The Ramsey Show - App - I Have Over $600K in Parent PLUS Loans!

Episode Date: May 23, 2022

George Kamel discusses: How to pay off over $600k in parent plus loans, What a 13-year-old should do to build wealth, A trucker who wants to buy a new semi,  The fear of using your savings to pay off debt, Why you should pay off debt before you invest, What to do when you are upside down on a car loan? Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

🎵 From Ramsey Network, this is The Ramsey Show, where we help you get control of your money, get ahead in your career, and get on the path to being well. I'm George Campbell, your host, joined today by myself. It's just me flying solo. They ditched me. The rest of the team is in Orlando, Florida at our Entree Leadership Summit event. And I'll be honest, I do have a little bit of FOMO. That's the fear of missing out. But I'm trying to channel some JOMO today. That is the joy of missing out because I have the privilege of hosting the Ramsey Show. It is my privilege and I would love to help

you take the right next step with your money. So give me a call. 888-825-5225. That's 888-825-5225. Jim is kicking off this hour in Des Moines. Jim, welcome to the Ramsey Show. Yes, thank you. How can I help today. Jim, or George, I have, I'm 63 years old. I can see 64 in the very near horizon. I've been practicing law for 35 years. My wife and I make a combined income of about $190,000 per year. We have a house that the real estate sites tell us is valued at about $1.3 million, which is, I believe, pretty accurate. We have a $390,000 first deed of trust on that house and about $85,000 second mortgage on that house. We have $410,000 in non-Roth IRAs combined

between the two of us. We have another $440,000 in regular investment accounts. Both are down a little bit right now, as you might imagine, but that's about where they are. That's where they were last Friday. I have six children that I put through Catholic school, from kindergarten through senior year in college. 102 years of Catholic education, and I paid the tuition the whole way through. Wow. So I now have, yeah, 102 years of Catholic education, and I paid the tuition the whole way through. Wow.

So I now have, yeah, 102 years of education, yeah. They're all six have bachelor's degrees, a couple have master's, daddy paid for almost all of it, happy to do so. It was $1.2 million from the time my oldest daughter, who's now 36 years old, started at college to the point my youngest son graduated, which was last May. I have come up with about $600,000 in my own money, and I have about $620,000 in parent-plus loans right now. Wow, that hurts. And, you know, they have been very good about saying, you want it deferred, you want it held off. There were COVID pauses. But I think the party's about to come to an end there. And I'm just wondering, I'm not without some assets, as I just described to you. I'm just wondering what you think I should do.

These people, Navion and the student loan people, seem to be pretty willing to negotiate, work out payment plans. But it will probably be the rest of my life. Not if I can help it, Jim. All right, all right. I think you got my story. Wow. Well, you've done really well. I mean, you guys have a great income.

You've been investing, but you also took on the burden of six kids, higher education. And so what I want to do is show you a path to get out of this. I'm sorry for your – it was from kindergarten to college. Oh, my goodness. It wasn't just higher education. It was lower, middle, and college. 102 years. Private Catholic school the whole way. Yep, every step of the way, yeah.

Was it worth it? Anyway, I'm sorry if you're not. Well, I think the answer is yes, but I'm still $600,000 away probably from answering the question fully and honestly. Now, what's the agreement with the kids? Did you just say, hey, kids, I got this? Or do they feel like they should pay some of this back? Good question. The agreement was all my kids went to very good and expensive schools.

And I told them if they could get in and they worked hard and took it seriously, that I would pay for it. And all six of them took me up on that deal and all six of them kept their end of the bargain. So it is my hope to be able to just ride this thing throughout myself. So there's no agreement that the kids would pay back. If I think I got in too much trouble, I think it probably would. I mean, all six are gainfully employed now. All six are doing well. But they're all starting their lives now. The grandkids are coming. They're buying houses. They're getting married, things like that. Okay. Well, how about this? Let's walk through the math here. How much do you have in non-retirement? You said you had $440,000 in a general investing account?

Yeah, I have a general investment account primarily in mutual funds and some individual stocks of right about $440,000 right now, which is down from about $500,000 a couple months ago, late 2020. How much other cash do you have in savings, checkings, all that, just non-retirement funds? Non-retirement, about another $35,000 in cash. Okay, so we're talking you have about $470,000 of liquid cash. Correct. Now, at your age, you can touch the retirement accounts. I'm trying to avoid that before we do, but you need

these payments out of your life if you ever plan on retiring. Are you still working? If I ever plan. I am, but like I said, I'm burning out on that as well. So yes, I've been working 90-hour weeks for 35 years, and I need a break. Oh my goodness. Jim, well, man, you're not scared of work, but you've also taken on a lot of burden for the family. Yes, and I'm happy to do it. I'm not complaining. I'm just trying to find the easiest exit ramp here, I guess. Okay. Well, in the few minutes we have remaining, here's what I want to walk through. If you sold off all of the investment funds that are non-retirement, you'd be down to less than $200,000 of student loan debt? Does that sound about right? $120,000 minus $404,000.

In very round numbers, yes, that would be about right. Okay. And then how quickly, making $190,000 a year, could we knock out the student loans, the remaining $200,000? Maybe two years if you hustled? At least. I'd have to hustle and have to eat a lot of peanut butter sandwiches, but yes. And then, worst case, could you downsize and home if all the kids are gone? Well, yeah. We live in a 6,500-square-foot home. We're empty nesters now. There are rooms we don't go into for months at a time. So yes.

And from that deal, if you sold it, you would net almost a million dollars. About 800 and something. Yeah. But yes. Yes. So to me, that sounds like a better plan. So this is what I have some peace just listening this through. If you sold off the non-retirement funds, leaving you with about $200,000, you hustle to work another two years to pay this all down while your retirement keeps growing, and then you downsize in-house and pay cash for the next one, leaving you with no payments and a bunch of money sitting in retirement. How's that sit with you?

Well, that $440,000 provides me with some level of security. You're not secure, Jim. You owe $620,000 to Navient. That's no security. All right. You can't bankrupt on that. I mean, student loans are one of the most difficult loans to get rid of. What are the payments on $620,000 of student loan debt?

I'm just curious. About $4,000 a month right now. Okay. Now walk this out with me. In two years, the student loan payments are gone. You now have $4,000 a month back in your life that you were paying towards Navient. Now invest that even for 10 years at 50 grand a year, you're going to be okay in retirement. But as long as these student loans are chaining you down, you're never going to be able to retire. And so don't get starry-eyed with the investment accounts and you're doing some fancy math over here.

Dude, you've got to get these payments out of your life. You took on the burden. And you can get out with this income and retire with dignity before you're 65, if I can help it. That's my plan for you, Jim. Rooting for you, man. This is The Ramsey Show. You know, we did a survey recently looking for ways that we could serve you better. One of the top things we learned is that people need help when it comes to life insurance. Most people know it's a top priority

and oftentimes money's not even the issue since term life is really just cheap. Some feel guilty for not taking action. Some need encouragement to follow through while others are confused about the options. This is why I hammer away every day talking about Term Life and Zander Insurance. You've got to get this taken care of, and Zander is the only company I recommend. They built their business to serve. Whether you just want information or you need that extra attention to get things done, in the end, they will help you make smart, confident decisions for your family. Wherever you are in the process, whether getting a quote or getting your policy approved,

please take the next step. Go to Zander.com or call 800-356-4282 and let them help. Welcome back to The Ramsey Show. I'm George Campbell, Ramsey personality, host of the Fine Print and Entree Leadership Podcast, all of which you can find on the Ramsey Network. Open phones this hour. The number to call is 888-825-5225. I am flying solo today because the rest of the team is in beautiful Orlando, Florida at our Entree Leadership Summit live event.

Dave Ramsey, Nick Saban, Jocko Willing, Jade Simmons, Patrick Lencioni, Ken Coleman, Dr. Henry Cloud, Will Godera, Dr. John Deloney, Jamie Kern-Lima, Jay Leno, Dr. Karen Lineleaf. I mean, what a lineup. Absolutely amazing. So we got about 2,500, 3,000 business leaders out there in room, many more watching on our live stream, hoping to grow themselves, their teams, their profits, all of it. And it's inspiring. And I got a little bit of FOMO, like I mentioned earlier, but I'm happy to be here in this seat. What a privilege and an honor. Titus joins us up next in Atlanta, Georgia. Titus, welcome to the show. Hey, how are you? Good. How are you? I'm better than I deserve. Boom. There we go. What's up, man? How can I help? So I am 13, and because I'm 13, I don't have a house or any debt to pay off. I was wondering what baby step I should be on.

Oh, I love this question. Titus, how did you find out about this show at 13 years old? My parents are pretty involved. They're working their way towards getting rid of debt. Wow. Well, you sound sharper than a lot of the 33-year-olds that call into the show. So good for you, man. I'm proud of you. So you're wanting to follow the baby steps. Are you plugged into Financial Peace University? Have your parents told you about that? I think we're going to be starting that this year. Awesome. Yeah, I think we're going to be starting that this year. Awesome. Yeah, I think we're going to be starting this over break. Okay, so you're wondering what baby step you're on at 13 years old.

This is one of my favorite questions in recent memory. So you have no debt, obviously, because you're 13. Gracious. I hope we don't have 13-year-olds going into debt. How much money do you have to your name? A little under $1,000, I think. Wow. So you have a positive net worth. You're doing better than most of Americans.

Does that feel pretty good? Yes, sir. So what are you doing for work? How are you getting this money? Well, I'm a saver, and also I was on the stock market a little. Wow. So, yeah. This is impressive.

Okay, so on a technical level, you would be in baby steps four through six because you don't have debt. Now, you don't have your fully funded emergency fund, but right now you don't have expenses. You're 13. Mom and dad are covering the bills, right? Okay.

Yes, sir. So here's what I would tell you. I wouldn't worry too much about the baby steps right now. What I want you to do is invest in Titus. And so I love that you're already getting into the stock market and understanding this stuff. It tells me that you're going to be a multimillionaire by the time you're 30 at most if you follow these steps. So do you know what you want to do uh after high school um i'm thinking about being an investor of sorts like uh on the stock market and uh like you want to work on wall street or what um you want to trade stocks for a

lot of um whether i don't know but whether it be like stocks or online, come on, like NFTs. Oh, you're into NFTs, huh? Well, I don't know too much about them, but I think the future of investing is shifting a little. And so I'd like to look more into modern things. I love it. A bit more modern stuff. Titus, I'll tell you what I learned because I was like you. I was a curious teenager and I was going, what's the latest thing I want to keep up?

And what I found now being 20 years older than you is that if you follow the trends, you will fall for the traps. And I want you to avoid the traps at your age so that you can build wealth. And the truth is things that are boring that you've probably heard about like a 401k, an IRA, mutual funds. They're not as sexy as NFTs and crypto and all the things you're probably into, but man, the amount of millionaires that have been created because of those things, the 401k, the IRA, boring mutual funds, it is astronomical. Now, show me all the millionaires who bought NFTs and struck rich. Have you heard of these people, Titus? No, sir. Agreed. We are in agreement there. So what I want for you, keep saving. I love that you're a saver. Also enjoy your life. You're 13.

I don't want you to spend your weekends trading stocks when you could be hanging out with friends, going to the mall, going to the movies, just doing normal 13-year-old stuff. Do you do that kind of stuff too? Yes, sir. Okay, good, good, good. You just sound so smart that I'm like, this guy has a hard time having fun. And so I know some folks like that. And so I want you to enjoy your teenage years. Also be very curious about what you're into. Try a lot of different things. This is the time to do that up until after high school when you go, all right, what's next? Do I want to be an investor? If you want to do that, that might be a career field because you're going to have many years of experience if

you're already starting. So I love that for you. The key for me is stay out of debt. Never touch it. Can you do that for me, Titus? Yes, sir. Yes, sir. Okay. No matter how tempting it sounds, don't touch student loans. You don't need a credit card. You don't need to build your credit score because at 13, if you're listening to this stuff, you're going to be able to pay cash for your first home. Is that a cool goal? Yes, sir. I love that. And then you don't have a payment in the world.

So all of the income you have can go towards your true love, which is investing, right? Yes, sir. And then we're off to the races. So I love your spirit, Titus. I appreciate the call. We're rooting for you. And it sounds like you're already going through FPU. Otherwise, I would gift it we're off to the races. So I love your spirit, Titus. I appreciate the call. We're rooting for you. And it sounds like you're already going through FPU. Otherwise, I would gift it to you.

Love that call. Be encouraged, America. There's 13-year-olds that are sharper than you when it comes to money. Wow. We all got to step up our game. Wesley joins us in Amarillo. Wesley, welcome to the show. Hey, George.

How are you doing? Great. How can I help? Well, I'm an owner-operator, truck driver, and I have a fairly new truck right now. It's paid for. It's a 2020. And I'm completely debt-free except for my mortgage. And usually I've been in the habit of trading trucks every three years and with the way things are going right now I'm wondering it's still a smart idea I have one on order at the moment

that I should be picking up in August but I still have time to cancel if I change my mind now my new one I can pay cash for, and after I sell this one with the way the market is, I'd probably be in the hole about maybe between $60,000 and $80,000. Ouch. But it would be completely paid for. There would be no borrowing of anything. So when you mean in the hole,

you mean you'd have to shell out $80,000 in cash? Yes. Okay, but you have the cash. But you have the cash? But I have the cash. Okay. Is this coming out of your business revenue? Yes. Okay. Yes. And on average, my take home per year on average, the last three years has been about 200,000. Wow. That's your take pay. You're crushing it, man. How old are you? 43. I wish I was as smart as that 13-year-old I just called, though.

Wow. You're doing great, man. And you're doing this all debt-free. That's impressive. All debt-free. I mean, it's taken a long time. I've been on my own. I've been trucking for 25 years, and I've been on my own for almost 15.

And I've moved up into the hazardous materials hauling. That's where the money's at, those hazardous materials. Yep. Nobody wants to deal with that? No, no, nobody wants to take the chance of blowing up. They have a problem with it for some reason. Okay, so this new truck, what's the benefit of moving up to the new truck versus the one you have? It's a 2020.

Okay. From my knowledge, the last 15 years, the factor would be downtime. For this one, I've noticed the last three years, I've only, each year, unscheduled downtime increases, usually by 20-some percent. And when I'm down for a day or two of unscheduled downtime, it's costing me $1,000. Yes, it's costing me $1,000 take home.

Here's how I look at this. I would upgrade. Since you're doing it with cash, this is coming out of your business expenses, what I would do is can I ROI the $60,000 to $80,000 that I'm going to be spending? And if you're telling me that it will ROI within a year or two, I'd go ahead and upgrade if you're doing it with cash.

Okay. That feel right? Okay. That sounds right. I was just needing, I've been trying to call for the last couple months because you were my final decision maker. Well, it's a blessing for both of us today, Wesley. Thank you so much for the call.

Love that you're doing this completely debt-free. It makes me feel a whole lot better. You've got an incredible take-home pay. And if you keep doing that, running your business debt-free, you will be wildly successful and build wealth. Thank you so much for the call. This is The Ramsey Show. Thank you. You're listening to The Ramsey Show. I'm George Camel, host of the Fine Print and Entree Leadership Podcast. Open phones this hour, 888-825-5225. Listen, inflation is affecting everyone right now, from the gas pump to the grocery store.

And while you can't control what happens with the economy, you can control what happens with your money. And the only way to control your money in uncertain times is to get on a budget. And the best way to budget is with EveryDollar. You'll plan out your monthly budget and track all of your expenses throughout best way to budget is with EveryDollar. You'll plan out your

monthly budget and track all of your expenses throughout the month. Plus, the EveryDollar mobile app lets you check your budget from anywhere so you can always make the right money decisions. I'm telling you, when you get on a budget, you'll be in total control of your money. Start budgeting for free by going to ramsaysolutions.com slash EveryDollar. That's ramsaysolutions.com slash Every dollar. That's ramsaysolutions.com slash every dollar. Matt joined us up next in Nashville, Tennessee, right down the road. Matt, welcome to the show. Hey, George. How's it going? Great. How are you? Going pretty good, man. I appreciate you taking my call. Thank you. It's an honor.

Happy to do it. What's going on with you? Well, so just real quick, I wanted to ask, I'm pretty sure I already know the answer, I guess, just more so looking for affirmation, I guess. I got plenty of that. So my wife and I are doing the baby steps together. I went through Financial Peace University myself about three, maybe four years ago. Got myself out of debt 100%. Awesome. Started walking through it a second time with my wife when we met in 2020. And she has paid off a very considerable amount of debt since then. But we're down to the last one.

Uh, so definitely see the light shining in our face at the end of the tunnel. Um, she, her last debt is, uh, some student loans, um, less than 16,000, I think maybe 15 and some change. I think we're looking at, okay. So we've got the savings to pay it off, but that would cut our savings almost in half. And I know with times of inflation, like you were just talking about, you know, uh,

God forbid is something more to happen with when one of our jobs or something, you know, um, that, you know, um, that savings,

uh, wouldn't carry us through as much today as it would have a year, maybe two years ago. So I'm a little hesitant because it's a little scary cutting our savings in half, but then again, we would be 100% debt-free. So I just wanted to hear your thoughts on that. Yeah, I understand, Matt. That's a tough one because right now you see security in your savings account, and I see insecurity with these student loans still around your necks. And so the way I look at it is this.

That money already has a name, and it's not yours right now. It's Navient. It's Sallie Mae. It's whoever you owe this student loan money to. And so when you deplete that savings account, that's not forever because, remember, you now have freed up a student loan payment. And so now we can start saving up real quick to get our fully funded emergency fund in place, which is actually going to give you the security you're looking for. So how much do you have in savings? So we have two savings. We have a house fund from the sale of her house last year.

There's just shy of $80,000 in that. And then we have an emergency savings that we've saved up, and there's about $30,000 and some change in that. So you have $110,000 in liquid cash, and you're calling me over a $15,000 student loan debt that you want to keep around? I mean, are you hearing yourself? Yes, sir. I am. Okay. Well, the good news is this is a good problem to have

because the student loans are gone today, and you still have $95,000. Does that not give you security? It does. I mean, we were saving 86 of that to, I'm sorry, we were saving a large chunk of that toward down payment on a new house whenever the market quits being stupid. We're actively looking with our realtor right now but um we're constantly being outbid by people coming over from different parts of the country and outbidding us locals that's the nashville way we we kind of decided just to hold off on looking for a house

right now sit tight we're in a we're in a very nice apartment in a very safe neighborhood right now. So we're not in a position where we have to make a hasty, desperate decision. So we're just going to sit tight on that for the next year or so and continue to build on that house fund. Perfect. So if you paid off the loans today, you have $95,000. You keep stacking money on top of that. Of course, part of that's your emergency fund, so we're leaving that alone. But that puts you in 3B today if you paid it off, which means you're saving up for that down payment. You'll have a six-figure down payment. I assume that's at least 10% of whatever you're looking at buying, right?

20% probably? It'd be between 25% and 30% given our max budget. This is a great place to be, Matt. I have no hesitation in paying off these loans today. Okay. Even with no interest or whatever it is. Yeah, absolutely, man. Good luck. Come do your debt-free scream. That'll be a fun one. All right. Brett joins us up next in Atlanta, Georgia. Brett, welcome to the show. Hey, George. Thanks for taking my call today. Absolutely. What's going on? Yeah, so I've heard the study of the 10,000 millionaires

and how they're all able to pay off their loans quickly, and that's how they, I guess, accredit themselves to becoming a millionaire. My question is basically I can't wrap my head around how it mathematically makes sense to pay off super low interest rate loans versus paying all of that overage money to buy stock that's currently on sale today. I know that there's risk involved, but I'm 27 years old. My wife and I, we both work and I rarely look at my stock account, whether the market is up or down. I just don't care. I guess I'm risk adverse. So I can definitely go into some of the scenario about where we are at in life, how much we're making, how much we have saved up. How much debt do you have?

Right now, two car loans at $37,000 at a 1.98% fixed interest rate. Rental property loan at $140,000 at a 3.25% fixed interest rate, rental property loan at $140,000 at a 3.25% fixed interest rate, and then personal home mortgage loan of $185,000 at 2.75% fixed interest rate. Okay. What's your household income? Anywhere between $250,000 to $300,000 a year. I love it. Well, you've got a nice big shovel. That helps with everything. Definitely. So your question was, why would I pay off the loans when I could just invest all of that money?

Yeah, the overage, I mean, I'm 27, so I'm guessing 30 plus years of compound interest work and it's magic. So at 27, let's just say you didn't have a payment in the world. What do your payments all add up to on your mortgage, your rental property, the car payments? Monthly payment of one car is $460,000. Another monthly payment is $565,000. Rental property payment is $950,000 and then home mortgage is $1,075,000. Okay. So about $3,000. Let's call that $3,000. What I want you to do is go to a compound interest calculator

and put $3,000 in there every month for the next 40 years. Tell me what that adds up to. And then tell me, do you want to keep those loans around, or is that money better off invested? Okay. I think I win. I'm playing the tortoise game. You're playing the hair game and that's fine. You know, I'm not mad. You're still going to be a millionaire. We'll get there different ways, but the way to do it without risk and with a little more financial peace, which let me tell you, as you get older and you start having a family, all those loans hanging around, aren't going to add any security to your life., you can do it Brett's way, and honestly, you'll be fine.

You're a sharp dude at 27. You know a thing or two. But as for me and my house, we just don't do payments. That's a value that we've adopted early on, and it's an identity thing for me. It's not about math. It's about the kind of person I am is the kind of guy who doesn't need to answer to anybody. And when I don't have a payment in the world, which I don't because I paid off my house in December, man, I'm light as a feather. Come at me, bro.

If I lost my job today, which God willing, if the show goes well, Dave doesn't do, I'm okay. I have an emergency fund. I don't owe anyone anything. And so that's the kind of mindset that I want you to have. You don't have to have it. You don't have to share all my values. But you call it into the show and ask me for my opinion, and you got it. And it's worth what you paid for it, my friend.

Thanks for the call. This is The Ramsey Show. Thank you. I'm George Camel. You're listening to The Ramsey Show. I'm looking out to an empty lobby right now. It's real sad. So this is your friendly reminder to come visit us. That's right. Here at the headquarters

of Ramsey Solutions. We're about 30 minutes south of wonderful Nashville, Tennessee. And when you enter this place, it is rare air. It's special. You smell the cookies being baked. We've got free baked goods, free coffee, a free mug. Whoever's hosting the show will come out twice an hour for photos, sign books, say hey. We love to meet people who travel from all over the country to come see us or make a pit stop on their way. We've got kind of the wall, the museum wall, if you will, where you can kind of check out the history of Ramsey Solutions. The team did an incredible job crafting an experience for our fans who want to visit, celebrate with us along their money journey. So go to RamseySolutions.com slash visit. Let us know you're coming.

We'll get you all the details, who's going to be here, what's going on. We would love to have you wherever you are in the world. Open phones this hour, 888-825-5225 is the number to call. Let me help you take the right next step with your money and your life. Jason has decided to do that. He's in Kansas City. Jason, welcome to the show. Yeah, thanks for having me. I appreciate it, George. Absolutely. What's going on with you? So really quick, me and my wife,

I'm 50, going to be 52. She's 50, going to be 51. We're kind of live bootstrapping Baby Step 5 with my daughter going to college right now. And we got an extra $600 a month that we started putting on our house payment because we were thinking that we wanted to have the house paid off in five years. But my interest rate is two and a quarter. And I'm starting to wonder if maybe that $600 might be better off put into our investment because we're kind of new to it. So we only got about 54 saved between our matches and our Roths being completely maxed out. And that's between the two of you?

Yeah, between the two of us. Okay. And what's left on the house? 66. Oh, okay. Well, we're not far away on the house there. What's your household income? It's about 115.

Okay, love it. Now, you're saying, should I be investing that extra $600 instead of putting it towards the house? Are you already investing 15% of your household income? Yes, yes, we are. We're both fully matched. We're fully on the match with our employers, and we're putting in $7,500 each on our Roth. Okay. Well, that's good news. And is college paid for, or are we still in the trenches of that? No, we're live bootstrapping our daughter through college. She just finished her first year. She's paying half, and we're paying half because she understands the importance of coming out of

this without any student loans on the other end. I love it. That's what I was going to ask. Is there any way she could pitch in more so that you guys can let your foot off that gas pedal and move towards paying off the house and investing? Probably not just because she is, you know, living out on her own too. And I would much rather, even though it would, you know, hurt us a little bit financially, I would much rather make sure that I'm, you know, helping her get to that level that I wasn't able to get to, you know? Yeah. Well, I found, and this, it's a sad situation that happens more often than I'd like, but students graduate because mom and dad helped them get through college debt free, but mom and dad didn't prepare for retirement. They didn't pay off the home. And now the children are stuck trying to

help the adults retire because they didn't prepare for themselves. So there's a 50-50 shot that she – I think she's going to graduate. She sounds like a real sharp lady. But there's a 100% chance that you guys need to retire. And so I want you to make sure you put your own mask on first. And that still leaves us with your original question, should I be investing extra? Beyond the 15%, I would still be putting that towards the house. And the question is, can you pay that off earlier than five years from now? Now you're putting what, 7,200 extra on the house payment? Right. We refinanced and we got it down to two and a quarter. And then that refinance, making it a 15-year note,

we were able to still figure out in our budget how to get an additional $600 on top of the house payment. Yeah. Well, I still like the idea of using that towards the house payment and finding ways to speed that process up even faster because investing 15% for the next, you know, five years while you pay off the house, you're still going to be in a good spot and you won't have a mortgage payment. And so it's going to be a lot easier to retire because your expenses just went way down. What's your mortgage payment? It's like, it's around nine, but you know, obviously that's half and half, right? I mean, some of that's the actual loan and then some of it's like the escrow, you know, for the insurance and the property tax. Sure. That's all baked in there. Well, here's what I like to do when I want to get fired up about this mortgage. Go pull up the amortization schedule and look at how much is

going towards interest versus the principal. And as you get towards the end, man, it feels good because almost every penny is actually hitting that principal, paying your debt down. And so the advice here doesn't change. You guys aren't in dire straits. I mean, I want you to have, you know, a million dollars in retirement, and it might mean you work longer than you want to. Do you plan on working for another decade or two? Oh, yeah. Yeah, I'm a busy kind of guy. I do a lot of side stuff with consulting and stuff like that too. Nice. Well, I'd keep that going. I'd increase the side hustles. I'd do everything I could to make sure the house is paid off and I'm investing. And once you get to baby step seven,

you can increase that investing. You can start investing 25%, 30% if you want to, to catch up. And at your age, you'll be able to do some of those catch-up contributions in your 401K and IRA. And so if you keep hustling another 10, 15 years, you're going to be able to retire. And I want you guys to retire as millionaires with a paid-for house. And I think that's still possible for you. And we'll let the kids figure out how they're going to pay for college debt-free. But you raised some good ones, so I'm not too worried about that. Appreciate the call. Alex joins us up next in St. Augustine, Florida. Alex, welcome to the show.

Hey, thanks for having me. What's going on? So I recently sold my home in Chattanooga to move back to Florida, and right around the time that I was selling it, I learned about you guys and figured out that I had a brand new truck that I did not need. That's a good realization. So now I'm trying to sell that truck. But when I bought this truck, I had gone in with another trade that I was upside down on. And even in today's market, I'm currently $8,000 under in this loan. And I have another

new car that my wife drives, and that one is not in the same situation. I owe 18 on it, and they'll give me 19 for it. But the truck I currently have, I owe 38 on it, and they're pretty much giving me 30 or,000 or $31,000 for it. Wow. That's a brand-new truck? It's a 2019 F-150. Okay. I feel like you can get more for it.

Where did you go? Have you checked seven places? Have you checked Carvana, Vroom, local dealerships? Have you done your due diligence there? I've checked about three different dealers, and they all say the same amount. Actually, Carvana offered me $27 for it. Well, that's because Carvana's broke right now, so they're not doing too hot. But I would keep checking.

I would check what you could get private party for it. And can you get rid of your wife's car then? Well, that's the thing. If I get rid of her car car her car payment is only 340 a month my car payment is 615 a month i'm not impressed with amounts of car payments i want you guys to just be debt free and get some beaters what's your income 75 000 um and my wife doesn't work she's a stay-at-home mom oh my goodness goodness. Yeah, but that should change this come August when my youngest one is finally going to kindergarten. So we'll be sending her off to school. My wife

will have free time, so she plans to get a job. But in the meantime, I was hoping to use the summer to get rid of these cars. And we could get rid of my wife's car and get her something more affordable, like you say, a beater for a couple of months. How much money do you have in the bank? I have about $9,000 left over from the sale of my house after paying off about $32,000 in credit card debt that we have. How much other debt do you have? I just have these two cars and a $7,500 personal loan. Okay. Here's what I would do if I was in your shoes. You have $9,000, and so you're upside down $8,000, but you

could cover it. And so that's not fun. I'm still trying to get the best deal for this car that I can. But I'm selling both of these cars. Dude, you make $70,000, and you have $50,000 tied up in cars. That's just too much car. So I'm getting rid of both cars. Get something reasonable, maybe $5,000 a piece. I know it's not going to be fun to drive, not going to be as flashy as the ones you got, but that will get you out of this along with the cash you have in the bank. And then we can breathe and get rid of this personal loan and move on with our lives and never touch debt again. Appreciate the call. That puts this hour of The Ramsey Show in the books. We'll be back with you before you know it. Do you love a good day, friend? Want to see the latest Ramsey Show videos going viral?

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