The Ramsey Show - App - How To Get Started Investing (Hour 3)

Episode Date: April 5, 2024

Девочка-пай Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by Jade Warshaw. This is your show, so give us a call at 888-825-5225 and we'll dig into your life and your money in front of America. But don't be scared. Don't be scared. We're kind. We'll treat you

well. And Mike is up first this hour in Lynchburg, Virginia. What's happening, Mike? Hey, George. How you doing? Hey, Jade. Hey, what's up? Better than we deserve, my friend. How can we help? Awesome. Good to hear. Before I get started, George, I gotta doing? Hey, Jade. Hey, what's up? Better than we deserve, my friend. How can we help? Awesome. Good to hear. Before I get started, George, I've got to say, just so you know, I feel like I've got to come clean next to Dave, obviously.

I think you're my favorite Ramsey host. Yes. I love your YouTube channel. Listen, five bucks on Venmo, America. That's what you'll get. Thank you for that kind endorsement, Mike. Absolutely. Thank you. So I just have a quick question. I'm 17 years old. I work full time and my company offers a 3% match IRA, simple IRA, 3% match. And I've been

contributing to that for a while. Right now I'm only at 3%, but I am working my way up hopefully very soon to that 15% Dave recommends. And basically, the financial advisor and the financial company that my company goes through, it's all provided. And so I was just talking to him the other day on the phone, and we're getting my investment set up and everything. And I wasn't exactly sure what to tell him because I knew basically the Ramsey principles on investing, but I'm not an expert on it by any means. So what he told me when I explained how I'd like to, I told him basically I wouldn't have to do it right now, but what I wanted to get to eventually was the 25% and all the four categories, you know, growth, growth and income, aggressive and international. And so what he told me is that basically he agreed with all that for the most part um he thought the the income was pretty much unnecessary at my stage um and the three uh stocks he recommended i put it in to start was a vanguard vti um charles schwab's scha and vanguard vxus

which he said would break down in my category, the way I was explaining it, basically as 60% in growth, 20% in really aggressive growth, and 20% in international. So I just wonder what y'all's thoughts are on that and how I should go forward. Yeah, well, first of all,

you're one of the sharpest 17-year-olds I've talked to in a while. I thought this was like a 45-year-old man calling in based on your maturity and wisdom and communication skills. So way to go. What are you making at this job? So it's commission-based. So I'm not exactly sure. This is my first year working on a new commission.

This will be my first full year. But I estimate by the time the year's over, I'll be making about $35,000. Okay. And are you still in school, or did you just kind of, by the time the year's over, I'll be making about $35,000. Okay. And are you still in school, or did you just kind of skip to the workforce? What's your plan there? I graduated. So I was actually homeschooled.

I graduated just after I turned 16, and then I've been working full-time since September of 2022. Wow. And what kind of work is this? This is house washing. House washing, okay. Exterior soft and power washing. Cool. All right. And we're talking about investments here. You've got 3% going in and you said the financial advisor advised these kinds of funds? Yes, sir. Okay. And who's this through? It is through Raymond James, I think is the financial firm. Okay, cool. Well, I mean, truthfully, you're going to find a lot of the same funds. So the funds that Dave recommends, the mutual funds versus some of these index funds that the

financial advisor is telling you about, they make up when you actually look at what's inside of them, it's a lot of the same companies. So at the end of the day, it may not make that big of a difference when you talk about the growth in income versus the growth versus aggressive growth. So I wouldn't worry too much about that. The key here is that you're diversified and that you're not in single stocks. And what he's talking about is essentially a total market index fund, like you'd find in the S&P 500. Right. Which is largely what I have in my mutual funds. And so there's not a huge difference. Now, the difference is the mutual funds that are

actively managed have fund managers that are hand selecting some stocks and different balances of those stocks in order to create a hopefully higher returns. Gotcha. But at this stage of the game, the funds that are chosen are not going to be the difference maker for you. It is your savings rate and your income. So I would be focused on that versus losing sleep over what funds you're in. I want to see you get up to that 15% if you're debt-free with an emergency fund. Are you at that stage? Yes, sir. Yes, that's very helpful. Actually, on that note, I had a very similar question. I went right along with it, if I can ask that. Okay. Yeah, basically, yeah, I've got the starter emergency fund, never had any debt. I've got, you know, I'm driving an old beater, 92 Ford Ranger. Wow. Yeah, it's before you were

born, my friend. Sorry? That's before you were born. That's impressive. Yeah, it's like double my age. So yeah, I'm done with the emergency fund. So basically, I've gotten through Baby Steps 3A. So my question is now, should I be focusing more, do you think, on Baby Steps 3B, saving up for the down payment, or more on baby step 4, which is working up to 15% in investments, which comes first, in your opinion? Well, you're 17. You're living at home? Yes. This is just Jade talking. I probably would not purchase a home until I've spent time living on my own in a rental type of situation. Whether it's you're renting a house from someone or you're renting an apartment, I just think it's good to get your

feet wet before you jump all the way into the pool. Oh yeah, for sure. Yeah, I definitely agree with that. I was just wondering, you know, if I get started now, I've been putting down a little bit each month just for a while, like just in a cash envelope saving for a while, just to start building it up. And I figure, you know, maybe five years down the road after I've been renting for three years or whatever, I might have a nice down payment saved up, but it's going to be a little bit harder to do that if I'm trying to get the investing all the way up to 15% at the same time. I think, I mean, you have the ability, again, you're in, technically you're in Baby Step 3B or Baby Step 4. So you can do both of them simultaneously. You can pause Baby Step 4 for a while and save up for a down payment. You have that option. But what I think is's great. I love that you're thinking towards the future and trying to make good choices, so don't get me wrong there. But I would be focusing a lot of time on, okay, what's my career path?

What do you see yourself doing, Mike, in the next even 10 years from now? Well, I love the job I'm at currently, and there's recently some opportunities to where there may be more room for growth than I had initially anticipated. So I'm not exactly sure how long I'll be at this, but I am also saving up because I would like to get the Ramsey financial coach training, at the very least get to do on the side and then maybe eventually full time. So what I want for you is I want for you to be able to talk about your career future in the same depth and detail that you were talking about how your investments are diversified. You were able to tell us exactly what the name of the funds were, which I think is great. You were able to tell us the percentage, Raymond James,

all of that. I want you to be able to tell me that about your career path. So that's your homework. That's my assignment for you. Get that income up because 15% of 30 is cool. That's $4,500, but 15% of 90, let's triple that. Now we're talking. And so focus on the income, and I believe you have the habits and discipline in place that when the income goes up, you're just going to build exponential wealth. And we are cheering you on. Hang on the line. I'm going to send you our friend Ken Coleman, his Get Clear Career Assessment,

and hook you up with his new book coming out called Find the Work You're Wired to Do. So hang on the line. Christian will pick up. We'll gift you that to help you on the career side. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. The number to call is 888-825-5225. As you're listening or watching, would you do us a quick favor? It's totally free to you. Only takes a moment. Share the show. Here's how you do that.

Simple ways you can engage. You can hit the subscribe button, hit the follow button wherever you're watching. Leave us a kind review. Share it with a friend. Word of mouth. Click the share button. All of that helps. Not give us more affirmation and validation.

Lord knows Jay doesn't need any more of that. But what it does is it helps the algorithm spread this to more people who maybe haven't seen the show. And that's what we want to do here is spread the hope. America needs healing right now, Jade. And we hope to be a small part of that by helping people have hope with their finances, with their life, with their relationships, with their careers. It's a dark time out there and we hope to be a tiny beacon of light out there. That's what we try to do, and you guys are a big part of that. You are the marketing plan.

Thank you for all you do to help us spread the word. Sarah is out there in Eugene, Oregon. What's going on, Sarah? Hi, George and Jade. I would love to get your advice on what job or school next steps would give me the best ROI and financial position, or maybe that's not even the best question for me to be asking. Maybe it's something else that I should be asking first. Where's Ken Coleman when you need him? I know. So what's your conundrum here? What was driving this call today? For the first time in my life, I feel like I've got a whole bunch of options. For the last two and a half years, I've always worked in some type of clerical administrative.

But for the last two years, I've been working as a and like restoring the hope in our judicial system working. I love that. You found work that matters to you. Right. I'm considering going to law school. I'm 46 and I'm feeling the pressure of if I were to go to law school next fall, I would be passing the bar at 50 years old. But maybe it gives me a way to do even more of what I love to do, helping people within our legal system. Or maybe I should just be focusing on moving up into more management positions within the court system instead of dumping $90,000 to $155,000 into another degree. Well, let's talk about it further. I have two questions that drummed up from what you said. The first question I had was, what is it about being a lawyer that makes you like, that's what I need to do? What part of the job is it? And then if you were to say, no,

it's me working up further in management in the court system without getting that degree, what part of that idea makes you go, yes, that's the thing I need to do? Yeah, well, I love being in the courtroom. Being a court clerk, right now, I'm making sure that all the details happen the way they're supposed to, but I don't have to make the decision, but I don't make a lot of money. And so being a lawyer would be another way to stay in the courtroom happenings each day, but make more money potentially and get more time to individually talk with people

rather than right now, I'm more just like a background stage manager. Okay, so what would it cost you? Have you done some research? What would it cost you to pursue this? Let's just play it out a little bit. And just background, my current net worth is $380,000. Most of that's tied up in my home equity. And so these numbers as I'm sharing them with you, I was thinking I'd make a lot more money and get to do more of what I love

and then when I ran out the numbers over the course of 20 years, I was coming out with an end result within $200,000 either way. Yeah, but there are two equations here. We'll hear the numbers but everything can't be about dollars. Like there's also gotta be some part of it

that's like, yeah, I'm doing work I love too. So let's hear, you know, do you have debt right now? Only my mortgage. Okay, so just the mortgage and how much do you owe on the mortgage? 115,000. Okay, how much do you currently earn? What's your current income?

Gross, it's 51,000. Okay. How much do you currently earn? What's your current income? Gross, it's $51,000. So I'm netting $40,000. Okay. And are you currently investing 15%? I'm almost there. I will have my full emergency fund saved by this December and everything's working fine so that I can switch that right over into investing 15% and having a little bit more to still. Do you have anything in investments right now? I do. I lost my husband seven years ago, so there's still about $60,000 sitting in trust stocks on top of, I've got 83,000 in retirement specific accounts. Okay. So the numbers I would want to know about, Sarah, are December comes, you get your emergency fund saved, you start saving 15%. That's when you see how much margin you actually have to put towards possibly cash flowing, you know,

a state school or something that you can do night school. I know my brother went to law school. He did night school and came out on the other side. He's a judge now. Yeah. So I know it's possible. In Oregon, I wouldn't, the only way to do night school is I'd have to do it online. And so I've been looking at a lot of different schools. My whole idea, because I don't want to, of course, go into debt to do this.

The only way I see to do that would be to sell the house. And then I don't want you doing that. I don't think I would do that. Really? The only reason, because at the end of the day, here's the parameters that I, and George, chime in. The parameters that I'd want to make sure, okay, you're 46.

I want to make sure that you're still retiring with a paid-for home. And you've come so far, I would hate for you to have to start over again with a higher cost, because real estate has gone up significantly. I would hate for you to have to start over again with a higher cost, because real estate has gone up significantly. I'd hate for you to have to start over with a higher interest rate, with a bigger loan, and further to plow through. You've made a lot of headway there. So in that way, I wouldn't want you to have to go backwards. I'd be looking for

a way that you can maybe earn now more. So maybe you start the path that you had said as a secondary choice, which is, hey, I'm going to work my way up this clerical court situation and see how far I can go. Not only will you possibly earn more money, but you're also going to get a feel and a taste for that work. And you might find out, you know what? I love this. This scratches the itch. I don't have to do the law school thing. Or you might get further up the ladder and go, I'm making more money. It's not scratching the itch, but since I'm making more money now, I can afford to cash flow my night school or my online school. Well, so on working up within my current court system, the way to work up and earn more money is to go into management, which pulls me out of the courtroom. So that's...

Have you looked into all of the options in that field? I mean, is there a paralegal position that might fit the bill here? Yeah, that could be another possibility that I haven't looked into yet. Okay. So I would just explore all the options and write them all down. Here's all my options, here's what the salaries are, and then here's the path to get there as far as education goes. Then it becomes, okay, what are all the paths to education? Which one can I cash flow? And then which one can I do the soonest? And you might decide, you know what? I'm okay being a paralegal. It'll get my income up to 60 or 70. I'm going to pay off the house. I'll get to retire without the headache of going through law school and being years from now. And that might be a path. So I think you're in the exploration phase still,

and I don't want you making any big financial moves other than following these baby steps. Get the emergency fund, begin investing 15%, then decide what the right education is, what the right career path is. And we'll help you with that. I'm going to give you Ken Coleman's new book that's not out yet,

but we'll give you the Get Clear assessment as well as his new book coming out called Find the Work You Love to Do, as well as Paycheck to Purpose. That's awesome. We're going to gift you that to help you on this journey. We want to see you win in this area. Your passion for this tells me that you're going to be doing something.

Yeah. And whether it's being a lawyer or whatever it is, we just want you to do it with peace and without payments. And that might mean we delay the dream, but that's also going to give you the most peace down the road as you retire with dignity doing what you love to do. So thank you for the call. Love to hear that. More of The Ramsey Show coming right up. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. If you want more from us for some reason,

be sure to check out Jade's new book called Money's Not a Math Problem. I've got a new one called Breaking Free from Broke. Both of them will help you win with money, help you change your mindset and paradigm around money, and help you build wealth with less stress. That's the whole goal. So be sure to check those out at ramseysolutions.com. Jade, this is a big deal. I finally got my tax return done this past weekend. Same. It was weighing on me emotionally. I didn't realize it. It was like living rent free in my head until I got it done. Yes. Felt good. I know that's right. I did mine a couple of months ago. So I did it instantly. Aren't you the teacher's pet? Listen, my mother-in-law, she don't play. She wants those numbers.

Well, you get extra credit. I love it. Well, taxes are confusing. People are stressed out about it this time of year. So to help you get a better handle on them, I want to unpack a question from one of our listeners. Here's what they had to say. I want to avoid overpaying taxes each month.

What do I need to change with my paycheck? This is a good one. I've been answering this question like I feel like once a day because we tell people all the time like don't give your money to the government. They're just holding it. They're giving the interest-free loan and get excited when you get a refund. I'm like this is not a bonus. Exactly. So now the big question is okay guys we hear what you're saying we don't want to get a refund how do we change it and that's essentially what this question is. So you could approach it one of two ways. Number one, if nothing has changed in your tax situation from last year,

or maybe this year you've already gotten your refund back and you're like, this needs to change for next year, you can look at that refund amount that you received and you can divide it by 12. And that's essentially what you're overpaying or if you wanna see what it is per paycheck and you get paid bi-weekly divided by 24 and you'll see, okay, this is the amount that I could have back in my paycheck and that's how much less you want taken out of your check. So now you've found the amount,

you found kind of like the golden egg and it's like, okay, this is what I need to change. So kind of keep that in your back pocket or if your tax situation has changed and you can't compare it situation has changed and you can't compare it to last year you can't compare it to this year then you could use uh software to just do a fake return which is essentially the same if you went to irs.gov but let's just be honest don't nobody want to go to irs.gov to find out what they're and do that fake return it just

boggles the mind i'd rather use ramsey smart tax and just go in there and do that fake return, it just boggles the mind. I'd rather use Ramsey Smart Tax and just go in there and do a fake return. And so then you can figure out again what your withholding would be. All you're doing is estimating your withholding at the right rate. And so now that you know what that number is, you can go to HR and fill out a new W-4 form. And it's worth noting that it's not like it used to be,

George, it used to be claiming dependence. You mark like 12 dependents and all this stuff. Yeah, it's not like that anymore. You can literally just fill in the amount. Say, I want $200 deducted from every paycheck. That's right. That's right. And so that's the way to do that.

That's to make sure you're not overpaying for your taxes anymore. And that's how you get the money back in your pocket, which is, let's be honest, where it belongs. It's your money. That's true. And to be fair, the IRS on their website, they have a pretty good withholding calculator that can help you figure this out. You don't have to do fake taxes. And the other side, as an example, let's say you get a $2,400 refund and you have 24 paychecks in a year, biweekly, like you said. Well, that means you need to put $100 back each paycheck.

That's right. In order to get back closer to zero. That's the goal. You don't want to owe too much. It's the Goldilocks here. Yeah. So that's a simple way to look at it. And then W-4, you just get with HR. And for some people who have a regular income like you and I,

what I did was I asked HR, okay, can I force a percentage? Because once I figured out what percentage of my income needed to be paid out, it was easier that way. And I didn't have to worry about, hey, it's not $200 this month, it's 500. So that's another helpful tool to check with your HR on. So if you want more tax help, head to ramseysolutions.com slash tax. There you're going to find Ramsey Smart Tax, the software Jade's talking about. Low upfront pricing, no nonsense, no hidden fees, and we'll help you connect with a tax bro who's Ramsey trusted, who can do it all for you if that's your speed. So again, that's ramseysolutions.com slash tax. We are here to help you file with confidence

and get it out of your life. Listen, one more tip that you could throw in there. If you haven't gotten your taxes done yet, I would just sneak that into my tax person and say, hey, listen, by the way, I don't want to get a refund. Like we've already done the one for this year, but for next year, can you just tell me?

Can you help me figure this out? And just kind of like, you know, like slide on in like you're sliding into DM out? And just kind of like, you know, like slide it, slide on in, like you're sliding into DMs. And they'll, they're happy to crunch the numbers. They can do it a lot faster than you can. Love it. All right. Let's move on to the phones. Mason's in New Orleans. What's happening, Mason? How y'all doing today? Doing great. How can Jade and I help? Yeah. So my question is I'm getting married in October this year. My fiance is going to come into the marriage with about $20,000 in student loans when she gets done with school. So my question is, should I hold back on my investments, like starting now to start saving more liquid cash? Because eventually in four

to five years, we're going to want to build or buy a house. So I'm just trying to see the best way to attack this because I feel like right now I'm currently investing a thousand dollars a month and I'm only able to save 500 to a thousand dollars a month cash. So I'm just saying, you know, should I stop investing so heavily or what do y'all think I should do? So you have no debt and you have a fully funded emergency fund? Yes. So I have, my truck is paid off. I have a car that's paid off. I have about, I have it right here, $9,298 of liquid cash right now. Great. Okay. So would that be about three months of expenses for you? Yeah. My expenses, automatic withdrawals are only, this is including the investing, $1,695 a month. What? That's crazy. That's including rent, utilities, everything.

No. So that's just- What do you think expenses are, man? Yeah. So, well, no, my grandparents blessed us for a year to where we only have to pay the utilities. So we do have rent free for a year. So where are you living? Yeah. Yeah. So they have a rental property and they offered it just to help us out for a year with their rent free.

You buried the lead. So you're living rent free right now. So life is going pretty well. For a year. Okay. Okay. But I'm trying to be, that's why I was talking to other people. That's why I'm investing heavily, just trying to be, if I were to have rent,

that's why I'm just doing that $1,000 a month investing. Well, you know you are going to have rent in a year, or however many months is left in this deal. My question is, and going back to your initial question with your fiancée, so you guys are actually getting married in May or she's graduating in May? No, we're getting married in October. She's not going to graduate to a year and a half from now.

Okay, where did I get May from? Okay, so my thought is I'd go along and work these baby steps as your plan. But maybe when you guys do get married, you mentioned that you have a car and a truck. Does she have a car or a vehicle as well? Yeah, her car is paid for as well. Okay, so that's three vehicles. When she graduates and you guys get married and all this happens and you come together, is there one of these vehicles that you can sell to get rid of the student loan and then be totally debt free? No. So my truck, I have my own business, so I need my truck for my business. And we live about 35 minutes away from where we just moved from. So I bought that car as a

computer car to save on gas. And I need that and she can't drive it. It's a standard. It's so old, but her car is only worth about seven to 10 grand anyways, so I don't really see any point if it's paid for to really get rid of it, you know? Okay. Who's paying for the wedding? Her parents are. Oh, that's nice. So you don't have to fork over any money for that. No, sir.

And you've already got the ring. Yes, sir. Okay. So here's what I would do if I was in your shoes, honestly. I would keep investing that 15%, and any money left over, I would just sock away into savings. My guess is that will get you pretty close to where when you get married, you can use the majority of your savings to knock out her student loan debt and then rebuild that emergency fund. And I still would consider getting rid of one of these vehicles. There's two of you. You don't need three vehicles, one of them sitting in the driveway, just going down in value.

But that's the thing. Well, you need more work gets 10 miles to the gallon. So if I live 35 minutes away from where I work, so I mean, it was every three days, it was $80. I was having to fill up. So you just leave your truck at work is what you're saying and drive your car. I leave it at work and I take my car home. I see. Okay. Well, I think you'll be close. Invest 15%. If you guys get married and the debt's still not going to be knocked out, you can pause investing for a short period in order to speed that up. But my guess is you get real close to having that $20,000 in liquid cash. And then just knock it out.

And then knock it out once you're married. But never before then. Do not combine anything before. I know that. Okay, just making sure. We've got to call things out like that on the show. Because I know you sound like an amazing guy, and she's a lucky gal, you're a lucky guy. We're going to gift you Financial Peace University as a little wedding gift on us.

How does that sound? Thank you. I appreciate it. Thank you all so much for your time. Absolutely. Hang on the line. Christian will pick up, and we will get that Financial Peace University membership sent over to you, as well as every dollar premium.

Help you guys budget together as a newlywed couple. Isn't love so sweet, Jade? Love is grand. I love love. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Jade Warshaw. Our scripture of the day comes from Isaiah 43, 18 and 19.

Forget the former things. Do not dwell on the past. See, I am doing a new thing. Now it springs up. Do you not perceive it? I am making a way in the wilderness and streams in the wasteland. In other news, Mick Jagger once said, The past is a great place.

I don't want to erase it or regret it, but I don't want to be its prisoner either. That's great. That's good. I don't know if I coined this. I probably heard it somewhere, but I like't want to be its prisoner either. That's great. That's good. I don't know if I coined this. I probably heard it somewhere, but I like this quote. Failure is a comma, not a coma. You know, you don't want the past to define you or hold you back or paralyze you. It's just a comma.

We're moving on, Jade. All right. I'm with it. Pontificate on that. That's my word. There it is. All right. Let's go to Shane in Huntsville,

Alabama. What's happening, Shane? Hey, thank you for taking my call. Sure. How can we help? Okay, I'm 53, and I've only got $48,000 in my retirement, in my 401k. I was putting 13% in, and I moved it down to 5% because we got an FPU. And it's only been a month, and we're still trying to hash things out. But I've got like $30,000 in debt with credit cards and other loans. And my wife's got $170,000 in stupid loans. And should I change my 401k down to nothing so we get everything paid off? Because $170,000 is going to take a while to pay off.

It is, but I would definitely not cash out your 401k to do that. I don't want to cash it out. Should I stop putting anything in it? Stop contributing. Stop contributing, yes. What's your household income? Last year I'm at 87, but my overtime fluctuates so much. So I'm going to say probably $70,000. Okay.

What does she make? My wife makes about $85,000. So what do you guys bring home every month? I bring home about, let's see, $2,500. She brings home about $3,000, $4,000. About $4,000 is what she brings home. Okay, so you guys are bringing home. Say that again?

I'm sorry. Hers is more steady of income than mine is because she's pretty much like salary. But she's a nurse. But you're looking at about $6,000 a month. I'm confused because if you take home $6,500, that's $78,000. But you told me your household income is $155,000. Well, yeah. I take home $7,500.

Well, right. So how much do you take home a month? I take home about $2,500. My check's about $1,200. That's what I'm confused about. Every two weeks, yeah. That makes no sense that you take home $30,000, yet you make $70,000. Are you sure? What are we missing? My yearly is about $70,000. Now, you did mention stopping retirement. How much was coming out of your retirement? I was taking 13% out, and I moved it down to 5%

because that's what my company matches is 5%. Okay, that's still not the difference. Something's still not adding up, but that's neither here nor there. Yes, you should stop investing. Total debt is... My take on that, that's not gross. I understand, but I'm saying after taxes and even health care, premium deductions or whatever, and 5% investing, you shouldn't be taking home 30, making 70.

Mm-hmm. In Alabama, you're not paying 60% in taxes. Yeah. Yeah. Well, it's different than what it was. No, but it's not. We worked so much overtime last year. I don't remember what it was. The last four know. No, but it's not. We worked so much overtime last year. I don't remember what it was.

The last four years, we worked so much overtime. I don't know what a regular... Okay. Well, here's the key. Well, let's go off the numbers you gave us of the gross income. You guys have $200,000 of consumer debt,

not including a mortgage. Right. And you make $155,000. George, I don't think we should go off of $155,000 because I don't think they make that. I think we should go off of $155,000 because I don't think they make that. I think we should go off the $6,000 a month. Okay.

So going off your take-home pay, my goal for you guys is to pay this off. Three years would be great. So if you do that math, $200,000 divided by three years, that's $66,000 a year, which means you need to be putting $5,500 a month, which might mean we need to get the income up and do some side hustles, do some overtime. Because this cannot take 10 years because you've got to get back to investing, because you guys have nothing in retirement. Right.

And I don't want you working at 75 if you don't have to be. Tell us about your vehicles. Well, that's one of the things. I plan on selling my truck. I don't even have it in the debt, because I plan on selling it, because I still owe like $28,000 on it. What's it worth? It's probably worth about $25,000, $26,000.

I wouldn't lose that much in it. Okay. What about your wife? But that's not included in what you just told us. So that's... Right. That's not included. Her car is not included, but her car is $40,000.

Oh my goodness. Her car probably ain't worth $28,000. Why? She traded. oh my goodness her car fall ain't worth 28 000 why uh just she traded she trades cars and she traded negative equity a lot of negative equity in it so okay so there's a lot to be learned from this just looking at the numbers um and i don't say any of this to be negative. I say it because there's a lot of, we're just, we're not paying attention to anything. We have one car. We don't want to drive it anymore.

Who cares if it's got what we owe on it. We're rolling it into the next one. I worked, I made this much one year. I'm not really sure what I make this year. I'm not really, there's a lot of, you guys aren't doing your due diligence.

You work, you work too hard to not know how much diligence you work you work too hard to not know how much you make and you work too hard to to have chaos yeah and so i i want you guys to get a hold of that and go we've got we've got to stop because until you get that together it doesn't matter what you do does that make sense how's your wife feel about all this well we're in the fpu this is our first full month and it was last month and we're kind of still but the way our budget is we're kind of still figuring out what we need to do okay but she's she's fully committed the same way you are yeah she is but i don't think she wants to get rid of her car well then

she's not fully committed and that's what I'm talking about. Like you guys are not going to be able to do this unless you are fully laser beam, 100 percent all in, both of you. And so that's that's that's got to be the prayer every night that you guys pray together is, hey, help us to just get all in on this. Help us to realize the gravity of this situation so we can do what it takes. That's what I would be praying every single day and every single night. Think of it this way. You're 53. Let's say you go all in like we're telling you to. And three years from now, you pay off this debt. You're now 56. Then for the next 10 years, you invest heavily. You do catch up contributions. You invest 15%. You get the house paid off. Well, now at 66, we can actually retire with dignity instead of looking up and the debt's still sitting there

and we still haven't invested anything. The way I've always looked at it, I'm probably going to work until I die. Until the day of your funeral? Not if you follow our way. That's a sad outlook. I don't know if I can follow that way. It's just my job

is so... It's hard for me to take another job, a second job, because of the way my job overtime is. This has nothing to do with your job. You guys made a lot of stupid decisions over a long period of time. Oh, I know I've made a lot of stupid decisions. So you guys are hardworking people.

You actually make good money, especially for Alabama. And so the problem is every time you got a raise, actually make good money, especially for Alabama. And so the problem is every time you got a raise, you made more money, we just spent it. And we saw a shiny new car and we wanted it. And if we didn't have the money, we put it on the credit card. Tell us about your house. It's probably worth about $181, $185 maybe. And we owe like $97 on it.

Okay, and tell me what the mortgage payment is. Just checking. 740 something, maybe. I think it's 740 something. All right. So there's no problem there. This is just, like we said, you guys buckling down and somebody, if not both of you, is picking up extra work, whether it's overtime. And when you're picking up that overtime, be clear. What is this going to mean for our next check? Like know what these dollars are so that you guys can crunch and figure out what the best strategy is for you bringing in extra income. And that starts with you really understanding what you know, what is your base salary? What does it look like when you pick up these extra hours and really getting your head around what the actual numbers are? Because before you were six, like you were you were only bringing in you were bringing in less than half of what you said you were bringing in which is crazy so we got to get that clear my last three years we've worked so much overtime i already don't

know and then the last well the first three months this this year we've worked pretty normal hours and we haven't had a whole lot of overtime well Well, I guess my... It was kind of a shock to my system, so... Yeah, yeah. Well, if your overtime amount... If without overtime, you're only bringing in $30,000, we might need to talk about a career shift. Either way, there's some deep sacrifice here. You're not going to be able to just roll tide your way into retirement, unfortunately. You got to make a plan. You got to invest. You got to get rid of this debt. And none of this is going to be easy. And y'all been living la vida loca the last who knows how many years. It's time to be an adult because we want to see you retire with dignity. This is The Ramsey Show. Thank you.