The Ramsey Show - App - “I’m $147k In Debt And Only Make $1,500 A Month”

Episode Date: November 19, 2025

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Normal is broke and common sense is weird. So we're here to help you transform your life from the Ramsey Network in the Fairwinds Credit Union Studio. This is The Ramsey Show. And I'm Rachel Cruz hosting this hour with Jade Warshaw. And we're answering your question. So give us a call at 3,8-825-5-2-2-2-5. And we'll be talking about your life, your money, career relationships, anything, and everything, we are here for you. So let's start off in Boston with Miguel.

Hi, welcome to the show. Hey, how's you going? We're doing well. How can we help today? So today I wanted to ask, so I have a business and I'm contemplating on what I should be next. because I'm also 147,000 in debt, and that's including credit cards, student loans, and car payment. Okay.

So I want to know if I should sell a business for what I think I'd give value for, and then start fresh and use that lump sum of money to attack, like, the debt. What kind of business are you in? It's a printing business, so merchandise. What would cause you to sell the business versus? versus using profit from the business to pay down the debt? I think it's just because I'll collect the lumps of money and like the business right now is kind of, you know, fluctuating.

It's up and down. And I'm also a loan in it. So it's a lot of my time where I feel like if I could change the... If you didn't have debt, Miguel, would you stay in this business? Or would you still want out? Yeah. You would stay in. I'll potentially stay in the business.

yeah okay yeah because i look at this as i mean because how much would you sell it for how much could you get out of it minus all of your liabilities and everything about 30 grand how much are you making off of it every year how much are you bringing home so this is actually like my first year in it um so i'd know at the end of the year but roughly after everything about $1,500 a month. $1,500 a month. Is this what you do full-time, or is this kind of like a side business? It's full-time.

Well, I don't know that I would sell it, but I would not have this being my full-time job right now because of what it's generating. It feels like it's... How are you guys living? Is your wife work? No, I'm single. You're single. How are you living off of $1,500 a month? just just making it happen honestly but what's your rent though like real numbers

I paid studio it's about 850 what else car car yeah 450 and then 450 okay yeah and then utilities I guess that's put in with the rent and then just you're scrapping on food no insurance yeah do you have insurance health insurance my cards no no no health insurance yeah so you're not on a you're not on a living wage right now

and so while I think it's cool to have a printing business this uh it eats like a part-time side hustle when we look at the the income that it's bringing so I would be looking as you're working this I'd be looking for a full-time job what are your what are your skills what have you done in the past before you did this business I technically just hopped off school and then save money and then started this business.

Yeah. How many hours a week? I've never really. How many hours a week are you putting into this? A lot. It's probably like 50, 60. Yeah. Yeah, yeah, yeah.

Okay, so if you did, do you have a buyer out there? Like when you say sell the business, I mean, what's that? Have you looked into that option? Is there a realistic option? yeah i have yeah i have a few options and that's when i mean the business i just mean like the equipment and everything yeah um oh i hear what you're saying not necessarily yeah okay yes that's where the debt is right what did you invest in to do this business like what equipment do you have oh i have all like dtg printer heat presses um and a couple

other machines you know i'll i'll tell you you haven't been doing the business long so I don't want to say that there's no future in it but how much of this debt is business debt like how much of it came from the business um about eight grand okay that's not bad of the 147 that's only eight I'm inclined for you to continue what I want to know is what's the minimal amount of hours that you can put in it to keep the $1,500 so that you can search for something else? Is there any feasible way to do that? Yeah, it's possible.

That's also another plan I've been thinking of, because I have a location in a premier like downtown area, so I was thinking of just getting rid of the space, trying to find something smaller, and then kind of just work on base of orders I get. Yeah, do you, much like being in there? Do you have consistent clients that you're reprinting for? Or is it a one and done?

For the most of both. A little bit of both, but I do have, I've picked up a few clients that are picking up, you know, a month. Yeah. And is most of the hours, when you're saying I'm working 50 hours on this, is it most of it in the actual physical printing that you're having to do, or is it trying to find new clients and marketing and thinking of creative ways to get your name out there? A little bit of both, but mainly the printing process, like printing and being in there.

Okay. Okay. Yeah, so I'm with Jade. I mean, Miguel, if you have all the equipment, and it is bringing in 1,500, obviously, that's not sustainable long term for you to live like that. Obviously, you know that, or you probably wouldn't be calling the show. So it's November. A part of me would give it another six months while doing something else.

Like, you need to go wait tables. I mean, you could make more money doing that. I mean, something, right? You need to go be doing something. And if you can keep this on the side and actually get some clientele, you could, I don't know. Grow it. Yes, grow it. And then maybe that be your.

full time or you just have these clients and you start making 3,000 a month while also still working to get out of all the credit, all the debt that you talked about at the beginning of this call. So I almost would be tempted just to hold tight for like maybe six months. Give yourself a time period though to say, okay, I don't go into any more debt in it. But to say, can I pick up any more steam in this business in the next six to nine months? And if you can't, then sure, sell the equipment, and then that will give you some money. But we just see this, Jade and I both, I think, as a great side hustle for right now, while you go get a full-time job somewhere else.

The fact that you've started generating money so quickly from it, I think, is good. And you have made an investment in some equipment, and it feels like worth it to try to play that out a little longer. But I like what Rachel said on putting a timeline on it. So I would do that, Miguel, or just throwing this out there, kind of the other side of the coin is, if you hate it and you're not enjoying it, but I think you are liking it in some degree because you said you'd still stay in if you didn't have debt is to yeah find something just full time sell the stuff and you start a whole new life where you're not feeling like you have to carry a business right because it does it's a lot of strain and mental calories to do that

so I don't know kind of two different options but either way you've got to get a second job either way agree agree rich yeah um I hope that helps I know that sometimes when we just tell people cut your expenses and get a job. I know. It feels tough, but truly, that is, that is the remedy. You don't have expenses to cut your bare bones as it is. So the next line of defense is getting more income. That's how it works. Yeah. And Ken Coleman has a book. Find the book, I'm sorry, find the work you're wired to do. And we'll send that to you because there's a great, um, it's not a quiz. Assessment at the back. Yeah. To kind of figure out, maybe this will help kind of narrow some possible career paths for you to, Miguel, that you can just kind of brainstorm and think. So holding the line, Christian's going to pick up.

Up next, we have Cody in Roanoke, Virginia. Hi, Cody. Welcome to the show. Hey. Hi, how are you doing? I'm hanging in there. Well, good. We are too.

How can we help today? Well, so I got a little bit of, uh, financial problem as well as marriage problem and it's becoming a strain more so you know with the marriage because of the financial problem um i have we recently had gotten married about five years ago my uh wife and i have had three kids in the last five years and my youngest kid um he was put in the ICU and long story short we have a bunch of medical debt it's about $35,000 worth and I just can't keep up I just recently in the last couple years we've been on Medicaid but um I just recently got a raise working which is good but it's like the more income I come in the more my wife likes to spend um I'm the saver. I like to say no and, you know, get bills paid.

We currently have been taking care of some of the medical bills by credit card, which recently I figured out was a no-no. Yeah. So I have seven grand left in medical debt. We have $6,000. Oh, that's it? Of the $35, you only have seven left? No, no, no, sorry. I have $7,000 of credit card debt.

Got it. And I still have the medical debt. got it okay um because we have the three kids we had to purchase well we didn't have to i guess we could have just kept going but my wife wanted to purchase a bigger vehicle for traveling and stuff would you spend on that uh that was about 50,000 oh yeah you're right you didn't have to spend that okay yeah so long story short is that we messed up when we bought the car and now it's kind of a paycheck to paycheck repetitive thing. When did you get the $50,000 vehicle?

How long have you had it? It's been about a year. Okay, shoot. Okay, so when you talk to her, Cody, about this, how did those conversations go? Are you showing her numbers? Are you telling her that she's spinning too much? Yeah, what's the...

It originally came up because I noticed that our savings account was going backwards. And instead of paying month to month, I mean, that dude's circling in there. Can you do that going down the road? Whoa. Cody? Sorry, sorry. Can you hear me? Yeah, I can hear you.

How much was in the savings account to start and how much has it dwindled down to? So originally we had about 20 grand in savings when we switched to, um, because, we had sold a house and we had a bunch of money invested into the house and we got a bunch of money back to pay off some debt. Well, we went into the house and had money left over. We had 20 grand in savings. Got it. And I noticed that I was having to, I've got it down to like 5,000 now. Five. Okay. And was she using any of this, Cody, for everyday expenses? Like the grocery store? Like, where is she spending it? So most of it has been when I get a budget because I do all the money because she stays at home and takes care of the kids because if we tried to put four kids through daycare, then it would just take an entire paycheck or two almost.

So the biggest thing is how it's going through like she's buying clothes for the girls or and I can't get her to stop. Well, let's, let's, let's, I feel like you're, I feel like you're laying out the problem. I want to get into some real numbers so we can see exactly what, what you're describing looks like. How much money are you bringing home every month? I'm bringing home from, so I got two jobs. I just started recently a landscaping business, which my main job I'm bringing in about $5,000 a month. And that's, you know, what I'm actually bringing home. not after taxes and then plus my side business if I get a job or two and I only have time to do that

on the weekend. How much? Roughly two grand at most. Okay. And give me an idea because you said you're a numbers guy. What are you for your, because I thought you said three kids, but then you said four. Is it four kids? So my oldest, yes. Okay. So my oldest, I have four kids. I have three with my wife currently. Understood. So for, give me an idea of what you have on. the budget to spend on groceries? Our budget right now is roughly about $1,200 a month on groceries. Okay, that's fair. I can't, I can't, I've tried to limit it, and it just seems like every time I try to limit it.

Well, that feels right. That feels right. Give me an example of a budget item that she's gone kind of ballistic on, so we can get an idea. Is this $50? Is this $500? No, so right now we have our, our. joint checking, which is what I, you know, feed the money to her through is like, if I tell her

$100, it ends up being $150. Okay, Cody, you're not her dad. Okay, so everything that you're saying in this call so far, not saying that she's out of bounds. She could be out of bounds because she spends more than what y'all are making. You can't do that mathematically be a grown-up, right? That's how you live life and debt. And we don't want that. But, I mean, you just said, like, well, she stays home with the kids and I do the money.

I put the money in the account that feeds her that. I mean, it's a very separate, even though maybe technically it's together, emotionally and plan-wise, you guys are on two different tracks. And when you tell her, this is how much you have to spend on groceries to me, that's a red flag in your marriage and communication. And so you need, I wish you had said, or the goal, I should say this, the goal is for you to say, we planned on spending $1,200 a month. And that was our plan. And so what I think the first step you have to do is to get her to sit down at the table with you and you guys look at numbers and together

you guys create a budget code because I'll be honest too I'm sure there's some wrong in there that she has but also she is seeing expenses every single day and knowing the reality of what things cost because she's the one buying them and you don't I get I'm not saying that she's justified in it but you actually may learn something

and sitting down with her and hearing what she has to say to say oh, wow, I didn't realize that sports uniforms cost, you know, 30 bucks a kid. And so now we're spending 100 bucks, you know, in one, you know, swipe because we needed uniforms. And that pisses me off because how do we spend them 100? You know, you may actually see some reality as well. But she also, if there's any entitlement in her end or any like, oh, well, I don't know. I just, I just have to buy the girls. If it's that attitude either, she has to grow up and mature. So you both need to sit down and you need to come to her and say you have you you you don't need to say well you're

spending too much you you you you Cody you need to tell her I'm freaking out over here like I am to this point where I feel so disconnected I feel so fearful I feel so protective of the money because I feel like we are not on the same page so will you please sit down for me right like you make it really about you and what you want for the outcome to be which is you guys be on the same page and for this not to take your marriage because it does, Cody, you're exactly right, because I do think people

cannot get on the same page. And so I would beg you to say that that's one of the best things that you can do because out of that budget meeting, I think she's going to have a lot to say, I think you're going to have a lot to say, and to be able to actually discuss it together,

not these one-off conversations. Does that make sense? Yeah, so we actually recently, I've been, well, I almost make her, I mean, it's kind of, of like feels forful sometimes because I'll sit down after the kids go to sleep and we'll sit and then I'll go over the budget numbers and stuff with her and um but like here recently I've done it more so to where she's aware of you know but there's a reason there's a there's a

there's a reason that this is off putting for her um and you've got to get to the bottom of what that is there there's something there whether it's something that has nothing to do with you possibly How did she grow up? What were the relationships she was in before? Maybe, I don't know, we didn't get to talk about it, but did she have a career before and she's used to kind of contributing in that way? And now she's not. There's something behind this. It's not just, well, she won't stick to the budget.

It's never that. There's always something beneath and you've got to be a professional detective to figure out what that is instead of just saying, well, she won't do it. And I've got to make her do it. Well, it's that time of year, and in a few weeks we're going to be doing the special giving edition of the Ramsey show. We do it every holiday season, and it's one of our favorites because I think it does, it highlights humanity. It kind of gives you faith into like the things that people are doing day in and day out for other people that are not highlighted or not seen. We like to highlight and show you all how incredible it is. So whether maybe you've tipped a waitress $100 or bought Thanksgiving dinner for a family

that couldn't afford something or afford the food, maybe bought someone a car, it could be something, anything where you have been generous, or maybe you've been on the receiving end of it, we want to hear from you. So if you will go to ramsysolutions.com slash ask and put giving in the subject line and just give us a little blurb of your story and what it is. and you may be, yes, selected to be on our giving show that we do annually again. So that is coming up on December 18th. So start sending your stories today so we can celebrate living like no one else.

So later you can live and give like no one else. All right, let's go to Beto in Atlanta. Hey, Beto, welcome to the show. Hi, how are you? We're doing well. How can we help today? All right, so I just bought my first car. I'm 17 years old.

I work full time out of M&A. Jim. And the finances that came with the car kind of are kicking me in the ass. Yeah. But it's my first car. And I don't really have another option. What'd you get? I got a 2012 Honda Accord. Okay. So what's the big deal? What's it cost to you? So the total is eight grand for the car. Okay. My friend owns it, owned it. And he told me I can pay him $400 a month. Okay. That's fine. I make roughly $800. $150 byweekly. Okay.

And the part that's getting me is the insurance. My insurance for just liability a month because of my age is about $700. Mm-hmm. And having to pay all of that on my own buying a used car, I also have to pay a title tax because we switched it over time of his name. And that's about another $700. A month? No, just in one time.

Just in one. Okay. I was like, what? Mm-hmm. I have to get it all done at once, which is kind of the hard part. And I have one or two little repairs that are going to cost me a total of $350 before I can get a tag. What would happen?

So you haven't done it yet. You haven't done this deal yet. How are you getting around now? So I did buy the car. Oh, you did buy it. And I have an operating permit from Georgia without a tag. for 30 days. But once that runs out, I'm going to be stuck without a tag and not being able to drive the car until I pay. We haven't, you haven't done the title exchange, the title transfer yet, right?

I have. Dang it. Okay. Because what I was going to suggest to you is to not buy this car and just work your job, because you were getting around somehow before this, keep doing that and save up $4,000 and get a beater. Yeah. Is there any way to go backwards on this deal? I don't think so. Okay. Second round then is you, tell me how old you are again, 22?

I'm 17. 17. Are you in high school? No, I work full time. You work full time, okay. And how much are you making, a bi-weekly you said you're making? $1,700 a month. Around $8.50 every two weeks.

Okay. Are you living alone or are you living with parents? I live with my mother, but I try to contribute where I can. I'm really independent financially. If you are working full-time, I just wonder, because you said full-time hours at an MMA gym, I wonder if there's something that you could find full-time that will give you a little bit more money to give you some breathing room on this while you can get it paid off. I applied to an orthopedic clinic of a friend that I know

and I'm supposed to start in about two weeks What will that be? Starting us at 20 an hour. Okay. And 40 hours a week? 8 a.m. to 5 p.m. Monday to Friday. Okay. So that's going to be better for you?

For sure. Are you able to go to this gym at night when you're done at 5 p.m? Yes. Go and work at night? Okay. So you could go work from like five to, seven, five to eight at the gym and get like an additional three hours a day?

Not necessarily. My hours from the gym are either 9 a.m. to about 1.30 or 4 p.m. to 9 o'clock. Okay. And if I get out of the other job at 5, the only time I have left would be those few hours. Yeah. And that would leave me no time to train,

which is why I got the job at the M&A gym in the first place. Well, what if you, what if you just, what if you continue to train? at the MMA gym just because you like training but you got a different part-time like a different side hustle job to bring in the 1700 so you did the full-time gig at the orthopedist office and then maybe you drive some Uber because you got a car now or not Uber but like you know Instacart DoorDash that kind of thing and then yeah you just work out at the place you like working out at

that makes complete sense I have one more question on starting my own business I was actually going to start my own business soon about car detailing but I wanted to know whether I should try to pull the trigger now or whether I should try to pull a trigger after I get everything with my car done and pay off I mean what's it cost you don't have any money I have about a thousand dollars saved up that I have like in case my car like engine messes up or anything like an emergency emergency and you need that I've been planning on touching yeah I haven't been planning on touching it but yeah so it would for the car detail, you'll probably need some equipment, right, to be able to. So that would be saving up and paying for that.

So I would just price out, if you talk to some people in the area that do it, how much they haven't invested in it, how many clients they have, how long the job takes, run some numbers because you may, I'm not sure what the numbers are, so you may find out, you may find out, oh my gosh, this is pretty incredible. I only have to put 500 bucks in and I'm making thousands a month. that's worth pausing paying off the car to get that built up to start that because it's going to bring in more income

or you talk to people and you're like oh crap that steamer and this and this to really do it. It's going to be thousands and you're only really making X amount like whatever the numbers end up being you probably can make that call. You have an amazing work ethic. It's very incredible.

And I just want you steering your financial decisions to help you not harm you and debt will always set you up in the negative. It always will. Financially, emotionally, your stress, everything. And I think you're kind of getting a glimpse of that, but I'm kind of glad you're getting a taste of it at $8,000 for a stupid car loan versus a $40,000 business loan that you're probably going to want to do when you're 25 because you're very entrepreneurial, right? So just remembering to stay away from debt

all together, all together. And you're a smart, hardworking guy. And I think you're going to do fantastic. So, yeah, the car dealers, or the car detailing stuff, again, I would price it out, kind of figure out. And if it feels like, okay, that's a good investment that's going to bring me a significant more money than these other two things combined. And it's something you can start small on. You don't have to start with every piece of it. It can really, you can build into that. Yeah, for sure. Yeah, that and then, and then starting to, to, yeah, get this car paid off. And it's going to, it's going to feel like an uphill battle with this insurance. When you turn 18, does it go back down? I'm sure. I'm sure it does. I'm not quite sure. Because I asked,

one of my friends who works with insurance and he said not usually and if it does it's minimal which I would appreciate anyway about 700 a month for liability is the only thing that's killing the $400 a month for the car I understand that right right right totally

yeah it's the insurance beats did you where did you get the insurance did you price out different companies or did you just pull a quote from one so I started with like dieco or something and they started me off at almost $1,000 for just libel because of my age.

Sure. And then I went to a few places. I went to this mom and pop shop for insurance down the road for me, and they quoted me the lowest at 700 months. Okay. Yeah, I would keep shopping that just to see. And yeah, when you turn 18, you should see a little bit of relief. And also when the vehicle is completely paid off,

you should see a little bit of relief. It's not going to be a lot, but it will be something. Yeah. Gosh, well, Beto, I hate that you're in the situation because I hear the stress and the regret already. But I really do think with putting some of these jobs kind of together, making some more money, and really being focused right now. Like, I think you're going to get out ahead on it. But I think it's a good lesson to learn.

I hate to say it, it's not fun. But you're feeling the weight of debt, and that's what debt does. Well, there's some things that no one tells you about money. and those are the emotions around it and Jay that's what you wrote your whole new book on that is right what no one tells you about money yeah it's it's powerful thank you're not only your story

but I think putting to words how people are feeling during this process whether it's getting out of debt especially but this it's a whole journey right this money journey is very real and it's very emotional but also it feels like you are sitting across from a friend who's been through the journey

and you give such great words so again how people are feeling and thinking Thank you. Yeah, I wanted to give practical steps because a lot of times like you say the word emotion and it's all like in the clouds. And the book is very, very practical. The same way we give you, you know, seven baby steps. I plan for your money. I'm giving you tactical things to get and deal with those emotions. It's not just you're going to feel sad. It's no. How do we work through it? Give me the information, Jade. I need steps and they're there. Yeah. And some of the resolve too because your emotions aren't the end, I'll be all to your point. There's something you can do to take that to continue. So I love it. So. I love it. exciting so you can pre-order now for 2499 and you can get over a hundred dollars in free bonus items including the audiobook which i appreciate so much uh the early access to the e-book uh an exclusive video with your financial checkup with you jade and an exclusive three-week online book club and live q and a with jade warshaw uh so you can go to ramsysolutions dot com slash store to pre-order it if you're watching on uh youtube or podcast we'll leave a link below but again the book is titled what no

one tells you about money. All right, let's go to Ian in Hartford, Connecticut. Hi, Ian. Welcome to the show. Hey, thanks for taking my call. Yes, absolutely. How can we help today? So I'm in a pretty interesting, pretty blessed situation here. I'm a 20-year-old engineering student, and I started doing affiliate marketing on TikTok shop like a year ago, and I've gotten pretty good at it. And last October, I did $180,000 in sales. Wow. Wow, Ian? Holy crap. They returned about $23,000 in profit, but I realized I, you know, through this time,

I kind of realized I hate engineering and I don't really want to do that. So I definitely don't want to do that for a job, but I have a pretty interesting opportunity to sail around the world on a semester at C-nex semester. Oh, yes. I had friends do this. Yeah, I was just kind of wondering, like, if I should. take the time off and do the semester at sea, enjoy my youth, or if I should continue to scale, because honestly, I think I could get to the point where I'm doing $1,000 to $2,000 days. Wow.

Is there a way to do both? No, unfortunately, I wouldn't have Wi-Fi on the ship, and then also I wouldn't be able to receive packages. Oh, to like fulfill orders and that kind of thing. If you did pause it for five months, does that change the business drastically? Or can you just pick it right back up? The business is kind of built on momentum. So it would be pretty hard to just, it wouldn't necessarily be hard because I'm pretty skilled at it, but I would definitely like, it would take some time to build back up.

Sure. I love, I mean, I'll tell you straight up, I worked at C for a long time right out of college. And I loved it. It was the best time of my life. I wouldn't trade it for anything. I've been to so many countries. it's it is quite the experience so part of me just wants you to have that life experience. I know you're 20 years old. I feel like you have your whole life to earn money even though

you're earning crazy money right now. There's something about there's a yeah, a specific time in life that you can just never get back and there are experience points in life that are so good for you too as a person like to do all and to enjoy. There's a part of me too where I'm like, man, you're 20 years old. You're obviously skilled at understanding how things work and to be I mean, not only just have an engineering degree, but let alone kind of some sales and understanding marketing. I mean, you know, you didn't just fall into this.

You learned it. And so you're a smart guy, so I'm not worried about your earning potential later in life. Yeah. So there's something about just doing a semester at sea, go have fun. You know, you're 20 years old.

I don't know. I'm an experienced person, though, so there's a part of me that, yeah. Do what? Do you have friends going? Yeah, one of my best friends would be going with me. Okay.

And do you want to go? Oh, yeah. I think I want to go. But at the same time, I'm also kind of worried about sending up my future. And, like, I want to get into real estate in the future and kind of have that be my main thing. So how's it? Well, you're not going to do real estate in the next four months. How is the, how is the semester at C being paid for? So actually, I get a full ride scholarship pretty much. So, man, I'm telling you, like, you're going to be, you're going to have to convince me that not to go. because I am I all that stuff's going to be waiting for you and I agree with Rachel you're smart

I'm not too concerned about what you'll do this is a kind of one of those I don't want to say I don't want to say once in a lifetime but it is kind of like a once in a lifetime for sure yeah you know to be able to go and travel for five months around the world and it's paid for yes yeah absolutely I know I think you're 20 years old Ian I think you need to just relax enjoy I so wonder what other person I wonder we may have me and jade may be the only person out of this show that happened to say kyn would tell him to do it ken would yeah kin would say to go to taylor swift concert too so that's right kin would be a yes uh george would probably be a no i feel like george would be too practical he might i am and let me just and who knows throw up the throw up the coin i think dave would say yes but let me just say like

percentage wise i am a 100% yes i'm not like a 70 30 jade says do it i 100% what's your what's your ratio my percentage is um i'm gonna go 95 wow maybe just like a tad less than jade but again from a percentage standpoint basically we're the same that's good kelly what's yours i'm 100% you should go out of yes okay is there anyone in the audience we have an audience out here anyone in the audience everyone's doing a thumbs up would you do a semester at c oh we're getting a lot oh wait there's one guy uh oh maybe one guy in the gray shirt i don't know i don't know he's a little iffy okay we got a a lot of yes, is Ian. I'm thinking you, I think you need to go. And when you stop in Paris, ooh, enjoy it because I've never been. So give the Eiffel Tower a wave for Rachel, please.

Eat a whole baguette just in the streets, a whole loaf of bread with no regrets. Yeah, go enjoy Ian. Go enjoy your time as a 20 year old with no responsibilities. And then again, it's incredible that you built up that thing. I mean, now again, if you were 34 with two kids. not going anywhere. Affiliate marketing is not going anywhere. Like it's the wave of the future and of the now. You're going to do great. You're going to do great. All right. Let's go to Sonia in Orlando, Florida. Hi, Sonia. Welcome to the show. Hey, thank you for taking my call. How are you today? We're doing great. How can we help you? Awesome. Well, I'm planning on retiring soon. And using money that I have in my fidelity account, I'll have to use that for about a year.

for my social security will kick in as a supplement. I have five properties, including the one that I live in, and I want to know if it makes sense for me to sell one of my rental properties to pay off, which is free and clear, to pay off, yes, to pay all of my properties are free and clear except for the one I live in. Oh, yeah. And the one my brother lives in that I purchased after my mom passed, I bought her reverse mortgage. Are those two in addition to the five or they're part of the five?

I have a total of five, including the one I live in. Okay. So I... If you sold one of the investment properties to pay off your primary home, would you officially pay off your primary home? Would it, would it pay it off free and clear? And then would you have some additional money left over? I have money saved up not only in my Fidelity account, but I also have money in my bank account. How much do you have total?

Total I have in my bank account, I have $130,000. Okay. So, and in retirement, I have about a half a million dollars. Good for you, Sonia. Okay. And what's the real estate total? I'm sorry, what's the question? What's your real estate total?

My real estate total is I have $1.3 million. Okay. And all the real estate. Gosh, Sonia, you are a baby steps millionaire. Incredible. So, yes, in a heartbeat, I would sell one of the properties to pay off your primary and be completely debt-free and be living off your investments. and the other rentals that, you know, if there's income coming in from those.

But you've done. You've done a fabulous job, Sonia. A fabulous job. And your next step, yeah, is just to become completely debt-free and then live and give like no one else. Welcome back to The Ransy Show in the Fairwinds Credit Union Studio. I'm Rachel Cruz with Jade Warshall. And we're going to Gabrielle in Los Angeles. Angeles, California. Hi, Gabrielle. Welcome to the show.

Hello, Jade. Hello, Rachel. It's Gabriel. Sorry. Oh, Gabriel. Gosh, I'm sorry. My bad. Thank you, Gabriel, for the fix. How can we help? All right. I was calling on behalf of my mom. She's 72. She's a widow who never remarried. Currently, she's retired. She's active in her church, and she has a home that's almost paid off. it doesn't include taxes and insurance, but lately she's been asking me for money. It started off small, but it's starting to escalate. How can I help her protect her being independent, but also set up her finances wisely for the future without becoming dependent on me or my siblings?

Yeah, for sure. How old are you? I'm 40. You're 40, okay. And her house is almost paid off. Is she still working? She's not. Okay, so she's retired.

Is she, do you know, do you have any idea in numbers of what's in her retirement? She's currently receiving, as far as her retirement savings, she does, I believe she's exhausted them. Okay. So she's currently the only income coming in in Social Security. Do you know what that is? I believe it was like 1,100, 1,300, possibly. Oh, wow. And do you know.

She's living on the bare minimum. Do you know what her mortgage is and what she has left on the mortgage in full? So the mortgage currently outstanding balance is around 100K. Okay. And then the mortgage payment is around, I'd say, 1450. Oh, gosh. Okay, well, yeah. So...

How is she paying for everything? Right now, I have my oldest sister who's living with her, and I believe they're splitting the cost of the mortgage. Okay. So they're half and half. Okay, so it's that's $700. And then everything else, I mean, is she able to pay for... Is your sister splitting?

other bills, do you know, like, electricity, water, all of that? Yeah, so from what I understand is that my other siblings, she approaches each sibling individually and asks for help, whether it's covering a bill or a few dollars here and there. Yeah. And it's for real needs. It's not for. Yeah. Is she able-bodied to go to work?

Is she able to work? She is able-bodied. However, she hasn't worked in some time. Mm-hmm. Yeah, that's so hard. I mean, the reality is she either, yeah, I mean, if she has no money and all she's getting is Social Security, it's not enough, to your point, when taxes are due for property tax, I mean, when she pays off the house, you know, she's going to have to pay for property tax and all that. What's the home worth? I'm just curious, if she were to sell it. If she were to sell it, what would it be worth? Conservatively, probably about $1.1 million. It's a five-bedroom, three-bath. As far as her renting up a room, that's also been thrown around.

I hate that for her. It would require me involving myself. I'm just wondering about... Is there like a... Go ahead. I'm just wondering, because my head is at, she's 72. She's still fairly young and she's in good health. She could live till 92, right?

So in my mind, I... In my mind, I look at $1 million. dollars that she stands to take away from this. And I go, okay, we can throw a decent amount and invest it and start that fund going. And then maybe she can buy a condo for, you know, $250 or $300. And you're in Los Angeles. I don't know what's there. What's possible? Can she buy something that's very small just for her? And then your sister goes and does her own thing because I'm also thinking what happens if the sister moves out and gets married or moves on in life, right? So there's a lot of variables here. I'd love for her to get some hands on that money, get some of it invested,

and get some of it in a smaller, modest living space for her. Yeah, I think that's what I envisioned for her. I just don't know where to start. I think if I do get the ball rolling, I'm seeing it through start to finish. Yeah. Yeah. So where would I start? Well, I would start with is everybody in Los Angeles, like your whole family, or do you have family that lives in less expensive areas of the country? No, we're all basically based out of the Los Angeles area. Okay. Have you looked at, or would you know, price ranges of, again, a very modest one-bedroom condo, that she could purchase. One-bedroom, one-bath condo, purchase outright. Possibly in the areas that were worrying, like around, oh, out-skirts.

Well, yeah, because she's got to be able to afford it. 400 okay okay so then she could invest 500 you know yeah i'm not mad at that and get that ball rolling and then again if she's able to not pull from those investments and maybe for just three years work somewhere just to pay just the you know just mortgage i'm sorry not mortgage which hopefully it's paid for yeah taxes taxes you know lights water food um and and just not touch that money as long as possible and let it grow and then live off of that because it's either going to be that or or you guys as as grown kid adults all have to say okay mom's not going to be able to afford this long term are we going to be willing to support her in it um so that would

have to be have to be a conversation that you guys have will she sell do you I mean if if you imagine yourself bringing this up to her what does that look like the last time that I brought up the conversation to her it was emotional yeah for her for me it's pretty straightforward I mean, the way that we're talking right now is the way that I talk with her. And, you know, she's open to it. But, again, she kind of pushes the work onto me. So, and so do my siblings. Do they kind of look to you, your sisters, too, to say, like, what do you think?

No, they don't have an opinion as far as what she should do. They feel that, you know, it's our home that we grew up in. and that she should hold on to it and she's only got such and such ways to go. Listen, there's no getting around the fact that this is emotional. Like I'm telling people all the time, that plays such a factor in how we manage the money. But if we look at the numbers, the math is not emotional. She doesn't have any money. She doesn't have anything and she's healthy.

She has a lot of years ahead of her. So she's got to get to the point where the discomfort, the discomfort, the discomfort, the discomfort, of staying the same is more uncomfortable than changing, right? And that's going to, you're starting, she's going to start to feel the cracks in that when you guys stop supplying the money, if that makes sense. The more that you got, and it's your choice, but the more that you say, okay, we'll float it, we'll float it, we'll float it, we'll float it. Just know that it'll float through the, yeah, for the next 20 years. Yeah. So you guys have to kind of get on the same page of saying, we can talk to her about this, but if she doesn't do it, we have to,

to allow her to feel it because when she feels it is when she's going to realize, okay, I have a difficult choice to make and just try to support her as much as you can. And it is emotional. It is tough. It's your family home. There's nothing comfortable about that. But the solution often is outside the comfort zone. So it sounds like my next steps might be like two part, right? It's kind of initiating that conversation with my mom about selling the home possibly. And then as far as with my siblings, it's having that conversation if we're going to do this. so we need to stop enabling her and giving her money, essentially. Yeah, absolutely.

Yeah, I mean, that's what I would do. And even pull some options, you can even get in touch with one of our real estate pros. Yeah, just to look for the area, like what's in the areas of where you guys are, just different options condo-wise. And, you know, there could be one of a mile down so she doesn't have to move major locations, right? Maybe it's just the actual home itself. Right. run some numbers and kind of get some more facts around it.

But yeah, this is difficult. The all new every dollar is here. And it is way more than just the incredible budgeting app that it is. It now has tons of advanced features to help you make progress with your money so much faster. And the average person is finding thousands of dollars in marketing. in just the first 15 minutes. So get every dollar for free starting today. Just get it in the app store or Google Play.

All right, let's go to Alex in Grand Rapids, Michigan. Hey, Alex, welcome to the show. Hi there. Thanks so much for taking my call. Absolutely. So I am, I'm 28 and debt-free. I'm looking to buy a tiny house to put on my parents' property. Without a credit score now, in a tiny house, technically not qualifying for a mortgage.

How do I go about getting a loan? for it. Well, let's talk about the loan process and then we'll talk about the tiny house on your parents' property. So with the loan process, if you have no credit score, you're just going to have to find a place that does manual underwriting for that. Now, we would recommend Churchill mortgage. There are companies that do that and you just have to check and make sure they'll do it in your area. But it's the same process. You're just going to have to show different trade lines. You're going to have to show your pay subs. You're going to have to show proof of income. If you work for yourself, you're going to have to show your tax returns, that sort of

thing. But for the most part, the process is the same. But you're saying it doesn't qualify for a mortgage because it's a tiny house? Correct. Yeah. So if it's under 400 square feet, I'm looking at 15 square feet. It doesn't qualify for a mortgage. What's the cost of it? I'm looking at about 40 to 50,000. Oh, save up and pay for it, Alex. I'm sorry? Save up and pay for it. It's like a car. Right now I only have about 10,000. Okay. Well, then just wait a little bit. Yeah.

So just be putting some money aside to $3,000 a month and just work your way up and probably, you know, 12, 18 months, then you can do it. Can I ask the long-term strategy on this? Yeah. So I have autism and I can't really live independently. So it's pseudo-independent being on my parents' property. Got you. Got you.

Okay. What are you doing for work? I coordinate volunteers for hospice. Cool. Are your parents involved at all, Alex, in this process? Would they be able to help you? Not financially, no. But they've been a great support.

Okay, okay, great. How long did it take you to save up the $10,000? I just finished. I got debt-free in February and then saved up like $6,000 for my $1,000 to $6-month emergency fund. And it's so, I don't know, last six months. Okay. Yeah, I'm with Rachel.

Just keep saving for this. It seems like you've thought through the best way for you to live. And I like that you've thought through that. I don't think you need to go into debt for this. And for anybody who is listening to my zero score spiel, that's for. And mortgage, no, but that's it. Yeah. That are trying to do a full mortgage on zero credit score.

But yeah, save up for it. I like the 40 to 50,000. Just understand that you. that this is yours, like the resale on this virtually doesn't exist because it's on your parents' property and this is money that you'll likely never get back. So understanding that is important, I'd say. Yep. Yeah, so running the, yeah, I mean, so it will, are you able to pick up extra work, Alex?

Yeah, I'm looking for a second part-time job. Okay, good for you. You sound incredible. I mean, the fact, I mean, you're very ambitious, you're very well-spoken, you know what you want, you've been doing the baby steps, you've been debt-free, you got your fully funded emergency fund. I mean, you're literally doing it all. The only thing that's going to suck is like the next probably three years of saving for

this, you know what I mean? You would just look at it like, you know, and people want to save up for a car. They want to save up for a college education, right? And these numbers, these are big numbers. I'm definitely not downplaying that. It's just so it's going to just take you longer to do it. And even though I guess technically, you know, I guess you could Ramsey, you know, go through it to say, well, but a mortgage is the one type of.

debt and this is for a house but figure out a way to do it but the fact that it's it's the fact that there is no resale because the one reason we do say a mortgage not only is because it is the most expensive thing that you're ever going to purchase as a home but also homes go up in value over time and this is more like a car in a sense where it's going to go down in value and so getting into debt even a personal loan for this financially would not be wise so it really would be you putting money aside and I mean I don't know about that the market in tiny homes is there can you can you buy or buy used ones can you buy a used one yeah that's what i'm looking at i'm looking at them on like facebook marketplace okay okay okay and so

maybe you could even Alex um i don't know that because for some people they may want it off their property there may be some urgency to get one off so maybe you could even negotiate with them and say hey if i have cash you know what's the lowest you wouldn't be able to do that today because you don't have that amount but when you're getting closer to that and you know three years or something I mean, you may be able to negotiate. Okay. For a lower price. Thank you, guys.

Absolutely, Alex. Yep. Thanks for the call. And again, I think, yeah, I just wouldn't do that. I wouldn't go to the debt routes. I wouldn't either. And because you never know, especially if you're already buying it used. Yes.

What type of resale would be. Yeah. On maybe, you know, selling it in the future. Yeah. Absolutely. All right. Let's go to Elijah in Salt Lake City. Hi, Elijah.

Welcome to the show. Hey, how's it going? I just have a question. I am 22 years old. I'm currently going to college right now. I'm almost done with my bachelor's degree. I have only about a year left. I'm only about 14,000 in student loan debt, so almost done.

But, yeah, that's my only debt, no credit card debt, nothing, no car loan, nothing like that. And I guess my question is, well, I'm looking to go into law enforcement after I graduate. I guess my question is, is it worth it to stay for a master's degree if I get an actual, like, pay incentive? for the rest of my career or if I should just once I get my bachelor's degree, take that pay incentive and just start working. Well, what would it cost you to get your master's? How would you pay for it? So that one would be, it would be loans, but it would be for a total about master's degree. I've been doing my research about 18,000 for the college that I'd be going to. And what's the difference in job that you would get if you just went into the police department

with a bachelor's versus a master's? Yeah. So if I went in with a bachelor's degree, I'd be getting a 3% pay incentive for the rest of my career. If I went in with a master's degree, I'd be getting 5% pay incentives. So I guess my question is it would take a long time to repay that, like get that money worth, with that extra 2% every year. But I do really enjoy college. I do want to get married before I leave college, and I, you know, enjoy my hobbies. So I just don't know if it makes financial sense to get a master's degree.

Not on debt. Not on debt, but I'm wondering if there's a way that you can cash flow. Are you working at all? And my next question is, do you have to do it right away or can you work on it later while you're in law enforcement and still get the 5% bump? Yeah, you can still get the 5% bump. I've just heard from a lot of people that, you know, it's really hard once you're starting this full-time job to go back.

Yeah, I mean, how much are you getting paid like your first year that you're working? So, yeah, first year with a bachelor's degree would be about 90K. Okay. And then with a master's degree, if I came in first year. It would be about 95. Okay. So that's my thing is that the percentage-wise is not big. I mean, we're talking maybe a $4,000 difference,

and you could do that in two months with a side gig. You know what I mean? Like, so there's a part of me, and I know, I mean, we have friends in law enforcement, and they even move around, they get up to detective, or they, you know, move around within it. Yeah. That can change your pay over time as well.

So, yeah, I think if you had the money and you wanted to do it, I don't think, I mean, I don't think I would stop you. But also, since you don't have the money, it's kind of, that's a no-go for me, personally. Okay, yeah. So you would just, you would, okay. So you wouldn't be, okay, with, you know, taking out student loans for the master's degree. No. Okay.

Yeah, I'd get this paid off. And, man, I wish we had a Ramsey dating act because I feel like we had a lot of calls of some ladies that are always single, Elijah, and they're always looking for a man, and we could have pointed them your way. I know, I know. No, I appreciate the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, I do. I do. Because I do think that's great. It's, I am for getting married young and, you know, and what he said is true. Like, when you're in college, there's people right there to choose from. Once you get out in the world, it's like, I got to work. I got to go out after hours. It's exhausting. You know, it's absolutely exhausting. I got to go to an event, get dressed up. College, it's like you got your pick right there. Got them right there.

got them right there. Oh, Elijah, yeah, I hope that helps. So yeah, if there's not the cash, but to Jade's point, if you're able to somehow cash flow, or even if you get into a situation where they help pay for half of it, I don't know, you know, your work, that would be incredible too. So I hope that helps. And, yeah, good luck. the debt-free stage. We have Christopher. Welcome, Christopher. Thank you, Rachel. It's so nice to be here. I'm glad you're here. We have a lobby full of people and always when we see someone staying on the stage with the headphones. We know that you've been on a debt-free journey. That's right, Christopher. Okay, so where are you from? I currently live in East Providence, Rhode Island.

Okay, wonderful. All right, so how much debt have you paid off? $63,563. Oh my gosh, to the T. What kind of debt was it? Mostly, it was actually 50-50. Credit card debt. and card debt. Okay, credit cards and cars. How long did it take? 11 months. Wow, you were pedal to the middle. Yes, you were.

How much were you making during that time? I went from 72,000 to about 80,000, but with overtime, I'm set to close out about 110 this year. Oh, my gosh. I was working a lot. You were kicking it. Yeah, and living off nothing. You just cut everything.

That was it. Actually, I even sold the car. It was a brand new, 24. I was a little upside down, so I did the one thing you say is okay with debt, get a loan, pay. And so it's not a myth. It actually works. It worked out.

It was tough. I ended up buying an 05 Lexus for about $6,000. Wow. And then a few months later, someone drove into it on my street. Oh, no. Oh, shoot. Oh, look at that. That's good looking cool. How much were you upside down?

I was upside down about $4,000, $5,000. You are the poster child or poster man adult of what we teach. I love hearing it. Oh, thank you. So when that one got hit, I actually got about, $8,000 from the insurance company. And I was like, how much, how cheap of a car can I get? So I bought another car for $2,000.

Stop this. Put the rest of it towards my credit cards. Stop it. Look at you. That's it right there. Christopher. And I said, you know what? That's what I'm driving right now.

Let's keep working. And it works. Oh my gosh. A $2,000 car. How many miles on it? $125,000. Man oh, man. And was it okay?

It runs great. Runs great. Manual transmission. It'll never die. Let's go. Let's go. Let's go. I wish you could be in the passenger seat of every

25-year-old guy in America. I just be like, listen to, you get this. That's how I learned. I'm actually a truck driver. I was listening to the Ramsey show 12 hours a day, five or six days a week. That's how you do it. And there were so many little pieces that were put together

that made me realize this whole debt thing is really ridiculous. Why am I doing this to myself? Yes. So yeah. Wow. I'm glad y'all do what you do. And you don't regret a thing. Not one bit.

So amazing. Okay, so 11 months ago, yeah, what was it for you? What you said, okay, I'm done. I'm going to just completely change everything I've been doing. I have a brand new car, I have some credit card debt, and I'm going to just, I'm going to change it. Yeah. Well, like I said, I've listened constantly. There are two things that stuck out in my mind.

I've been working 70 hours a week plus since I was 18 years old. Oh, wow. I heard Dr. John Deloney say one time, very exasperated. You know, working 70 hours a week isn't sustainable. Baby steps one through three are meant to be intense. After that, four, five, and six are supposed to be intentional. I was like, maybe that's why I feel so burnt out. 70 hours a week for 16 years. It's a lot. Yeah. So I said, you know what? That's the time.

And between Dave saying the only reason, the only thing a credit score does for you is show how well you play kissy face with the bank. I was like, yeah, I've been playing that for a long time. Maybe I should stop doing that. So it was time to just get it done. What was the hardest part? I want to know, like, it's one thing to hear it. And then when you start doing it and you feel like the discomfort of it, what was the main like emotion that was holding you back? I would say swallowing in my pride. Like I said, I've been working very hard my whole life and to have to get rid of a brand new car that I really enjoy it.

That was your gift to yourself. Yeah, I just didn't need it. It wasn't a necessity. I hear everyone say on here, oh, I had to go buy a new car. No, you didn't. Save up for a couple weeks, buy a clunker like that one. Man, you need to be behind this desk. So good.

Let me know. Christopher, for real, though, that I think that's a great point. The ego hates going backwards. Absolutely. So it does, it takes a level of humility to say what I was presenting to the world, what I'm going to present, actually, from a mathematical standpoint is better, but from a, from a presentation image perspective, it looks less. Right.

And so the ego doesn't like it. Absolutely not. It's very, very difficult. And so the fact that people that do it, you know, are serious and don't think a level of maturity and humility, that's really, really amazing. Okay. So have you turned down the hours of working 70? I have so far.

Okay. I'm planning on picking it back up probably in March. I don't like driving in the snow up north. So I figure now that I'm out of debt, I don't need to work 70 hours a week anymore. Let's bring it down to 40 or 50. And in the summertime, I'll make some more money. And I'm still working on Baby Step 3. When it's Baby Step 4 comes, I'll be good.

Yeah. And you can upgrade from the $2,000 car. Absolutely. Yes. Make some changes. Wow. Okay. Have you been able to feel a difference since you've paid off?

A huge difference. A couple of years ago, I found out I had a panic disorder. So I have a little bit of anxiety. I think most of it was from my debt. Wow. At that time, before I found the Ramsey show, I had a house that was $400,000. So it was a lot that I had that just I didn't need.

I ended up selling the house long before I found the Ramsey show. Now it's just I feel a weight lifted off my chest and I can just breathe. I sleep better at night. Simplicity. That's it. That's incredible. Absolutely incredible. Did you have some cheerleaders in your corner during all this?

My parents, Bob and Simone. Bob and Simone. All my friends up. north all my friends down here i used to live in clarksville for a while oh yeah so i'm here visiting them and i figured hey come do a debt free scream amazing yeah at one point i had 42 credit cards holy smokes i was playing that game building that credit score stop because you know i've heard dave say it many times why do you get a credit card to build a credit score well do you build a credit score to get more debt why do you get more debt to build a credit score so i was like that's that's just foolish i'm done

done i closed every single account paid i had a balance on five one was around 3800 one was 4 000 the other, the last three were about 8,000, give or take a few hundred. From that point, I went to the avalanche method because they were so close. I was like, I'll pay off the one that's at 28%. Sure. These two have zero. We'll save a little bit. Sure. So once you save the three to six months, what are you going to do to celebrate? Because you, my friend, deserve celebration. I am going to continue saving to upgrade that hunk of junk. And what do you got your eye on? You know, the car I sold was a 2024 Subaru Cross Trek. my rental that I got here is an outback, a superware outback.

And it's a lot more spacious. I kind of like that. So probably something like that or a forester. I love that. An SUV with all-wheel drive. Yes, because you live in the snow. Yeah, exactly. Okay.

So great. Okay. I'm going back to the 40, was 42? 42, yep. Okay, credit cards. What was the one that you were like, you could not wait to close out? You were like, I just. Discover.

Discover. I took that and I went, snip, snip. Oh, my God. Gosh, wow. So great. You're a rock star. Thank you. Well done.

Well done. Okay, what would you say to someone who is listening? Maybe they're Christopher. Maybe they've just found the show. And they're thinking, what, like, gosh, I do have credit cards. I have car loans. What would you say to them if they feel like there's no way I could do that? I would say, just do it.

What do you have to lose? Only your debt. You're just going to lose your debt. That's the worst case scenario. If you stop going into debt, you'll be good. Try your hardest. It's going to be hard. harder for some, you know, easier for others and just keep doing it. If you keep pushing and keep

pushing, struggle now so you can have a better life later. Yeah. Talk about, talk quickly about the adaptation. You took your car down to the dealership and got rid of it. That's right. How quickly did you adapt? Like, how quickly did you turn that corner from, oh, what was me to, I'm fine with this $2,000 car? Pretty quickly. I was, I was upset like kind of a little bit, but I was, my first car was a 95 Chevy pickup truck and I loved it. So I like older vehicles. It's just now things are so new. They're safer. There's better features. So you like the new stuff too. At least with that 05 or 07 rather, I can fix anything on it. I don't need to take it to a mechanic. If something goes wrong, I just take it apart, replace a part. And that's it. Good point. You can figure it out.

That's right. Figure it out. Wow. Well, Christopher, you've made our day. Absolutely incredible. I mean, no, for real. You are the reason we do. that's right and you're living proof that it happens you know what I mean and um yeah so whether yeah single married male fee whoever you are out there this is the guy it's proof that you just can say if I just believe that I can do it and I start making changes I can that's right just do it incredible all right you ready Christopher I am all right so we got Christopher from Rhode Island paid off 63 thousand five hundred and sixty three dollars cars and credit cards and 11 months making 72 to 80

with overtime with $110,000 a year. All right, Christopher, let's hear your debt-free scream. Three, two, one. I'm debt-free! Oh, ladies and gentlemen, that's how it's done. That is how it's done.

The poster man. today's question of the day is sponsored by why refi if you're tired of or if you've tried everything to fix your defaulted private student loans and nothing's worked why refi can help they build custom fixed rate plans based on what you can actually afford so learn more at yrefi.com slash ramsi That's the letter Y, R-E-F-Y dot com slash Ramsey, not available in all states. All righty.

Today's question comes from Layla in Maine. She says, When my boyfriend sold his house and moved into mine, we agreed that he can buy into my house after a few years, which is now. We plan on getting married

at some point, but we're in no rush. He's giving me $75,000 to be part owner of the house. What should I do with this money? I already have an emergency fund and my only debt is $220,000 on a mortgage, which will now be only half of my debt and about $5,000 on a 2% interest car loan. Should I put it all into a mutual fund, load up my IRA or some mix of the two. I'm struggling, Layla, because you're asking one question, but I need to answer a different question than the one you're asking.

I would give I would do one of two things A, here's my problem with the whole thing is the fact that you're not married in this house and you're exchanging money in a way and property in a way that married people do and really not even the way that married people do

it's all messed up but because you're not married there's no protections here for you and the more that you co-mingle money into this it's just going to make it more of a messy process if for some reason this doesn't go down the path of marriage like you think, because to your own point, there's not even a rush to get married. So this is getting

very messy, very fast. If I were in your shoes today, and I know this is not the question you asked, but Rachel, if I were her, I would not accept money until we get married. And if he wants to pay rent or pay something for living in your house, because essentially that's what's happening, he's got to be okay with that because there doesn't need to be a level of commitment by buying into a house if there's not a commitment to the relationship. Yes. Well, and I'm assuming if he's going to be giving her this amount of money, does he want to be on the title, like be part owner even legally?

And that means you're then sharing a legal rights of a home with someone you're not married to. And as quickly as he says, I love you today is as quick as you could fall out of love. He falls out of love. And again, because you're not married, there's zero protection. He could just walk out the door. But now you guys are going to have to refinance a house to get his name off of him because you meet someone else and want to get married to this other person

then he got your records into a mess. So, no, I mean, I wouldn't exist it. I'm with you, Jade. Because, again, I'm assuming by accepting this amount of money, he's going to want legal ownership of the home to be put on some, you know, on the title. So, so yeah, it's a no for me. And, yeah, I mean, the fact you guys are living together and before marriage, which is becoming more and more common.

And if he wants to pay you rent and you guys have a roommate type relationship too, you can do that. It just gets really messy. fast. And from a relational level, I will tell you, studies are coming out more and more as well to show that actually divorce rates are much lower if you don't live together before. That's right. And the quality of marriage and the quality of relationship and everything is different. When you're not just playing house and then deciding to finally commit, you actually go through the stages, which is more old school, but it's showing more and more from a relational

standpoint. It's more stable. So, and again, that's not what you asked, Lela, but I'm with Jade. I wouldn't accept it. Yeah. And therefore, I'm not going to answer the question you asked. It's all love, Layla. It's all love. All right. Let's go to Jay in Atlanta, Georgia. Hi, Jay.

Welcome. Hey. Hello, Miss Jade and Ms. Rachel. Well, hello, Mr. Jay. How can we help today? Yes, I just had a question about investing in Roth versus the traditional 401K. And only because, like, I, But from my experience, I've invested in a 401k that you're for about a year.

And it was about like $1,200 in there a couple of months ago. But also, I had ended up losing my job. So I just went ahead and sold it. And I got back half. So I was trying to see what was different. So normally, yes. Okay. So what we would normally say is if you leave a job, you want to roll over your 401k just to a traditional IRA.

So you're keeping the investments. You're just moving it out of the company's 401K versus that basically what you did is you just sold it. And if the market was kind of low at the time, you know, you may not have gotten, you know, fully what it was. And probably paid some taxes and all of it. Fees. Yeah. Because it was retirement funds. Yes.

Yeah. So, yeah, you did get hit hard with some penalties. So our rule of thumb with investing is, did your 401K at your previous employer? Did it have a match built in? Yes, it had about a 4% match. 4% match. Okay, perfect. Do you have a new job now with a 401k currently?

Yes. I have a new job and they actually match up to 30%. Wow. That's great. That's great. Okay, perfect. And is this one a Roth? You asked about Roth versus traditional.

Is it a Roth 401K on this one? I think so that's another thing I'm not really sure the difference and you know I just picked one yeah if you have the choice if they're telling you you have the choice and I would ask I would make sure to get with HR and ask that question I would select a Roth option because in that way you're paying the taxes on the money now so that when you go to retire all it's all tax free growth which is great for you so I would always select that and if not the traditional's fine and you can, you know, get the match on that. The biggest question is if you're ready to be investing yet at this point. So can you tell us a little bit about, like, do you have any

debt? Do you own or rent your house? Tell us about that. Yeah. So I rent right now. My rent is about 700. And other than that, I have child support. That's about 400. That can vary. And then my student loan repayment is about $60 a month. I put a extra $60 with it, so it's about $120. What's the whole lump of debt? I just, I was, so I found you guys about a year ago, and I paid some stuff off, so I just got about $9.7K left. Okay, that's good. I paid off about, I started at 22. Okay, way to go. Nice, Jay. Anything else, credit cards or cars? Oh, yes. My groceries are about 200. Good.

And so, yeah, that's it. No credit cards, no car note. No, I did open up a credit card last year, and then I found you guys a month later and closed it. Look at that. Do you have any money saved, Jay? Yes, I have about 2.5 saved. The only thing is that's earmarked for a car right now. I work for a company, and we get company vehicles.

so that comes out of my check. So I'm saving that 2.5 to just get another car right now. Oh, because you've only been driving the company car. Right. Okay, gotcha. Yeah, so what I would probably do, Jay, is just pause all retirement and work to throw as much money at this $9,700 that you have left in debt. And then start working to bump up that emergency funds.

You know, you have $2,500 in it. I know it's earmarked for a car. but I would just I would get three months and you don't have a ton of expenses month to month which is great so you could be on the three month side that could be your baby step three and then we can start looking at retirement which will be 15% of your income into retirement so so like jade said at the beginning of the call of the Roth this is a picture I have this is my dad's teaching from the old old FPU but it's the little coat do you remember this he had like different jars like one was a IRA one was a 401k and then there's like a little coat that he put

over each one. He was like, the coat is the Roth. So if, so, so if your investment has a Roth around it, that means you have funded those retirement accounts after you've paid taxes on your income. So you pay all your taxes and then after tax income, then goes into those. Now, if it's before tax, then again, that money is coming out before you pay taxes on your income. And because of that, the government has to tax you on that because they did not tax you earlier on your income. And then they tax you on all the growth. And if you know anything about compound interest, your investments will grow, grow, grow. So, Roth is amazing.

Not everyone offers a Roth 401k, but if they offer it, like Jade said, take it and open up a Roth IRA and be putting 15% of your income into that. But that won't probably be for another two years, Jay, or a year and a half after you pay off this debt and get a fully funded emergency fund. But I'm so glad that you picked up the show and you actually are making progress. You paid off so much debt already, Jay. So just keep at it. You're doing incredible.

Welcome back to The Ramsey Show in the Fairwinds Credit Union Studio. I'm Rachel Cruz with Jade Warshaw, and we are taking your calls at AAA 825-5-2-25. And up next, we have Les in Greenville, South Carolina. Hi, Les. Welcome to the show. Hi. Hi, what a pleasure to speak with you. Oh, well, thanks for calling in Les.

How can we help today? My question is, is there any rule of thumb or percentage of how much of our assets we could have tied up in our home versus cash? Our current situation is, I'm 72, my wife is 69, and we still have income from our business of 300,000. a year, but that will slowly curtail as we enter more of a semi-retirement mode. But we're currently 2.5 million net worth, 2 million cash, half million in the home. We were looking at a potential purchase or upgrading or wouldn't this be not? ice in a home. We're a little bit spoiled. We've had two occasions where we've lived on the water on the lake. In our town, we have a small, they call it a mountain, but it's a small mountain.

That is overlooking, yeah, but it has a limited number of homesites. It's quite old. A lot of the homes are quite old up there of about 120, overlooking the city with mountain ranges in the west. So you're wanting to upgrade? Upgrade from the 500,000 or second home? Second or upgrade? No, no. It would be primary home. Okay. What's it going to cost to get that house on the big hill? If it doesn't stay within 1 million or 1.1, then the deals off the $1,000. The table. But then that would be a shift of we'd have a million in the house and one and a half million in cash. How long will you continue to draw the 300,000 and how quickly do you think it'll, like what will be the rate of deplenishment? I would, based on my projections, it won't

completely end, but I projected that in It'd be five years before we'd even have to start drawing off of any interest or anything in our investments. Oh, five years. Okay, that's great. And in the meantime, will you continue to invest from the $300,000? Please say yes. Oh, heavens, yes. Yeah.

Here's brief background story after bankruptcy and foreclosure at age 57 months. I have 54 who walked into a financial peace university class, nothing to our name, $320,000 in debt, exactly 10 years almost to the day. We said, well, when Dave showed us the path, we said we're committing to this, we're doing this, almost 10 years exactly. Wow. We hit the first million. The next five years, the second million.

I'm on track that the third million would be in three years. Yes. Unbelievable. Gosh, Les, well done, you guys. That's incredible. Absolutely incredible. Yeah. So I am grateful to you folks.

Oh, well, no less. I mean, you're the one that did it. I mean, seriously. And would you say 20 years ago? It'd be 16 years ago. 16 years ago. Okay. Yeah.

Incredible. Yeah. So I think from the rough math, yeah, if you guys are able to, you know, be able to get this 300,000, and I know you have to live on some of it, but yeah, in four years, that could easily become another million to throw in. So I think if you guys keep it around that million dollar mark from just the rough math of even if you just didn't even add the other million, but you had the two million, you know, and if you're living off 6% or whatever it may be, I think you're going to be, you guys will be

totally fine. Do you have a good financial planner? Yes. I kind of hesitate because I've been kicking around just doing it myself. Sure. Yes. No, that's fair. Yeah, yeah. So I think, yeah, I think sitting down and kind of running out all the numbers with someone because if you're 72 and in good health, I mean, you could live another 20 years. But I think, Jay, did you? Yeah, I was just looking through it. I mean, you should be putting away at least 3,700. 50 a month. Does that feel about right for you? Yeah, currently. Or more.

We're putting away 150,000 a year. Okay, great. And so you have to consider, yeah, lump sum is going to double every seven years. So let's say, like you said, it's at least five years that you'll continue to get that $300,000 income. So you guys... Well, no, it's going to incrementally reduce. Reduce. Okay. Okay. But what's it cost to run your household? You've got a lot of margin, correct? Right. Current, current to run the household is 7,000. But at this point, 2,800 of that a month is designated to vacations.

Yeah, exactly. So you've got plenty of margin. Not, yeah. That's. My point. is you should do this. That's my point is you're going to have plenty of money. You guys have done well. You've got a great income. It's going to dwindle, but it's still going to be a really great income for the next five years, even as it continues to slowly go down. I'm okay with you're doubling in house. And I'm okay with it. Rachel, I'm, yeah. I mean, I think the million, you have 500,000 in your primary home now. It's just pulling out another 500,000 to upgrade to a million dollar home. And then you guys will have that $2 million in cash. Yeah. And then you'll be putting

some money away continually. And then I think from there, yeah, I mean, I think you got a great nest egg. And yeah, I think you'd be totally fine. But again, I think running all scenarios with somebody who's looking at the market, looking at rates, looking at how aggressive your funds are, how not aggressive they're putting, I mean, whatever that you're invested in, I would be running some long-term numbers. Because, you know, there is, you know, there is the percentage of what you want to withdraw that makes sense from a historical perspective of what the market makes, right? So like, of course, one year, you know, or last year it was like 23% or something crazy. Oh, it was crazy. Yes. Wild. And then some years it's going to do 8%. Right. So to be able to

find that happy medium. And I know people have different percentages of their opinion. Financial planners will be more conservative, which is great. I think Dave's is a little aggressive. What he says that you can pull out. He's like, it's fine. The market's made fine. Right, right. Yeah, but we running those numbers long term for you and your wife over the next, you know, map out 20 years and just see what it brings you. But yeah, you should be, you should be totally fine less. I think you're being very conservative. And again, it's not this percentage, but the fact that everything's paid off too. Because that is one thing we think about going into retirement, having a paid off house is a huge, huge upside to when you start actually pulling some money from retirement of how much

you actually need to pull. When you don't have to pull a mortgage or rent, like, man, that saves you a ton. That's right. So, Les, well done. You and your sweet wife, I mean, 16 years ago, decided to change the game on what you guys do with your money. And it just proves that money is a long-term marathon, you guys.

But it works. If you do the right stuff over and over again, it works. We don't have to wait for Black Friday to get our Black Friday deals. The sale is happening right now. It includes $12 best-selling hardcover books, $12 questions for humans, decks, $6.99 audio books and e-books, which is what I'm loving these days. Yes, indeed. $15 assessments and more. Just go to ramsysolutions.com slash store, or if you're watching on YouTube or podcast, we'll leave a link in the description.

All right, let's go to Kim in Salt Lake City. Hi, Kim. Welcome to the show. Hi. Thanks for having me. Yes, absolutely. How can we help today? I am left a single mom unemployed after a divorce, after 26 years of marriage.

Sadly, I thought I'd be over it in two years, but doesn't happen always. that easy, I guess, for some people. So I'm at the stage where it's time that my divorce decree claims I need to either get my home in my own name or sell it. Okay. I have all the equity. I took that as alimony because I didn't want to disrupt. I had seven children living at home at the time of the divorce.

Okay. And I have two. I rented my basement immediately, like the week my divorce was final. I put up a wall, rented the basement. I'm going to make this happen. And now two years have passed, and I'm trying to figure out how, I feel like I'm making baby steps, but I don't know how to make the big steps, I guess, or the big decisions.

Yeah, for sure. How much equity is in the house, Kim? So it's an acre in horse land and property value put that as $1.4 million. I'd have to give a little off, I'm sure, for the state of part of the back acreage. Okay, so for $1.4 million, How much do you have left on the loan?

$450,000. $450,000. Okay. And how much is the mortgage payment a month? I pay $28,000. Okay. How have you been handling that $2880 with no income? So we scheduled, we mediated November of 23.

Divorce was final January. of 24 so that he could claim us on his taxes, which I just realized, oh, no wonder that's going to affect my college, my FAFSA. Anyway, right now, but that's a side note. The point is, I, the minute I had an inkling, he was making decisions different than for our family, because we, he used to have. he owns a business that's worth a few million, and I chose to just walk away and take equity in the home

so I didn't have to disrupt my children. Sure, sure. But how have you been paying for this mortgage currently because this has happened and you've been living? Because I've been saving. I had about $50,000 in savings. Okay, so you've just been pulling it out of that? And, yeah, like somehow 400,000 turned into 40,000 what he could give me at divorce time.

And I had said, fine. So you were given 400,000? Did I hear that right? No, we had that in the bank. He bought an Aston Martin. Understood. Anyway, we won't go into that part. Okay.

So you've been, you had 50,000 in savings, and you've been kind of just pulling it out every month to live. And now it's gone? I have food storage. Yes, I sold jet skis. I sold my truck because I don't have any debt besides my home. Never did. So I'm living off my truck payment right now. I'm going to accounting school and I'm online.

Okay, good. And I did get student loans. When will you be done with accounting school and able to work? I have like a year. That's the problem. I really think it's a self-esteem issue. Oh, well, have you... My unemployment.

Yeah. I didn't get unemployment, and he, anyway, I'm, it destroyed me. I really, I know I'm smart. I know I can do it. And you can. And I figured out how to do all the accounting for his business for him. And I would just a stay-at-home mom, and I could have gotten the alimony of a stay-at-home mom, but then, oh, wait, when you work for your...

For four years, you're an able-bodied worker. Yeah. I want you, have you been in any counseling, Kim? Yes, yes. Okay, I want you to continue with that because you're right. This is huge. Yeah, and Kim, are your kids all in school? Well, yes.

Okay, so my youngest, too, are high school, freshman and senior. Perfect. Okay, great. Because I was going to say, I think it would just be good for you, Kim. to your point about self-esteem, there's something about going through the actions after something that's just horrific. I mean, I can't imagine.

I think what you've walked through is so difficult. It's so hard. I think it would take away anyone's self-esteem. I mean, like, it just, it's horrible. But I think there's something to be said about getting up in the morning, putting on an outfit, going and interacting with other people, and then coming home.

And that may even be a receptionist at an accounting firm or something. You know what you mean? Like if there's a way to get your foot in the door just in that industry since you're going to school for and make some connections that's going to be really helpful

but to do anything Kim I mean honestly I think it would just be really healthy for you to get out of the house earn some money be around people and you're going to have to because you are running out of money

so there is the self-esteem issue of that it's good for you to do this and get some wins under your belt but you also you're going to have to do this from a financial standpoint if you want to keep the house now that's going to be a big question to figure out if you can sustain this house

And so you need to know, okay, a year from now, here's what I have to make full-time as an accountant, starting out to be able to support this mortgage payment, which you're going to need to make. I mean, gosh, yeah, I mean, it's basically a little bit put it off because I had a child with anxiety that really struggled. Yeah. Like every day for eighth grade, we ended up doing like we're doing two periods a day.

But you're okay. Are you in a place now, though? I want to, I know there's a lot that happened then, but I really want to focus on now. Exactly. And here's why. Let me tell you why, because here's why. If you sell this house and you take a million dollars from it,

I'm afraid that you'll just burn through that and not work. And I don't want that for you. And yeah, that's what I'm afraid to. That's exactly thanks for putting that into work. You know? And so that's why I want you to take Rachel's advice. And today, this week, that be your number one priority is I'm going to look for receptionist jobs.

And if I can't find a receptionist job, I'm going to look for another job answering phones. And if I can't find that, I'm going to pick anything, take anything. Or a local church. If there's a local church even to go get plugged into and work for them. Because Kim, to Jade's point, is so good. Because Kim goes with Kim. And if Kim stays the same and you're staying consistent and you get a million dollars in your lap, you continue to be Kim with a million.

And right now, we know there's a better version of Cam. So if we can get a better version, a healthier version of Cam, and then even you make the call in a year or two to sell the house, well, we have hardworking up and out of Cam who's, you know what I mean? Self-sustaining with a million dollars, which means you're going to be making really clear decisions when it comes to money. I think you still are in that fog, which again, I do not fault you for. I think when you walk through a divorce, that grief is horrific.

And having seven kids that you're still thinking. about. I mean, all of it, it's very, very difficult. So the fact that you're still grieving, I would not, I would not shame you for that. And I don't think you need to be shamed, you know, shaming yourself. I think give yourself the freedom to still feel an experience what you're experiencing. But we also have to start making some moves to create a positivity around us. And I think part of that is getting some quick wins. And I really do think there's a self-esteem boost when you earn and you do something and there's a cause and effect. And you know, I can do this because you can kill you really really can so we are cheering you on if you'll hold on the line

christian will pick up and we're going to give you every dollar for a year to help you get this budget crunching when you start earning this income to figure out how to stay on track that's not every day jade we get two debt-free screams what in one show and so we are so that on the stage in the lobby, on the debt-free scream stage is Steve and Tanya. Welcome you guys. Thank you. Thanks, Rachel. Absolutely.

Where are you guys from? We are from Piedmont, Alabama, which is about an hour north of Birmingham. Okay, so close to Birmingham, Alabama. Yes. Okay, so how much debt have you guys paid off? 279,000. Oh, my gosh. Okay, and how long did that take you?

Six years, 10 months, and 27 days. Oh, man. days, yes. And making what kind of income during that time? When we started, it was 135. We finished up at about $252,000. Wow. Very nice. And what kind of debt was the $249,000? Well, we had about $179,000. Yes. We had about 61 in consumer debt, like tractor, truck, a little bit of credit card, and the rest was our house. I know it. Oh, you did it. Oh, you paid off the house.

We did. Everything. Completely debt-free in six years, you guys. Yes. Wow. Incredible. I mean, just below the seven-year mark, you guys did great. You guys really, yeah.

Amazing, you guys. Congratulations. Thank you. Okay, so what happened six years ago to make you think we want to go on this crazy journey and pay off our house? Right. Well, we actually got married seven years ago, seven and a half years ago. Okay. And so we were about to embark upon building this house.

And so, and we had kind of, I had gone to FPU years ago. I kind of dabbled in the baby steps, but never really was aligned in that marriage and just kind of struggled the whole way through it. When we got together, we just committed from day one that this is what we're going to do. Oh, yeah. Lockstep. She says, we're doing it. we're doing it okay that oh so good is that when y'all paid it off that was that the picture of when

you did your last mortgage payment yes they throw it back up there so good okay so uh so when you guys got married you both did you guys talk about it a lot before you guys tied the not money in general because i do feel like people get nervous and if it's a second marriage too right we hear that a lot that people like oh gosh i don't know if i kind of want to keep it over my stuff over here is over there how did you guys work that out well it was kind of of hey we're going to do this we're going to do this together no matter what yes you know because i know in my past and his you know we you know we weren't on the same page so we definitely talked about faith finances um family so the three fs the three fs yes that's what you get that's what you get

i love it well done you guys okay so what was what was the hardest part of all of this I think the hardest part is just choosing to live different. You know, everyone around you is doing all the things, eating out, you know, doing all the things. Like, we ate out on Tuesday night when tacos were $1.25. That's the only time we ever ate out. Yeah. You know, we packed our lunch every day. We bought our clothes at thrift stores and on eBay.

We sold things we didn't use. We just chose to live differently. Did anybody ask questions? Like, was it obvious to people around you? Like, you're doing something different, or were you kind of flying under the radar? No, I talked about it a lot. They were sick of hearing it. I know my grown children were sick of hearing it.

My friends, my coworkers. I mean, I just kept, we kept laser focused, and that's all that I thought about. And I'll tell you what really turned it around. We sat and did our written budget. We do the old school papers, the written budget. And I asked Steve, I said, have you ever really tithed 10%? like have you went all in and he's like no and I was like we're doing it and we did it and when I tell you promotions rolled in and raises and I mean it just oh my gosh it just all came

together I mean we were obedient yeah we were very disciplined like you said we we packed our lunch every day and yeah I'm so I'm so sick of top aware yeah well it's funny I'm gonna ask guys because we always talk about baby steps one through three is intense yes and And then four through seven, or four through six is kind of, you know, we say intentional. But it doesn't sound like you guys let up very much to pay off the house. Or do you feel like a lot of that sacrifice was during the consumer debt stage? And then did y'all lighten up when you kind of went to work on the house? Or were y'all intents the whole way?

No, we actually wound up at the end. We were paying $5,500 a month every month on the house. Wow. We were like, everything. We didn't let up once we got, I mean, I mean, once we got the savings in place, then every spare dollar went to the house. Went to the house. So then I want to ask you the question that I hear all the time, which is, I mean, six and a half years, six years is a long time.

How did you stay motivated? Like, what was the thing that kept you going with that? I mean, $5,500 a month is a lot. That's a lot. It was little wins. It was if we wanted something special, we wanted to go out to eat or, you know, I wanted to buy a new blouse or whatever. I sold things People were sick of me on Facebook

I'm going to find the money to do this Tanya's like there's Tanya again selling something I would buy decor and just flip it but we follow the baby steps I love that just to the T and I was kind of like you Jade

I always heard you know we ain't got no money I mean I was raised you know paycheck to paycheck and I literally changed my family tree and I'm leaving a legacy to we're leaving a legacy to our children's children Yes. Oh, I love that. Wow.

That decision to, yeah, to live differently, what you were saying, Steve. I'm like, it's just, it's so powerful, so powerful. Okay, so what would you tell a couple that's listening? And maybe they're in your stage of life, right? And they are, they've walked a similar story to you guys and they're thinking, oh gosh, but there's no way. Like, I don't know. I don't think we can change. I don't know if we can do something different. What encouragement or motivation would you give them to say, yes, you can do something that is totally different than maybe how you, what you ever done with money and you could even have. paid off house well for me i mean i i mean i basically started over when i was 55 years old and you know so my message is that it's not too late you know you can you can turn things around you know i was not in a position where i mean where i wanted to be and i mean back to the motivation question i mean my motivation was that i want to retire before i'm 65 yeah yeah yeah it's good and so yeah mine was um you know like i said i just wanted to do something completely different than than how i was raised or how my family i i wanted to make sure you know my children have the things that they

needed and they see me as an example and um and also grandchildren yeah yeah yeah i just um yeah i just refused to stay the same that's right so how are you going to celebrate what's the big thing that you guys are going to do to put a big bow on this well when i turned 50 he took me to Hawaii so we have you know once we were out of debt yeah we saved and paid cash and so we've we've done some trips we love to travel um generosity is huge yeah that was us in montana so good um we're um generosity is huge and just enjoy and travel and beautiful you know live like no one else i hope you'll enjoy a Nashville night tonight thank you all i hope y'all get to celebrate doing the step free scream because it's incredible and your your story

is so inspiring to so many people that, yeah, anyone can do it. You know, it's just like if you just got to believe and you've got to stay consistent. Exactly. Like, that's what I heard too, which is incredible. All right, you guys, are you ready? We're ready.

We got Stephen Tanya from right outside of Birmingham paid off $279,000, which includes their house. And they did it in six years, 10 months, and 27 days, making 135 to 250. All right, you guys, count it down. Let's hear your big, debt-free scream. Three. Two, one, we're dead free!

Oh my gosh, so good. Do you what I love about that is, you know, they both said they had been married before, second marriages. And there is, and Steve said, you know, I had to start over at 55. Mm-hmm. And there's just something about this redemption. Yes.

That you get to, it's a second chance. There is something that I can still change what I've done. And because of that, still, their grown kids are watching them. That's right. And then their children's children, you know, just like what Tanya was saying, there's just something beautiful about that legacy that even when when hardship happens and occurs, which it has in all of our stories. But you can still change something. And that redemption is so beautiful for what they've done. Such encouragement and so excited for them.

Well done, you guys. Well done. our scripture of the day comes from proverbs 1423 in all toil there is profit but mere talk tends only to poverty anne lander said no one nobody ever drowned in his own sweat oh boy well what a picture that is but i guess it's true i guess it's true work hard people work hard there you go the grit the grit is good All right, let's go to Lisa in Charlotte's. Hi, Lisa. Welcome to the show. Thank you. Yes, absolutely. How can we help today? So my husband and I, we have between our Roth IRA and our 401 pay, he has $535,000, and I have $275,000 plus $200 in a CD. Okay. And I think we messed up during the pandemic when at the beginning,

when it took like a big dive, I got nervous because I'm on disability right now. I have lupus bad. And so we're not contributing to our IRA anymore. And so what I did is I moved everything. I kept it in the Roth IRA and mutual funds, but I took it out of the stock market. So it's kind of been sitting there earning a little less interest. So I'm wondering if we messed up for retirement or if we should move it back. into the stock market at our age or what we should do?

So the 535 and the 275 are no longer invested? They are, but not in the stock market. They're more in a secure. I put them in CDs, so four and five year CDs. So they're earning four and five percent interest. Oh, yeah. Okay, so not to just let you know, and Lisa, but did you make a mistake?

The answer would be yes, because I just want to use this as a teaching example that what you did, you know, is pretty normal. People do freak out. If they start to see a dip in the market, they're like, oh, dear God, and they pull their money out or they put it somewhere else. And what we always say is the only person that gets hurt on a roller coaster ride is the person that jumps off.

And essentially, Lisa, you did. You jumped off because the last, you know, few years have been 23%. I mean, it's been like, it's been crazy. So it would have been, I mean, yeah, yeah, I mean, seven times, you know, what you've been making is what you would have earned. So did you make a mistake? I'm going to say yes, because I think long-term investing, you just stay in. Whether it goes down and you get freaked out, just stay on the roller coaster because it's

going to go up and down. It's what the market does. But when you pull your money out, if you pulled it all the way out, which I can't tell quite what you, I don't know exactly how that transfer looked. I didn't pull it out where I'm paying taxes on it. So it's still under the 401K, but just in the market part. But what's difficult now is when, because I'm going to say, yes, put your money back in, you're now going to be buying back in at the top where you would have, you know,

you would have lost all those returns. So it's not too late. You can still get back in Lisa. So I didn't mean to harp on you, but I did want to make that kind of a teaching point because what you did was very common. People do that a lot. But just not to freak out next time because, you know, you guys did lose out on a lot of interest. you could have earned. So what I would do is, yes, I would get back in. How old are you guys?

I'm 54 and my husband's 59. And 59, okay. Perfect. Yes. That's what we're worried about is retirement. Like, we don't want to go back in and then worry a little bit about that. But our house is almost paid off. So we feel better about that. But we still, we owe $168,000 left on your house. Okay, how much you guys make a year? Um, so again, right now I'm not. So he makes $122,000 and I get about $30,000 with my Social Security. Oh, that's right. Okay, perfect. Okay, that's great. So you guys, um, and then, yeah, so I'm just thinking, you know, at 54, 59. I mean, you guys, you know, I mean, it could be another 30 years, 35 years that you guys live. You know, if you're, if you guys are, um, you know, healthy and doing all the things. So that's why you still have a long term, if you will. time to get back in the market that even if it does dip for a little bit, a few years, you got, you know, just picture 30 years as an example of what you guys have to kind of

ride this out. Yeah. And if I'm understanding the numbers, right, you have a million dollars, right? You had $535, $200, $900, $900,000 is worth. And we owe just $168 left at 2.5% interest. So I haven't been paying that much extra on that right now just because our interest is so low. Right, but just the CDs alone, the 535, the 275, and the 200. Did I get those numbers right? Yes, yes. Yeah. So if you're saying, hey, today I'm going to plug in a million

dollars, that's not bad, right? I mean, of course, keep three to six months out in cash, but you're going to be just fine. Okay. Yeah. Put that money in. Yeah. And I would, Lisa, I think you're a little hesitant to even get back in the market, but I would, because if you think about even, okay, in your house, you've got to get aggressive on that house. They say, even if it's two and a half percent, you're making 3% on your CDs you guys are you know you're paying what you're making and you're kind of just yes you're you have a wash right now um so yes I would be aggressive on paying off the house and then we just talked to a couple we literally just had that free scream that they you know they paid theirs off which is amazing so um so it can be done so I'd be do that and then I would

I would even sit down we have great smart vester pros there in Charlotte and I would sit down with someone and look to see and tell them about about you know a little bit of your nerves around you feel like it's risky like you don't want to lose your retirement you know these kind of things because a lot of people can feel that way but what I want you to do is listen to someone that you trust someone that you like you know find a financial planner that you actually I think personally enjoy because I think it's important that you trust them and let them show you some of these numbers and to be able to say hey here's the facts of the track record of the markets on the yeah with the COVID I mean what was the stats we taught on this gosh it's been five years now but when

it went down. I think it only took nine months to get back to where it was and beyond. You know what I mean? So like even that was a quick, when you look at these massive, you know, 08, 07 was a little bit different, but you look at, you know, things like COVID, September 11th. You look at these major events that do take kind of a dip, but then a lot of them returned so quickly that the news doesn't talk about it, that it all gets back up, you know, within a few months. So, so I do want you to do some digging and some learning. Yeah, absolutely. comes to it because it is worth it, Lisa. You guys still have plenty of years ahead of you that you guys could really be making some gains when it comes to your money versus it just sitting in CDs. I mean, honestly, I think that's one of, it'll be a detriment long term. And I think if you, I think what will help you with your fear is play it out not just the way it went down, but play it out in your mind what would have happened if you hadn't made that error. And then you'll see, oh gosh. The juxtaposition. Yes. And you'll, I think that'll help with some of the nerves to say, well, everybody who stayed in is actually. doing better ahead right so yep so yes as far as the house goes you do recommend paying because i have money in a cd i could yes when that expires i could just pay the house i would 100% the interest rate was low okay no i would do it you guys do you got to account for the piece that the piece part of that you guys are you know your husband's about to be in a 60s there's nothing better than having no payments in the world and owning the place where you live in okay great Yeah, absolutely. Thanks, Lisa, for the call. We appreciate it. Yeah, there is, that house portion is, it's an interesting one because I think every single person we've talked to, Jade. That sounds extreme because we've talked to a lot. Yeah, tens of thousands, 100,000 people that have paid off their home at events or been here on the debt-free stage or contacting us on social or something to let us know. I mean, I have not gotten one message or one comment that someone who pays off their house regrets it.

That's right. No one has ever said, man, I wish I had done that. I wish I still had my mortgage. Oh, I just wish I still had my mortgage. Because here's the thing too. You can always go back and get another mortgage. If you want to, you can go back and borrow on your house once it's paid off. So and from a mathematical standpoint, you know, the game is that people play that I can make more in the market than what I'm actually, you know, invested in a two, a half percent interest rates. But I could be making 15 percent in the market. You know, my gosh, like I have this huge spread. But what doesn't, yeah, Yeah, which you can't calculate. What you can't put in a spreadsheet or a formula is that peace of mind of knowing that my house, I don't owe anyone anything. And there's something so powerful about the autonomy of our money. Absolutely. And then I think about, I mean, this is just worst case scenario, but I think about the person who doesn't pay off their house and they go into retirement. And suppose you go into retirement in a really down or really low year. Yes.

Now you've got less money in your accounts currently. And you've got your mortgage and this whole life of debt to keep up. So there are things to think about. Absolutely. Such a great point. But yeah, Lisa, thanks for the call. And I think that's a great, you're a great example of what people are feeling and thinking sometimes. And so I really appreciate you calling in.

All right, Jade, thanks for a great show. As always, thanks to our audience that always comes and visits us. We so appreciate you guys there in the lobby. Thanks to everyone in the booth. And remember, there's ultimately only one way to financial peace. And that's to walk daily with the Prince of Peace, Christ Jesus. Thank you.