurance pro. Are they shopping around different companies, or are they beholden to one? No, they're shopping around different insurance companies, but again, with me being self-employed, it's kind of... Your options are not as great as through an employer. Yeah, exactly.

Do you think you'll be self-employed forever? Pretty much, yes. You're crushing it on your own. What do you do I'm a chiropractor awesome nice way to go a debt free chiropractor we like to hear that

who's about to have a paid four house these are the kind of nitpicking questions where I would sit down and do the math of hey if I invested in my HSA what could that look like over 30 years and is it worth taking the hit of the extra you know $3,500 a if I invested in my HSA, what could that look like over 30 years? And is it worth taking the hit of the extra, you know, 3,500 bucks a year I'm paying? And we don't know what healthcare is going to cost next year and 10 years from now and 20 years from now. So there's something else to factor in as well. So as a healthy guy, I hope you continue to remain healthy.

And I think the deductible is not that big of a deal in your world. And so I don't think there's a terrible way you could go on either side of this thing. Okay. Yeah. I, like I said, I've been, I've been using this as exactly like you said, investment and investment vehicle for just letting it grow, not touching that, uh, HSA investment for the last couple of years. But, um, uh, I was just thinking at one point, if it continues to go up and up and up with this, all of a sudden it's $75 more a month. At what point do I just have to draw a line and be like, this just doesn't make sense? Yeah. No, that makes sense. And at one point you might be self-insured where you go, all right, I can have a crazy catastrophic plan, but other than that, I'm going to be okay if something goes down. But that's a great question, Scott. I mean, you're asking the right questions. You could also sit

down with an investment pro, like a smart investor pro, and crunch the numbers on the HSA side, and then you can start to compare those numbers apples to apples. You know, it's hard to do that in a quick radio call. But it really is. And he's coming to the Indianapolis event. I can't wait to make, Scott, make sure you meet us. We usually hang out after the event and do pictures and well I was wondering if we should invite you backstage for a pre-event adjustment. Oh my goodness Ken that's a great idea. I don't know if we'll have to have any kind of forms or you know x-rays ahead of time but a little lay down on the green room couch and just get adjusted. I would trust him a little snap crackle pop and uh you're you're feeling good when you head out on stage there, George.

I love that that's what Ken was thinking about. We're shooting the breeze on HSAs. Ken's like, I could really use an adjustment right now. Well, listen, this is your lane, man. You were giving great advice, and I'm over here going, boy, I sure would like a little neck adjustment right now. Well, Scott, be sure to get in touch, and if you want to join us for the Building Wealth,

you don't have to come to the green room and give Ken an adjustment. No, not, but if you want to, I'm sure we can make a great ken's just like any old stranger in the green room saying you say you're a chiropractor he's not any old stranger i trust scott with my whole life this guy is an incredible financial shape and in all seriousness you know when we talk to chiropractors or dentists or doctors that have a practice and they're not just swimming in debt. Boy, it is such a relief. That's the shocking part. This guy's debt-free and he's going to have a paid-for house in a year and a half.

I know. And probably a thriving business. And he could grow it as much as he would like to grow it. This is the way to do it. Absolutely. Versus you get a practice and you're just... You're 300 grand in the hole for the practice. You still have your student loans.

It gives me a stomachache. You know what we need? Ken, some Tums. Tums. Well, that's right. We haven't had a Tums moment on the show in quite some time. Just give him some heartburn. Not that we want one.

We don't like the heartburn on the show. Not sponsored, by the way. No, not sponsored. Not at all. Not at all. All right, Scott, great talking to you. Hopefully we'll get to see you in Indianapolis and keep on keeping on the best as yet to be. He's George Campbell.

I'm Ken Coleman. And you know this is The Ramsey Show. Thank you. the ramsey show continues it continues to give you practical wisdom that will lead to transformation in your money life your work life and, and your relationship life. I'm Ken Coleman, joined by George Campbell, and we are excited to be with you. The phone number to jump in is 888-825-5225. That's 888-825-5225. Sam joins us in Minneapolis, Minnesota now. Sam, how can we help? Hi.

I was calling because I am currently on Baby Step four and am going to graduate school here soon, and I'm going to be acquiring about tens of thousands of dollars of debt, roughly 97. And I was wondering, when I start saving that 15%, where should I be investing it, since I know I'm not in debt now, but I will be? So you're currently debt-free, but you're soon to be in $100,000 of debt? Yes. Okay, so you're taking all these loans out at once. Is it too late to talk you off the ledge out of any of this?

You already signed the paperwork? I haven't taken out any loans. Oh, you haven't? No, I just got accepted last week. Well, congratulations. Yeah. Thank you. And what are you getting your doctorate in?

I'm getting my doctorate in medicine. Very cool. Wow. Which way do you want to go? I'm actually going to South College in Knoxville. Okay, but I meant like what kind of practice? What kind of medicine are you going to practice? I would like to be a pharmacy coordinator.

I like doing the behind-the-scenes stuff to see people just go to have their visits smoothly. Awesome. Do you have to have a doctorate to have that job? You technically have to be a pharmacist. Yeah, but you don't need the doctorate. Correct? I guess it depends on where you go. Okay, here's why I'm asking this. We don't want to see you go into debt. So if you need the doctorate, I get it. George, you looked that up. Do you need a doctorate? Is that a requirement here in Tennessee? I'm currently not seeing that. I did see the median salary for pharmacy coordinators in Tennessee is about $50,000,

which tells me there's probably not a doctorate involved at that level. And, Sam, here's why I'm asking that. Again, if it does require a doctorate, we want you to be patient and save the cash up and get the doctorate. George and I were just talking about this earlier in the show where we had a chiropractor call in who was not swimming in debt. And as a result, you could hear him laughing. He's about to pay off his house. Yeah, paying off his house, and he's enjoying his work. So if you don't need the doctorate, don't do it.

And you don't have the cash anyway. But if you have to have the doctorate, do it, but save up the cash. And Sam, as far as the baby steps go, you're kind of in the pause phase where you're trying to cash flow this doctorate if you are pursuing that. And so you would not be investing anything right now. Your one job is to stack up as much cash as possible in order to go through this program completely debt-free. Sure. So once you're out of that, you're on the other side of this, you know what's happening. If you have debt, you don't have debt, then you can start investing once you're debt-free with that fully funded emergency fund.

But right now, you've got some life ahead of you, some big decisions to make. And I'm so glad you called before you signed on that dotted line. And if you need some more insight on this, please go watch our documentary, Borrowed Future. It is free on YouTube now. And it's about 88 minutes long, and it's going to give you some real good perspective on higher education, student loans, and this crisis we find ourselves in. Oh, sure. I just don't think it's a pharmacy coordinator. I just know my manager's manager right now is a pharmacy coordinator, and he makes roughly $200,000.

Okay, so maybe a different title or role. Yeah, I think you need a little more research. And Sam, I mean, you do not want to step into the $100,000 loan if you don't need this doctorate. You do not want to do it. So let's go spend a little bit more time researching, talking to those actual people there that you know on the ground and go, hey, what is required to get to where you are? Okay. And they're going to be willing to answer those questions. But again, you need to delineate between someone suggesting that you get a doctorate versus needing the doctorate. Do you understand what I'm saying? Yes. All right. Well, thank you for the call. And again, you know, George, back to just in case anybody's confused,

if a degree, whether it be an undergrad or a graduate-level degree, is the only way to get where you want to go, then yes, we want you to do it. But we want you to take the advice of Christina Ellis. We have a best-selling book called Debt-Free Degree. We want you to pay cash for it. It is not worth it. You know all too well the ugly side of the borrowed future documentary, and it's just never worth going into that debt.

Yeah, and I stumbled myself before I knew about Ramsey, stumbled into $36,000 worth of debt. And unfortunately, you can't stumble out as it turns out. You go into debt real nonchalantly, Ken, but you you got to be chalant if you want to pay it off i like what you did there is that actually a word i don't think so but i know you're a wordsmith i feel like it is because if if a word is nonchalant then then what is chalant one would think ken yeah let's look that up i think a quick google search i think i think america wants to know uh i mean because if you're if it's non-invasive it's not coming up in the dictionary it's invasive it is like i've always wondered about overwhelming and underwhelming is something

just whelming okay all right we will we will table this issue for a commercial break and come back to you webster's got nothing for nothing on Nothing on Shallant. So there it is. Let's go to Spokane, Washington. Tom is on the line. Tom, how can we help? Hey, guys. I have a rental question. So I got a new landlord in July. He said he was going to get a management company to come and take care of everything. He gave me his name. I didn't sign anything, no new lease or anything. And then I never saw him again. So I'm sitting on six months rent, haven't heard from anybody, just wondering what to do. Okay. For six months, you've not seen or heard, you've not gotten a bill, nothing? Is this person

alive? That's kind of of what either he's in jail or he's dead is this a house is there you renting a house a duplex two he bought two duplexes right next to each other and he hasn't picked up rent from anybody okay so this isn't just you you have other people that are in the duplexes with you, and nobody's heard anything. Yeah, and we did the math. It's over $20,000 in rent that he hasn't picked up. Did he own these duplexes outright, or was he in debt for them? Oh, I'm not sure.

Well, this is very— I would honestly go to police and do a welfare check on this person. Yeah. Yeah. Yeah. My in-laws are worried he's trying to pull some kind of scam, but I know somebody could be showing up for that. It's a weird scam to pull when there's no money coming out of your account. Yeah, you're not legally liable for anything. You haven't even signed a lease agreement. And that's the other thing.

He said our rent was going to go up another 400 but we didn't sign anything so my neighbor is still budgeting the old rent and not the new rent because he doesn't sign anything do you think i should uh go off of what he said to increase well first of all you don't it's a moot point it's all yeah there's there's nothing for you to do other than i guess you could like george said file a missing person uh or do a little research and find out where this guy is because what the only thing i'm concerned about honestly tom you kind of i'm processing this one if i was in your shoes first of all i wouldn't be paying anybody anything i haven't gotten a bill we haven't

heard from the guy definitely hang on to the money. Don't spend that money. But I'm not spending it. But I'm also making plans to go somewhere else in case this thing goes, you know, wacky. You know? He's either going to show up at some point and ask for the money or something's really wrong. And you're not going to be able to squat there forever. Right. So I'd save the money and have a backup plan. That's what we're doing.

I know. forever right so i'd save the money and have a backup that's what we're doing i know but you're technically not doing anything wrong because the owner is not existent here's the other thing i would do i would absolutely stay there but i would have a plan that i could get out of there in 36 48 hours if i had to okay yeah is there any other other association tied to the building? Is there anyone else you can get in touch with? Maintenance, anyone? Well, that's the weird thing. If somebody's still paying the water bill, the water still works. All right, so call the water department.

Just do a little bit of... Yeah, who's paying? We need to get in touch with them. Yeah, I would do it. This is a very simple investigation thing here where you can call the utilities and start nosing around and figure out what's going on. I'd be preparing to leave. Something doesn't add up.

It's weird. Spooky situation. Spooky in Spokane, George. That's what's going on there. Leave it to Ken Coleman with the alliteration. I love it. I'm always here for you, George. Hey, we're here for you.

Don't move. More of your calls coming up. This is The Ramsey Show. Are you sick of planned obsolescence? You know, when companies make products crappy, so you have to buy more of their crappy products? Well, me too. And it's why I love companies like Grip6. Grip6 is all about quality products meant to last forever.

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By the way, I did that once and mismeasured. Mismeasured. Can't talk. but the shock of no one exactly don't leave that to ken coleman to measure the blind that's well intricate and i would gripe about it except for blinds.com they just sent you new ones i called them up called the customer service told them i was a bonehead you know fell all over the sword. And the nice person was like, hey, don't worry about it. That's why we do this. So when I read this, I want people to understand, I know what it's like to mismeasure and they take care of you. So anyway, you get free samples, free shipping. And with the new promos they run every month,

you'll save even more. All you got to do is use the promo code Ramsey to get the best deal. Today's question comes from Robert in Connecticut. I currently work at a job in the social services field making about $45,000 a year. I don't hate my job, but I do want to make more money. I've got a degree in psychology, which I absolutely despise due to the fact that I went to college because I lacked the self-confidence at 18 to stand up to my parents and stand my ground. Oh, yikes. Now I'm 25 and I'm more confident than ever.

I'm thinking about going back to school for accounting because it's a lucrative field with a lot of job security. I don't necessarily want to be an accountant, but as I get older, I see there's great value in a stable job. On the other hand, I'm still young and want to pursue YouTube. I've got an idea for a podcast I want to do with a friend that I'm confident is unique. It's what I'm passionate about, and hopefully it'll blow up. I'm also a realist and know that I do need to start taking life more seriously and start

focusing on a stable career rather than taking a chance and throwing myself into this podcast, not knowing what the outcome will be for certain. Any thoughts? Yeah, lots of thoughts here. So many thoughts. Wow. Okay, let's just review for everybody. He's in social services, making $45,000 a year, wants to make more money.

Good. Fantastic. Has a degree that he has no interest in, psychology. Now he's thinking about accounting because somebody somewhere, or he read something somewhere where he said, oh, accounting is such a very good, stable career, I can make good money. But he didn't want to do it. He wants to try the YouTube and podcasting, which he should do. But they don't have to be exclusive. It's not all in on the podcast and YouTube. It's, I'm going to do that on the side, meaning I'm going to do it nights and weekends or early mornings, and I'm

going to put out content and see if it does, in fact, blow up. But while I'm doing that and I'm going to put out content and see if it does in fact blow up. But while I'm doing that, I'm actually pursuing work that I'm good at, work that I enjoy, and work that produces results that matter to me. He needs to get clear career assessment, in all honesty, just to be able to go, what work was I put on this planet to do? In other words, what am I good at? What do I love to do? What results matter to me? Folks, that is a purpose statement for each one of us. If we spend the majority of our day using what we do best to do work we love to produce results that matter to us, we are experiencing purpose and meaning, and we're actually enjoying it because we're good at it, and we love the work. And so our personal life tends to be a little bit better. Our financial life is better because we're good at it and we love the work. And so our personal life tends to be a

little bit better. Our financial life is better if we're making solid decisions because we're excelling at what we're doing. We're getting promoted. We're making more money. So this young man, the thoughts are, hey, go ahead and start the YouTube, the podcast, but let's also get very serious about the type of work that makes you feel fulfilled and that you're actually good at. And now we do both. And if the podcast and the YouTube channel takes off, fantastic. You can check out. But until then, we don't want to just stay in the social services field either because, again, it's not long before you're languishing in a role that is very needed.

Oh, yeah. I mean, you're on the front lines with people. And if you're not committed to social service work, you shouldn't be doing it. Well, it's so funny that our brains, Ken, they're like, either I have to be miserable and make good money, or I'm going to love what I do and be broke. That's right. Why do our brains just give us those two options

when we know there's so much more in between? Well, because I think, again, the way work is described to us, the way we experience work so many times, is in a negative light. So it's kind of like, all right, boy, if I want to do something I love, there ain't no way I can make money doing that. The dream job is like a fantasy.

It's like a unicorn with wings. Do all unicorns have wings? Or is that just that? The ones in my head do. Okay, very good. Thank you. Well, and look at this story, Ken. He said, I despise the fact that I went to college. I lack the self-confidence.

The parents pressured him into getting a degree he didn't want to get in a field he didn't want to be in. Yeah. And then parents are like, why don't you have the kids yet in the house? And they're like, I'm miserable, mom and dad. Yeah, you pressured me down a path that I didn't want to go down. Agreed. Oh, it's so sad.

And also, what's the podcast idea? And go, if it's sports, for example, well, maybe you should go work in sports. Oh, that's exactly right. Because YouTube is not a platform. That's a very good call out. So when you say I want to be a YouTuber, that tells me nothing. That's just a platform. What's a professional role that is in some way related to the subject of the podcast?

It's got to be something. It's got to be something. I mean, I want to start a sports podcast with you. Do you? Yeah, it's called SEC What I Did There. SEC What I Did There. You're great at sports commentating. I know nothing about sports. You know nothing about it.

I don't even know how that would work. Well, I'm learning along the way. And maybe I teach you a play or two. A play? Okay. Or a play-action pass, if you will. I don't know, George. I'm afraid you're going to hurt yourself.

Well, that's a free idea if anyone wants to start a new sports podcast. Let's get to some money, work, and relationship questions to keep you away from sports okay that's a touchdown i'll tell you what would be fun is i'm going to ask george during the commercial break if he knows what the sec stands for good chance he doesn't i'll report to you when we come back for our final segment but first mike is on the line it's sarasota florida mike how can we help hey i appreciate it. Yeah, just a quick question. You know, I'm basically under contract.

You know, of course, I could get out of it to buy a new home. Actually, it's a townhouse in Sarasota. And I guess the question is, you know, I have some debt, you know, as far as student loans. But basically, to kind of give you a snapshot, you know, I make, you know, around $90,000 a year and I have about $84,000 in student loans. I'm 46. I have, you know, a car payment, but other than that, that's the only debts I have. And the mortgage payment looks like it's going to be around the $2,900 with, you know, all fees and everything, CDDs, HOA fees, et cetera, $2,900 to $3,100. And I'm just wondering if it's something that I should do or just continue to rent and see what the market does in the next couple of years.

And I will say I have about maybe $38,000 of my 401k. Okay. Well, the short answer here, Mike, is no, I would not do this because I'm scared you're going to be house poor and you're going to be stressed up to your eyeballs, and this American dream of homeownership is going to quickly become a nightmare. That's what I'm feeling. I feel it in your voice. You kind of are sensing it's going there.

What is your take-home pay? Yeah, I was going to say, unfortunately, a lot of the taxes, you know, I'm in sales so you know i get a salary commissions but to give you an example you know last year i made 105 this year maybe it's 85 and the next year could be 100 you know what i mean so it fluctuates and i get taxed you know kind of heavily it's your take home generally five or six a month? Oh, yeah, yeah. I think that's fair, yeah, to be conservative, maybe $4,700, $4,800 after, you know, deductions for health insurance. And you're talking $3,100 is going to be going towards this home ownership dream. And so, man, that is 63% of your take-home pay is being swallowed up immediately.

So I would get out of this contract if you can do it with no harm and no foul and with your integrity intact. Yeah, and you know, it's an FHA. I'm sorry, I didn't mean to cut you off. No, it's all right. It's an FHA loan, and there is some very big incentives they put on it. You know, it's supposedly like about $420,000, and then, you know, they lowered the price by $37,000,

and they're paying pretty much most of my closing costs. So there are some pretty good deals, but at the end of the day, I'm looking at the payment. Last thing I want is to be house board. And I also kind of wonder the second part of that question. Should I just focus on paying off those student loans for the next few years and then try to buy something? Yes. I want you out of debt completely before you even start saving up for the down payment. And before you do that, you need an emergency fund on top of that. So here's the deal. Baby step one, $1,000. Baby step two, pay off all consumer debt using the debt snowball. Line up all your debts, smallest to largest, and attack the small one aggressively. Make minimum

payments on the rest. Baby step three, three to six months of expenses in the emergency fund. And then we start saving up for the down payment. But these FHA loans are not a blessing. It's not a deal because they just make broke people even broker because they can get into homes with nothing down while still having a hundred grand of debt sitting on the other side. So man, I want the best for you, Mike. I know that you want this dream. You're 46. You're going, I should be a homeowner by now. But when you do it slowly with patience, with no debt, and you get the down payment saved, it's going to be a completely different experience. So be patient, stay the course,

and get out of this deal. Good stuff there, George. All right. We got to take a quick break, but we're not going anywhere and you shouldn't either. This is The Ramsey Show. I'm Ken Coleman, joined by my colleague George Campbell, and we are here for you this hour. Our scripture of the day comes from Joshua 1, verse 9. Have I not commanded you? Be strong and courageous. Do not be frightened.

And do not be dismayed, for the Lord your God is with you wherever you go. Today's quote from elon musk haven't heard of him much hasn't been in the news much no not at all it's been real all quiet on the western front there yeah by the way fantastic movie on netflix i was baiting you into that ken i know i can't even help myself it's folks adhd is real uh i want you to know the struggle is real to stay focused uh today's quote from elon musk when something is important enough you do it even if the odds are not in your favor boy now that begs a question george he they plant the team this is relevant okay the the scuttlebutt the the the brouhaha is that twitter is going down what say you george i mean it's been real interesting to watch

are the odds in elon's favor i don't know i mean i don't want to bet against the guy because against all odds he's been very successful but the way things are going over at twitter whoo i mean it was trending yesterday rip twitter and uh so a lot of people laid off a lot of people left yesterday because there was a there was a deadline now this is relevant to remote work there was a deadline as Now, this is relevant to remote work. There was a deadline as of yesterday. If you were going to want to remote work, you were done. He was going to give you three months severance. Well, and the ultimatum of, you're about to be working real intense hours,

and if that's not for you, let me know by 5 p.m. because you're gone. And so then he changed it. So then he came out and tweeted, and he was like, all right, on remote work, if you can get an agreement with your leader. So Elon is not the picture of stability as a leader. I'm just saying. That's a nice way to put it. All right.

Very good. Scranton, PA. Boy, I love when we go to Scranton. Always puts a smile on my face. Kevin joins us in Scranton, Pennsylvania. Kevin, how can we help? Hi. It's nice to talk to you guys.

Good to talk to you, sir. What's going on? So I was curious if I should just pause my investment and start paying all my student loans. I graduate in the spring of this year, so I didn't know what should I do about that. Okay, how much do you have in student loans? I, um, well, I didn't really realize it. I'm the first in my family to actually kind of go

through college. So, um, I'm about 29 years old. So when I went, I kind of thought it was just like they were just telling me it's free money. Don't worry about it. Who told you? And then I realized that I ended up owing 4040,000 in student loans. Oh, boy. You thought they were just giving away $40,000 worth of monies. No, they were telling me it was like Pellet Grants and it's free money. Oh, okay, like the financial aid package. They're like, well, it includes $40,000 in subsidized loans.

Yeah, and I didn't know about that. Okay. Well, we learned from our mistakes, and I didn't know about that. Okay. Well, we learned from our mistakes, and I fell into the same traps as you, Kevin, so I'm not beating you up here. But there is a time and place that I want you to invest that is going to help you build wealth, and that is once you're debt-free. And so as long as you have debt in your life, I want you to pause all investing, and not because George said, but because we found that if you want to build wealth long- term, you get out of debt, stay out of debt, which gives you the margin to invest way more later on. Oh, okay. So you don't have an income right now?

Yeah, I make about like $25,000 a year. Okay. So I have about like six grand in some stocks. Um, I'll think about cashing that out and just either holding onto it as a, as a, um, emergency fund. Do you have any other money in the bank? Yeah, I have about two, 2000 in my bank account. Okay. Keep the 2000 there. I would cash out of those stocks and apply it to your student loan debt and start to knock those out. That is your next goal in life is to get rid of this. Do you have any other debt other than the student loans? Car payments, credit cards?

Maybe about like $300 on a credit card, but I'm about to pay that off and get rid of it. Love it. Yeah, cut that thing up, close the account, never look back. I'm going to gift you, Kevin, Financial Peace University because it'll walk you through what we call the baby steps. And in there, it's going to show you exactly how to get out of debt the best way, the fastest way, which is the debt snowball, listing all your debts smallest to largest, regardless of the interest rate. And then you're never going to look back. But man, I see a bright future for a guy like you. And when you get out of school and you're trying to do investing, you're trying to pay off the loans, you're trying to save up for the down payment, you end up

nowhere because you're doing 48 things at once. So slow down, get real focused and intense on one thing at a time. That's what we teach in Financial Peace University. So hang on the line. Austin will pick up and we'll get that to you. Yeah. Love that. Love the young people thinking about this stuff and being serious about it. Great stuff. Let's go to caleb in boise idaho caleb how can we help hi um so i think i have a career question um i'm trying to figure out if i need to um switch my job or add another job for more income because i'm 22 years old um and i'm still living at home and me and my girlfriend are getting pretty serious and we'd like to kind of get married hopefully next year or something like that but I don't have any money saved up for a ring or an apartment or anything like that okay what are you doing now

uh I actually I actually love my job um I get to work on exotic cars and stuff like that and wash them and detail. I'm a detailer. But it's not paying the most right now. It's kind of just getting me by, or maybe I'm just not budgeting well. What are you making per hour? I'm making $17 an hour. Okay. And so do you have any debt? I don't think you do.

Do you have any debt? I have a car payment. I still owe $16 on, and then maybe a $400 car repair bill coming in. All right, so what's your car payment? $321 a month. All right. So you said you thought it was a career question. What's the specific question about your work?

Yeah, basically I'm just getting really overwhelmed and stressed because, like, I really want to get married. I really want to move out. But I'm just kind of living paycheck to paycheck. And my car's been having so many issues. It's just like a constant. There's always something wrong with it. So I'm debating if I should get a truck.

I'm looking at like a $17,000 truck, but I feel like that might be too much. Well, first of all, so you need more income because it feels like you like working with cars. Do you want to work long-term with cars? I think I do, yeah. Okay, so I'll tell you what.

I think this is less about changing the job unless you can get a better paying job yeah are you working for a company doing detailing or is this on your own yeah yeah it's a really big company it's it's a yeah it's a higher end all right so here's my point i think your options are can i keep working with this company but get a better paying job with the company still working with cars okay or you need to go get another job which is a part-time job you're young and you can go work and get another job maybe make it 20 bucks an hour stocking shelves at a big box store you know go get more income and then we only got about a minute and a half but i want to have george step in here because the reason you're living paycheck

to paycheck is really not the 17 an hour job It's because you're not managing your money well and George can help you there. Yeah. So what's this car worth? Uh, well, I bought it at 21 and I could probably sell it like on Facebook for 17. It's a, it's a Mustang, so it's kind of hard to sell right now. Why is it hard to sell right now? Uh, just cause Mustangs are harder,000. It's a Mustang, so it's kind of hard to sell right now. Why is it hard to sell right now? Just because Mustangs are harder to sell. Sports cars are harder to sell. There's a guy like you out there who wants to buy a Mustang for $17,000. So I think you go sell that Mustang and get a reliable, used, cheaper car, maybe for $6,000 or $10,000 to help speed up this journey and free you from that

car payment. Do you have any money in the bank? I only have about a thousand dollars. Okay. I'm kind of on step two. I just purchased the financial piece. Oh, great. Good. Well, that'll be very helpful as well. But I'll tell you this. I met a kid, 16 years old, at our building wealth event in Sacramento. He was making $40 to $70 an hour doing detailing on his own. And so I say that to say, you may want to go out on your own and just go in your neighborhood Facebook group next door and start posting in there and saying, hey, I do details for $120. And you start to get a lot of gigs, you do a reliable job, and you start to make double your income overnight. Just doing, even on the side right now, you could do that on the weekends.

So I should just really kind of find some side income to kind of start moving forward? Long term, we've got to get the income up. But for now, things you can do tomorrow is go do this stuff on the side. While you're looking for, what does the ladder look like for me to grow in this company or somewhere else, working in cars or working with cars but that can be figured out long term once we stop the fire hey thank you so much for the call caleb good job george thanks i want to say thanks to the guys behind the glass for keeping us on the air and we want to thank you america for listening and watching this is your

show it is The Ramsey Show. Hey, folks. Ken Coleman here. Did you know The Ramsey Show is one of the most popular podcasts in the world? It's your daily dose of advice on life and money. Check out all of our shows from The Ramsey Network wherever you listen to podcasts.