The Ramsey Show - App - How Can I Save for My Family’s Future? (Hour 1)

Episode Date: January 23, 2024

Девочка-пай Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by my good friend Ken Coleman. This is your show, America. We are here for you to help you take the right next step with your money, with your work, and with your life. The number to call is 888-825-5225. I'd be happy to chime in on your money questions. And Ken, he is the work, career, purpose guy.

If you feel stuck, you feel like you're not doing what you want to do, you feel like you could be making more money, you're not sure how to have that conversation with your boss or your coworker, Ken is an expert at walking you through those predicaments. And so we're happy to take your call, 888-825-5225. Matt joins us up first in Raleigh. Matt, what is going on, my friend? How are you doing today? Good. How are you? Good. How can we help? So me and my wife, we've been together for about five years, married for two. We just found out a little bit ago that we are expecting, and she's about 15 weeks. So we've kind of made some changes in kind of our spending habits and being able to save up for when our child is due.

One of the things that came up was saving for college, which I'm able to provide that. I'm in the military and I'm actually going to be passing along my 9-11 GI Bill, which is a full ride scholarship for that child. The other thing that we were looking at was a custodial brokerage account when the child is born. Me and my wife have been kind of talking about it, doing $100 a month until they're 18. The only thing is, is my wife is concerned that much money when our child turns 18 is going to be too much.

I kind of did the math, $100 with a 10% rate of return. By the time they're 18, they'll have $53,000. Just trying to get an insight if that's too much money or... Well, I personally don't think so. If you just look at the inflation and what things could cost 20 years from now, I don't think it would be a waste to be investing for your kid's future, whether it's in a custodial brokerage account or a 529 plan We think we aren't going to go that route just because I'm able to pass along my post-911 GI Bill. It's a full-ride scholarship, and it includes housing as well. Oh, great. So all expenses are 100% covered. And what would the custodial brokerage account be for then? More of just having a savings account.

From what I looked at, once they turn 18, it goes into their possession and they can do whatever they want with it. Me personally, I've never inherited anything from my parents. All the income and savings that I have, me and my wife have done it together. And so it's just more of a way to get a head start for our child. That way they don't feel like when they turn 18 that they're on their own. Well, I don't think you could have too much then. I've never heard a parent go, well, they had too much to set them up and get the car

and get the down payment on the house. I think whatever you put in there is going to be an amazing blessing, and you guys have done a great job already. Gotcha, gotcha. So $100 is not too much. It doesn't sound like it's putting you guys out to put away $1,200 a year, is it? No, no. Me and my wife, I mean, we make a little over $90,000.

I already have $38,000 in a Roth IRA. Are you doing 15%? $90,000. I already have $38,000 in a Roth IRA. Are you doing 15%? So I'm doing 10% and military matches 4% or 5%. The only difference is my 10% is Roth and the 5% is traditional. Yes. Okay. I would still up your percentage to 15%. And so if you're investing 15% of $90,000, you're putting away some money for college, then you're attacking the house,

that puts you right in line with these baby steps that have helped so many people build wealth. Gotcha. So if you can still do all of that with 100 bucks left over to put away, I think your kid will be very happy at that surprise. And I think you're going to raise a great kid that's not entitled. Because that's always the fear, Ken, is you go, here's a pile of money, don't ruin your life. But I think if you raise your kid the

right way with the right mindset around college and adulthood, they're not going to ruin their life. They're going to say, thank you for helping set me up for success. And to that end, Matt, I don't know that I would reveal to the child that this money is coming. I'd almost make this a surprise on their 18th birthday and raise them in a way that they don't know that that money's sitting there. And so they develop grit. They develop hard work. They don't have that sense of entitlement. That would be my only thing. I'd be a great, awesome surprise, but I would not reveal it early. Because, you know, listen, who among us doesn't change our gear? If you know 50 grand is coming up, why would you work that part-time job for three years? What do you think about that? In fact, I didn't have a strong opinion on that until you said surprise. You said it'd be a great surprise, and that made me think. I don't know that I would tell the kid. Well, there's a few schools of thought you know dave did the 401 dave plan with his kids when it came to saving up for a car and so that's true he would match so i think it's good but that's for the car i'm talking

about this is like yeah you know they don't have access to their 18 yes so presumably we got the car beforehand yeah what do you think george i like the hold off on it. There's no reason to. I mean, they're going to avoid debt. And so it's okay to have a string attached and go, listen, this is the caveat is we're not touching debt. You will not take out any debt. If you do, the situation is going to change. And right now with college, they're not going to. Well, and that's the thing is i mean the college is

paid for now if we have a second kid all right then only half their college is paid for because i'm going to be splitting up evenly and if we do have a second child um that that's what i was kind of telling towards my wife is i mean if they have fifty thousand dollars they'd be able to go to college and not have any debt and possibly even leave college with some of that money still left over. Yeah, I mean, I think you're making a wise decision because you've got the GI Bill. And the cool thing is with the Secure 2.0 Act, you can roll over a portion of funds from a 529 into a Roth IRA over time. And so it's not a, quote, waste. A lot of people just go,

well, I'm not going to save for college because what if they don't go? What happens is the kid doesn't have the money to go. They take out six figures in student loans and then there's trapped with payments. So I love that you guys are thinking through this in a really wise way, Matt. And I think this kid's obviously going to go

to college debt-free, but the better thing is they're going to learn money management at an early age. Yeah, and that's the goal. That's the goal. I love it. Well, hey, thank you for your service, Matt. And what an inspiring story to see at least one more student becoming a student without a student loan. It is possible. And sometimes it's the GI Bill through the military. It's one of the great benefits. If you're a service member and you're able to go to school debt-free or your children are able to go to school debt-free and not have that burden of student loans,

what an incredible way to set your kid up, Ken, to not be in chains when they graduate. Because then no matter what job they have, they feel broke. That's right. Because they've got payments all around them. And I'm one of these guys that's holding out hope. I'll be misty-eyed when the day arrives, George. I think it's going to happen.

When we see the current higher ed situation just completely broken up, and we see the cost of getting educated back down to way more feasible, true ROI on the amount of money people are spending, and we see the student loan crisis gone forever. That's my hope. Amen. It's supply and demand. Let's just stop paying these colleges exorbitant amounts of money. Exactly. This is The Ramsey Show.

Welcome back to The Ramsey Show. I'm George Camel, joined by Ken Coleman this hour. The number is 888-825-5225. Don't be shy. Don't be scared. Give us a call. We'll walk you through. Why would you be scared of us? People are frightened, Ken. Very intimidated by us. Well, because of the live, you know,

kind of on-the-air business. But if you look at us two, I mean, you couldn't be less scarier of two guys. But if you can't see us, you only hear us, you think,

wow, these guys must be intimidating. No, I'm pretty sure that when anybody hears you, they're not intimidated. Fair point. My baritone, maybe. But yours? My tenor? Kind of a mousy tenor. Kind of a honey-soaked tenor, if you will. Oh, honey-soaked. I like that. Dude, that's good.

Well, Jack's not scared. He called in. Jack is not. Let's see what Jack's got going on. My hometown. Oh, yeah, Boston. Boston, Massachusetts. Let's go. Jack, how you doing? Hey, doing well, guys. Thanks for taking my call. Sure. How can we help? I had a quick question here. I'm trying to figure out if I should sell or keep my condo, my primary residence where I'm at now. I recently found out the condo association hasn't been really managed that well over the past 15 years or so. I've been here for about eight, but I just found out that there's about $3 million worth of damages on the property in terms of like roofs that need to be replaced and siding and rot and things like that, possibly mold,

but they're not sure yet. There's about like 15 buildings on the property that need to be, you know, fixed and everything and repaired. Um, they did have a guy come on site and do a full evaluation assessment of the property and documented all the damage that he found. But I'm just trying to figure out how much of an increase in an HOA fee is too much to the point where as an owner, I should probably think about selling my property or just staying put considering how much home prices have appreciated over the years and the high interest rates with mortgages. And I would certainly be taking on more debt than the current mortgage that I have now, which is at about $120,000 that I owe currently. So $120,000 on the mortgage, and once these

damages are divvied out among all of the homeowners, what do you think it'll be? Right around $30,000 if I were to pay it out of pocket up front. And what is the stipulations? Can you just pay it over time with no penalty? But you can't sell the condo without paying the fee. Right. I'm sure that's probably how it would works. They're not there yet. They still need to get quotes and everything. Um, like that, that $3 million mark is just the preliminary company that came in. They want to get quotes from three others before they take action. Yeah. Oof. And so what's your current HOA fee?

Right now, uh, they just bumped it up to $500. And next year, so like by the end of this year, hopefully they should have a plan in place to repair the damages. That's their goal, the board. And they had like a projection increase over the next 20 years. It would be a 20-year loan that they would take out most likely to do the repairs. And the HOA would max out around the 15-year loan that they would take out most likely to do the repairs. And the HOA would max out around the 15-year mark. So somewhere around like 20, 30 something, it would be up around like $725 it would cap out at. But next year, it would be around 600. But this year, we're at the $500

mark. Got it. So we're talking about an increase of $1,200 a year, potentially, and then eventually $2,400 a year plus. But that kind of caps out. You're not going to be paying $2,000 in HOA fees. No. Okay. So that's what we're talking about here. I just like to put numbers on it to give me some real facts, because this does stink, and it happens all over. And you're right, a lot of HOAs are not managed well, and things like this happen, and it gets passed on to the homeowners, of course. So not fun to deal with, but this is part of life. As a homeowner, you get to deal with. So what is your mortgage outside of the HOA fee?

What is that up to? Like the monthly payment? Yes. It's about $888 principal and interest. Okay. And then what is your take-home pay after taxes per month? Take-home, I think I'm right around maybe $3,300. Okay. So as a percentage of your income, that mortgage plus the HOA, it's taken up a good chunk. Right. You know, when you look at 1388 out of 3300, it's 42% of your take-home pay right now is going toward this house.

And so as that goes up, you know, it could creep up to 50% of your income is going toward this house, which is then going to be hard to invest for the future, hard to live your life. Are you feeling that pain right now? Not so much right now. I'm pretty frugal. I try to save as much as I can, but I'm definitely concerned about the future, especially as the HOA fee creeps up to 600 by 2025, essentially. Yeah. Well, here's the thing. Once you put numbers to it and you add this into your budget, the extra, you know, $50 a month they're going to start charging is not going to crush you. That's $600 a year. Correct? Correct. So it's not fun

to pay the extra $600 a year, then $800 a year, but it's not worth, let's go ahead and sell the condo today because you might have to deal with more HOA fees and higher HOA fees elsewhere if you went and sold and bought another property, especially in the Boston area. Because my brother's got a condo in the Boston area and he knows this life well. These are some old condos that have not been taken care of very well. So Jack, if I'm in your shoes, I'm going to hold off is what I'm telling you right now. It's not worth it to save 600 bucks a year. I would rather you go make more money. So how can we get your income up to where this isn't as big of an issue? What are you doing for work? Yeah, I work in at a health insurance company. Okay. How long you been there?

I've been there about two years. Okay. Are you making around 50K? What is the actual gross salary? So the actual gross salary, and I might have messed up the take-home pay figure there after taxes, but I gross about 80K a year. Oh, great. That's good. What's promotion look like for you? That's a little bit uncertain at the moment. The company is kind of going through a restructure. So I might be at that salary for a little bit while longer. Well, and again, but you're a young man and you've got plenty of option, plenty of energy. And to George's point, at this season of your life, that gig, you know, the gig economy right now where people are using their professional skill set, which you have plenty, to make money on the side, you know, and contract

labor. Look, you know, that's the way you get more margin right now. And if you want more margin, go get it. You know, you may get to a certain point where you go, okay, I'll do it for six months. I'll do it for 12 months. I'll do it for 18 months to save X amount of dollars. It's not a bad idea if you've got the margin relationally to be able to do it. Yeah. And Jack, when you do, if you did choose to sell, you got to also think about the fees that you're going to pay to sell it, the fees you're going to pay to buy a new condo, moving costs. So there's a lot of other figures to factor in that I think would outweigh the extra 600 bucks you're going to pay in the next year. So down the line, if you want to move because of other reasons, you can move, but I would stay put for now. But what do you think is going to happen

on the other side of the improvements if he stays? And I agree with you, he should stay, but I think he benefits. I mean, sure, he's going to pay more in HOA, but then if he sells it down the road, I would imagine these improvements are going to help his sales price. You would hope. One would hope, especially in the Boston area. And I'm sure even in the eight years, Jack, you've been there, the condo is appreciated, correct? Correct, yep. So that's a win right there. That's the other thing I was going to mention.

I like the benefit of the improvements. If you hold, like George says, and I think George is right for every point he makes, but I'd add that to it. You're going to benefit from that. Think of it as an investment going to benefit from that. Think of it as an investment in your resale value. And even paying the $1,300 total with HOA and the mortgage, that's still pretty reasonable for a metro city like Boston to have your own place. So you've done this really smart, Jack, and I'm proud of you for living on less than you make. That's the key to this whole thing. Do you have any debt? I don't. No, I just paid off 33 grand over the summer for my student loans.

Wow, Jack. Way to go, man. How does that feel? It felt awesome. Yeah, it was pretty sweet. I love it. You got an emergency fund as well, three to six months? I do, yeah.

Great. And you're investing in your retirement plans? Yep. Look at that. I have one more question. Jack, are you born and raised or been in the Boston area a long time? No, I grew up in the New Hampshire area, so north of Boston by about an hour. Still a New Englander.

The reason I ask is because you and George, both, you'd never know that you've lived a long time in that area. I'm pretty impressed with the lack of accent. We lose it, Ken. We are chameleons. We can bring it up when we want to. Give me an example. Take us to break in Boston. Bostonian.

Dude, you been in the Red Sox game? Dude, it was wicked sick, dude. Poppy just smashed one to the Green Monster. There it is, Ken. That's like keeping it PG for the show. You actually have to know about baseball to finish that, but it was good accent. I almost lost it at Green Monster. That one you've got to get for Fenway.

Monster. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Camel, joined by Ken Coleman. And Ken and I are going to be at a brand new event that we've got coming up May 10th and 11th right here in Nashville, Tennessee called Total Money Makeover Weekend. I know there's millions of you out there. You've been listening for a while. Maybe you're still sitting on the sidelines. Well, no more sitting around. You got to take action. So in just one weekend,

you're going to get a crash course on everything we teach about money. We've got all brand new content, new talks from all of the Ramsey personalities, including Dave Ramsey, on budgeting, beating debt, investing, making more money, and so much more. So no matter what baby step you're on, if you're just getting started, maybe you're even at baby step seven, and you're looking for ways to build wealth and give generously, this event will light a fire under your butt to keep going, to keep making progress. We've also got some special things happening during the event. We've got a live Smart Money Happy Hour recording on Friday night. That'll be a blast. We've got live Q&As throughout the weekend, which is one of my favorite things to witness from our friend Ken Coleman. When he dives

in with one person in the crowd, it is magic. So you don't want to miss this. Our events are actually fun. These are not boring. We've got musical experiences. Our team is world class. So early bird tickets start at just $99, but they're going to keep going up. This is the cheapest you're going to find them. So get your tickets now, ramsaysolutions.com slash events, and make plans to join us Nashville, Tennessee, May 10th and 11th. ramsaysolutions.com slash events.

And we're kicking around some fun ideas that may know, that may or may not make it. Is this you pitching to get on Smart Money Happy Hour again? Well, I've already done that. I already did that last week, and I'm not going to pitch it again. So you brought it up, but that's what people want. I knew it was ruminating in that little mind of yours. No, I've got another idea that you and I, you know, a lot of guys don't care what they wear. Their wives care what they wear.

What if we had a special bonus session, and i lead it couples only and we we kind of help the wives out we call it total clothing makeover and the wives will volunteer their husbands to parade on stage and we will judge their fashion and give them some tips yeah so this is good content uh we'll give them tips and then you'll help them do it on a budget this is actually good good. Ken, I... Maybe start with Deloney. We could start with Deloney. We could start with John. Thank you, James, the producer. Everybody knows that guy needs a total clothing makeover.

I mean, first of all, would it kill him to dress like a doctor? I think we all have that teenager that dresses like Deloney in our lives, you know? But listen, I actually make no fun of it. Because you know what? The guy doesn't have to make a lot of decisions. That's true. You and I, on the other hand, we're stewing every morning. Which shawl cardigan are we going to throw on this morning?

Hey, I haven't rocked a cardigan in a while, but you know what, I'll do it next time we're on together just so you can take shots at it. Oh, that's fun. We have a good time. We do. We enjoy it, and we're going to have a good time helping people out. Who's up next? Well, it's time for the neighborly question of the day.

Oh, the neighborly question of the day. That's right. Yeah, don't get too excited. This is a really good one. I'm excited to get your input. So then, Ramsey Show question of the day oh the neighborly question of the day that's right yeah don't get too excited this is a really good one i'm excited to get your input so then okay ramsey show question of the day brought to you by neighborly your hub for home services neighborly.com slash ramsey is the place to go you can download their winter maintenance checklist completely free and full of tips to get your home through the colder months with no issues again you can check it out at neighborly.com slash Ramsey. Today's question

comes from Billy in Indiana. 10 years ago, I was destitute and owed $15,000 to the IRS. I raised my kids by myself with no contribution from my ex-wife. I followed your teachings and I'm now debt-free with money in savings and investments. I'm retired and living very frugally, but I'm terrified of being destitute again. My weekly grocery budget am i reading this right 35 dollars i don't use the ac in the summer and won't turn on the heat in the winter this is from billy in indiana uh he turns it on when it gets below freezing yikes i've taken all the light bulbs but one out of all the fixtures in the house i take three minute showers and haven't eaten out in two years how do i live without my phobia of being broke again man this is intense but i but let me just say destitute it's a heavy word the kids there's some stories but i don't know what that word means

but it takes down and out to a new level and i think that um him having nothing at all so seared his conscience yeah i mean this is as much emotional relational as it is financial i do and i think he has my therapy i think this is some i think i would get some therapy on this to be able to create a narrative that is in opposition to the voice of fear. Because the voice of fear is rooted in tremendous pain, George. And so you've got to counteract that. Again, Deloney's not here, but the bottom line is this is a form of OCD. And OCD is anxiety, and I'm not in any way diagnosing him with OCD, but I'm saying it feels like he's so obsessed with saving money

that you're talking about $35 a week not using the air conditioning. I've seen this episode of Extreme Cheapskates. These people do not have thrilling, joyful lives. They're terrified. They're terrified. And so I would start with, I think Ken's spot on here. Billy, you need to go to therapy and deal with the past. And a good start is reading our friend, Dr. John Deloney's book, Own Your Past, Change Your Future, because you're not there anymore. You're doing well now. And so we tell people to make a budget and actually look at how much margin you have and force yourself to go out and eat once a week. Force yourself to go

be generous. We found that generosity can unlock something when it comes to that destitute mindset, and it will make you have an open hand when it comes to money. So I would start to give, save, spend in each area. You're great at saving and that muscle has been flexed, but you got a flat tire when it comes to giving and spending. So I would increase both of those, force it in your budget. And the other thing I would do is get people around you. You sound like you're isolated, like you're living like a recluse. Start making some community, get plugged into a local church, hang out with family and friends. That's going to help you break out of this. Yeah, I agree.

I mean, this is just overcoming the trauma and then beginning to get the tools to get over it. But then you've got to take some steps and go, okay, what if I spend $150 a week on groceries? Is it going to tank you? No. But I think the fear is so great here that even seeing it on paper, I don't know that that's going to solve it. Stair step it. We're going to spend 40 bucks this week, 45 the next week until you're spending a reasonable

amount. I mean, this sounds like it's affecting your health. If you're living in a 34 degree house, eating literal rice and beans, that's frightening. So Billy, we're wishing you the best, man, but you got to take some steps to knock yourself out of this vortex. Sorry to hear you're going through that. All right, let're wishing you the best, man, but you've got to take some steps to knock yourself out of this vortex. Sorry to hear you're going through that. All right, let's go to the phones. Janice is in Orlando.

Janice, welcome to The Ramsey Show. Hi. Hey. Thank you for taking my call. Sure. To give you some background, well, I'm 58 years old, divorced. I work full-time. I have no debt.

Hey, Janice. Janice, sorry to interrupt you. Could you maybe adjust your phone? You sound a bit muffled. Oh, okay. Who's better? A little bit better. Go ahead.

Okay. So, 58, divorced. You're working full-time. Yes, no debt. I have an emergency fund, so I'm currently saving for retirement as well. The problem is I currently rent out a studio, and with rents increasing the way they have been, I'm getting a little nervous, and I'm wondering if at 58, is that a good age to maybe purchase a condo? I don't want to get into a situation where the rents get too high and I'm not able to pay, basically.

Yeah, no, it's a reasonable fear. The right age to buy a home or condo or whatever is when you're financially able to. And so I think now is a great time if you have the money and you can put down the down payment and you're able to cover this mortgage, it's no more than a quarter of your take-home pay. That's how you know you're making a right decision. But I think you're right. I would rather you have a fixed cost and pay off that house so that you can retire with dignity without these rising costs of rent weighing you down in retirement. So how much money do you have saved outside of the emergency fund? Well, the emergency fund, I have $30,000.

Okay. But you haven't started on the down payment savings? No. Okay. I would begin there. How much money can you put away every month for this down payment now? Well, let's see. I have 30K in my emergency fund, which may be a little too much. Total money that I have is the last time I checked, which was two days ago, $117,000. Is that in retirement, though, or is that liquid cash from the bank? That's everything. Okay.

30 is liquid, and then the rest is split between a 401k and a Roth. Okay, I don't want you touching those retirement accounts. We need to build up money outside of that with future income, and so that's what I would do. Increase your income, put that money aside. When you're ready, reach out to a Ramsey-trusted real estate agent at ramseysolutions.com. And we're wishing you the best with the home ownership journey. Welcome back to The Ramsey Show. I'm George Campbell, joined by Ken Coleman. If you like this show, be sure to check out all of the shows on The Ramsey Network, including The Ken Coleman Show, which films right next door to The Ramsey Show, which is fun. And, of course, the Smart Money Happy Hour. I co-host with Rachel Cruz and my YouTube channel. We're having a good time over there, Ken, breaking records around here. People are enjoying the youtube content well that's good your team's doing a great job and and you obviously are really great for that quick snippy you know entertaining you're just perfect

for youtube that means the world i think i'm being serious well i've got a face for radio and i think youtube is the next best place for people who don't have a the face you know you can make it as a youtuber out there you don't have to be good looking you just got to be good that's the best encouragement i could ask for from ken coleman today i like that i think you're a good looking guy i you're i'm trying to compliment you i'm not fishing you're you're you're what i'm not fishing for compliments i know you're not but i'm just saying i'm not surprised that the channel is doing great i think it's fantastic very happy we have a great team here all right let's get to the phones before we get in a massive fight. CJ, break this up, my friend. How can we help you today?

Hey, George. Hey, Ken. So I'm a 21-year-old, and I've just accumulated about $90,000 from a sign-on bonus for becoming a professional baseball player. And my goal is I'm just trying to maximize this money and kind of set myself up for an easier road down the line. Nice. So I just don't really have a starting point, and I just want to get some advice for what to do with this money.

Congrats. Yeah. Okay, so let's talk about, you said you're 19? 21. 21, okay. Yeah. 21 years old. This is the most money you've ever seen in your life, I imagine.

Yeah. It's more than I know what to do with, for sure. Good. It should take your breath away just a little bit. Not cause you to go in paralysis mode, but enough to pause and go, breathe. Yeah. Have you already gotten it? I take a deep breath every time I see it.

So is it in your savings account right now? It is. It's just sitting there. Okay. Okay, cool. So is it in your savings account right now? It is. It's just sitting there. Okay. Okay, cool. So let's talk through your financial situation. Do you have any debt? No, I'm debt-free.

Nice. Emergency fund, three to six months? Yep, it's included within that. Wonderful. Okay, so you already have no debt and a pile of money in the bank regardless of the 90K or is this on top of that? No, that's it. As well, I'm going to have a checking account with like my, I keep my weekly pay or my bi-weekly pay in that checking account and just use that. Great. So how much will you be making going forward? It's about $1,000. It's about $2,000 a month going forward. Okay. Do you get also expenses taken care of or are you required to take care of your own expenses? Yes, for the

next five months at least, my living is taken care of. Two out of three of my meals are taken care of. And so I really, my only expenses right now are groceries, gas, and whatever I want to do for fun. All right, what happens after the five months? Because this is going to dictate what George is going to coach you on. What happens after that five months? I would either have to move back. Well, right now I'm renting out a house, so I would have to either move back into the team-sanctioned hotel

or I would be set up at an apartment complex at, like, one of our affiliates where I'd be playing. When you say set up, are they paying for it? Yes, my living can be taken care of after this next five months. Great. Good, good, good, good. All right. As well as meals?

At least two out of three, yeah. Okay. That's good. So that's going to really limit your expenses going forward, which is wonderful, as long as you have this career okay yeah well well without getting into the particulars he's in the early stages as far as professional baseball yeah yeah yeah he's got he's got quite a path if things get better i mean you're in the minor leagues right now i'm guessing is that right yeah that's correct yeah so as moves up, obviously he could get a really large contract.

But as long as he's in the minors, the actual pay is not very big. Yeah. Right, it could be a very long journey. So the sign-on bonus is great, but we also have to manage this well because you may end up needing some of this down the line. Sorry, CJ, I'm catching him up on this. That helps me. Ken is my sports historian. He helps me with this stuff.

Thank you, Ken. So you're in a great place financially already. Are there expenses coming up that you know you're going to have to pay for, like a car repair or upgrading the car, things like that? A flight. I know I'm definitely going to have to pay for a flight soon, but that's, I mean, that's $300 to $400. Great. So the key here is we got to continue living on less than we make. We don't want to go use this sign-on bonus to just go buy a $90,000 car on vacation. What about taxes?

Taxes are another thing we have to be thinking about. Is this going to be taxable income, I assume? You're going to owe 25%, 30% on? 40%? It's already been taxed already, but I'm still learning tax and everything, so I'm sure there's something I'll have to pay. I would connect with a Ramsey-trusted tax pro at ramseysolutions.com, and they can help coach you through this to make sure, because what I don't want is you wake up to a huge tax bill that you're not prepared for that eats up all of this

money. Right, right. So for now, CJ, I'm going to leave this in a high-yield savings account, and I would continue to invest out of your paychecks. Is there some sort of retirement plan provided, or are you on your own for that? I'm on my own for that. Okay. And for that, you may want to reach out to a SmartVestor pro. These are investing pros that can help you with the investing journey. But a Roth IRA is always a great place to start when you have earned income,

as long as you're not above the income limit. And so you could fund one of those with this $90,000, just get a head start if you haven't been investing at all. Okay. And if you- Yeah, no, I haven't been investing at all. So a Roth IRA is a good place to start. Roth IRA. Yes. And as long as you're, I imagine you're under the income limit right now, you could be getting close with this 90K sign on. So again, check on your adjusted gross income for the year. And if you're able to contribute to that, that's a great place to start. I believe for 2024, it's now $7,000 you can contribute a year. And within that, the Roth IRA is just a shell, CJ.

You want to actually buy funds within that. And I would not recommend single stocks. What you're looking for here is good growth stock mutual funds. And our team will send you a resource for that. I've got a video called Investing for Beginners on YouTube that walks through all of this. And that will help you out immensely as you start this journey. But at 21, CJ, if you continue to live on less than you make, you invest 15% of your income, you never touch debt, you're going to be so unbelievably wealthy, and you're just getting started with this career. Yes, right. So thank you all so much for the advice. I'll look

into Roth IRAs, not the single stock, but what's the other one? Mutual funds. Growth stock mutual funds. That just means a giant pool of stocks, like 90 to 200 stocks in one bucket so that you're diversified because you don't want all of your eggs in one basket when it comes to investing. Right. And, CJ, you don't have to answer this.

You don't have to answer this. I got to ask, are you allowed to tell us your position, or would you rather not? Yeah, I'm a pitcher. Oh, I was wondering. So, okay, what's your best pitch? What's your go-to pitch? That's the fastball, baby. That's the fastball.

Yeah, the high heat. I know about the fastball. Do you know about the fastball? I played a little MLB 2000 back in my day, Ken. CJ knows what's up. There you go. CJ, man, that's awesome. Listen, man, we're cheering for you.

And, George, let me tell you this. If CJ keeps advancing as a pitcher, we're talking. He's going to call back one day with a lot of zeros. He's going to be like, I'm buying my seventh rental property. Let me tell you, George, the pitchers make the big bucks. I'm proud of them. Yeah, good job, CJ. Well, keep at it, buddy. Take care of your

body. Ignore all your buddies who are out buying really expensive stuff because they just got the signing bonus. That's going to be the hardest part for you is avoiding the distractions. I agree. And to help you with that, I'm going to send you a copy of my brand new book called Breaking Free from Broke. There's a great chapter on investing traps in there. There's a chapter called Wealth is Patience. It's going to teach you all the stuff I just outlined. So I hope that helps you along this journey and helps you avoid mistakes. This is the book people wish they read when they were 21, CJ. So hang on the line. Austin's going to pick up. We will send you a link to the Investing for Beginners video as well as a copy of my book,

Breaking Free from Broke. All right. Honest question, George. How fast, what's the fastest pitch that you think you could even just get the bat around and touch the ball? Forget hitting it solid. You could get around on it and make contact. How fast? What's the fastest? Oh, like if someone threw a 70 mile per hour pitch. Yeah, have you been paying attention to what we've been talking about? Yeah, I mean, I'm going to be modest.

What do you think? What's the fastest pitch you think you could hit? 40 miles per hour. 40 miles an hour. Is that reasonable? That's ridiculous. You're saying I couldn't do it. You should be able to. 40 miles an hour is not that fast.

I wanted to go modest. Well, that was ridiculous. What could you hit? Could you hit a 70? I'm going to say I could get around on 70. For sure I could get around on it. Whether I hit it squarely. I think I could still probably hit an 80-mile-an-hour pitch.

We'll see. I think we should. I play a lot of pickleball. Let's hit the old diamond, Ken. Let's see what you got. Let's do it. That puts this hour of the Ramsey Show in the books. I'm George Campbell.

He's Ken Coleman. We'll be back before you know it. Thank you.