The Ramsey Show - App - Is It Really Possible To Go to Medical School Debt-Free? (Hour 1)

Episode Date: February 10, 2022

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Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. Rachel Cruz, Ramsey personality, number one best-selling author of the New York Times, is my co-host today, also my daughter. We'll be taking your questions about life and money and relationships and careers. We talk about all of it here on the Ramsey Show every day. Open phones at 888-825-5225. That's 888-825- 5-2-2-5. Diego starts us off in Phoenix, Arizona. Hi, Diego. Welcome to the Ramsey Show. Hey, Dave. How are you guys doing today? Better than I deserve. What's up?

Hi. So I'm 26. I have my bachelor's. I want to go to medical school. I want to do a debt-free. I've heard you talk about it before on the show to go through medical school. I want to do it debt-free. I've heard you talk about it before on the show, to go through, like, the military, see, like, what other programs that they offer. I tried going through them. I got disqualified. So, like, I really, like, don't want to go into all this debt, but, like, it's just so time-consuming. And on top of that, I live with my parents. Like, I'm 26.

Like, I want to move out, but it seems like, like, I don't know how I can do it without going into debt, you know, cause I want to go to medical school. Like I'm, I'm ready to go. Like I'm going to do this master's, um, in August that, that will give me, uh, an entry away into medical school. So it's just like a nine month, uh, master's program. But to do that, I need to go into all this debt. So I don't know. I don't know what, what, what I could do.

Yeah. Diego, it's a great question. I feel like this is one we get, you know, quite often, especially whether it's medical school or law school. And I think different situations, different schools have different routes. And, of course, it's very rare. And, Dave, I obviously would love your take on it because you talk to people more than I do with this scenario. But but what I know, Diego, is that there have been ways that people have found a way not just to pay cash, but they've done things within the medical community or they were part of, you know, not not a fellowship, but some type of program that actually helps them pay their way through. And I feel like I hear more often that happening more in the law school spectrum. But, Dave, have you, for medical school specifically? There's a couple of things that are going on.

Number one, I want to go back and address a phrase you said. This is so time-consuming. Let me tell you what's time-consuming. Paying off $250,000 in debt, that's time-consuming. Okay, so, yeah, you need to spend the time and the effort, and that is the big deal, is to spend the time and the effort on the front end. There's a couple of angles I would tell you to look at. One is where you get accepted to medical school is very, very important in the equation

because medical school is not unlike other forms of higher education in that some of that is 4 and 5x what the other one costs. And so, you know, there is the cheaper version. And by the way, I don't remember ever asking a doctor where he went to school. I just asked him if he could fix that broken thing on me. You know, that's all I wanted to know. And if he convinced me he could then we're there i never really asked for credentials did you go to uh you know a big time med school or

a little known med school i didn't ask uh now obviously uh you can learn some things in some places you can't learn in other places and those sorts of things but anyway so school selection just like it is in undergrad, is very important. The second thing you can look for is the MD-PhD program. The most famous one is over at Duke, but there's several schools around the country that have those, and that's basically where you get on staff at the school and do some teaching, some undergrad teaching, some grad-level teaching type stuff, like graduate assistant type teaching.

And since you're a staff member, you get free or near-free tuition. It's like getting a fellowship, though. It's very rare. It's very hard to get in. You know, one in 100, one in whatever, get it. The second thing I would do is I would pick up Ramsey Personality, Christina Ellis' book, Confessions of a Scholarship Winner. What Christina did was she managed to apply for and get enough scholarships that she got a half a million dollars in scholarships.

What? Yeah, she did, yeah. That'll pay for your med school, dude. Okay, so you need to do what she did in that sense because she ended up going, getting her undergrad and then went to Vanderbilt for her grad, paid cash for all of it, had money left over. And she's on our team now. She's a brand-new Ramsey personality.

But before she came here, she wrote a book that was a bestseller called Confessions of a Scholarship Winner, The Secrets That Helped Me Win $500,000 in Free Money for College, How You Can Too. So that type of stuff is the type of material you need to be rolling around in all day long. The last thing I'll tell you, and again, this is all just needle in a haystack stuff, but, dude, all you got to do is find one needle, and you're there.

This does not have to be a policy for the United States of America. This is Diego. Just got to do it. Just Diego. That's the only guy that's got to do it. All right? So for your sake, anyway. Now, a lot of the large pharmaceutical companies and large hospital companies are desperate to have doctors like them.

And that includes future doctors and so they some of them have scholarship or uh work for hire type programs meaning that you can talk to a large hospital corporation and promise to work for them in a different setting maybe at a reduced rate for several years uh but you know you can go to an underserved area an inner city area a rural area where they're having trouble getting docks to park and you go there and serve for three years afterwards. You get paid to do that. But in return for making that promise in advance, it's a modern-day indentured servant program. You get free medical school paid for by them.

So that's the type of stuff I'm looking for. Is all of that worth it? Well, you've just got to weigh it out but i can tell you this christina talks about she probably made a thousand dollars an hour applying for scholarships so i mean if she had what 50 000 hours you know in the thing sure that'd be that'd be a hundred dollars an hour you know or five thousand hours would be a would be a thousand dollars an hour that she got and she's she's amazing oh yeah no christina's absolutely incredible i don't know like the scholarships in the medical yeah but these were not tied to anything she used them for grad no she did but i'm saying for diego yeah uh are they specific yeah like are they

specific for medical i don't know they're very again anything that's graduate level harder to get than undergrad. Yes. Yes. A lot of undergrad out there laying around. And so, yeah, you're saying all this is a needle in a haystack. And sure it is. But what I know is even being on this show and talking to people around the country, people have done it.

Like, they'll come up to me in a book signing line or something like, oh, yeah, I went to medical school debt free. And I was like, how'd you do that? Yes. I always ask because it's some kind of program like this, right? It takes a little bit of that creativity. Like, when debt is not an option in your life and you said I'm not, whether it's medical school or credit card debt, you have to find a new way of looking. It's not just this automatic.

So it does take some creativity and work to go into. It's not getting in the drive-thru and getting a Starbucks. I mean, you're going to have to. This is not cookie cutter. I mean, there's not one on every corner. You're going to have to scratch and claw and dig and turn over rocks until a crawdad runs out. You don't even know what that is. But there you go.

I know what a crawdad is. I know. He doesn't. Diego, where's Diego from? Phoenix? Oh, but there's crawdads in Phoenix. You think? I don't know.

Is there? In Louisiana, they're crayfish. So I don't know. This is the Ramsey Show. Hey guys, Rachel Cruz here. I've got a money-saving idea for you. This Valentine's Day, skip the expensive dinner reservations at some crowded restaurant. Really, you guys, it's an overpriced, pre-fixed meal. Instead, grab some chocolate, pour some wine, and join me and my friend, Dr. John Deloney,

for our Money and Marriage Valentine's live stream on February 11th, 7 p.m. Central Time. From the comfort of your own living room, we'll teach you the five questions every couple needs to ask to unlock a healthier, stronger marriage. Now that is a great Valentine's gift to the both of you. So get with your spouse and go to RamseySolutions.com slash events to buy your tickets to the Money and Marriage Valentine's live stream. You're just one night away from a stronger, more intimate marriage. Grab your tickets now at ramsaysolutions.com slash events. The only reservation you need to make this Valentine's Day is at ramsaysolutions.com slash events. That's ramsaysolutions.com slash events. So, how's the resolutions going?

If you're like most people, you hit them hard in January and you're starting to run out of steam if you hadn't already. Why? Because you're trying to do it all on your own and you don't have a proven plan that's step-by-step to help you make it happen. If you really want to do this stuff, if you really want to get control of your money don't do it alone get the support the accountability you need by joining a financial peace university class you can go through the proven money plan with other people who will help you stay motivated they'll encourage you they'll also hold you accountable that's what your friends will do and they'll be your new friends and many of them will be friends for life because they're trying to do the exact same thing you're doing, getting out of debt, building wealth, being outrageously generous. And right now there's hundreds of Financial Peace

University classes getting started in person and online. So no more lame resolutions. Make 2022 the year you take control of your money, and don't do it alone. Find a Financial Peace University class. Get started with a free trial at RamseySolutions.com slash FPU. RamseySolutions.com slash FPU. Jacob's in Chattanooga. Hi, Jacob. Welcome to the Ramsey Show.

Hey, Dave. Hey, Rachel. How are you guys? Great, man. Welcome to the Ramsey Show. Hey, Dave. Hey, Rachel. How are you guys? Great, man. What's up? So my wife and I are 27 years old. We just finished Baby Step 3 and are moving into Baby Step 4. Way to go! Yeah, we're excited.

So we sat down with a smart investor in Chattanooga, started laying out our numbers and talking to him about, um, investing and our goals for retirement. And after chatting with him, we kind of left discouraged rather than encouraged. And I know baby step four, five, six, it's supposed to be kind of moving into this exciting dream for the future. Have vision. We just left the conversation feeling kind of defeated a little bit. When we used your online platform for investing, the number that it was giving us, even at a low percentage, was way higher than what he's given us. And we're just feeling discouraged and kind of defeated and

not knowing what to do next. So Jacob, is it that you're discouraged that when you're looking at specifically investing or when you're looking at specifically investing or when you're looking kind of at your situation with four, five, and six, there's just once you do everything and lifestyle, there's not a lot of money left. What specifically is discouraging, just the investing part? A little bit of both. So basically, my wife is, we have a 10-month-old. My wife is working part-time from home, staying with him.

And so our take-home pay is about $4,500 a month. So we don't have a ton to throw towards investing and towards the college fund and the house. But we still feel hopeful that we've created room in our budget. We live pretty below our means, so we feel like we have a good amount of money each month to still throw at those things. Okay, stop a second. Stop a second. See, if you put 15% of your income in Baby Step 4 and your income is $75,000 a year,

why are you not going to be wealthy? I don't understand. Our income is only about $4,500. $4,500 a month is just under sixty thousand a year take-home pay which puts you at about 70 or 75 000 gross what's your gross our gross is about 50 right now dude you can't add your your take-home pay is $50,000. Four times 12 is $48,000. You said you take home $4,500 a month.

But his wife... No, he said this is what you said. It's part-time as well. Right? Yeah, my wife's working part-time. Okay. Did you not tell me $4,500 take-home pay per month? Did you tell me that yes sir multiply that by 12 for me 12s are hard okay it's 54 000 which means your gross

rev your gross income before taxes is north of 70 might be 68 does that okay okay let's. Let's just time out for a second. Jacob, tell me, like, does that make sense? Or are you... Is there another piece of this puzzle that we're missing? Or I just want to get on the same track with you. Yeah, it makes sense. I mean, the math makes sense to me, obviously.

All right, so if you take 15% of your gross income, you're going to be wealthy if you invest that in good growth stock mutual funds. Do you have a match at work? No, sir, we don't. Okay. And that's assuming you never get a raise. Right. And of course you're going to get a raise.

Of course your household income is going to go up over time. And when you get the house paid off, you're going to dump even more money in it. So, I mean, you're not going to be a millionaire in four years, but we didn't tell you that. You're going to be a millionaire in 15 years. But I'll say this, Jacob, whether it's you're making $55,000, $65,000, $75,000. Like, I know as you go through and do your budget, though,

and you're doing your expenses and then you're getting to this point of baby steps four five and six uh and after you do the 15 and you want to put some in for college and you're wanting to pay the house off early right like it he said he was he said he could do all that he's running tight but i thought i understood you to say jacob now tell me if i'm wrong okay i thought i understood you to say you ran the investment calculator and got one number, and when you sat down with SmartVestor Pro, they gave you a different number,

and that number that you didn't feel like you were going to be able to build wealth based on what the SmartVestor Pro told you, and you were just pressed by that. Is that what you said? Right. Yeah, absolutely. So when we did the online calculator, we're really struggling, honestly,

to know if we should continue with this smart investor or if we should look for someone else. I think you should look for someone else. Okay. Okay. Okay. You got a bad start here, whether it's the guy's fault or your fault. I don't know.

You got a bad start, but the honeymoon was rough. Yeah. Yeah. So, you know, you got to have a person handling your money that you're comfortable with and that you trust and so forth. So here's the thing. The next time this kind of a conversation comes up, go ahead and challenge it and go, okay, what's the difference in this and when I ran the calculator? Because that's you being the owner of your money, and they're there to teach you, not them there to go, well, you're only going to get this much money.

And you go, oh, crap. Well, I'm not going to go over there because that guy's not going to do it. Listen, it ain't got anything to do with the guy. It ain't got anything to go well you're only going to get this much money and you go oh crap well i'm not going to go over there because that guy's not going to do it listen i ain't gonna do it the guy ain't gonna do with you it's what you put it in sure and so if you pick good growth stock mutual funds that get average annual rates of return and you save 15 of 65 or 70 000 a year from age 27 to age 67 you're going to have north of five million dollars sure and that's what we're seeing on your website and that's what my brain just told me i didn't use a calculator and the confusion was just sitting down with him and hearing he must have been running a lower rate of return or an inflation and adjust adjusted rate of return to be conservative because those guys

always like to under promise and over deliver but it's not up to them it's up to you sure so yeah i would sit down with a different one and go listen when i run the numbers out here's what i get and here's the thing by the way both of you are wrong and so am i because your life is not going to unfold linearly to where you go okay we're going to project this based on a three percent cost of living raise per year we're always going to give 15 of the new cost of living and we're projecting that the house is going to be paid off here and when it pays off we're going to fully max out all retirement and that's going to take us to there there's like 73 variables oh and by the way you

got more raises than that oh by the way your rich uncle died that you didn't even know you had oh by the way you sign up for a stock plan at your company and somehow get a big bonus that way that you didn't see coming there's a whole bunch of stuff going to happen in the next 20 years you have no idea what it is and most of it's good so the numbers are wrong it's just an idea to keep you moving totally yes and jacob and anyone else listening i think that this is a great though reminder that when you sit down with somebody i mean you know he's 20 27 years old great though reminder that when you sit down with someone, I mean, you know, he's 27 years old. The first time to probably maybe sit down

with a financial advisor. I get it. It can be intimidating. Like Winston and I just went with ours. We go every January just to relook at everything. And even though I know what I'm doing for the most part and we know everyone, it's still, I mean, it still takes me a hot second to be like, okay, this, it's an intimidating thing. And when you're not

in this world and you don't know, so all that to say, ask questions. And if you feel like, okay, this, like, it's an intimidating thing. And when you're not in this world and you don't know, so all that to say, ask questions. And if you feel like, no, this, I'm getting something different here on this website, tell me what's different here versus there. And don't feel stupid to ask questions because it can be. Be the eight-year-old little boy. Why? Why? Why?

Ask why about everything. Do you want to kill him? Why? Yeah. Why? But do it because it's your. Do you want to kill them? Why? Yeah. Why? But do it because it's your money. Absolutely. I'm glad you called, Jacob, because it's confusing.

And so hopefully that gave you some clarity. And I think you were on to something there. You get someone that you get that comfort level with that you're not intimidated with, whether it's his fault or not. I'm not even blaming him. But you got a rough start there. There's other smart Mr. Pros. Get one that has the heart of a teacher that you can jive with and that doesn't take care of you but teaches you.

And that's the whole thing. This is the Ramsey Show. We'll be right back. One of our favorite things to do is to take a call from someone and tell us their debt-free story so they can do their debt-free scream. The thing that's more favorite is if they're actually here live in the lobby of Ramsey Solutions on the debt-free stage, which, by the way, you can come visit us anytime you'd like. We've got a coffee shop, and the coffee and the homemade cookies are free. There's a bookstore, a whole experience when you come to visit the Ramsey headquarters.

We'd love to have you. But the only thing even more favorite than all of that is our own team members on the Debt Free Stage. Yeah. So Scott Pena and his wife Molly are with us to do their debt-free scheme scream scott's been with us about a year he works on the ed solutions team helping to get high school curriculum and curriculum in middle schools all across america and uh welcome man hey thank you congratulations you guys thank you so cool so happy to be here. Well done. How much have you all paid off?

$153,000. Wow. How long did that take? Took 34 months. Good for you. Okay. And 12 of those approximately you have been here. Right.

So two years before you got here, two years before you got here and a year after you got here, you're working on this. Right. So I don't ask your incomes because you work here and all your compadres are standing around completely inappropriate but uh tell us your story what happened oh man about three years ago we had just gotten engaged and um we got your book my parents found you later in their marriage and kind of learned the hard way similar to your story um of you and sharon dave and so that was one thing that they were really, you know, wanted to encourage us to look into this right as we got engaged.

And I think we were just both really convicted right when we started reading Total Money Makeover that we had been blessed with so much and had just found the love of our life that we had been praying for, and yet we had no idea how to handle our finances. And I remember we were reading one story about a family with three children and taking out a second mortgage and having two car loans, and we just looked at each other and said, that's going to be us. Like, we got to get this together.

And just, yeah, we were totally bought in right away. Read the book in two weeks, and it was over after that. Game on. Game on. So you get married and go. We're not taking all this baggage into our marriage. right away read the book in two weeks and i mean it was it was over after that game on game on we are so you get married and go we're not right taking all this baggage into our marriage like let's let's go what kind of debt was 153 000 101 of it was student loans ouch i know big sally that's it she's out i love it give her the eviction notice. That's it. And the rest was just dumb consumer debt. We had credit cards, taxes owed, a family loan, our wedding, some more credit cards. Wow.

Wow. Okay. Yeah. So where were you all living when you first got married? We were living in Southern California. Okay. Yes. And how do you end up here for the last 12 months of the journey? We spent two years in Chicago, lived downtown Chicago.

And, you know, COVID was part of a blessing because everything was shut down. And so we could just tackle our debt and we had nothing else going on. Yeah. And, yeah, so I spent two years in Chicago. And then, you know, during the whole journey of us tackling our debt, we were just like, why don't we shoot for our dreams and try to make our way down to Nashville and work for an organization that's obviously just changed our life forever and changed our family tree. We've got a little one now. Smart. And I work in Ramsey Ed, and I can't be more blessed to just help that next person not

be another Scott Penney out there, you know? Yeah. And taking out student loans and consumer debt. So selling our curriculum is just life-changing, you know? Because I get to give back any way I can. Yeah. Way to go, guys. Well, I feel like it's, you know, when you say three years, over the scope of life, it's

like, oh, three years. Absolutely. We talk about, you know, just make the sacrifice and all that. But when you're in the middle of the three years right like when you're in month like nine and ten and you're like oh and so there are hard parts i know so what was like what was the hardest part though of this journey for you guys if i take this one babe um so we parked so we parked our car about a mile away for for about a year and a half and so i was definitely trucked my in the snow and everything because we didn't want to pay for parking at our high rise.

At the Chicago. Yeah, in Chicago because we're in the city, right? So we parked our car a mile away. Every day I'd walk over there and grab our car just to save money on parking. And we had one car for the two of us. We shared one car. We never had cable. We walked everywhere.

Even if a train stopped, I was two stops away. Instead of paying $2 to take the red line or whatever, one of those lines out there, I'd just walk it anyways. Anything I can do to save, we walked miles. Wow. We did. We just walked. Yeah. I think the hardest part for me was just, and the most impactful financially,

was just doing the rice and beans, um, literally for our food budget. You know, we lived on $60 a week for three meals a day for the two of us. And that was, that just really helped us, um, really helped us reach our goals, but was really difficult. Yeah. Really got tired of some foods. So we just had to really keep encouraging each other that this is temporary yeah but i'm i mean we came into this marriage with a with a bunch of debt and it just strengthened us in so many ways you know all the difficult conversations we we had it was just it was just you and i you know and we were our biggest cheerleaders the whole way out um what a way to start it was just i mean it was a blessing you know we just we just went after you know, and now we've got a brand new little boy who was born three months ago and stuff.

And so, you know, it's just awesome. Very cool, you guys. And I love that part, though, about the relationship because there is something to be said that we live in such like a microwave culture, right? Like we just want the results. But when you have to walk a journey and specifically when you're married and you do it together, like what is formed in that relationship during the time that it's just, it's not easy and it's like that dragging feeling, right?

And thinking of the impossible and then you cross the finish line together. It's like the victory is that much more sweet, right? It's so sweet. So exciting. I love that. Yeah, it's cool. I told Scott recently

that there were times in the middle where I would think, like, man, I wish we were one of those couples that had $20,000 of debt. And it just felt like such a big mountain. But on the other side, I feel like we may not have been changed in the way that we have been through the Lord's leading if it hadn't been so big. Because it really required a lot of us. So even though it was really difficult in retrospect i'm grateful because i i think if

the amount were as big we wouldn't have been changed as much yes it's great you know transform the change of form that's right way to go guys so proud of you all right What do you tell people the key to getting out of debt is? Man. Communication was key. I mean, we cut cable, so we actually had to have conversations with each other in this crazy world of technology. And so we actually had dinners together where we cooked together, we budgeted,

we saved. A lot of Mexi bowls because of rice and beans and beans and rice. But communication and patience, diligence, and just don't give up. Just never give up because it's only 34 months. It's not that long in the grand scheme of things. How's it feel now that you're done? Oh, my gosh.

I've been teary all day. It feels incredible. It feels very good. Who are your biggest cheerleaders outside the two of you? Each other. You know, my in-laws, though, they were the ones that introduced us to Total Money Makeover. And we read that thing so quick. It was ridiculous.

And then just after that, it was just take off. We're done with this. Past life. Also, listening in to the show and hearing other debt-free screams and seeing people with bigger amounts than ours and different situations and other obstacles. That was really encouraging to see other people's stories. And this is a dream come true to be here today. Yeah.

It's awesome. Well, it's a dream come true to have you. Way to go, guys. Very, very proud of you. We've got a copy of Baby Steps Millionaires, which you already got, but we'll give you another one. We'll take another one. Another copy of Total Money Makeover, which you already got, but you can have that, too. You can give them both away.

We'll go ahead and give you Christmas gifts for next year. But both number one bestsellers, of course. We're so proud of you guys. Congratulations. Very, very, very well done. Are you going to grab the babe? We are. Good.

Yes. Get babe in the picture. Oh, my goodness. What is his name? This is Baby Bennett. Baby Bennett. Three whole months old. Oh, my goodness. What is his name? This is Baby Bennett. Baby Bennett. Three whole months old. Oh, my goodness.

He doesn't even know what's going on. As a matter of fact, he's getting ready to be scared after this yell. I know. So you want the headphones for him or anything? Yeah. All right. Scott and Molly and Bennett. I love it.

$153,000 paid off in 34 months, and he'll be calling your high school soon to get the high school curriculum in so your teachers answer up out there. Count it down. Let's hear a debt-free scream. Three, two, one. We're debt-free! Yeah!

And he's screaming. Bennett's like, what? Bennett's like, what? Bennett's like, what? Bennett, it's the best thing that's happened to you. It's loud in here. Love it. And they screamed anyway. Yeah, I love it.

This is the Ramsey Show. We'll be right back. Rachel Cruz, Ramsey personality, is my co-host today. Number one best-selling author three times over. We're here to take your calls about your life, your money, your careers, your relationships. It's all here on The Ramsey Show. Ben is with us in Newark, New Jersey. Hi, Ben. Welcome to The Ramsey Show. Hi, Dave. How are you guys doing? Thank you so much for taking my call. I greatly appreciate it.

Sure. What's up? So, I'm 42 years old. I'd like to just kind of rattle off some numbers, kind of maybe you could help me get organized and answer one of my questions. I'm currently debt-free, except I do have two investment properties. One's $190,000 that I have left on it and another one for $160,000. I have 120 in mutual funds, 72K in an IRA. In my business, I have 70K and I have an emergency fund of 60,000. So I guess where I'm at right now,

based upon my age, is I'm wondering if I should, should I, since I have an emergency fund and I have a good amount of money on the side, keep letting that build for compound interest? Because if maybe somebody, a tenant moves out, I have a good emergency fund saved up. Or should I be emptying out my mutual fund, take my business, some of my money that's in my business and my emergency fund and pay off one of the properties.

So now I have three paid off properties. I don't know if I mentioned that too. I also have two. I have my own residence that's paid off and another investment property paid off. Okay. And what do you make? I'm just trying to organize. What do you make?

Pretty much between 80 and 120. I work in the sports field. I own a sports training company. Good for you. Well done, sir. You've done a great job. Thank you, Dave. I appreciate it.

You've been my mentor. You and everybody you've had on there has been absolutely amazing to me. My wife loves you guys, too. And here's the thing. I don't think you're as disorganized as maybe you feel like because you were able to just rattle off your exact numbers sounds pretty organized to me so you know maybe maybe what you want to do is maybe the word's not disorganized maybe what you're saying is you want to reallocate some of this and start accomplishing some of these goals

is that right yes i just don't know where to start okay i know you always say pay things off i just wasn't sure. Well, you've done a great job. I mean, you're sitting in Baby Step 6 because your rentals aren't yet paid off. And so what I would do if I were you is I would sit down and say, okay, I want to develop a plan to pay off these rentals. That's job one right now. While putting 15% of your income away into retirement.

Now, so you've got what? $120,000 in a mutual fund. Yeah, $120,000 in a mutual fund, and then you've got $300,000 and some change, $350,000 in rental debt, right? Yes, sir. Okay. So like you said, if you threw the $120,000 at the $160,000 rental, and if you can scrape up another the 160 rental, you know,

and if you can scrape up another 30 or 40 in the next little while or use some of your business emergency fund. But your business does need an emergency fund. It does need retained earnings. So I really wouldn't drain it all the way down. But if you pulled 40 out of it and used that mutual fund, then you only got the 190 left. You might build that business emergency fund back up a little bit after that and then i would begin to just say i'm going to

direct all cash flow at that 190 laser focused and knock it out would that be a plan okay yeah i i guess i was just worried because i was just here you know people talking about talking about time in the market, and I figured if I took my $120,000 out, I'd be able to have that. Well, you want to be in the market for long term, but the reason for being in the market is to have wealth, and what we're trying to do here is clear off debt. So the other option would be to sell one of the rentals, and I don't know if you want to do that or not.

No. The renting, everything's gone really well with them so far. and I don't know if you want to do that or not. No. They're renting. Everything's kind of really well with them so far. Well, I mean, you've listened to me long enough. You know I'm probably more pro-real estate than I am mutual funds. I love both. I have a lot of money in both. But if I'm choosing, I'm going to choose real estate because I'm a real estate guru.

That's what I was going to ask is that. Okay, so I'm using the 120 towards the 160. I might or might not use the company emergency fund. The thing about using it is it's going to increase your cash flow immediately because you've got no debt on that rental, and that rental's cash flow goes through the roof all of a sudden. Like what's the payment on the rental? One rental is $1,254.

The other one is $1,254. The other one is $1,508. Okay, so $1,254 is going to be freed up day one if you do this. You could write checks today out of the mutual fund and out of the business emergency fund and have $1,254 a month cleared up. That's $1,414 a year. Okay. It's not the end of the world. You could do it.

I mean, or if you want to just throw if you're not going to do that i'd throw the 120 on the mutual fund for sure i'm doing that one at the 160 and then cash flow that last 40 and then when that and keep your emergency fund in the business if you want to i don't care none of this is on fire none of this is gazelle intensity this is all intentionality not intensity so it's kind of like we're just going around the monopoly board and you know we're just going to collect some money go around again collect some money go around again hit free parking right you know and um yeah that so i'm throwing the 120 at it today i might throw 40 out of the business emergency fund depending on how stable you

feel like your business is then the next job is to rebuild that business emergency fund followed by every other dollar of cash you can find after that's done start throwing at that 190 i'll bet you're done with that 190 in three years that's what we're hoping we're actually expecting our first baby soon oh kind of like yeah yeah so i don't know if that would that change anything that no no it doesn't change any of this months because you're in good shape for the baby you don't have to worry about the baby everything's good thank you dave it's just listen there's not a wrong answer here you've done really smart if you sit right where you are you're not dumb all i was doing is trying to tune it up a notch okay you've done a great job just go ahead and go ahead and just sit sit in that for a moment you're sitting there with

a lot of money good job good job so rentals are it's a big thing i feel like or maybe it's just the season of life i'm in and knowing people and talking to people but it feels like getting rental property is like it's exciting and people are doing it more and more is what it feels like. Real estate's quite the rage right now. You're right. So for you being a real estate guy and for someone listening that has a rental, they have debt on it, maybe they don't have a ton of cash to throw at it, all of that, keeping a rental and paying it off, obviously, is the goal. But that between the market, you just, it's a, it could be an either or is kind of what

you're telling him. A decent rental that you paid decent, that you paid a reasonable price for, makes you more money than the stock market will make you. Okay? Including the depreciation schedule, including the cash flow schedule including the cash flow including the appreciation the increase in value those are the three rates three places you get return on rentals it's called an internal rate of return when you put them all three together but it's more hassle yes as you know your husband winston runs all of our rentals and you guys have your rentals so it's their

hassle and mutual funds you just open up the email and go oh there it is right there's no hassle at all there you don't have to do anything that mutual funds don't ever uh have a dog that pees in the living room floor you know so but tenants do and so the cat no one told you about the mutual fund oh the ten thousand dollar cat they will screw up a house okay so yeah stink and so um man but over time okay yeah but over time, okay, yeah. But over time, real estate. Real estate is going to make you more money, but it costs you more emotional and time bandwidth. It's more hassle.

And I don't want you keeping real estate under the heading of all real estate's good, because it's not. Or all real estate's so good that I can justify debt to do it. No, you can't. If you're already there like he is, I'm not going to make you panic. I wouldn't tell you to panic. I can't make you do anything. But I wouldn't tell you to panic and jump out. But I don't want you to get caught up in this get-rich-quick real estate vibe

that's running around out there that says all real estate's good. The renters are going to pay my payments, which renters don't pay payments. You pay payments. Hopefully, you collect rent. But we'll see. And so that's just BS. The renter's going to pay it off. If the renter was going to pay it off, the renter would own it.

Okay? That's just bunk. So don't fall into all that crap. But you can go slow about getting it paid off. So have a three-year plan, a five-year plan to get them paid off, not a 15-year plan to get them paid off. Get them done. Get them done or get them sold

and some of them you own and they're not even making money and all they are is a hassle it's like a bad ugly hobby sell the crap out of that this is the ramsey show Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen to podcasts.