The Ramsey Show - App - I Work at a College but Don't Support Some of the Degrees They Offer (Hour 3)

Episode Date: April 28, 2021

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🎵 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. I'm Dave Ramsey, your host. Thank you for joining us. Open phones at 888-825-5225. That's 888-825-5225. Joseph is with us to start off this hour in Puerto Rico. Hi, Joseph.

How are you? I'm doing well, Dave. Thank you so much for taking my call. I appreciate it. Certainly. How can I help? All right. About five years ago, I'm going to give you kind of a snapshot of who we are and what's going on here

so that you can kind of answer my question when I tell you the end of it here. We moved to Puerto Rico about five years ago to start a new ministry, and we rented our home. And about three years ago, our small group Bible study, we're trying to decide what's our next Bible study going to be. And we're like, we all stink at managing our money. We all give our wives insecurities and, you know, we're just not very good at it. We're living paycheck to paycheck. We're not paying for retirement. So our small group Bible study decided to go through Financial Peace University. So the eight of us took this course together. And in the last three years, we've paid off about $10,000 in debt.

We've saved our $1,000 emergency fund, put $25,000 in the bank for our six months of reserves and started finally investing in retirement. And like I said, we've been renting our home. And about six months ago, our landlord came to us and said, hey, he moved to Texas about five years ago. And when we started renting here, he came to us and said, hey, I want to get out of this house. I want to sell it, but I'm going to give you guys the first option. And so he's like, I'll just ask for what I owe on it. And we're like, started panicking. We're like, okay, well, we don't have money to buy a house right now because we're just putting all of our money into retirement and trying to save up for that because we were so

behind on it. And, um, so we started looking around for another place to rent. The rental market here is totally dried up. Um, there's so many people moving here for the tax benefits in Puerto Rico that rentals are just like astronomically high. Um, and so we're looking back now at, at, at purchasing this home. Um, it's, you could sell it for about two, there's, there's houses in the market right now for about 249, 250 same houses in our neighborhood. Um, he owes 200 on it. And so we have our, we don't have the 20% down payment per se saved up, but we have our six months fund and we have our about $25,000 between our two emergency,

I'm sorry, not emergency, about $25,000 between our two IRAs, and then we have our $10,000 of bided money that just came in. So we have that money sitting there, and we're planning on using that towards putting our 20% down on the house. Even if you don't put down 20%, that's okay on a first home purchase. The only problem is you're going to get the PMI, but it's not a requirement that we give you in Financial Peace University on your first home purchase that you put down 20%, as long as you understand that you're taking out PMI. And so you're getting private mortgage insurance, which just adds to the expense of the house, obviously. So I would scrape together and add some to the 10. I would not use your emergency fund. I would not use your emergency fund. I would not use your IRA.

But if you can buy this house and put some money with that 10, or if you back your emergency fund down a little bit and say it's six months and we're going to back it down to three months, that's okay, because it's still in the three to six months range. But we're not going to use your emergency fund. We're certainly not cleaning out your IRAs. But I would stop adding to them right now while we work on this. How long have you got to purchase it?

How long will he give you? Well, we actually went into the contract with them. So we're in the contract process now. So why did you call me? You already did your deal. Good. I guess because I'm nervous about, you know, that question of whether or not we should liquidate the IRA.

No, you shouldn't. And use all our money. And that's where I was kind of not finding anate the IRA. No, you shouldn't. And use all our money. And that's where I was kind of not finding an answer. Yeah, no, you shouldn't. And I called the guy to kind of find that. No, I've never told someone to liquidate an IRA to buy a house, ever. No, you shouldn't. But the $10,000 will be enough.

That should get you into it. And anything else you can scratch together between now and closing, how far can you delay the closing, stop your retirement savings, and pile cash on, pile cash on, pile cash on. Sell everything in sight, pile cash on to get you a good strong down payment on top of that 10. That's all fine. And again, if you crank down that, if you have a six-month emergency fund and you back it down to three months, that's not the end of the world. You may want to beef it up later again. But as long as you're in that three to six months range. no we're not using the whole emergency fund i wouldn't use a dime

of your retirement account and then um the payment needs to be a fourth of your take-home pay on a 15-year fixed rate and you should have known that from going through financial peace university we did teach you that so hopefully that does fit in with your income in this situation but it sounds like it's a good buy and um and you're at the you're at the right place to do it you're just trying to scrape together some nickels out of the corner of the couch to make it work that's all you can pull it off john's with us in dallas hi john welcome to the ramsey show hey dave what's up? Better than I desired. I advise at a college, and I got in trouble with my bosses because I told some students coming in for advising that I didn't think general studies was a good choice of major.

And my bosses are putting pressure on me to promote this degree and all of our degrees equally. And, you know, you talk about useless degrees a lot. I was just curious, what do you think of the general studies degree, and what would you do if you were in my situation? And I think I'm just going to hang up and listen. Thank you. Thank you. I appreciate your call. general studies degree assumes that all education is profitable in the marketplace and we've proven that it's not um education is important the more you know the better life you'll

have and um if you know some of the things that the marketplace actually appreciates, then the better income you'll have. Which is why I read like a maniac still, and I haven't been in college in years. And so adding education, adding knowledge, even if it's just weird knowledge on a hobby you're working on, that still just adds to the quality of your life. And so in that sense, a general studies or a liberal arts degree or whatever you want to call it is fine just for a well-rounded life. But it is not the equivalent of some of the other degree fields

in terms of what the person can do with their life as a result of it. And so, you know, you'd be much better off not going to college and getting some technology certificates. You'd make a lot more money. And you'd be much better off studying a field of study that, you know, young people coming out with supply chain logistics degrees now are making 80, 90,000 bucks coming out. They're not coming out making that with general studies.

And so, you know, if what would I do if I'm in your shoes? Why? It sounds like you're working for an idiot to me. You know, they're asking you to promote things that are as if they're equal when they're not. And they're asking you to go against your integrity. In other words, you have to lie now to students to please your boss. And so it sounds like I'm not working there much longer. I'm going to be doing something else with my life, I guess.

I've done that a few times in my life. One of the questions I get all the time is, which life insurance company should I use for my term life policy? A valid question, since there are hundreds of companies out there with rates all over the place and riders and add-ons that are simply a waste of money. You need to get this done and make the right decision. That's why the only company I use and have recommended for over 20 years

is Zander Insurance. Zander is a broker who shops the top term life companies for you and finds the best rates available from the only plans I recommend. They also save you time whether you want to work online, over the phone, or via text. Their team will cater to your needs and help you make the right decision. This is an absolute necessity and Zander has made the process easy and convenient. Call them at 800-356-4282 or visit Zander.com for instant online quotes. Have you ever made a dumb decision with zeros on the end because you did not do your research? Yeah, me too. Most people make choices based on feelings or opinions,

especially when doing something like buying a house. But when it comes to the real estate market, feelings are not your friends. Facts are your friends. So check your facts. Find out what you can actually afford. Research what's trending in home prices. Talk to a reputable real estate agent in your area listen if you're thinking of selling a home in this crazy market we're in right

now this is not amateur hour anybody can sell a house yeah a monkey can sell a house but they're not necessarily going to get the most for it right now and uh some you know some people that get the real estate license, they don't know what they're doing any more than a monkey would know. And so you need a pro in your corner. You need somebody who knows what they're doing. You need to get with one of our real estate ELPs, our endorsed local providers. Never buy a house without the facts.

And you've got to have – listen, you need a pro because this is a weird market, and you could lose tens of thousands of dollars by someone not knowing how to navigate the craziness that's out there right now. And you've really got to have somebody knowing what they're doing right now. So text HOUSE to 33-789, particularly if you're getting ready to sell a house. Text HOUSE to 33-789. Paul is with us in mccallan texas hey paul welcome to the ramsey show i love the lead-in music so i just have a question i've got kind of a crux in my life right now and i could use a little advice because it's kind of tricky. Okay.

So pretty much I live down here. It's an affordable way of life, but I've been in a position in higher education for about 10 plus years. And there's little to no upward mobility. And, of course, you know, you look at going on to further your education, it's no guarantee you might make $10,000 or more, you know, it's not really worth the return on investment. Recently, I was given or possibly given an opportunity to look at moving to Santa Barbara, California to work, I might add, also in higher education, but for substantially more. I own a home, which is a, as I like to say, large garden, small farm operation here where I am. And I really would not like to let it go, but I have been trying to look for opportunities in the job market in this area for a very long time, and I have not found much in the way of upward mobility again. So I'm just wondering, is this potential opportunity in California, even though I realize it is a very high and expensive place to live, although it is

paradise, you know, is it really worth looking at doing something like that even for just a couple of years to put back into the property here and renting or selling or even just, you know, it's really just one of those things where I'm trying to get my finances on track and this came about. What do you make now? Oh, about 40. What would you make there? About 80 to 85 is the estimate. Of course, I would fight for more, but, you know, that's about the estimate. Okay. Yeah, there's no hope of owning real estate in that area unless there was some long-term investment.

But yeah, you know, it would be a rental. How did you, how did this lead come about? Well, it's through a very old friend of mine, very old colleague. And he's in the opportunity and is looking for people that he can trust and know that work hard and work good. So, I mean, that's kind of, yeah, that's how it came about. What do you do in higher education? Well, I help with administering scholarships for students at the moment, but I've also worked in public information,

and I've also worked in grant writing, and this would be working in more of an IT kind of project management situation. So you have a Ph.D. in higher ed or what? I do not. I have two bachelor's degrees and an associate degree, and I'm about to finish up a certificate in project management in the next probably four weeks. Who says you have to stay in higher education? Nobody does, but I have tried.

Literally, I have tried. It's like part of my work schedule week. Spend two or three hours looking for work and apply, apply, apply. And I've just not hit the target for whatever reason. Mm-hmm. Okay. I know it's tough, right? No, I think if you had other options, you wouldn't even be looking at this one.

I don't have many options. No, I wouldn't want to say that. I wouldn't want to say that. I said if you had three or four options on the table, I know you told me you didn't have options. But if you had an $80,000 option in Dallas, you wouldn't even be talking about this. You're cutting out? We had a bit of a cut out there. Okay, I said if you had an $80,000 option in Dallas, you wouldn't even be talking about this. And so I think that what this has done is it has woken you up,

and probably your job hunt technique sucks. And we've got to work on that, and let's get you some more options to look at. Because, I mean, if you want to do this there's nothing evil in what you're talking about but it sounds kind of a little bit desperate like it's the like it's the only thing out there and it's just not that's just not true that's a scarcity mentality and it's just not just book you just hadn't been able to land the right thing. So what I would tell you is I'm going to send you a copy of Ken Coleman's book, The Proximity Principle, and if you've got degrees in areas outside of higher education

and you've been having trouble finding upward mobility in higher education in your area, then let's get outside of higher education and let's start looking at project management anywhere. You just got a certificate on that. The project management, PM1s, PM2s, they're making more than you're making, and they're certainly making more than you're making in Houston, Dallas, San Antonio, Austin for sure, and I didn't even leave your state yet. So I'm not against you going to the other place i it just feels like you're

considering it because you feel like it's the only possible path to make more money and i don't i just don't believe that is the case so i'm going to send you a copy of the proximity principle i want you to get on ken coleman's website i want you to learn everything he has about hunting for a job about doing your resume about the interview techniques about how to get your foot in the door and get your name out of the pile because all these applications you're filling out going a pile with 2 000 other people and nobody ever sees your app again you get buried and you have to do something to differentiate yourself and ken can show you how to do that go to ken coleman.com and he can walk you through all of that. So, hey, man, thanks for the call. Folks, when you're facing a decision of any kind, and you've got like two options and neither one of them are great,

or it feels like it's very, very limited or very trapped. And you get kind of, we all get kind of fatalistic about it. It's like, oh, well, that's the only thing. It's almost never the only thing. And so what I've had to learn to do is the more options I have, two things occur. No matter what it is you're looking at. If you're looking at buying a car, if you're looking at a career change, if you're looking for a wife, I mean, the more options you have, the more power you have, and the more likely you are to make the right decision. When you only have two options and you feel trapped, very seldom is either one of those the right option.

And so you need more options to give you power, to not feel trapped, and to make a better decision. In every case, and there's no difference with him. This is the Ramsey Show. We'll be right back. Thank you for joining us, America. Jonathan is in Lubbock, Texas. Hey, Jonathan, welcome to the Dave Ramsey Show. Hey, Dave, how are you? Better than I deserve.

What's up? Hey, so I'm facing kind of a unique situation. I've been pretty blessed with some amazing parents that have been great role models in all areas of life, especially financially. And they taught financial peace to Sunday schools and even made me read financial peace, which I didn't enjoy at the time, but I'm super grateful now. So I'm 19 years old. I just graduated high school. I'm about to finish up my first year at a community college. And I've been able to go completely free based off scholarships and even some going back towards me for getting put back for later and leftovers.

And my situation kind of surrounds, I'm planning to continue and get a bachelor's degree. And I'm even planning past that and want to get a law degree in the future. Yet, through reading and having great mentors and all that I've learned through reading about money and especially through y'all's programs, I know the time prudence of saving for retirement. So my question stems, I have enough money saved, my family does, to be able to fully pay for all the way up to my bachelor's degree. But I have siblings too, and so I understand my law school will be kind of a cash flows

system when it gets to that point but my question is I've been putting money into my Roth IRA that I set up last year and contributing as much as I can but financially thinking smartly about you know paying for other things and I've been sitting down with my parents talking about that. But my question is, should I continue to contribute to my retirement savings while I have this desire to go to a graduate school that I'm not entirely sure I'll have funds for up front? No, you should not. Okay. You should stop saving for retirement, and you should put all your money aside

to complete the education track that you're on. And the reason is this. You, what you can make in the marketplace extra as a result of these degrees is a lot more than you will make on a mutual fund. Right. Education that is usable in the marketplace to increase your income is always more valuable than a mutual fund. Now, education that's left-handed puppetry is not. I mean, you get a degree in underwater BB stacking or something, it's of no value, right?

And people get these stupid butt degrees. But if you're going to go get a law degree, and then you're going to use the law degree to create an incredible income as an attorney uh and get on a really strong career path of law whatever that is and whatever version of the law it is but i mean you're not gonna uh go to work for thirty thousand dollars a year for the state doing nothing i'm talking about you're going to go out there and you're going to use the law degree to make a couple hundred or more a year as a result of being an attorney and developing a career in that area. That is going to give you a better mathematical return on your investment than a mutual fund will. And you have plenty of time to do your investing i don't want you to put it off forever

but your education with the track you're on jonathan and the kind of a young man you are is more valuable the way you're laying it out than a mutual fund is so no i would stop and pile up cash and let's get let's get this law degree and let's pay cash for it and a big old pile of cash and if you have a bunch of cash left over because you piled up such a big pile when you graduate you got a big old pile left oh well we'll try to figure it out you know lane is in lincoln nebraska hi lane how are you doing well dave hey first of all let me just say thanks so much for all you and your team do it's an honor to speak with you honor to speak speak with you, sir. God bless you. How can we help? Yeah.

So, hey, last year, the year of the dumpster fire, me and my wife were actually able to become debt-free, finish Baby Step 2, first time in the eight years of our marriage, which was awesome. Great. And then I guess you could say partially thanks to government stimulus, if that's possible. We sped through baby step three and were able to upgrade an old car. So we found ourselves at steps four, five, and six quicker than we expected. Wonderful.

But that's a huge blessing. Wonderful. I am a pastor, and currently we live in the church parsonage. It's a very nice home. We're thankful for it. I know that's not always the case, but my question is kind of, you know, whether we love the church we're at, but whether we're here for five years, ten years, or until I retire, we realize that eventually we will have to buy a home, and when that time comes, we don't want to be starting from nothing at that point. So my question is, where should we be saving money for this future home?

I would start paying a small house payment into a mutual fund. Into a mutual fund? Yeah, that's just your home purchase fund later. It could be sooner. It could fund later. It could be sooner. It could be later. It could be much later. I don't know how long you're going to be in the parsonage either. But having worked with pastors for 30 years, if you just fast forward this out 30 years from today,

and you never save money for a house, and then your pastoral career, you go into retirement, you don't have the parsonage anymore, you don't have a house. Yeah, exactly. That's a problem. And so I don't know whether this is going to, maybe you move five years from now to a different position, and they don't have a parsonage, then you would be ready to buy then. Or I don't know whether it's 40 years from today, and this parsonage is over. And you spend your whole career at that church, which either one's fine with me.

I'm open to whatever God's got for you. But I do know that if you save money, it's going to keep you in a position of, well, to be able to buy a house. It's that simple. So, yeah, just start, you know, pretend your baby step six is really there as if you had a mortgage. But instead of paying off the mortgage, you're building up cash to buy the house. And so whatever you would put on the baby step six, and you might want to just set up a mutual fund with your SmartVestor Pro or even just an index fund would be fine. But just automatically draft it out of your checking account each month, a small house payment, depending on what your household income is.

But, I mean, if you start putting $1,000 a month aside and you do that for a decade, you're going to have some serious money in that account to buy a house, maybe even pay cash for a house. So it puts you in really good shape. Zach is with us in New Jersey. Hi, Zach. Welcome to the Ramsey Show. Thank you for having me. How are you? Better than i deserve

how can i help um so i'm 28 years old married with a kid on her life um and i've been watching a lot of youtube videos for the past month or two um and getting debt free is definitely at the top of my priority list now good um. My wife and I own two cars. One of them is paid off. The other one is $30,000 in loans. In total, we have $120,000. The other $90,000 is student loans. And we're getting to the point where her car has too many miles

because she drives anywhere from 40,000 to 60,000 miles a year. My solution to that was that she would take my car, which has 10,000 miles, I would take the other car, and she would drive this until we needed another car or it paid off. However, since she spends so much time in a vehicle every year she's pretty particular about what she wants and so she really wants to trade the car that we have now that is thirty thousand dollars in debt and buy something that's forty to forty five thousand dollars in debt um and i kind of had worked out a plan with her where we can pay off fifteen thousand dollars in six months and at that point since the payment would be gone from the other loan we would work

ourselves into potentially buying that car no not a chance dude listen listen i don't give a crap what she's particular about. You guys are broke. You are deeply in debt up to your eyeballs. And now you're talking about buying a freaking $45,000 car and put 60,000 miles a year on it and destroy its value? Zach, that's dumber than a rock, man. Absolutely not. Not a chance. our scripture today proverbs 3 5 and 6 trust in the lord with all your heart and lean not on your own understanding in all your ways acknowledge him and he shall direct your paths. Benjamin Franklin said, an investment in knowledge pays the best interest.

Mary is with us in Dallas, Texas. Hi, Mary. Welcome to the Ramsey Show. Thank you, Dave. I just have a question about yearly home insurance that you purchase. I own a home. It's totally paid off. I have no debt. I have savings. And I was just wondering, is it prudent to, and I just made a claim and we had hail and

they're going to be replacing the roof for me. uh that will hopefully last for another 20 20 years or so so i just wondered if that was a prudent idea if what keeping homeowners insurance in place excuse me not buying the homeowners insurance no it is not prudent i would buy homeowners insurance okay i have homeowners insurance on my home and I can write a check and replace it tomorrow if it burns down, but it is a good buy to insure it. All of my properties that I own I have insurance on, and I have the ability to replace all of them financially if something happened without that. But it's good risk management to transfer the risk of a fire or a tornado or another catastrophic event.

Now, what I would do is I would raise your deductible up good and high. So ask your homeowners. I'd do two things. One is I'd shop your homeowners insurance. If you haven't shopped it with an independent insurance agent, you can go to DaveRamsey.com and click ELP for insurance. They'll shop a bunch of different companies and get you the best price. Number one, do that, okay, if you haven't, because you may get a much better price.

Number two, get the price on the deductible, and I'll teach you how to analyze that. What is your current deductible? I think it's 2%. 2%? That's unusual. It's usually $500 or $1,000 or $5,000. No, it's a percentage of the value of the home that they have insured. Interesting.

So how much do they have insured? They have it insured for $249,000. Okay. So you have a $5,000 deductible. Basically, yeah. Approximately. Okay. That's a very high deductible.

So you're probably not going to gain anything by raising it from $5,000 to $10,000. But you could ask, because I'm not worried about a $10,000 loss for you. I'm worried about a $250,000 loss. Right. And so if you can get a substantially cheaper price by going from 2% to 4% with your company or by getting a $5,000 deductible with somebody else and our $10,000 deductible with somebody else. See, here's the way you look at it. What are you paying in premiums now?

I think it's, if I'm not mistaken, it's around $1,200 a year. Okay. So let's pretend we went from $5,000 deductible to $10,000 deductible, 2% to 4%, okay? You're taking an extra $5,000 worth of risk. And if they drop the price $100 for you doing that from $1,200 to $1,100, you can divide that $100 into that $5,000 and you figure out real quickly that that's 50 months. Probably not doing that one. But if they drop the price to $300 for you to take an extra $5,000 risk,

you don't have that many claims on this. No. Then you would, you know, I would take, I run really high deductibles on all my stuff. Because, again, it's not the first $5,000 or $10,000 that I'm worried about. It's the first $250,000, the back $250,000. Nathan's with us in Universal City, Texas. Hi, Nathan, How are you? Doing good, sir. Yourself?

Better than I deserve. How can I help? Yes, sir. So my question is, is it wise to share a room with my girlfriend? So my company is sending me on a trip to Maui. I won Summit this year. So they're sending me for a week, and I get to take one other person with me um i'd like to take my girlfriend with me but um i don't know if it's a wise decision to uh lodge in the same bedroom okay are you all already living together sleeping together no sir okay so this will be violating that right right we're trying to abstain until marriage. Yes, sir. Okay. And how old are you, sir?

25. Okay. I mean, you certainly can do whatever you want, but you're asking me, which is a mistake, because I'll tell you. So I would get a separate bedroom, because if I'm 25 years old, I don't have that much willpower. Right. I mean, really. You're just asking for a situation that apparently based on you're telling me what your values are that you're going to regret. You're just asking for trouble. Right. On top of that, I don't really care how people think about the way it looks,

but I care about the way something looks for my wife. And I don't want to compromise her reputation. And I'm going to guess and say, if you're concerned about this kind of thing, like I would be, we share that value system, then I would be concerned about what people thought about my wife. That's a true statement, yes, sir. Yeah, so, I mean, like her dad. Right.

Mainly her dad, honestly. Yeah. yeah and uh you know because you know ever all of us guys are going yeah you might pull that off but you probably won't you know and why put yourself through that oh my gosh uh so no as a matter of reputation of the lady that you love will be very old-fashioned here we're going to protect her reputation to her dad to her friends because you've made this statement that you're going to wait until marriage then let's let's put a situation in place that leaves no one questioning that you did much less uh having to have that kind of self-discipline, which

at 25, there was no chance. So, Nathan, you're a good young man. You have a good heart. We need more people like you in America today. There are so few of you. Thank you, sir. I'm honored to speak with you today. Open phones at 888-825-5225.

Yes, there are people out here like me that are dinosaurs that actually believe that we're supposed to be married before we engage in sexual activity like that. Yeah, I know it's hard to believe for some of you. You can't grasp the concept, but it's a part of my Christian faith. I actually do believe that. I didn't always.

I wasn't always a Christian, and my faith has informed me on that, and it's not a question in my mind, but it seems to be a foreign concept in a culture that has become so toxic, a foreign concept. Does my old dinosaur heart good to talk to a Nathan that is actually concerned, gallant young gentleman, concerned about his fiancée and actually cares what her dad thinks. What a man of honor.

Oh, don't we need more men of honor and more women of honor? Men of virtue. Women of virtue. They're getting more and more rare. It's almost like having a superpower nowadays so well thank you sir you did my heart good today i appreciate talking to you that about puts this particular hour of the ramsey show in the books james childs is our producer.

Kelly Daniel is our associate producer and phone screener. First time I've done a show by myself in a long time. I feel kind of lonely in here. That puts this hour of the show in the books. We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace,

and that's to walk daily with the Prince of Peace, Christ Jesus. heard about an event, product, or service and didn't have a chance to write it down, don't worry. We list everything you've heard about during this episode in the podcast show notes section or head to theramzshow.com. Thanks for listening.