The Ramsey Show - App - I Co-Signed My Son's Student Loans (Hour 2)

Episode Date: June 23, 2021

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Live Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Dr. John Deloney, Ramsey personality, best-selling author of the BMW as the status symbol of choice. Dr. John Deloney, Ramsey Personality, best-selling author of the book Redefining Anxiety, is my co-host today. As we talk about your life, your money, your mental health,

anything you want to talk about, we're here. The phone number, 888-825-5225. Betsy starts off this hour in Baltimore, Maryland. Hi, Betsy, how are you? Hi, Dave, I'm fine. Thank you for taking my call. My pleasure. How can we help? A few years ago, I got divorced after 21 years. And three years ago, I bought a house.

And I'll just say that I really didn't have all my wits about me, and I bought a house from a flipper. And I thought I had a realtor that I could trust, and it turned out that I didn't. So I had this 92-year-old house that needs a fair amount of work. I was also talked into getting a seven-year arm mortgage, and I'm in the third year. What do you owe on the house? I guess I owe about $180,000. I think that's about where it is now. If you were to put it on the market without doing any work to it, like it sits today, what could you get for it?

Well, I paid $275. If you were to put it on the market today, like it sits, with the work that it needs on it, what could you get for it? Well, that's my issue because my conscience says that I have to sell it at a fee. What is the house worth? I would say it would probably go on the market for $275. I just don't know if I... Good. I mean, you think it'll bring that? I think it could.

Good. Yes. Good. Get with a real estate ELP at ramsey solutions.com get it on the market and sell it that was my question i didn't know whether i should get out of this yes and get out of it yes okay everything you described in this entire conversation was the opposite of fun. Right. Well, the house became more than I thought I could handle.

The deal was bad going in, and the deal has been bad since you sat there, and you've got a bad mortgage. Right. There's nothing here that is happiness. No. On top of that, it is a reminder of the mindset you were in of a poor state you were in when your life fell apart. It's just a reminder every day.

It is. It is. Get out of it. Yeah, the broken house kind of feels like the broken you that went in and bought the broken house

every time you drive up in front of it. Do I sell it as is? Yes, ma'am. Yes, ma'am. You're not in the business of rehabbing. There's somebody that watched way too much HGTV that's going to run right into this thing.

Yeah. There's a Chip and Joanna out there somewhere, buddy. They are smiling big. And hey, will you do me a huge favor? Yes. The next time you buy a house, the next time you rent a house, I want you to change your language. And this is important because it's going to make you walk a little bit taller.

I want you to change your language from, I got talked into, and to, I did it. It was dumb. I did it. I went in a good state. I did this, and now I'm going to make it right. I'm going to sell it. I'm going to sell it as is. I'm going to make $100,000. I'm going to put down another property that I've got my wits about me. I'm going to make good decisions, get good counsel, and I'm going to stand six inches taller starting today. So you're going to understand the deal. You're going to understand what the property is worth. You're going to understand what you're getting into so that no matter how competent or incompetent who you're dealing with is that you're not going to be taken.

They got to go through Betsy from Maryland, right? Right. I just was concerned about if I move out of here and the houses are so expensive. Listen, even if you go rent for a while and it takes you a while to find a reasonable deal, the market has to calm down before you find a reasonable deal, nothing about the deal that you're in is fun. And so this is a really good time to get out of an unfun deal. Sell it.

Okay. Okay. And is summertime okay or should I have done it? Betsy, Betsy, Betsy. Sell it. Yes. Sell it. Bets, or should I have done it? Betsy, Betsy, Betsy. Sell it. Yes. Sell it. Okay. Betsy, how long have you been divorced? Four years. Four and a half years.

Was that a surprise? Did it shock you? It wasn't a shock, but... Was it devastating? The whole thing was a lie. The whole thing was a lie, so it was devastating. Okay, here's what has not happened in four years. You've not learned to trust Betsy again. That's true. And the marriage fell apart, but at the end of the day, you blame Betsy.

Betsy should have known. And at this point, you've got to stand back up and say, Betsy is worth being trusted, is worth good counsel, is worth good friends, is worth not having to ask 17 different questions when one of the smartest guys in America is telling you what to do. John. I was talking about myself, not you. Clearly. Clearly.

Clearly. Clearly me, not you. Yeah. The trick is. Trust Betsy. There's going to be a lot of peace that comes if you just go keep your life real simple and rent a nice place for a little while. And you got a little pile of money in the bank and you don't have any issues anymore and all of the emotions and the problems that this house represents and the regrets that this house

represents are in the rearview mirror and the windshield is bigger than the rearview mirror we call that grace look forward look forward and give bet. And give Betsy grace. Yeah. You're okay. You're smarter than you're giving yourself credit for. You're stronger than you're giving yourself credit for. Good stuff. Open phones at 888-825-5225.

You know, we always say personal finance is 80% behavior. It's 20% head knowledge. And I have always anecdotally seen the correlation between bad decisions, being paralyzed on making a decision, to the things that have happened in somebody's life. I mean, we had a caller in another hour that had gone through chemo followed by pandemic. These are not financial things, but they always affect financial things. Right. And financial things always affect them. That's exactly right. And so this idea that somehow money is its own little category siloed over here to the side from your emotions, your relationships, your betrayals, your hurts,

your physical well-being, the time you were molested when you were 749 years ago. All of these things play into your money. That's right. And they play into, like you said, your marriages and your work relationships. It plays into all that stuff. And we, Dave, we have a, we've got a society, a culture that says you are the worst thing you've ever

done. You are the worst thing that's ever happened to you. And we do not have a collective sense either individually or as a culture of what redemption looks like, what saying I made a stupid decision and I'm better than that and I'm not going to do it again, and what going forward looks like.

And we see folks like Betsy who are good people who are trapped in that cyclone of doubt and shame. From the past. From the past. Yeah. And the hardest person to get over doubting is yourself. Yeah. Good stuff.

This is The Ramsey Show. In an uncertain world, being a good steward of your money is more important than ever. While some circumstances can't be controlled, there are items within your budget you can take charge of, such as your health care costs. For nearly 40 years, Christian Health Care Ministries, or CHM, has provided a budget-friendly means of sharing for medical bills when our members need it. Learn more by visiting chministries.org slash budget. That's chministries.org slash budget. Our co-host today, open phones at 888-825-5225. Well, you know what can really suck, and that's called living paycheck to paycheck. At the end of the month, you have too much month left at the end of the money. You can never get ahead. You feel like a rat in a wheel.

But you don't have to live like this. Stop running in the wheel. Stop. And we can show you how to start making progress. You need to check out Financial Peace University. You can find it at Ramsey Plus. This membership will show you how to make changes that you need to get the results you want. You want to get out of debt?

You want to be on a plan? You want to get control? You want to get traction? Financial Peace University can show you how to do that. And again, it's located at Ramsey Plus. It gives you complete access to that plus all kinds of other courses, plus the Every Dollar Budgeting app. Yeah, it's all there.

And listen, if you want to start making real progress, you can do a free trial of Ramsey Plus. That gives you access to Financial Peace University and all these other things. Text the word trial to 33789. Text trial to 33789. Open phones at 888-825-5225. You know, I was talking with some of our marketing team this morning at Remzi Plus, and I was trying to remember, see if you remember this,

when you signed up for Netflix. Do you remember? Way back in the day? Yeah, I mean, well, number one, I had it back when they used to send the stupid. They mailed them to you. They mailed them to you in these little weird little fiberglass sleeve things, and then I quit that because I kept getting, I couldn't watch them fast enough. I felt like it didn't work.

Okay. And then, of course, now it's online through your Apple TV or whatever, and you can, it's $9 or whatever, $10 or $12, whatever they charge now, and it's... But I didn't sign up for Netflix. I signed up to watch a show that somebody told me about that happened to be on Netflix. Netflix.

That's right. And that was the gateway drug. And then we got off of it, and ten years later, I remembered that Netflix, or five years later, has lots of movies, but that initial one, as I wanted to watch those movies. Yeah. Yeah. So, yeah. Nobody went to Blockbuster because they liked it. They went there because that's where the movie was, right?

And it wasn't always there. Right. It was the other thing. And then you forget to take it back. And then they would come and mortgage your house. And take your car from you. Yeah. You know, this kind of stuff.

That was not a model that anyone hated to see go bye-bye. But now we've got access in our living room. You can just punch it up and it comes up, right? You don't have to go to the store and get a VHS tape. Some of you people don't know what that is. Look it up. You'll probably see it on Google. But, yeah, it's an interesting thing.

I don't remember signing up for Netflix. I remember signing up to watch the show. Or I did that the other day with I didn't sign up to get Apple TV. Everyone kept telling me about this show, Ted Lasso. Yeah. And so I signed up to watch Ted Lasso just the other day. And it happened to be on Apple TV. Yeah, that's exactly how this works.

Yeah. That's a different way of doing it. And Lasso's great, by the way. Have you binged it all the way through? I can't tell you the number of people that said, I think they, I think somebody made a movie about you. No. It was incredible. I loved every second of it. You're not as nerdy as he is. But that show is so satirical.

It's so well written, too. It's beautifully written. It's so funny. Yeah. And it'll catch you off guard, and all of a sudden your eyes will be leaking, too. Yeah. And you get sympathetic for characters you shouldn't be. And it's just very interesting.

It humanizes everybody, which I think is a more honest way to do art these days. Yeah. It's very, very well done. Yeah. That's exactly what happened there. Yeah. Because I couldn't tell you where, you know, Yellowstone. We watched that thing, right?

It's great. Yeah. I don't know. Right this second, I don't know where it sits. It's on one of the things, right? It's on one of those places. But I didn't sign up for the thing. I signed up to go watch that, you know?

And so that's an interesting way we do things in our culture now. Very interesting. So that's kind of the way we do things in our culture now. Very interesting. So that's kind of the way Ramsey Plus is, I guess. It's like Netflix. You don't sign up for Ramsey Plus. You go to Financial Peace University, which happens to be on. On it. Or I want to go.

I keep hearing about Anthony O'Neill's show. I want to go check it out. Yeah. He's got some stuff on Ramsey Plus. Yeah. It's on Ramsey Plus or I want to watch it. On the Ramsey Network. It's on YouTube.

That's right. But you don't sign up for youtube and then randomly find anthony you might but um because he's a big deal on youtube but uh but but you know but more than likely you're going to find him oh and it's on youtube yeah that's it that's so interesting to me but the hope is that you're the products you put out are so good that now you buy it because it's Apple. Yeah. If Apple says you need a watch, that's okay, right? Eventually, yeah. But are the shows are so good that you go see what other shows they put out?

The quality is, right. That's what other shows they put out. Just as quality. You know, the HBO documentary series, they've had a good reputation of most of them being pretty good. Yeah. And so when HBO has a doc come out, people want to see it. You know, it's going to be good. They've built a pretty good. And so when HBO has a doc come out, people want to see it. They've built a pretty good brand around that as an example. That's just a

consumer's observation. I am not endorsing any of this. It's just a very interesting kind of a user experience with the way our minds work when we're doing these things. Very interesting. Brittany's with us in Santa Barbara. Hi, Brittany. How are you? Hi there. I'm great. How are you? Hi there. I'm great.

How are you? Better than I deserve. What's up? Okay. So my husband and I are going to be moving our family to eastern Tennessee in probably one to two years. We have two rentals here, both with mortgages and our primary with a mortgage. So our dilemma is, should we sell the rentals right now, pay off our last small debt,

and then do 1031 in Tennessee to buy two rentals in cash? Or should we just pay the capital gains here, pay off our last small debt, and purchase rentals and a primary when we move? Cash. You called Dave Ramsey. Yes. Yeah, cash but if you sell them now you got to buy now you can't do a 1031 two years from now after you sell right right right well we have family in tennessee that could look after the properties um why do you have to sell land? Why are you waiting two years? Well, my husband's finishing up school. Oh, okay.

So we'd like to have a finish here in California, and then, yeah, that's our main reason. Sure, that makes sense. Okay. Yeah, finish up and then put all the properties on the market and come over here. And you should be able to come to Tennessee and pay cash for everything. That's what we thought, yeah. We've been, you know, watching the property values a lot. Well, they're going to move between now and then,

and I don't know, you know, I don't know how much they're going to move up or down, whether California is going to get in trouble by then. Well, that's our fear, exactly. It's possible. It could happen. I mean, if you start seeing cracks in the market, I haven't seen any cracks in the market yet. The only cracks I've seen are the leading indicator of how many people leaving the state. Yeah.

But that's the only thing that's bothering me in terms of eventually that that's going to catch up with the economy there and catch up with the supply-demand curve on the real estate because there's a bazillion more people leaving than coming in to California and New York right now. So that eventually is going to affect the economy, but I don't know when. And if I'm you, I'm not panicked about that. I'm just going to start watching. But if I start seeing the real estate market locally right around you, right there in Santa Barbara, which is a wonderful area, beautiful area. Yeah. If I start seeing the market slow down and get to be a little bit lethargic, I'm going to start talking about going ahead and liquidating these things.

Mm-hmm. But I don't think you need to today because I think you've still got a hot market like a lot of the other areas. Yeah, yeah. It's definitely up. Yeah. If you put a house on the market right now, it'll sell fast, won't it? Yes.

Yeah. So you're not exactly in a thing here. You're not exactly in a problem. So, you know, that's the deal. So I'm just going to sit on them for today. When you get ready to move, if the market has not made you go ahead and put them on the market earlier, then you move them and do your 1031s and come to Tennessee and pay cash when you make the move. Very interesting.

And the 1031 is just the exchange on the capital gains? It's a trade. You're trading one house for another. In the old days, we used to have to buy. We used to have to get the, like if we wanted to buy a house in East Tennessee, you would have to get that owner to trade with you. Okay. But now you can sell the house into an escrow account, a special 1031 escrow account,

use those funds to buy another property, and the IRS treats it as if you traded for that property. So you don't have to pay the... So there's no capital gains. Capital, your basis rolls in, your gains roll into the next deal. Gotcha. You roll them in, and eventually you'll get tagged on that if you ever sell out while you're alive. Gotcha. But it keeps you from having to pay right now.

A 1031 tax-deferred exchange. Like-kind properties. It's investment property to investment property. This is the Ramsey Show. show. dr john deloney ramsey personality is my co-host today open phones at 888-825-5225 in the lobby of ramsey solutions on the debt-free stage peter and katherine are with us hey guys how are you afternoon welcome welcome where do you guys live we're in columbus ohio oh nice drive to nashville stage. Peter and Catherine are with us. Hey guys, how are you? Good afternoon. Welcome, welcome. Where do you guys live? We're in Columbus, Ohio. Oh, nice drive to Nashville. How much debt have you paid off? $177,000 in 29 months. Love it. And your range of income during that time? $130,000 to $170,000.

Good. What do you guys do for a living? I work in human resources for a large specialty retailer. I am a salesman for Cutco Closing Gifts and Kitchen Knives. Oh, good for you. Very fun. Good for you guys. So what kind of debt was the $177,000? It was a lot of student loans and back IRS debt.

Credit cards. Parent loans. Family loans. Just about everything. Everything but car loans, really. You were fairly normal. And normal sucks. Yeah, it's not fun.

So how much did you owe the KGB? I mean, the IRS. I think it was around $15,000, $16,000 over a period of a couple years. Self-employment. Yeah. What'd you say period of a couple years. Self-employment. Yeah. What'd you say? Self-employment. Self-employment without paying the taxes.

Yeah, that'll get you. That was an awesome point. That will bite you right there. So, all right, very cool. So what happened 29 months ago that lit this fuse? Well, it starts a little earlier than that. We met each other end of April in 2018. We got to know each other pretty well, and Catherine realized I was in a pretty poor financial state.

And it made her pretty nervous. So most of this was yours? Yeah, my bad decisions. Okay. Well, we know the IRS was. That was already set up. Okay. Yes, it was and she told me you know i

think if we're going to have a future relationship with each other i i am nervous about your finances and your debt that was so sweet i'm i'm i'm speechless that's awesome instead of like going dude if you don't fix this you're're out. She said, somebody told you. That's a phrase. That's a great phrase. Somebody told you that your values were important. And that hitching yourself to a giant lead cement block that was going to get thrown into a river wasn't a great idea. Who taught you that?

I mean, we both grew up in great financial households. Okay. So we had really good role models. Yeah, but you're a boundaries. But the delivery on that, too. It wasn't like, fix this, you jerk. It was like, it was so sweet. It was implied.

It was so sweet. I know. It was a little passive-aggressive in there, but I liked it. She gives bad news with smiles and gentleness. That's right. It's great delivery. I just liked it. You're a stud.

So now you're motivated because you got the message. Well, my- Mail delivered. That's right. It's great delivery. I just like it. You're a stud. So now you're motivated because you got the message. Well, my... Mail delivered. Ding, ding. The response was, I know what I'm doing. I've got a way of doing this. Really?

I understand. They're Dave Ramsey and all those. I know how to do it. God, Ramsey. Her response was, well, you might know how to do it,

but the way you're doing it is terrible. You married an HR director, brother. And she actually does have a sense of humor, believe it or not. That's awesome. I believe it. This is great.

So fast forward, we ended up taking Financial Peace University. Ed and Joy Nickerson were great coordinators. And during that time, it really helped us to get on the same page financially. And during that time, we got engaged. So we knew that we were going to be starting our get on the same page financially. And during that time, we got engaged. So we knew that we were going to be starting our marriage on the same footing because obviously finance is one of the biggest stumbling blocks with marriages. Yeah. And we would just like to start off on a better footing than stumbling.

Good for you guys. And after about six months of, yeah, ish, Dave-ish, we decided let's really hunker down. Let's get the budget down. Another six months of, yeah, ish, Dave-ish, we decided let's really hunker down. Let's get the budget down. Another six months of doing that, we thought, you know, we're kind of getting the hang of this. And we decided we would like to pass on this information and this way of life, frankly, to others. And so we signed up to be coordinators for financial peace. Oh, thank you.

Wow. It's all in. Our pleasure. And our first class was one person, so we got a lot of one-on-one time. And it helped us to really figure out what we were doing. But also stay bought in. And remind why we're doing what we're doing. And we got to run another class. We had four folks in there, two young couples that had just been married and in a similar

position to where we were. And it was just a great way to pass it forward. They'll be friends for life. Yeah. Yeah. Wow. Look at you guys. So powerful.

Well done. Well done. And don't you love the way she looked at him and she said, yeah, you may know what you're doing, but it doesn't look like it. But you're not doing it. Yeah. So you have a brilliant, tactful woman that you married.

What was it that fondly convinced you to look in the mirror and go, you're exactly right? There's a humbling moment there. It is. It's kind of biting when somebody criticizes the way you do things. As a great salesman, you always have a comeback. That's what you're great at.

But at some point, you had to stop and look in the mirror and go, you're right. You're right. Trying to pay off one credit card so that I have money to buy groceries so that I have some more money to pay off another credit card and juggling those back and forth and realizing this is no way to live. My parents didn't live this way. I don't want to live this way. And she's willing to work with me. It wasn't an immediate deal killer, so I thought this is a good woman.

Amen. This is a beautiful story. And you're a humble man. Both of you are awesome. You're both good, too, man. You're awesome. This is very cool. I mean, you've engaged in some of the hardest things that human beings can engage in, the idea of getting engaged, getting married.

Oh, and by the way, while we're doing all that, we pay off $177,000. That's pretty stinking incredible. And giving feedback and receiving feedback are two hard things too. That's incredible. We both owned homes when we got married. So we had to decide who got to keep the house.

I'm guessing you won? I did. So there's a theme here. Just saying. I did win. So there's a theme here. Just saying. I did win. So we had a lot of long conversations after we'd taken financial peace. We had gotten married. We both had homes. We moved in together once we got married.

And obviously, we're not living in different homes. But we talked for a while about- What do we do with the other house? Should we keep it? Should we rent it out? And like, it's got a mortgage on it. It's not like we owned it outright. So it was...

Like, nope. We're over leveraged. We need to sell it and put that money towards... And that helped accelerate this thing. Yes. It did. Yeah, we had some returns from the house, but... And all my stuff that we had to sell.

Oh. So that it all fits. Yeah. That's right. It is. Consolidating to one house. Welcome to marriage. So that it all fits. That's right. It is. Consolidating to one house. Welcome to marriage. This is awesome, guys.

This is so cool. So what do you tell people? You've led financial peace. You've paid off $177,000. Someone says, how did you do that? What are the keys to getting out of debt? Because you're professionals. You've actually done it.

I mean, for me, it's a right relationship with money and a right relationship with God. So understanding that it's not our money, I think, was huge for both of us. What does that cause you to do differently? I think it really changes our point of view towards generosity. Like, this is not our money anyway, so we can have like as you've said many times the most fun you can have with money which is giving it away and I think I struggled with that during the journey I was like oh we can't you know we can't give money to people I don't know we just

that was something I think that came up but I think that right relationship continuing to tithe and be submissive with the blessings that God has given us, I think has been critical. I would say for me it was sticking with the budget was the biggest thing because once you've made those hard decisions ahead of time, you don't really have to make decisions. There's no strain. The strain is getting it on the paper and committing to doing it. But if you're going to do what's on the paper, once it's on there,

it's just execution. Yeah. Yeah, that's a good point. I like that. It was sometimes challenging when we got a big sales bonus or great sales month or she got a bonus. It's like, oh, we could go buy stuff. But it became the more we did it, the more we got into the habit of living below our means. And it became more fun to see how many debts and accounts we could close

out than how much stuff we could buy. It gets gamified. We've got a copy of the Legacy Journey for you. That's the next chapter in the story. You're going to be continuing to leave a legacy and an extra copy of the Total Money Makeover for you to give away and help somebody start their journey, start the begin process. Thank you for leading the class. You guys are amazing.

Peter and Catherine, the begin process. Thank you for leading the class. You guys are amazing. Peter and Catherine, Columbus, Ohio, $177,000 paid off in 20 months, 29 months, making $130,000 to $170,000. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! We're debt-free!

Touchdown, baby! Woo! That's how it's done, right there. This is The Ramsey Show. We'll be right back. Dr. John Deloney, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. John is with us in Pennsylvania. Hi, John. How are you?

I'm doing well, Dave. Thanks for taking my call. I appreciate it. Sure. What's up? So I think I'm in baby step three, but I'm not sure. I paid off all our debt and recently finished paying off the car. We're debt-free, except my oldest son, I've co-signed some of his college loans.

So I'm not sure, should I put them into my debt snowball and start paying them off, or just step in if he starts having trouble paying them? Is he paying them? Well, he just graduated in May, and he's still looking for a job. Okay, so he's got six months before he has to start paying. Yeah. How much is owed on these loans? All together, it's right about $30,000.

How much debt have you paid off so far? Well, I really haven't paid off anything. There's a couple different loans i thought you were on then you say you paid off some debt oh my my debt yes sir sorry um uh gosh uh probably close to 96 000 wow 90 yeah 96 000 What do you make? Household income? Household income is about $79,000. Okay. Well, you've done very, very well. Yeah.

Well, I mean, this is what accountants call a contingent liability, meaning that you are liable if he doesn't pay. That's what cosigning sets you up for. So you are technically debt-free. You're technically on Baby step three okay uh i would want your baby step three to be pretty beefy your emergency fund so don't do three to six go like six to eight or yeah yeah i'm gonna probably cheat a little bit up in the eight side just to kind of offset the fact that you have a kid that has not gotten a job and he's got thirty thousand

dollars he's supposed to start paying on and if he doesn't you're about to and if you have to if you have to start paying the payments because he doesn't then I'm just going to treat it like my debt I'm going to stop everything and knock it out yeah he's got a computer science degree uh and he did very well in school so we're pretty confident he's going to get a decent paying job me too but i'm just you know at the moment uh for today i would just set aside extra but at the six month mark if he doesn't start paying this on time and they start bothering you just roll up your sleeves and knock it out okay and john take him if you haven't already take him to lunch because he is going to get a good job and make sure he knows to not go

buy a car in a fancy apartment put him into financial peace university knock this thing yeah well so we found out about you about two years ago um before you know uh he went off to the college he went to um and and so it's a little bit of a moral issue for me because my youngest son, he's sort of getting a free ride because I work at a college. And so we're getting like a tremendous discount for him. Why didn't the other one go there? They didn't have the degree he wanted at my school. Well, I mean, I don't see it as a moral issue. Listen, fair is something that happens at the county.

Yeah. That's a great line, Dave. Good one, Dave. It is what it is. If you've got a child that has that is in a different situation, then it's a different situation. Equal is not fair.

Fair is not equal. And that's just part of the way life works out. And, you know, my kids did not get the exact same amount. The younger one ended up with possibly more because we had a better start by the time he came along. But it's all worked out for all of them they're going to be just fine so and you can do something that blesses one of the other ones a little bit later if you want to or something like that the one that you didn't cost you anything you know that kind of thing but anyway yeah you you can help if you want to help but i

would be prepared to pay it off immediately as fast as you can if he fails in paying it. That's the way I would position it. Thank you. Open phones at 888-825-5225. Aubrey is in Salt Lake City. Hey, Aubrey, what's up? Hi. Thank you for taking my call.

Sure. I have a question. So my cousin and I got married three years ago, and he is graduating at the end of the year with his Ph.D. in mechanical engineering. Wow. What's he going to do, teach? He wants to eventually, he's got an emphasis in aerospace. He's been working on research with new aircraft.

Very cool. That's fun. But our question is, he's known about you since he started school, so he has no debt for his school. And our question, our debate at home is, we really want to pay cash for a house, but I personally don't see that as possible without saving for five plus years, depending on his income. And so we were just kind of wondering, when is it?

He's 33, and I'm 30. We're wondering, when is it time to do the 15%, even though we want to pay 100% for a house? Generally, we tell folks three years, that you don't want to lay off of your retirement longer than that. But if you have a goal of paying for a house and you have a Ph.D. in mechanical engineering and you're in the aerospace world, I'm projecting a pretty dead gum good income here. And so if you're 33 and you have a paid-for house, you're probably still going to be multi-gazillionaires by the time you get to retirement if you just invest from that point forward. So if it takes you five years it

doesn't kill me in this situation you see why hello yeah um i just ran a bunch of numbers and i'm a little bit i don't know we have two kids and just, maybe it's just my. If you can pay cash for a house, by what age? By, well, five years would be 38. Okay, at 38 years old, and 30 years is 68, of making $200,000 plus a year and investing substantial amounts because you have absolutely no house payment. If you just invest a house payment for 30 years, that's $10 million. I don't know where you've been running your numbers, but what would have been a house payment that you don't have anymore?

I'm trying to be more conservative with... It just depends on what he wants to do. He doesn't want to work at the big places. Well, if he's not going to go earn an income commensurate with what I'm talking about, that may change the formula. If he's going to make $30,000 a year because he's taking some half go earn an income commensurate with what i'm talking about that may change the formula if he's going to make thirty thousand dollars a year because he's taking some half-butt government job or something when he ought to be making 10x that then no that's a i do change my answer then so yeah you guess you need to talk that through with him but i'm

projecting a big income in this household and with no house payment for all those years you'll have no trouble landing this thing yeah but i mean if you want to go i mean i would think even as a professor teaching yeah he'd be making 150 years yeah with depending on how good he is and i i also don't see a challenge with taking out a 10-year mortgage then and yeah working it backwards if you want to if you want to start saying 15 and take out a short mortgage that's fine but i love the idea of paying cash for the house and having to be free your entire life yeah but you have to commit to all sides of the equation which is the income side uh the investment side after the house is purchased uh and the paying cash side and we're going to be on an intentional detailed budget to where we hit all of these goals. Well, and it's going to be a weighing.

So if we want to say for five years or four years, I'm going to take job X, and as a family, we're going to hit the gas, so that for the back 30 years, then take that job, man. Take that job plus another job. Take that job and adjunct somewhere else and be a professor there and do what you got to do. So you go in and pay cash for a house, and, man, you're done. Yeah, you'll be in great. I mean, if you have have a paid for house when you're 38 and you're making six figures what you you you if you invest reasonably out of that you're gonna have 10 million dollars i mean you really will so you should be fine but um you know if you're investing in good growth

stock mutual funds stock market rates of return. You'll be there. You're going to be just fine. But if you don't play through on all of that, then, yeah, you just end up with a paid-for house and a bad job. And that's certainly not what we're recommending. Definitely not. That puts this hour of The Ramsey Show in the books. James Childs is our producer. Kelly Daniel is our associate producer and phone screener.

John, Dr. John Deloney is my co-host today. This is The Ramsey Show. Hey, it's Kelly, associate producer and phone screener for The Ramsey Show. If you would like to do your debt-free scream live on the show, make sure you visit theramseyshow.com and register. We would love for you to come to Nashville and tell Dave your story.