The Ramsey Show - App - How Do I Get a Good Return on My Investments? (Hour 2)

Episode Date: September 20, 2023

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 Camel, co-host of Smart Money Happy Hour, joined by Ken Coleman, host of The Ken Coleman Show. And we are here to serve you today, America. You can give us a call at 888-825-5225. If you've got that burning question, don't be shy. This is the day to call. Ken and I, you know, we haven't been called intimidating many times in our life.

That's a great point. In fact, we couldn't intimidate an ant, let's be honest. I once fought an ant, and I lost. Exactly. You know, we have fun together. We enjoy being together. We're here to help you. We're not going to yell at you.

We're going to encourage you. And George is one half of the wildly popular duo, Rachel Cruz being the other half of Smart Money Happy Hour. And I'd like to point out that in the Yeti here is just water. Thank you for pointing that out. There are no cocktails or mocktails on the set today. I am unbeveraged here. I'll bet the advice would be better, though.

I wonder. That's fair. I wouldn't work any longer, but the advice would be great for one show. Well, hey, if you want some of that advice, you can try us, 888-825-5225. John is kicking us off in Seattle. John, welcome to the show. John. Hey, guys.

Thanks for taking my call. Hey, how you doing? Good, good. So my wife and I are 33. We're on baby steps four through six right now. And step four, we've got figured out the retirement stuff. And right now we're looking at step five and six. Um, we've got two kids, one more on the way. And so I'm focusing in on step five right now, which is the kids college fund. Um, and the

main question I have is basically how much to put in there for each of the kids. Cause you know, it seems like there's my view. So basically my wife and I of the kids. Because, you know, it seems like there's... My view, so basically my wife and I both value education. I've got an MBA and my wife's got a doctorate. And it's worked for us. Our careers made sense. We paid off our debt. And the career path we chose made sense.

We have constant discussions about, you know, we want our kids to go into certain degrees certain areas maybe um we're kind of discussing how much should we put away should we cover their undergrad should we set aside some stuff for graduate like should we set them up for our past i'm i'm personally on the fence between you know i think 10 to 20 years from now, you know, the ROI on certain degrees might not make sense. Like if my son decides he wants to do a six month plumber course and become an apprentice and start his own business and take some business courses on the side and, you know, start off with no debt, I would rather have that. But at the same time, we're kind of talking about,

well, if they're going to go down the education education route we want them to have some skin in the game because my wife and i both had to pay student loans and it kind of forced us to work while we were all right john let me john let me jump in for a second we're going to get to the money piece how old are the kids um so oh this is five youngest is two and then the other one's on the way okay john first of all i love your heart and i love that your intent on this but you need to breathe man uh they're two and five like just enjoy finger painting and sock puppets and whatever else is going on okay that's the first thing secondly um you asked the question and maybe it was rhetorical, but I'm going to, I'm going to take it literally as a guy who is way further

down the path than you. I'm only speaking from experience. You don't even have to call this wisdom. Okay. You have no freaking idea what your kids are going to decide to do. You have no freaking idea what the world of work is going to look like at that point. And you're absolutely right about the ROI. The ROI on a college degree right now is already plummeting. And that world is changing rapidly. I talk about that almost every day on the Ken Coleman Show. As the work guy here at Ramsey, I'm focusing on the education piece that qualifies you for work. But let me also say, you said, should we steer them?

Should we push them in the direction that we went? No. No. No. Let your kids choose their own path. But let me also say, you said, should we steer them? Should we push them in the direction that we went? No! No! Let your kids choose their own path. It's a disaster situation for parents to put pressure on these kids to do what you do. Yeah, where I'm coming from with that is that if there's a pot of money put aside and they want to do, I don't know, a fine arts degree or something to that nature,

that there would be some stipulations attached to the money maybe that the ROI would need to be positive on it for them to do it. And we would want to have that. But those variables are not even fully in your control. So the variable i would put on it is we're going to give you this money and you're going to graduate from your

undergrad in four years yeah we're not going to slouch around we're not going to do this in six years we're going to get good grades and graduate or you're going to use that for your plumbing trade school and you're going to be a freaking awesome plumber and you're just going to pull your pants up higher than most plumbers that's all all we ask. It's a little thing. That's big. Just for all of us. Can we all agree on that one? Yeah. So, you know, John, put the money aside.

You can put in a 529. But don't underfund it to allow them to go into debt to teach them a life lesson. Listen, I took on student loan debt. There was no wonderful lessons I learned. My life just would have been better without student loans. I worked just as hard. Everyone's life. That was because I had great parents who raised me well to work hard.

Now, could we have done better on the financial side and paid cash for college? That would have been great. But as far as work ethic and the character that your kids are going to have, you have a direct influence on that. We don't know if they're going to go into fine arts or they're going to be pro athletes or if they're going to be YouTubers like Ken and I, we don't know. And 20 years from now, we don't know what the world of work looks like or the world of college looks like. So the best thing I can do is what can I do today to set my kids up for tomorrow and the next day? And that means throwing money into the 529, knowing we don't know what the future holds. And the good news is, John, with the new Secure Act 2.0, you can now convert up to 35 grand of that money to a Roth IRA if they don't use it for college.

So not all is lost here. Would your recommendation be to do the 529 then or should? Yes. Because if I don't know how much I'm ultimately going to, should I just throw it in a brokerage account? It's the same thing. No, it's not the same thing. There's tax advantages with the 529 that you're not going to get with the brokerage account. And so I like the actual 529. The other thing is brokerage account becomes, well, we want to get a down payment on a rental property because we heard Airbnb is hot. That's right. And so I like the 529 having a specific goal that is meant for this child. And again, you can always change beneficiaries. What if one of them goes to a really expensive school and one of them does the trades?

And so there's a lot of options you have when you have money. The options when you don't is student loan debt. And to me and my family, for me and my family, that's not an option. It's off the table. Yeah. But be prepared, John. I want to prepare your heart because you and your wife represent a lot of parents out there that I'm speaking to. You need to be okay if your kid doesn't want to go get the fancy degree at the fancy college that you went to. That does not mean they're losers. And college and the value of a degree is going

to be so wildly different in 15, 16, 18 years. I can't even begin to tell you. I'm telling you. I'm telling you right now, folks, it's going to be very decentralized and splintered from the offering that you see today. It's too much money. It's too much debt. And it's so little relevance to the American workplace right now. Right now, imagine what it's going to be like in five to seven years. You're going to have a bunch of empty buildings. And you know what I say? Good riddance. Ken, I love, I've heard you say this before. Is a college degree the only way and is it the best way to the work you want to do?

Let's focus on the work we want to do instead of some degree we want to get. And we'll have a generation that's actually happy with their work and making good money. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So, if you feel like the system is working against you,

try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs.

They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to the Ramsey Show. I'm George Campbell, joined by Ken Coleman this hour. Give us a call at 888-825-5225. So Ken, many moons ago, just over 90 days ago. Great reference. On the show, I said, hey, here's a challenge for the

listeners out there, for the credit card people. Because we talked about, I did a poll saying, hey, what is the reason you won't cut up the credit card? And there's a lot of reasons, we got fraud protections, and I love my my rewards and it's the convenience and fear, security glands flaring up. And so I challenged everyone to say, hey, for 90 days, don't use your credit card. Put it in a block of ice, lock it in a safe and just use your debit card, stick to cash and see how it changes your spending. So this has now been 90 days. And so what I want to do is challenge the listeners. If you actually had committed to this, I know you did, because about at least 67 people said, I'm committing to this.

67, that's a great response. At least, so I've got to go back through my DMs and find it. There's some homework on my end, but if that was you, I need you to reach out to me, at GeorgeCamelWithAK on Instagram. Send me a DM if that was you. Now, if you didn't do the challenge, don't bother me, all right? But if this was you- Just follow me at Ken Coleman. So how about that? Yes. And you can talk to Ken. He's lonely over there.

Yeah. I love to get in the DMs. There we go. No, I don't. But I'm curious the results of this. I actually would like to know that too. Anecdotal study. Can we say if for some reason you're listening right now, call into the show? I would love that. If you're listening and you were one of those people who said, I committed, here's what happened. Good or bad. Let's put them

to the front of the line, Christian, and let's see if we have someone who took George up on his challenge and they're listening to us right now and they call in and they did not use their credit card for 90 days. My hypothesis was you're going to spend way less, you're going to have way more margin, and you won't miss the precious rewards, and you're going to cut up that card once and for all. Have you seen the legislation that is pending in Congress right now? Yes. Have you heard about this? Well, Visa and MasterCard have been fighting to increase the transaction fees,

the interchange fees they charge to businesses. Right. Which will end up, by the way, hurting the consumer. Because what do businesses do? You think they're just going to take it and just pay the extra 1%? No, they're going to increase prices by at least that. No, they're going to pass it on. They're going to make your sweater a little bit more expensive, George. Exactly. And so we're all complaining about inflation while getting excited about our rewards cards, which are causing all of this to happen. Because guess what? Visa and MasterCard are not gifting you that out of generosity. That's the fees. They need to make

money in order to pass on your rewards, which in turn makes all of the things you buy more expensive, which in turn makes you complain about inflation. They love those rewards. So those could go away, George. Yes. It would be a great thing. A great day in America. A great day in America if we had to live without our rewards, which by the way, 30 years ago, 20 years ago, was not even a thing. So the idea that you can't live without a credit card, I go, well, I just watched this Burger King ad, Ken. Did you see this? It was a 1993 Burger King ad where they had just started accepting credit cards. And they were interviewing people in the restaurant going,

they were going, oh my gosh, what do you think about this? And they're going, well, I mean, I can't imagine someone swiping their credit card for fast food. Right. Who's going to do that? Yeah, it's nuts. Do you remember when the whole rewards thing actually became a thing? I mean, it was in my lifetime because I grew up with it.

And so at least, I'm going to say 20, 25 years ago, credit card companies started becoming aware of this. I'm going to get you, what color hat would you like? Trucker hat, solid color. It can't be red. And I'll explain that in just a moment. Okay, I'll go black. Okay, I'm going to get you a black trucker's hat that says Marfa on the front of it.

M-A-R-F-A. Make America reward-free again. Wow. I don't know if it'll stick, but I will proudly wear that hat, Ken. It's probably not. And now I understand why it can't be read. Thank you for that. You see what I was doing there? Yes. Because you were so passionate, like it would be a great day in America if we had no more credit card rewards. So I thought, well, you need a Marfa hat. You heard great in America. Make America reward free again it i feel like it's too many letters if you've ever wondered what it's like to be inside the brain of ken coleman that was a great picture there it is it's like a 15 year old and a 75 year old all at once yeah it's an old man with a young brain i love it thank you for that ken thank you

i feel like that's a compliment yeah i'll i'll report back ken as i uh start to inquire with all the people that committed to the challenge, but I can't wait to see the results. I think it's a great challenge. All right, let's get to the phones. Gina is in Sacramento. Gina, welcome to the show. Thank you for taking my call. I have a quick question on investing. I'm on Baby Steps 4 and 6, and I've always heard that you should contribute to your company retirement plan to get the match. But what about when the rate of return is really low and I'm having better returns in my Roth IRA? Should I just max that out instead? I don't see it as an either or. And so if you look at our investing strategy, it's five words, math beats Roth beats traditional. And so what is your match with your

employer? So if I contribute 4%, they will contribute 2%. And that's the maximum. Okay, great. So we're going to take that first, because that's a 100% return. So regardless of what the fund is that you're invested in, you just doubled your money instantly, right? Or at least 50% of it. Should I pay attention to what the annualized rate is of return or the cumulative? The annualized is what you're looking for. And you want to look at this over a long period of time. So I wouldn't be looking one year in. For the past four years, my annualized rate of return is 1.55%.

Okay. And what about your Roth IRA? That is 4.8. Okay. So what you want to look at is what am I invested in in the Roth IRA? What actually makes up, is it a mutual fund inside of there? What are you invested in? Yeah, it's just, I picked a fund and then it just does its thing. Okay. So what I would do is look in with your 403B plan and say, what am I invested in? Did I choose some rough funds? Do I need to change my allocations going forward? And that's what I would do. And usually there's going to be a financial advisor tied to your HR's 403B plan that you can reach out to with those kinds of questions.

And if there isn't, you can always reach out to a SmartVestor Pro. Okay, that sounds good. Thank you. Yeah, you got it. That's a great question. And I don't want you to get hung up because a lot of people, Ken, we always spout these numbers. We say, hey, you can get 11% annual average return if you invest in the stock market. And they go, where's my 11%? I'm getting 4% this year. And I'm going, well, yeah, I never said every single year on command, it's going to be an exact 11%. I mean, I'm looking here, Ken, at this chart, right? This is the S&P 500. This represents the 500 largest, most established companies. And that's really what we call the

stock market. They represent the overall stock market. And in 2020, we had a return of 18.4%. Everyone would say that's amazing. 2021, 28% in 2021. And then 2022 happened and everyone freaked out because it was negative 18%. What are we on track for right now? And we are back up. So far, 2023, 17%. And so when you look at those numbers,

and you can see this chart, there's a whole lot of blue, which means we're up, and a whole little bit of red. And so when you look at the long-term track record of the stock market, most of the time it's trending up. And yes, if you look at a given period, six months period, a year period, you may not see 11% or 18% or 20%. But overall, what you're looking for is a good solid mutual fund. It has a good track record. It's invested in the right kinds of companies. We recommend splitting it into four different types of mutual funds. So you've got growth, growth and income, aggressive growth, and international. And what that does, it just diversifies. It just says, hey, let's not put all of our eggs in the Silicon Valley basket of all these hot tech startups.

Let's not put all of our eggs in the old big companies like the Home Depots of the world. And let's also invest in some international companies like Samsung or Nestle so that if the U.S. market takes a dip, we found there tends to be a inverse relationship where the international funds could balance that out. And so that's all you're doing. And over the course of your investing journey, which is not a year, it's 20 years, 30 years, 40 years, you're gonna see great returns and you will thank us later. So you can look into it. I wouldn't stress.

I don't look at my 401k every three months to see, am I up, am I down? I just invest for the long haul. And once a year, once every six months, I'll check it just to see what's going on. But I don't stress out about it. Yeah. I don't even think about it. I just know that what the average is saying, it's going to be great and just hold on to it. And there's so much fear mongering out there and so much news about everything that's bad. You'd be surprised if you just took three days, just three, and didn't pay attention to the news at all. How much better you feel?

And then check back in and go, huh, my life doesn't suck. That's right. And remember this. It's not about timing the market. It's about time in the market. Don't jump off the roller coaster until the ride is over, my friends. This is The Ramsey Show. This is The Ramsey Show. I'm George Campbell, joined by Ken Coleman this hour.

888-825-5225. We are here for you, helping you take the right next step in your life, in your work, and your money. Martha is up next in Orlando. Martha, welcome to the show. Hi, thank you for taking my call, first of all. Sure. I've got a quick situation. I'm getting ready to retire in the next couple of years. I'm debt free. And my question is, I don't get a lot, I won't have a lot of income coming in once I retire I am self-employed like I said not going to get much in in social security so therefore I've got a couple investment properties to actually generate income right now so I was thinking my personal home the homestead property if it's wise to do a reverse mortgage on that, take the money from that and buy another property, cash obviously, and use that as income. Rent it out and use the money as income.

Where did you hear about this idea of the reverse mortgage? Oh, I'm in real estate. Oh, okay. So you know the ins and outs of these deals? Yes. Oh, boy. And it still the ins and outs of these deals. Yes. Oh, boy. And it still sounds like a good idea to you. Yes.

Because, you know, if I could be in my home. Tom Selleck is selling these schlepping them on late night television. Yes. Oh, boy. Well, I have strong feelings against reverse mortgages, so I cannot in good faith tell you or anyone else who would call into the show that this is a wise decision for their financial future. It puts your home at risk. It's adding more debt to your name. It's causing you to go backwards financially. And the interest and fees can reduce that equity even further. And if you don't meet the loan obligations, you know what happens? You're in real estate. Foreclosure. Yes. Yeah. But the reverse mortgage is until you pass away. You can stay there as long as you can.

Sure. But I'm confused why this is a money-making scheme to do the reverse mortgage to get a rental? Because I'll get the equity I got from my home, take half of it, okay, and put it into another home. Is the home paid for? Huh? Is the home paid for? Yes. So you have no payments on the home and we're going to create a payment. They're going to pay you by robbing your equity over time. No, they're not going to pay me. I'm going to take all the equities on the house and put it into another... So you're talking about a home equity loan? No, no, no, no.

You can take the funds. A lump sum. A lump sum. Okay. And that's what you would do? That's enough. That's going to give me more than 400, cost of 500,000,

which I can use and purchase another home and then generate income that way. But that's essentially like you saying, hey, should I go take out a mortgage for $500,000 as a retirement plan? Yeah, but I'm not paying on it. How are you... I don't understand how you don't think this debt is attached to your name. It is attached, but I'm not making payments.

I need to make income. Well, this isn't the plan if we're talking about making income. Yeah, this is a disastrous idea. So let's find a better plan. So you have rentals. What are the rental properties worth? One is worth $400,000. Okay.

And the other one? Is $80,000. Okay. And are they paid for or do you have mortgages on them? No, they're paid for. Everything's paid for. And what's your current house worth? It's over 900,000. Love it. And do you have anything else to your name? Any other assets? Anything in retirement? Very little. Okay. So on paper, I'm seeing you have $1.5 million in real estate or so?

Mm-hmm. So wouldn't this be a better plan if you're looking at making income? Why don't we sell maybe your personal – maybe we sell everything and we figure out a new living situation so that you can free up that cash and invest that instead? Because these rental properties, what are they making? And investing, I don't know how to invest. I've got burning in all these investments.

Well, I want you to make wise investments. There's a broad spectrum from sucks to amazing when it comes to investing. But I'm telling you, you don't have to do this rental income plan. What are they bringing in total? What's the net profit per month? I will say they bring like 2400 okay and that's not enough for you to live off of on top of social security no okay so how much do you need to live off of i need at least another i will say about seven grand you have ten thousand dollars

in expenses with no payments i Yeah, I like to travel. You don't have enough money to travel. That's not a living expense. That's like me saying, George asking me, Ken, how much do you need to live off of? And I throw a huge number out there. And I go, well, I like to drive. That's what I need.

I told you. No, that's not what you need. No, George has been very nice. I'm going to be very honest with you. You need $7,600 every single month to travel? No. First of all, no, stop. what you need no no george has been very nice i'm gonna be very honest you need seventy six hundred dollars every single month to travel no first of all no stop you don't need to travel it was rhetorical i know but i'm i'm irritated listening oh martha we irritated ken okay i got my car he's getting a little verklet you don't need ten thousand dollars you don't need ten grand

you need to pay for your utilities you need to need 10 grand. You need to pay for your utilities. You need to pay for your food. You need to pay for your clothes, transportation, other miscellaneous expenses you can save up. But you don't need that kind of money. And to take out a loan from your equity, a reverse mortgage to get another house to spit off a little bit of money for all of the risk and all of the upkeep and everything else, it's just nonsensical. It doesn't make any sense. I would rather you sell all your properties and scale back your living, and you're going to have a very nice nest egg. Yeah, I guess so. I guess you're right.

Yeah, I mean, you know, I mean, you could decide. Less travel for me then that means less travel less spending money but less risk debt is risk how old are you martha um 61 oh my how many more working years do you have now it's going to give another couple more years okay what's your income huh what's your income aside from the rental's your income? Aside from the rental properties, what do you do for a living and how much do you make? We generate a good $200,000 right now. Who's we? My husband and I. Okay. So he's working as well. Does he have any assets or is this what you laid out? Is that everything between the both of you? That's everything for us. Okay. So what

if we put this $200,000 to good work for the next five years? Because you know what $200,000 is for five years? That means a million dollars is going to pass through your fingers over the next five years. Now, what most people do is they wake up and go, oh my gosh, we made $200,000. We're doing our taxes. I don't know where it all went. We got nothing to show for it. Or you could take advantage of all these catch-up contributions, start maxing out your retirement accounts, start socking away money, and have some retirement with dignity. That's my goal for you. But the way to do it, you've done such a great job getting these places paid off,

and now you're telling me you want to go back into debt, which is not going to set you up in retirement. I don't see it as a debt. You don't see a mortgage as a debt? No, because that's until I pass on. They've done some really great marketing then, haven't they? It's literally in the program. It's called a reverse mortgage. Do you know where the word mortgage comes from? It's a French word, death pledge. Okay. Did you know that? It's a real fun,

dark fact for you, Martha. And so if you're telling me that's not debt, when the word death pledges in it, I don't know what to tell you. You called the wrong show today. But I want you to have an amazing retirement. I want you to travel. And I also know that going into debt is going to hinder your ability to travel. And right now we're getting starry-eyed over what a rental income could do for us. And I also know during COVID, you couldn't even collect rent. It was a moratorium and it caused a lot of people to freak out for good reason. That part is true. And so that I don't want you in a situation like that. And what happens if the HVAC goes or the renters don't pay

or you have trouble filling that spot? It's not a foolproof money making scheme. All while you're over in the Amalfi Coast, you know, what are you going to do then? I would set some goals over what we're going to do for the next five years because I don't want you working in your 70s. Is that fair? That's fair. Okay. And I would not be scared of the stock market. If you are, keep listening to this show. Connect with one of our SmartVestor pros. They've got a heart of a teacher. And this is a network of investing professionals across the country. They don't work for us, but they will take care of you and help guide you along this investing journey and give you some peace that your money's not going to disappear. You were serious about the mortgage? It's a French word for death?

That's a real thing, Ken. I thought you might have been messing with her. No. You can Google this, folks. I wonder how you say it. Death pledge. Mortgage. Our team just put it up there. French. Mort. Death. Wow.

Gage. Pledge. George, you blew my mind. I'm full of fun facts. If you guys ever want to do a trivia night around mortgages, take me with you. I'll be your Huckleberry. This is The Ramsey Show. Hey, folks. Welcome back to The Ramsey Show. I'm George Camel, joined by Ken Coleman. It's a free call at 888-825-5225.

My mama always told me that sharing is caring, Ken, and so I'd really appreciate it if everyone out there, if you enjoy the show, consider sharing it with a friend, hitting the share button wherever you're listening, leave a review, and just tell people about it hit the subscribe button let the algorithms know you're into it so that we can displace all the filth that's out there all the toxic advice that's uh constantly swirling around us and i know it is because you guys send it to us going have you guys seen this you got to talk about this on the show and so one of the ways we can help with that

is getting to the top of your YouTube algorithms and podcast algorithms so that people know we're out here telling them the truth even when it hurts. So we really appreciate that. And throw a little something extra in if you like George and I together. We've been called the root beer float of the Ramsey show. So we're very proud of that moniker. I don't know why, but it's something I, it's on my wall.

Yeah. Is it really? Picture me and you, 8x10, root beer float across the top. I say that, now some fan is going to send us an 8x10. I know. We don't, no, we're joking. We're just having fun. It's going to be the Step Brothers movie poster, but with our faces on it instead.

Yeah. Root beer float. You know why we do this show, George? Why? For people like Chappie chappy online too that's right i've been waiting this might be the first chappy in years the first chappy i've ever talked to in my life and i couldn't be more chappy's gonna deliver out in san francisco what's up chappy how's it going chappy. Is that a God-given name? If God is my mother, then possibly. But no, my real name, unfortunately, is Christopher.

But I've gone by Chappy. I'd stick with Chappy. Three months old. That's awesome. Nobody knows me as Christopher. I don't even answer to Christopher. Well, and we will not call you that. You are Chappy to us, and that's all you'll ever be. I love it.

How can we help today? Well, thank you for all the great content and conversations. Really enjoyed the stuff with Alex Hermosi and Grant Steffen and whatnot. Oh, thank you. My question is around student loans, as many are at my age, around 30 years old. So I've got some cash on hand, but I've currently student loans of about $17,300. And basically the question is, should I just take all the cash and, you know, one lump sum payment, you know, basically at the end of this month, pay it all off, um, or kind of,

you know, break that down to whatever, a thousand dollars a month, you know, smaller, you know, multiple payments. How much cash do you have? In total, my cash on hand across cash savings and investments, $113,000. I've got 30 odd in a savings account that was for a house, but didn't buy a house, you know. So the market was challenging to get into, and now the interest rates go up. So basically taking, you know, that $17,000 that's owed out of the $30,000 that I have and just paying it all off.

Dude, pay it off today. Yes, like right now on the phone with us would be even better. Just bam, done. Sign in, log on, click. Yeah, like right now on the phone with us would be even better. Just bam, done. Sign in, log on, click. Yeah. Done. What's holding you back? Why are you wanting to do it over a longer period of time?

I think it's just like the shock value of like taking $17,000 out of my account, you know, writing that check. You know what's even greater shock value? Taking out $17,000 in student loan debt. Yeah. Yeah, we don't even blink an eye when we let students do this, do we? Here's $80,000. We don't know.

We've never even seen $80,000. Good for you. Way to go. Your future's going to be great. You're $100,000 in debt. Woo-hoo! That's a great impression, Ken. They sound just like that.

I think it does, yeah. So, Chappy, I'm paying this thing off today, man. I'm never looking back. I don't think you're going to regret it. I understand that's a lot of money to see blown in one fell swoop, but that's exactly what you need to do is get out of debt as soon as possible because that means those next paychecks all stay with you. That's the issue.

You're not worried about what the next headline is around student loans. You're just going, huh, maybe I'll change the channel. Just a fun exercise real quick, Chappie. Let's just assume that you've paid it off right right now how do you think that's going to feel what do you think that's going to be uh what's going to feel like emotionally it'll feel good uh also seeing my bank account drop i didn't ask you that i didn't ask you that but no no it would be nice to be to be debt free and be able to take you know that what is three hundred dollars a month yes amen when the truth is chappy that's 17 grand it doesn't have your name on it in your bank account it looks like

it does it's got sally may's name on it yeah but let's focus how much money will you have left after paying the 17 off um whatever 113 minus that's right hey bro that's a lot of money for a debt-free guy who's got a huge future in front of him i'm trying to change your mindset you're so hung up on watching 17 disappear from your bank account but you forgot that you're watching 17 disappear from your debt balance sheet so 95k remaining 95k debt free and 300 a month raise that's what you should be thinking about i'm gonna tell you what's gonna happen after you do that chappy's gonna be happy i had to do it how did i not get there first i'm a little upset with myself yeah i'm so proud of you man we want to see a happy chappy be gone this is ken's new tagline

for the rest of the hour we should move on to the next call because i can't stop myself it's like a toddler it's just sounds too good i love it well next up is a less exciting name, but a beautiful name. Brooke is with us in Oklahoma City. How are you, Brooke? I'm good. How are you guys? Good. How are you? Well, I kind of have a situation and I was hoping to get some advice or just any ideas on how, you know, I could mess up my financial situation or fix my messed up financial situation. Okay. What's wrong with it?

Okay. Okay. So I was living with my grandparents and it became a very toxic environment because my grandma has a bipolar, you know, that's, you know, what that can be like. Um, and I was living there, uh, you know, no bills. I was going to school and I ended up running a balance with the school I was living there, you know, no bills. I was going to school, and I ended up running a balance with the school I was going to, so I basically had to drop out because I had no way to pay for it and get a job. While I was working a job, I wasn't making enough at all.

Then I got an apartment, and I found a different job where I made a little bit more, but it wasn't cutting it, and every month I was living paycheck to paycheck, and so I thought, okay, well, let's get another job, try to find something more high-paying, and no one is going to hire me without a degree. That's just a simple fact. No, not true, not true. Okay, well, okay. So I see what you mean, but

I thought- Do you have a job right now? I do. Okay. What do you make? 52K a year. Good for you. Without a degree? Without a degree, yes. I thought you just said no one's going to hire you without a degree. You're making 52K. Well, yes, but it's not enough to pay my bills what are your bills do you have debt i yes i've i've in order to live here i've i've maxed out my credit cards i've taken out different loans and i'm working full-time and going full-time at school because I found a grant to get my school account

right. Okay, Brooke, let's pause. Let's just say we put this whole thing on pause and we go, let's get a financial foundation under us. Let's get ahead of these payments. Let's clean up this debt. Let's stop maxing out the cards. Could you do that? Because right now you're running a million miles an hour just speaking. I imagine that's how your life is too. And we want to help you with that. One of the things I'm going to recommend is, and George, I want you to give her some stuff to help her really fast. You have got to pause on school. You do not need to be going to school full time. Full stop, pause. I don't care about the grant, stop. You need to be

working a second, maybe a third job to get your income up in the short term so that we can get control of your debt and your expenses. Let's stabilize your financial life. Then we'll worry about the professional choices. Absolutely. And Brooke, I'm going to do you one better. I'm going to gift you one year of our premium version of EveryDollar. And here's what I want you to do. Go to everydollar.com slash budgeting. Everyone listening can do this. I'm doing a free training on September 26th on how to break the paycheck to paycheck cycle in 90 days. This was made specifically for people like you. It's at 1230 Eastern Time, 1130 Central Time. I'm going to walk you through how to use our tool to become debt-free, to get that emergency fund filled up,

to create that margin, and you're going to be so excited to budget. So hang on the line. I'm going to gift you one year of that and then join us every dollar.com slash budgeting for that webinar. And I'm going to walk you through that specifically and say, Hey, I'm Brooke from the show. I'll get put you right to the front of the line to get your question answered. Brooke, thank you so much for the call that puts this hour of the Ramsey show in the books. Hey, it's Ken. If you love the show and want a deeper dive on your money journey, we have a weekly newsletter that gives you trending and helpful articles and tips on following the Ramsey way. Go to ramsaysolutions.com today to sign up for our newsletter. Again, that's ramsaysolutions.com to sign up for our weekly newsletter.