The Ramsey Show - App - How the Debt Ceiling Affects Your Money (Hour 2)

Episode Date: May 16, 2023

Dave Ramsey & Rachel Cruze answer your questions and discuss: Why it's hard to pay off debt if you don't combine finances in marriage, How the debt ceiling debacle affects you, What to do with an insurance payout from a wife's passing, "Should I help my girlfriend with her expenses?" Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Join a Personality-led FPU class. Click here! Enter The Ramsey Cash Giveaway for a chance at $3,000! https://bit.ly/TRSgvwy Shop our bestsellers during the $10 Sale! https://bit.ly/TRS10Sale Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Live from the headquarters of Ramsey Solutions, broadcasting from the pods moving in storage studios, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. Rachel Cruz, Ramsey personality, number one best-selling author, host of The Rachel Cruz Show, co-host of Smart Money Happy Hour with George Camel is my co-host today. Thank you for joining us, America.

Lee is with us in St. Louis. Hi, Lee. Welcome to The Ramsey Show. Hi, Mr. Ramsey. I was calling today because I'm trying to get through these baby steps kind of on my own. Since my husband and I, our finances are separated. And I'm wondering if I should stop putting into my 401k to get there faster. Why are your finances? Is it Leah or Lee?

It's Leah. That's okay. No, no, it's great. It's great no no it's great it's great i've been called worse no oh my gosh uh i'll call you by your right name though um yeah leah why why are the finances separate they didn't start off that way uh we've been married for 14 years in august and when we started out um our finances were together, but we thought a lot about money. Bills were always paid. I'll say that. I've always worked full time. But my husband, when we got married, was going to school. And he actually went to pharmacy school. And when he finished pharmacy school and started getting what I call like his big money. We were doubling up on his loans and paying those off faster, but the checking account was always to zero and that he just couldn't take it anymore. And I couldn't take the fighting.

So we decided together to split our finances. But now fast forward, that's been about eight years and I'm still kind of living paycheck to paycheck essentially. And I know that that bothers living paycheck to paycheck, essentially. And I know that that bothers him for me to say that. But that's it. Well, it's kind of a Dr. Phil moment. How's that working for you? It's not.

It's not. I know. So Leah, here's the truth. Here's what we have found. It's really difficult. It's not that it's absolutely impossible, but I want to say it is really difficult to win with money long term and have money goals like getting out of debt, saving up an emergency fund, like doing all the baby steps that we talk about. When you are in a household and you're working on one income and the other person is there with their income, but you guys share bills, your names are maybe on each other's debt because you're married. Like, I mean, it's like it's half in, it's half out. And so for one to go on this really straight path and run really hard while the other one isn't there, it's almost like you're just dragging this weight behind you trying to

make progress. And it's really difficult, almost impossible to make progress when that happens. And so honestly, I would say, Leah, I mean, the tactical answer to your question is yes, pause retirement while you're paying off debt and getting an emergency fund in place. But that's two, three steps later. I think the first main step is you and your husband. I mean, honestly, sitting down and you guys really getting to this point, though, where you communicate, obviously, your needs, your desires, what your fears were, what the frustration was eight years ago and bring it back up. Because what y'all basically did was just decided to avoid a fight instead of get to a resolution by just separating.

And a lot of couples do that. Well, we just fight. We can't do this. We're going to just separate and just ignore each other financially and run on these two separate roads. But the issues are still there and they're probably coming up in other places in your marriage too, Leah. Yeah, he, we still fuss and fight about it because he's unbelievably frugal. Like he goes neutral down to hell to save on gas. So he's paid off his student loans, which were very high, like over $160,000. He's paid those off. He has an amazing savings, but I'm still over here like chugging along paycheck to

paycheck. And why is that because of your income or is that because of your money habits? I definitely a combination. He makes double what I make, but we try to split the bills. So I feel like, okay, I can get the bills met, but then I've discovered now through your book, thank you. I'm so excited you're on the show today because I love you and reading your book has opened my eyes to my own issues that I didn't even know I had. And I was like, oh my gosh, that's me. That's why I do that. And I didn't understand. So now I'm like, you know, this age of enlightenment and I'm like, Oh, okay. So now I'm like, okay, let's make a budget and let's not spend money on Amazon and let's not go out to eat five times a

week. And, you know, so I'm learning, um, there's definitely some behavior stuff on my side, but also when I'm still trying to meet, like all the bills that we've kind of said that we would meet together, but separate, it's hard. Yeah. Yeah. So this overall situation is not efficient. It's not good relationally. You're not resolving the underlying issues.

He's not respecting your ability to enjoy life, and he's gone on with his frugality so much that instead of it being a virtue, it's turned into something you're starting to resent. You're paying more than half the bills with less than half the income. I'm not sure how you figured that out was okay. And so, you know, there's just so much wrong with this. So the old book of common prayer says this for richer, for poorer in sickness and health unto the all my worldly goods I pledge. And it's this idea of joining our lives, because here's what happens relationally and practically as well. What you spend your money on says what you value. And you value going out to eat and enjoying life like Rachel. Okay?

Rachel's mom, on the other hand, has six-year-old leftovers in the freezer. She's your husband. Okay? Yeah. This is true. They fell out when I opened the door the other day and i said you're throwing some of this out or i am it hit me on the toe this has got to stop and so this is this is how life works right i mean this is marriage and so we're going to i'm going to enjoy my wife's frugality she's going to know that her life is much more fun because I'm around because I'm the minister of fun at our place and I'm the spender by nature even

though I teach this stuff every day and so I'll be the one that plans the fancy spancy trip that she gets to take so you're that person and that's he has that benefit by having you but he's not getting the benefit of that. You have the benefit of having some net worth and actual nest egg built because he's freaking frugal. That's awesomeness. See, Larry Burkett used to say, if two people like just to like get married, one of you is unnecessary. But you're not getting the benefit, the complementary of your complementary skills and values. Instead, they became a reason for separation. And Leah, I'm telling you too, there's a level of couples when you separate your finances,

you're separating something that's supposed to be unified. Yeah, dreams. When you marry someone, you are sharing your life, not in this like codependent way of, you know, all that. Like you still are Leah and he is still him. And that was to Dave's point earlier. Like you're still going to be who you are but when you separate that and you guys don't work together with your finances I'm telling you there's stuff that you guys are avoiding and you end up being roommates that there's a level of intimacy that

is created and vulnerability when you say I everything I have is yours, everything you have is mine, and we're a team. We're married. It should be us against the world. And instead, you're in this triangle with the world trying to dance around it, and it's exhausting. So your marriage will thrive, will be so much richer and deeper if you guys work on the same team. So that's the next conversation. We're going to give you a financial peace university. I want the two of you together to go through it. I'm going to give it to you as a gift. If that doesn't solve it, get in marriage counseling for the good of your relationship and your future. Rachel Cruz, Ramsey Personality is my co-host today our question of the day sponsored by

neighborly your hub for home services if you're moving you have a long list of to-dos but neighborly has local pros like housemaster five-star painting window genie and junk king to check items off that list visit neighborly.com to schedule home service experts near you. And today's question comes from Wayne in Pennsylvania. Right now, what would be the best investment and stocks to invest in if there's a downturn coming? If the government does not raise the debt ceiling in June and we go into a recession, what is the best thing to do with our money? Well, Wayne, I mean, I would say the, I mean, honestly, we're still so consistent regardless of what downturn is happening, especially when it comes to investing. If you are out of debt with a

fully funded emergency fund, you still want to be investing. I mean, even in a downturn. Especially in a downturn. Yeah, we've had ups and downs. And what happens is a lot of people have a lot of fear and they freak out. And so they either stop investing or they pull their money out at the bottom, which is actually the best time to invest

because then you get to ride all the gains when it goes back up. And so I would be very consistent, Wayne, on what you're doing. I mean, we talk about retirement a lot, 401ks, Roth IRAs, you know, good mutual funds within those and just continue the path. Now, you know, if you are in a position and, you know, with a recession, I mean, the job market and stuff, you know, that's sometimes where you see significant possible layoffs

and that kind of thing. So if you're in an environment, a company or an industry that layoffs are happening, and you have a three month emergency fund, maybe I would probably bump it up to six, you know, you can be conservative on the same on the savings end to get to money. But other than that, I mean, I would I would keep investing. But in June is when the debt ceiling, Dave comes into comes into effect. and so there's that whole conversation going on and so when you look at that what are what are your thoughts around all that I yawn it's happened so many times in my 62 years that they get up to the and they're just gonna raise it right I mean

what are they gonna do yeah of course they're to raise it like a hundred percent of the time they raise the debt ceiling because they just can't keep quit spending they spend like they're drunk and on drugs i mean they just spend all the time up there and so they're going to raise it of course they're going to raise it but there's going to politically posture around and act like it's somebody's fault. It's not somebody's fault. It's your fault and my fault because we elected those idiots. And we keep sending them up there. And they keep doing the same stupid butt stuff over and over and over again. They're going to raise it.

And even if they don't for three weeks and they have to set some federal workers aside or some kind of crap like that, like they do a time or two, I can remember. I think it's happened twice or three times in my life but every so often we get this thing but it's democrats versus republicans and i'm going to push through my little agenda in order to not hold i'm going to hold the nation hostage so i can get my little political crap into the bill and that's what we're doing and that's what we're seeing up there right now at this moment yeah as always so they're going to pass it and and even if they don't it's not going to throw the nation into a recession where'd you get that that's just wrong it's not going to do that so all of that aside though your core question is yeah your core question is what do we invest in

i invest in four types of mutual funds, growth, growth and income, aggressive growth, and international. I prefer mutual funds that have at least a 10-year track record and all of the ones I currently own do. And I invest in those in up times, in down times, in all times. I never stop. I never stop. I never stop. I invest all the way down. I invest all the way up.

I am always looking like I'm the smartest person on the planet. And the only intelligent thing I did was I didn't stop. And I just keep investing. And I just keep investing. And I just keep investing. And we found all kinds of research that says the number one correlating factor to people who build wealth investing is that they actually invest. Consistently. They don't sit and discuss whether the debt ceiling is going to knock them out or whether the dollar is going to get blown up or whether the chimney, all the dead gum drama that goes around the economy all the time.

Well, the other drama piece, you mentioned it, but the word recession, it's bad. I mean, it's it's a it's one that's floated around for a while. And a lot of people are saying that that's something that you can see consecutive quarters of the GDP going down. That's a recession. But it's a little different. If you say it with movie music in the background, boom, boom, boom, boom, a recession. Recession report live on CNN or Fox.

It's the recession. We're following the recession. And then it didn't actually happen. It's the recession. We're following the recession. And then it didn't actually happen. It's kind of anticlimactic. You know, and so, or the recession happens and the economy was down one quarter of one

percent, two consecutive quarters. And so it's technically a recession that totals a half a percent of shrinkage. Wellop-dee-doo-dee i mean really i can tell you something that had a whole lot more effect on it its name was fauci okay he had a lot more impact on your economy and on your dad gum the mess that you call inflation now the inflation crap is real yeah but recession yeah guys listen

there's always a newscaster whose job is to scare your butt because you don't watch unless you're mad or scared and if you're mad or scared you go down the rabbit hole and keep watching and keep watching and keep watching and you study all the theories and all the reasons that everything that we've worked for is just going to evaporate and we're all going to die and this drama this fear porn is just real i'm not making fun of wayne i'm making fun of me and rachel and everybody else we all do this we all do this you're the conspiracy theory queen of the family of course so you know we all do this and so you get you just you get sucked into this freudian negative scarcity fear-based stuff and it keeps you the reason i'm going off on it is it keeps you from investing yes yes yes you have to just it's

an act of your will it's an act of your will. It's an act of your intellect. I'm just going to keep investing. And the ones that never stop for any reason, they just keep investing. They're the tortoise, and they win every time I read the book. That's good. Good stuff. Jordan's with us in Sacramento. Hey, Jordan, welcome to the Ramsey Show. Hi, thank you guys so much for taking my call.

I'm so happy. Well, we're honored. How can we help? Okay, so basically, my husband and I are in baby step number two, and his brother in October is having a wedding, and he lives all the way in Boston. So my husband and I have, like, done the math, and we're just kind of getting like a little

bit of anxiety about it because we really feel like obviously we can't afford it because we have debt. Um, but at the same time, my husband just feels really bad because it's his brother. So it's like, but at the same time, when we look at our goals of like starting a family and things like that, we kind of feel like we just need to make the decision of not going. But then again, because it's his brother, there's just that factor of feeling really guilty about it. Yeah, for sure. Well, I would say when events like this happen, because a lot of people, you know, whether it's weddings or 50th anniversary celebrations, right? I think it's looking at the people in the relationship at

this point and just saying, hey, how important is this relationship? And I'm not saying this is your brother's case, but just say like, they don't really have, what if, right? They didn't really have a relationship. They don't talk, anything. I still, Jordan, would caution you, when it's immediate family, I'm like, I don't think I would miss my sister or my brother's wedding. I don't think I would. And so even though you're in baby step two,

for me, this is where I would probably pause and pile up some money, get a cheap flight from Sacramento to Boston, and... Sleep in your husband's old bedroom that he grew up in, in your in-law's house, and turn around and come back home. Cheap it out. Don't miss your brother's wedding. But do it on the absolute cheap

If it was your friend's wedding No you're going to miss it Because 25 years from now they're not going to be your friend Unless it's your absolute 25 years from now they're not going to be your friend They're not you're not even going to know who they are You're not But I'll tell you 25 years from now he's still going to be your brother

So yeah I definitely I wouldn't miss this. Not even a chance. But cheap on the cheap. The absolute cheap. Hey, Rachel. I got to tell you. We can talk about it.

I agree. And I have thoughts. I have thoughts. We have to go to break. I can imagine you do. We got to go break. thank you for joining us america rachel cruz ramsey personality is my co-host today as a spender rachel you've been known to buy things like pizza yes i do pizza i love going out to eat so whenever i have extra cash on hand uh it's it is absolutely the best that's why i'm so excited

to announce our ramsey cash giveaway it is back and this is your chance to win up to five hundred dollars or the three thousand dollar grand prize so guys it is so easy to enter. All you have to do is go to ramseysolutions.com slash giveaway, and you can increase your chances of winning by entering daily. So there is no purchase necessary, but you must be 18 or older to win. And we're not stopping there. We are actually running one of our famous, incredible sales. The $10 sale is here. So get the books and the tools you need to build wealth, find the career that you were made for, improve your mental health, and deepen your relationships.

The $10 sale includes all questions for humans conversations from Dr. John Deloney, and my book, Know Yourself, Know Your Money, and Dave Ramsey's newest bestselling book, Baby Steps Millionaires. And all those deals will be gone soon. So make sure to shop the $10 sale today at RamseySolutions.com. John's in Chicago.

Hey, John. Welcome to the Ramsey Show. Hey, Dave. Thanks for having me. Sure. What's up? Well, my wife of 10 and a half years passed last April. Oh, my.

She had a five-year cancer battle. Like a year ago April or just the other day? Just the other day about a month ago. Oh, my. Gosh, John. I'm sorry, John. How old was she? 37.

Wow. What was her name? Mary. Mary. I'm so sorry. Thanks. I appreciate it. You said you've been married 10 years?

Yes. And she's been fighting this five? Yep. Wow. You guys got kids? Three. Nine, eight, and six. Oh.

How are they doing? I'm more than a girl. We're getting by. Day by day. One day at a time yeah i'm so sorry john thanks it's been a battle how can we help today so uh we had been going through the baby steps you know we really took a look in the mirror about four years ago. We were still in about a $92,000 normal debt, everything and anything. We had gotten it down to about $30,000. That was in home equity.

And then we still have about $260,000 on our mortgage. And now everything is coming. We're fortunate. We did it when our first son was born. We got life insurance, and I'll be having that money trickling in really soon, and I'll have her pension payout, her survivor benefits, and her pension reimbursement check coming in the next couple of weeks, and I'm going to have all this, and I just don't know what to do with it and where I should do it.

Do I pay down the mortgage? What do I do? What's the grand total? With everything, we're getting an estate check from my dad. My dad passed about nine months ago. I have about $ 600 to work with. Okay. Well, the first thing you need to do, and we always recommend this,

is just give yourself lots of room for grief. Because when someone's going through what you're going through, your brain doesn't work good. If something happened to Sharon, my brain wouldn't work good. I mean, it just clouds you. You know, everything's going good for one minute, and the next minute a wave hits you. You know what I mean?

Oh, yeah. Yes, absolutely. And sometimes it catches you off guard almost, and you see some color or something. You know, I mean mean any little thing can trigger so just give yourself some space to cry and that's okay that's not bad that's a human thing and you need to give your room some room to do that so i try to make as few big decisions as i can make um and make them slowly as i I can make them. So the good news is there's

nothing pushing you here. What types of decisions could you make that you would mess up? Well, you could invest in the wrong thing, because your critical thinking skills to look at an investment are not at the top of their game right now. So I would not do any big-time, complicated investing. instead i would just park it in a high yield savings account or a cd for six months and cry okay um but i would pay off that he that he lock you know a little thirty thousand dollar might reach over and pay off the house uh did she pass in the hospital or at home at At home. Okay. She was home for about a month on hospice. Okay.

John, do you think, will you be in that home long term, do you think? Do you see yourself staying there? I want to. I love our neighborhood. I love our house. Yeah. I love our area. Our oldest is on the spectrum, and we have great supports around him out here in his school.

Totally. That's great. He's really thrived in the last few years, and I don't see myself going anywhere. Yeah, perfect. Okay. Well, sometimes people need to get away from the place, and sometimes they're perfectly okay with it. I think I'm okay with it, yeah. I'm not trying to tell you what to do. I'm just throwing out things here.

So that would affect whether I'd want to pay it off or not, right? I mean, if you're going to put it up for sale, you know, in four or five months, then I'm not going to pay it off. But if you're going to keep it, at least for the foreseeable future, I'd probably reach over and pay it off. So that used up $300 of the $600 if I did my math right. Yes. And now you've got no payments and no stress. And then we just park the rest of it i wouldn't do it i wouldn't do any investing until your head clears there's no need to no big purchase no big

purchases yeah you don't need to do some grandiose thing and you don't need to make a grandiose generosity move either okay no big giving at this stage. Wait six months to do a big decision on the other 300. And give yourself six months to cry. I think it's logical, and you probably can agree with me, even though you're right in the midst of the pain, I think you can still agree with me that six months from now, your brain is going to be working better than it works right now. I sure hope so.

Well, I'm positive. And so you're not, I wouldn't be, and I do this for a living and have for decades, I would not be in a condition to make a major financial decision one month after Sharon's gone. I couldn't do it. Okay? And I'm, you know. Yeah, so things like with that 300, John, just ideas, again, nothing to do it. Okay. And I'm, you know.

Yeah, so things like with that 300, John, just ideas, again, nothing to do today. But in six months, you know, maybe it's one of those things you look up and it's, you know, maybe kids' college accounts. You put some of that money in there. Maybe you guys go on a great trip, you know, next summer, a year from now, and say, hey, we're going to go

and use some of this and enjoy it and do a trip. You can have places to designate this money, but just like he was saying earlier, nothing big needs to happen. The biggest stuff would be this debt if you wanted just to kind of clean it up. But even, John, if you wanted to do nothing, nothing for a few months financially, you're fine. Nothing is in a rush here. Yeah.

Okay. And, hey, man, if we can help you anyway you call us back okay thanks Dave I appreciate it I'm so sorry sorry for you man I have a huh yeah just high yield savings and just park it guys that's a great rule for anyone who's lost somebody you've lost a child you've lost a spouse uh even sometimes a parent depending on the situation even a divorce i mean anything that that has a level of that grief trauma yes a traumatic event or anything like yeah just give yourself some room you got to remember personal finance is 80 behavior it's only head knowledge. The mathematics necessary to become wealthy are sixth grade math. But the critical thinking skills to keep yourself from doing something stupid

are grown-up stuff. That's called maturity, emotional stability, spiritual maturity, spiritual stability, relational maturity, relational stability. Those are higher indicators of your ability to build wealth than you being some kind of math savant. In other words, navigating life while you do money is a bigger deal than actually doing math. And so you've got to have some things like when you're in a traumatic situation pause and breathe this is the ramsey personality is my co-host today charles is with us on the ramsey show hey charles in boston how are you good how are you doing better than i deserve how can we help uh yeah so my question today i'm a bit of like a trust fund baby type of

situation and uh my question has to do with um helping my girlfriend with some of her expenses here and there it's never that much and i'm kind of overall i'm pretty stingy and all that so i guess my big question is just how much should I really do? For a girlfriend? Yeah. Nothing. That's your honest advice, just kind of help myself out. Yeah, she's fine. Yeah, y'all aren't married.

I mean, you're not even engaged. Y'all are dating, and that's awesome. I mean, if you take her out on a date you can buy dinner yeah but you don't need to be paying her freaking rent i guess that's a good thing i have more it was really about uh different trips honestly trips you know i want to go on as well um so you know should I be paying for any of that type of thing, or do you think that's just a bad decision? So tell me about being a trust fund baby.

What does that mean? Yeah, so my parents kind of set up like a trust for me when I was a child. How old are you now? But I'm 25 now. Okay, and what do you do for a living? I do sales. Okay, what do you make? About 80 and that.

Do you live on that or do you spend more than that? I easily live on that. In fact, over the last few years since I graduated, I've been. So you don't utilize the money from the trust for your life at this stage? Yeah, I've never withdrawn from it. Okay, because a trust fund, baby, generally means a useless human being who does nothing because his parents left him too much money. Okay, that's not you.

You're industrious. You have a job. You're doing well you're living on your own income and the trust is just a uh it's extra gravy on the biscuit it's just extra wealth and that's not a trust fund baby i mean you are a baby that got a trust but that's not a but the the trust fund baby thing is a negative connotation does that make sense yeah and you're you're not that guy. Yeah.

You're a guy who earns his own keep. And your grandpa and your dad and your mom will be proud of you, right? Yeah. Okay. Yeah. Okay. So date a woman like that. Okay.

Not one that's financially needy as a single girl yeah that i mean it's just honestly yeah and it's just kind of dragging yeah i mean does she work yeah she works as well okay so why can she not pay her part of her life if you all go on a trip or something? Yeah, she doesn't have any disposable income at this point. What does she make? $55,000. Okay. Well, you got disposable income at $80,000, so interesting.

You can look at this, but you just need to be real careful of it because i got to tell you every dollar you put into something like this has a tendency a negative weight on the relationship you start skewing the relationship when you're not both coming at the relationship from strength financially spiritually character everything it's very hard to get an equilibrium that's an old guy talking no that does make a lot of sense honestly yeah and i would say too charles you where you could tend to overspend because i do want to applaud you that you're living within your means of the income that you have and i think that's going to do you really well with the level of dignity and what that's going to do for you as a person, right? I'm like, just because you've come from wealth, you are still standing on your own two feet. And I think

that is going to breed a lot of great characteristics in who you become as your life unfolds. Saying all that, I think when love is in the picture and this girlfriend that you really like and you guys think of like, oh, my gosh, we could go on this awesome trip and have fun with that be. That's where overspending and emotions come into play. So there's almost a level of accountability even for you to be like, OK, yeah, here's a great trip that we want to take. But I'm paying for my stuff. She's going to pay for her. So that's even going to dictate the type of trip we take it may not be as nice of a trip if i if i pay for it all right and so there's almost this level where you can tend to overspend in lifestyle in the name of yeah we're

going to just go and have fun and live life and all that so there's there's something to be said about having that boundary with yourself of you pay for your stuff now we're just making you process it like an adult instead of a child you just process you have to process the decision like a grown-up and when you do that that it's going to lead you to really smart decisions here or smarter decisions good. Thank you for joining us. Jeff is in Tampa. Hi, Jeff. Welcome to the Ramsey Show. Thank you, Dave. I'll preface this call after listening to callers

back, but I lost my wife of 47 years 30 days ago. She died of cancer. Oh, my gosh, Jeff. Yeah, in our home of me, she was in my arms and our children at her side. Wow.

I'm so sorry. So, yes, this is tough. But I heard everything you said about not making the decisions. But if I could, I'd like to present my question to you. Sure. So I'm debt-free except for the the house i owe 56k on it um i have some savings uh in retirement uh in the 401k and ira and then i have about i have some money in a business checking account that i have not transferred in as income yet. How much?

About $180,000. Okay, and how much in your nest egg at retirement? About, well, let's see, about, well, right now the 401k is $115,000. It went down. It's only at $115,000 right now. And then the IRA is 90. Okay. So you got another couple of hundred there and then a couple of hundred in business checking. 56 mortgage.

What's your question? Well, first of all, I have a specific, being an, I own a small real estate company and we manage properties and we sell and list and sell. Well, I do. My wife's not here anymore. Um, and so I want to buy a specific rental property and I can get it for like two 85 K and it pays 2000 a month rent. And, um, and so my question is, should I try to take that money out of retirement and add my business, uh, from my, my business income to it and buy the rental? Or should I not?

If I take all that money out, I'm going to get nailed on taxes. You're going to get nailed on taxes anyway because a sub-S and an LLC and a business are taxable in a calendar year. Whether you take the money out or not, the profit is taxable. Okay. Are you a sub-S or not the profit is taxable okay are you a sub s or an llc uh yes yeah you're gonna get you get it's all it's all passed through on calendar year you get taxed anyway okay i face the same thing that's how i know so uh but if i understand you right you'd have to drain everything to buy this rental property and you'd have basically no money left well i would have no because i would have i could take 85 out of my checking and then i'd

have about 100 and then i would have the um but i mean you have no nest egg other than real estate right yeah i wouldn't do that well after after taxes, you're right. I would not have a lot left. I'd have to build it back up. Yeah. Or I could pay my house off. I'd pay your house off and rest. And let's save towards buying a rental property that we can pay cash for without just completely liquidating everything to cause it to happen.

It scares me that you're just basically cleaning out all the accounts to buy this one property. I love real estate, but I don't love any of it that much. You got to keep a liquidity position. You got to keep some cash in this situation. I don't know how much other properties and what your overall net worth is, but you've obviously done pretty well. But I would hold back on that as much as I love real estate. Hey, I'm so sorry, Jeff. Sorry you're facing that. That puts this hour of The Ramsey Show in the books. Dave here.

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