The Ramsey Show - App - How Do I Budget for Starting a Business? (Hour 1)

Episode Date: September 21, 2020

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225 as we take your calls from all over the nation. It's a free call. Some say the advice is worth exactly what you pay for it. 888-825-5225.

In Ithaca, New York, Ale is going to start off this hour. Hi, Ale. Welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. How are you? Better than I deserve. What's up. Hi, A.O., welcome to the Dave Ramsey Show. Hi, Dave, thanks for taking my call. How are you? Better than I deserve. What's up? Hi, yeah, so I've been a listener for a few years now. I discovered you halfway through undergrad. I went the first two years just taking out loans, and I ended up taking out about $45,000 in loans, and then My friend showed me your show. I ended up getting three jobs

paid the rest in cash. Good for you. Way to go. My grad school is funded. I'm currently in my master's and I'll be starting my PhD next year. Again, funded. Don't plan on taking out any loans.

I also cut up all my credit cards. I'm totally on your plan. I love it. Great. I'm honored. So what's your Ph.D. in, going to be in? Yeah, so epidemiology. Oh, wow.

Good for you. Very cool. Cool. Yeah, so my question is I recently tried to start to get into investing, which I know isn't exactly following your plan, but I had a little bit of money in my savings. And so I took about just from saving up from working over the years. And so I took about $5,000 last year and invested it. And now I currently have about $50,000. And so I was wondering, since I will be in my PhD for probably the next five years and I won't have an income, but I also won't be expected to pay off my loans,

should I save that money as a way to get through the next five years, or should I just go ahead and take that and pay off my loans? Well, there's not a bad answer here. Everything is going in the right direction. So it's just a matter of what is the most efficient. So for me, job one is for a guy as smart as you to complete all of these fields of study, the master's, the PhD, and everything, 100% debt-free, how sure are we that we can do that if we use this money to pay off the loans? In other words, that jeopardizes that goal.

If I thought this money might be needed, that there was a 10% chance that the way you're getting a free PhD might fall through and you might need this money to complete a debt-free field of study, then I would use the money on that before I would use it to reduce your loans while you're in school. Job one is graduate debt-free, no matter what happens. Yes. So who's paying for the PhD and the master's? How are you getting all that done?

It's the programs that I'm in are fully funded for the Ph.D. and the master's? How are you getting all that done? It's the programs that I'm in are fully funded for the students through the school. Scholarships, fellowship, what is this? Yeah, I guess it's through teaching. You have to take part as teaching. Okay, so if they lost their funding for that or you lost your teaching position, you'd have to pay for your study, right? Correct. If we were going to put a probability on that, is it 10% that that could happen? 2% that could happen? 25% that could happen? Yeah, I guess I'd have to put it below 5%. Okay, then you feel pretty safe about using this money

to pay off your debt now, right? Well, that's what I'm unsure about. I don't know if I should keep that. Well, the point is the only way you would pay off this debt with this money is if you know that you know that you know you're not going to need it to finish school debt-free. Because job one, rule one, is get out of school debt-free. Then we can address the debts. So if it all plays out the day you graduate debt-free, or the day you graduate without having any need of this money, the $50,000 would have grown some more, but when you graduate you take that $50,000 and pay off the $45,000,

or you do it today, but if something hiccups, you've got to find another way to finish school debt-free. Gotcha. So your choice. Either one of those is fine, but you can probably judge those probabilities better than I can from where you're sitting because you're in the middle of those programs, those institutions. You know how solid they are or they aren't and the funding behind them and the fellowships and whatever it is you've gotten tied into there. So that's excellent. You've done a wonderful job.

Very, very smart smart and turning five grand into 50 grand ain't bad either dude well done well done ray is in los angeles ray is hey ray how can we help hi dave thanks for taking my call i very much appreciate it my question is is um i'm currently on my husband and i are currently on baby step two uh we've paid off about 30 000 since march way to go we are working very very hard it's a covid debt snowball you got going we do i picked up extra three jobs at a time i am working we are working very hard. The question I have is refinance. Our current rate is 4.875. We have 28 years left. We want to refinance.

It's going to go, we shopped around 2.5% for 15 years. But like I said, we are on Baby Step 2. You got equity in the house though, right? Oh, yeah. We have about $150,000 in equity. Baby Step 2 is not affected, except that your payment may go up a tiny bit. It's going up $200,000. Yeah, that's okay.

I don't mind that. I would pay for the refinance costs, roll them into the loan, though. I would not take them out of pocket. Okay, because we are still cash flowing. We have two kids in college. I have a son that's in the Navy and got him on to you. He didn't believe me,

but one of his commanders told him, oh, yeah, I know Dave Ramsey. Listen to your mom. And so he's actually on board now. So we're really excited. Well, here's the thing. You're doing all of that with or without the $200. You can do it with a $200 increase, and you're saving 2%

and locking in these historic low interest rates on your refi and getting down to a 15-year. I love all of that. It's worth the $200 strain. Oh, that's what I want to hear. My husband said, I'm not doing it unless you can get through to Dave on Monday. Well, now here, remember, the closing costs are not coming out of pocket.

You're rolling those into the loan. The only thing we're stinging your budget with is the $200 increase. You follow me? Right, and that's what he's nervous about. I wouldn't worry about that at all because those are going to be recouped with a 2% plus savings annually. See, what's your loan balance? $207,000. Okay, so 2% savings is $4,000 a year that you're saving by doing this.

You're not seeing it in cash flow, but over the scope of the loan, you're being charged over $4,000, probably closer to $4,500 less per year for interest. So all of that money is going towards paying back those closing costs and reducing the principal built into the move from 28 to 15 years. You're not seeing it because your cash flow is actually getting worse by going up $200 in payments, but your benefit to you is about $4,000 to $5,000 a year. Yes, you do this.

Absolutely, you do this. Good call. This is The Dave Ramsey Show. folks i love telling you about well-made well-thought-out products today i'm talking about grip six belts i don't know about you but I'm not a fan of traditional belts. They never fit right, and they're uncomfortable. Grip6 belts are unique. Owner BJ designed a truly modern minimalist belt made of high quality materials with no holes, no flap, and no bulk. And the buckles come in really cool designs and are interchangeable. I personally own these belts in different styles. And talk about affordability, Grip 6 belts come with a lifetime guarantee.

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Hey, Andrew, what's up? Hey, Dave, how are you? Better than I deserve, man. How can I help? Awesome. I had a question. So I'm, like you just said, living in San Antonio. I'm in the military right now.

We got about probably three years left. And I actually called, I spoke to Ken Coleman a couple weeks ago, and he encouraged me that this is probably, should probably look at being my last enlistment because it just doesn't line up with my goals anymore. So we're kind of looking at that transition, and we're plotting a move to the Nashville area actually at the end of this. You and the rest of America. Okay.

So the house that we're living in now is very much a starter home. We bought it only moved here for about 170. And we're just wondering like at what point is it appropriate mathematically to move up in house? Because the house we live in, like we'd what point is it appropriate mathematically to move up in-house? Because the house we live in, like, we'd like to be in a nicer part of town eventually, you know, a little bit bigger. And so we're just trying to figure out, like, mathematically how to make that happen without, like, starting over on the mortgage, you know. Okay. Well, number one, you wouldn't do this until you move to Nashville. I mean, three years out, you ride that house for three years.

It doesn't make sense to buy and sell a house inside of three years. Right. No, we're not looking at doing this now. I'm just for planning purposes. Yeah, so you sell the house there, you move to Nashville, start your new career, buy another house, right? Right. And then you would start a new mortgage on a 15-year fixed rate.

Here's the thing. When someone says starting over on the mortgage, that makes me think that you believe that all the interest on a mortgage is paid up front. Which is not true, by the way. Do you think that? No, I don't think that.

All you're starting over is you have a different debt, a bigger debt, or a smaller debt. So what do you currently owe on San Antonio House? Currently we owe $155,000. Okay, so if you buy $155,000 at the same interest rate or less in Nashville, which would be very hard to do, or the Nashville market, you could get out in the country. You might weigh out in the country, you might pull that off. Okay, but anyway, if you did that, mathematically speaking, you would exactly start where you are today.

You would just move the 155 at the same interest rate over here, and if it was the same number of years, you would have lost zero ground. The only way you lose ground is you go further in debt, which you said, I want to move up in-house, that's cool. So let's say you buy a $300,000 house because your new career pays more than your old career. And you move to Nashville and buy a $300,000 house. Now that's a little more feasible.

And so now you've doubled your mortgage, so what you've started over is twice as much debt. But nothing else started over other than that. Okay. Yeah, that makes sense. How many years remaining on your current mortgage

uh we've only lived in this house for just less than a year so we've got 14 years left oh so you did a 15 year okay so when you move you would have 11 years left if you did my scenario on 11 years regardless of the amount you took out you would still be debt-free at exactly the same time. Agreed? Yeah, that sounds... Yeah, which you wouldn't do that. You'll probably get a new 15-year, 300, 325,000, or whatever number it is when you move up. That's all fine, as long as it's on a 15-year fixed where the payment's no more than a fourth

of your take-home pay. But that's how it's going to work. So sit tight where you are, and then as you arrange yourself into the new career three years from now, and you decide which city you're going to live in for sure, you start shopping for real estate and start figuring out how much we actually can afford based on your new income to purchase on a 15 year fixed rate where the payments no more than a fourth year take home pay. And that'll keep you between the ditches, brother. Hey, thank you for your service. We really, really appreciate you guys. Landon is with us.

Landon is in Memphis. Hi, Landon. How are you? Hey, how's it going, Dave? I appreciate you taking my call. Sure. How can I help? So I'm 24, and my wife is 22, and she just started working,

and we're both working full-time now, and we want to pay our house off in the next 17 months. Wow. I love you guys. Now, I know that you say that you should take your foot off the gas just a little bit and do some things after you pay off your debt. So we don't have any debt, so we just really hate our house payments so much that we just want to kind of kill it and get it over with. And so after we do that, our goal is to save up for some rental properties and potentially build a real estate portfolio and go from there. In all cash, right? Of course, yes, sir.

Yeah, man, you're on. Wow, I love you. You're awesome. So my question is, after we pay our house off and start saving up for real estate, how aggressive should we be in building our real estate portfolio? Because if it was up to me and my wife would do it too, I would just do beans and rice. Yeah, because she's 22. When she's 32, maybe not so much. She'll get tired of your butt. Exactly. And so, you know, how aggressive should we be in saving up and paying cash for real estate, you know, and still enjoy some of, you know, the money?

I got to tell you, man, I really like you. I was you when I was 24. You're incredible. And so I can tell you this. You're going to kill your wife, okay? Don't kill your wife. You're going to kill her enthusiasm for this because you would – I'm all the way to the wall, man.

You put everything on the wall, don't you? You don't hold anything back, pedal to the metal, go for it. And, you know, she's going to be on beans and rice until you have $2 million in real estate and she'll start to hate me and you okay let's not do that exactly right yeah so that's that's what i would have done it's exactly how i'm wired and the mistakes i made in my marriage when i was your age so i get to save you from me okay so anyway the um what we'll do is you'll be at baby step seven when your home's paid off, right? Right. Very well done.

You guys are studs. Breathe twice. Okay, now look at your household income. What's your household income at that point? So take home this year, we'll take home about $120. Next year, we'll take home about $150. Good for you. And so out of that, we're going to be having huge piles of cash to buy real estate with,

and the only question is how intense. Are we in agreement on what the question is? Are you asking me? No, is that what you're asking me? Yes, sir. That's right. How aggressive should we be? What kind of time?

I want you to take a percentage of your budget in addition to taxes, in addition to tithe. If you're an evangelical Christian like me, you tithe. Okay. In addition to those two things, take a percentage of your income to enjoy. Okay. And a percentage to invest and an additional percentage for outrageous generosity. I don't care what the percentages are, but if generosity and enjoyment are zero and investing is a hundred percent,

you're going to blow your wife up. Right. And your life. So even if you just add additional 5% for generosity and 10% for enjoyment, you get to buy the couch, the car, the trip, whatever the thingy is that lets a little steam off, and then you can put still the lion's share towards investing. But this is the point that you should kind of smooth things out just a little bit.

You don't use gazelle intensity at baby step seven right so some percentage for enjoyment and by the way before you state the percentage ask her what it is yes sir and uh then probably go with her answer okay and because she's not she's not going to say 70% for enjoyment. I'll just tell you now, she's going to want to buckle down and put pedal to the metal. See, the thing you're doing here, the problem is you almost said get it over with. You don't get this over with. Because the program we're putting in here is the rhythm of the rest of your life.

You don't get over generosity. You don't get over investing. You never get enough to do all these things. Right. So that's why these percentages, this is the same exact thing I do when I'm meeting with an NFL player who's making $10 million a year. Because their average career is 3.2 years. NFL stands for not for long. And we try to explain to them, during this time, you need to bank a bunch of this. You need to have some enjoyment. But too many of these guys enjoy it all, and then they have nothing when they come out of the league. So don't enjoy it all, but don't invest it all.

Don't give it all. Do all three at some percentage that the three the two of you are in agreement with and you're going to be perfectly safe good job man well done this is the Dave Ramsey show Hey, guys. At The Dave Ramsey Show, we really value your input. It helps us to know what's important to you so we can deliver relevant content to help you crush your money goals. We just launched a brand new survey, and we'd love your feedback. It only takes a few minutes, and you'll be entered to win a $100 Amazon gift card.

No purchase necessary. Take the survey at DaveRamsey.com slash survey or text survey to 33789. In the lobby of Ramsey Solutions on the debt-free stage, which can only mean one thing. Troy and Kelly are with us. Debt-free, guys. Way to go. Thank you. Where do you guys live?

We live in Corona, Riverside, California. Awesome. Well, welcome to Nashville. Good to have you. And how much did you guys pay off? $205,100. Way to go. All right. How long did this take?

20 months. Whoa. And your range of income during that time? I went from $185,000 up to about $235,000 and then back down to $205,000 right now. Cool. What do you guys do for a living? I'm a physical therapist. And I work at a med spa.

Oh, very cool. Well, good to have. Awesome. How much? What kind of debt was this $205,000? So some taxes, a credit card, a couple of cars. Medical student loans? Student loans, solar panels, and a pool construction loan. You're just kind of normal.

Oh, yeah. We want to get it all, you know? Just borrow everything. Yeah, we want to get everything. You're just like an American. That's right. Way to go, man. So did you cash flow all this or did you sell some stuff?

Everything. We did it on our own. No, didn't sell anything. You've been on beans and rice. I mean, you've used up over half your income after taxes to be able to do this for two years. She would tell you that, yes. I would. That's what that picture is. It's beans and rice our kids are holding up. Oh, okay. So, it's been a journey.

Okay. So, those of you watching on YouTube, you saw the beans and rice. Alright, there we oh okay all right so it's been a journey okay so those of you watching on youtube you saw the beans and rice all right there we go good all right wow so what i mean because you guys you obviously kind of uh did the the slingshot right from stupid all the way into smart exactly right and so what's the slingshot what causes that 20 months ago um you know next month is our 10-year anniversary uh wedding and i would say our whole marriage uh money has always been an issue uh many fights many fights and i was going to a conference in san diego uh before this all started and i turned on your podcast uh randomly and started listening to it and i'm like this this is making sense to me and uh oh like oh yeah but it wasn't making sense to me i came home and uh i told her about it and

you know it was it was it didn't go over well so then we got into another fight yeah of course um and it turned into we got to do this this is our we got to do something to change how we're how we're working in our marriage and uh she finally agreed we're going to give this a go, and I'm so thankful that she did. So, Kelly, the first thing is he comes in with crazy ideas, and you went, you're crazy. That's a normal thing, right? He hears this podcast, this nut burger on the radio, right? And you go, that's nuts. Nobody does that.

And it causes a big blow up and that's a normal process by the way that's the way i would have reacted if i were you by the way so uh uh what was it though that turned for you kelly where you said i got we got to try this because he said you kind of came around said we gotta try it what happened um i think i we were raised my brother and i our parents probably gave us more than what we deserved. And we lived a life that was absolutely amazing. But I used to see my parents argue a lot. And we have two young kids.

And I wanted the trajectory in our relationship to be different. And if I could eliminate one of those stressors that caused the divorce rate to go up in America, then we're going to, you know, have it, have a go at it. And so. Okay. So I'm willing to try something different because the big deal here is making sure the marriage is good. Absolutely. So in the name of the kids, in the name of the marriage, I'm going to do something I

don't even understand. I don't like. Yeah. But I'm going to try it. For sure. That's huge. Yeah. That's very noble.

Yeah. Well, that's, that's doing something beyond yourself. I mean, that's like putting others first. Yeah. Very, very cool. And that's generally where people's lives change. Yeah. Absolutely. doing something beyond yourself. I mean, that's like putting others first. Yeah. Very, very cool. And that's generally where people's lives change. Yeah. Absolutely.

When they do that. Usually we don't change our lives for selfish motives. Yeah. Usually we do it for someone we love. For sure. Or something we love. Yeah. That's noble.

Way to go. Thank you. So proud of you guys. So how's the marriage on this subject now? It's amazing. Yeah. I mean, we're on the same page. I think right now the sky's the limit now. we're on the same page. And, you know, we, I think, right now, it's sky's

the limit. Now we're finished. Baby said three, we're on 456. Now. And we can see the light. That's really all the hard work is paying off now. Yeah, sure. Well, I mean, the math starts to be easy when you get the principles. Absolutely. It's not easy. But it happens pretty, I mean, 20 months in the scope of your life is not bad. no no although it was hell yeah it was a long 20 months what was the toughest part of the 20 months all of it just kidding for me that's true for me it was is knowing that she was having such a hard time with it you know for it was in a hard it wasn't hard for me at all just i'm i'm a very minimalist kind of a guy um but knowing that it was tough for her was hard for me. And I wanted to get done because I knew how good it could be, and that's why I kept trying to tell her, it's going to be good.

I promise you it's going to be good. And just knowing that she was struggling, especially in the beginning, was tough for me. Yeah, that makes sense. Okay. Well, you've got all the components of a fabulous marriage there. It's always good. You guys are incredible.

So what do you tell people the key to getting out of debt is? well for me it's it's you got to have someone that's willing to go through the journey with you um especially if you're married uh the fact that she was on the page with me the whole time um knowing that we were working towards something it made it so much easier and then the budget i mean she's she knows how the budget just made a huge impact for regards to knowing what we had to spend and where we had to kind of trim down. And she did a great job with, you know, being on page with me with the budget for sure. So Kelly, what made you accept the budget? Well, I just realized today that the three things that like got me through and got me probably on the budget were my three W's, which was worship, the word, and lots of wine. And as long as I had, and it was boxed wine.

It was fine. But those three things, you know, just got through. And then realizing how much better every month went by our marriage was getting. So, of course, you know, all those things kind of in play made it easier for me. So what's really, really interesting is you said earlier that, you know, my brother and I, my mom and dad didn't tell us no very often. They did not. And so you had to learn to say no to yourself. Very hard.

And lots of people, too, and events. And you just have to know how to say no. It's a hard word. It's a very hard word. But it's the only word that grown-ups use. Absolutely. Yeah, that's well done. Now you're going to teach your kids the word, right? Yes.

They probably know it too well at this point, which is fine. They'll live. Yeah. Just a funny story for you, too. When we first started all this, my oldest daughter loves you and she talks about you all the time. So we walk in her room one morning, and she has the TV on, and we look over, and she's watching your YouTube show.

We're like, what are you doing? She's like, I'm watching Dave Ramsey. Oh, no, it's gone too long. Polluting the teenagers. I love it. Way to go, you guys. We're very, very proud of you. Thank you.

So well done. Who were your biggest cheerleaders outside of the two of you? I would say our parents were really, really big cheerleaders. Our friends and my coworkers were. They're the ones that got me through, for sure. Yeah. Okay. Good.

So, yeah, the word, the worship, and the wine. Yeah. Good. I'm going with WW. I'm thinking it's a plan here. I'm thinking it's a plan. It's all in the bible every bit of it that's right good stuff what about you uh troy what do you say um yeah just the

cheerleaders yeah same as her just the family being there to you know help out as needed and not so much that they're you know motivating us but they're motivating us by by being there to help yeah um and that's the biggest thing and all the friends not pressuring us to do stuff and knowing that we're going through the journey. And that's just, we appreciate that so much. Any of your friends jump on board while you're doing it? They always ask. A lot of the friends, they're asking, what's going on?

How are you doing? So you don't know if they're doing it, though? I don't know if they're doing it. No, I don't know if they're doing it. They'll own up to it when they do. They'll tell you later. Yeah. Well, well done.

Very good. We got a copy of Chris Hogan's book for you, Everyday Millionaires. Awesome. For sure. That's the next chapter in your story. So very, very proud of you guys. Thank you. Very well done.

Thank you very much. We're honored to have been in your presence and to get to meet some rock stars like you guys. You're heroes. Well done. Thank you. All right. Troy and Kelly, Riverside, California.

$205,000 paid off in 20 months, making $185,000 to $235,000. Cash flowed it all. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free. Yeah. Woo-hoo.

Yeah, baby! That's how it's done right there. So how many times have you listened to and watched these debt-free screams? And yet there you sit. When are you going to get off your butt? This is you. You should be next. Yeah, I'm talking to you. Right there. When are you going to get off your butt? This is you. You should be next. Yeah, I'm talking to you.

Right there. Yeah, you. Yeah, yeah. You thought it was somebody else? It's you. It's time. It's your turn. This is the Dave Ramsey Show. Thank you for joining us, America.

We're glad you're here. This is the Dave Ramsey Show. Common sense for your dollars and cents. God's and grandma's ways of handling money. Hey, we value the input from our listeners right here on the show. It helps us to know what's important to you so we can keep putting out the right kind of content. And we've launched a brand new survey.

We always learn something from you guys. Just go to DaveRamsey.com slash survey. It just takes a few minutes, and there's the possibility that you would be the winner of a $100 Amazon gift card. Someone that fills out the survey will get that. Text the word SURVEY, if you'd rather, to 33-789-SURVEY, to 33-789-or DaveRamsey.com-slash-survey. Tell us what you like and don't like about The Dave Ramsey show. And we may listen to some of it. No, I'm kidding.

We'll read it all for sure, and we always learn something, and we're always going to stick by our principles at the same time. So if you want us to start telling people to take out a credit card, that's probably not going to happen. But, you know, other stuff, we'd love to have the idea of hearing from you guys. So, again, text SURVEY to 33-789. Kristen is with us in Columbus, Ohio. Hi, Kristen. Welcome to the Dave Ramsey Show. Hi, Dave. How are you? Better than I deserve. What's up? I am a nurse practitioner, and I currently have a salary job that I really like,

but I'm looking to go out on my own and start my own business on the side. I'm trying to figure out how much do I budget out of my personal budget to start this up. I kind of have a general idea of what I'm willing to just like completely put in a blow category, if you will. And I don't I mean, you can really get down a rabbit hole with kind of stuff like this. And so I'm trying to be sensible about like setting a budget and what's realistic. Um, but also not shortchange myself, um, too. So I was just wondering if you could help me figure that out.

The faster the business makes whatever money you put into it back, the easier this decision is. So how much money are you talking about putting into the business and how quickly would it come back with your estimate? I mean, you're guessing, but what are you thinking? I set kind of a base budget to like just $5,000 just for startup costs. What does that buy? What do you need $5,000 for? That buys me basic equipment. It buys me a new laptop. It buys me some portable equipment.

To do what? What business is this? I'm a nurse practitioner, and I want to take primary care, like general health care, into the workplace. So I wouldn't need, like, a rental space or anything like that for a brick and mortar office. Do you have a laptop? I do, but it's on the fritz. And to support the electronic medical record that I would need, I need to get a new one.

Okay. All right. And so that's what, $1,000? Right. Okay. What else do you need i like um a portable exam table um and maybe and just some like blood pressure cough otoscope those different like supplies and stuff like that um and how quickly would you make five thousand dollars doing this

um i guess it depends on how quickly obviously but i mean if you do your plan and you work your butt off, can you make the $5,000 back in a month or is it a year? Oh, I would think at least maybe first three months. If it's very slow to start, I would think within three months. Okay, and what is your current income total? I make just over $100 right now. Okay. And what is your current income total? I make just over a hundred right now. Okay. So we take 5% of your income and we get it back in two to three months. And then you don't keep buying crap. Right. Now you make money. Right. Don't

call me and tell me you need more equipment. You take that equipment and you go make some money. Okay. And then only after you get this thing up to making $50,000, $60,000, $70,000 a year do you start thinking about more equipment or something. Okay. But, you know, that's the trap you get into. That's the rabbit hole you talked about, the wormhole you can go down, and the bunny trail, whatever freaking metaphor we want to use. But the idea being that just go make money with the business.

And where people get off track is they keep thinking, oh, I need to grow my business, I need to grow my business. Yeah, only after you really, really get things moving do we worry about that. Right now all we're trying to do is change jobs. The first goal is own your job. After that, the next goal is put more stuff into it and own a business. Okay, so do you think 5 percent of my income is reasonable yes because we're going to recoup it we're going to recoup it in two months okay maybe three but i really want you to do it in two if it takes if it

because here's the thing if it drags out a year you'd have been better off doing something else right and saving your money you know i mean because five thousand dollars a year you'd have been better off doing something else right and saving your money you know i mean because five thousand dollars a year i mean that's 480 bucks a month i mean you can make that delivering pizza two nights a week you don't have to have a laptop you know so you know so don't you know don't get that's that that's the thing that people can get all enamored with the dream of owning their own business and that kind of stuff. So, but you're right on track. You're doing the right stuff.

Hold on. I'm going to send you a copy of Christy Wright's number one bestselling book, The Business Boutique, Equipping Women to Make Money Doing What They Love. So there you go. Check it out. Open phones at 888-825-5225. Paul is in Denver. Hey, Paul, welcome to the Dave Ramsey Show.

Hey, thanks for having me. Sure, how can I help? So my question is, it's actually more about my mother-in-law, but she just turned 60, and she's kind of working like a dog right now. She has no savings, no retirement. She currently owns one rental property, and in about two or three years, she'll own the current house that she lives in. How old is she? She's just turned 60.

Okay. But she has a paid-for rental house. Yes. That's worth what? Probably $300,000 to $400,000. That's not a bad retirement. okay all right um and i guess her current plan is to you know just live off of the rent payments for those two houses um and it just seems like my concern i guess is one of the properties i don't see renting well

which is her current house and it it's worth probably $700,000. Where's she going to live if she did that? Probably end up with us. But I don't know exactly what that piece of the plan is. Yeah, until you can critique her plan, you need her plan. Sure. So we need to know what she's going to do. Because I would take the sub.

Where does she live? Denver? Uh, it's, it's a suburb of Denver further out. It's probably about an hour outside. Yeah. 700 might be a high rental. Uh, you might want to have two, three fifties instead of a 700, but Denver's real estate is pretty expensive. So it's possible that that's an okay rental, but she needs that. You need to know where she's planning to live, but she's got a million dollars worth of real estate invested. Yeah. That's not bad. I guess my concern is, well, what if she doesn't rent? What if she can't fill that rental?

Well, you sell it. You take the money and put it in mutual funds and live off the mutual fund income. She's a millionaire, dude. She's a millionaire. She's going to be okay. Okay. And I know she is really concerned about the idea of mutual funds because she has lost money in the market, you know, years ago. Yeah.

Well, that's an issue of education. But the point is, is this woman going to starve to death and have to move in with you and live off of social insecurity because she saved no money? Answer is no. She's a millionaire. She has a million dollars in paid-for real estate. Somehow, if she uses her brain, she can turn that into some money one way or another if she'll listen to somebody. True. I mean, you can live off of the income that a million dollars creates somewhere if you're half smart about it.

So I just think there's a lot of fears on your part that she's moving in with you, but I don't need Millionaire Mama living with me. Millionaire Mama can figure out a place to live. And by the way, she's 60. She probably doesn't want to live with you. I'm 60. I don't want to live with my kids. That's for sure. I love them, but I don't want to live with them.

So, you know, that would be like, no, thanks. The reason I work is so I don't have to do that. So anyway, uh, bottom line is, yeah, she's going to be okay. But if you, you probably just need to say, Hey mom, I'm just concerned about you. If you, you know, you want me to help you with your plan a little bit, I'll coach you along on some of the ideas. I'd love to know what you're doing. If you don't want to tell me and tell me it's none of my business. That's an option. But if you'd like my help or input,

I'd be honored to walk with you while you're figuring out what you're doing with these investments so you've got a good, strong game plan. Because if you've got a good game plan, you don't have to worry. This is the Dave Ramsey Show. Dave here. We just launched a brand new survey, and we'd love your feedback. You'll be entered to win a $100 Amazon gift card. No purchase necessary. Take the survey at DaveRamsey.com slash survey or text survey to 33-789.