The Ramsey Show - App - Is It Smarter to Pay Off College Loans or Start Investing? (Hour 2)

Episode Date: August 6, 2018

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Live from the headquarters of Ramsey Solutions, this is the Dave Ramsey Show, where America hangs out to have a conversation about your life and your money. Sitting in for Dave Ramsey this hour, I'm Ken Coleman, host of the Ken Coleman Show on Sirius XM, which you can hear leading into the Dave Ramsey Show Monday through Friday. And it's always fun when I'm joined in studio by some friends. Today, best-selling co-author of The Graduate Survival Guide, Anthony O'Neill, joins me. And the best-selling author of Love Your Life, Not Theirs, Rachel Cruz. Anthony, Rachel, how are you?

Doing great. Amazing. Fun to be back in here with all of you guys. It's always fun when we get to do this. I know. It is fun. Now, have the three of us done the show together before? I can't remember.

One time. I think we did once. Yeah. Good. All right. So it's going to be fun. Your calls. It's fun. Now, have the three of us done the show together before? I can't remember. One time. I think we did once. Yeah. All right. So it's going to be fun. Your calls. It's what it's about. 888-825-5225.

888-825-5225. We'll take your questions about money. We'll take your questions about your kids, those millennials. We'll take your questions about career. It is your hour. 888-825-5225. Coming up in our next segment, you don't want to miss this, Anthony O'Neill

is going to read a powerful email from a parent. So that's coming up along with your calls. But we started off with Carlin, I hope I said that right, in Houston. Carlin, how can we help you? Hi, Ken. How are you doing today? I am living the dream. How are you?

I'm doing very well. I just want to say I'm very excited to speak with you, and thank you for taking my call. Sure. What's going on? So I've been listening to your podcast for a while, and I've been doing some discovery work, and I have a couple items on my list, and I wanted to get your insights. Okay. Give them to me.

All right. So the first one is public speaking slash teaching, and basically what I mean by this is a lot of what Ramsey Solution does, what the Ramsey personalities do, you give people tools to give them the potential possibilities, help them to become the best version of themselves. That's what lights my fire. And then the second one would be writing. And so what I'm thinking is that I could have writing as a platform,

maybe to become a public speaker. All right. So what is the big topic? Is it financial? Is it career? I know you love Ramsey Solutions, the idea of helping people live a better life. But if I could snap my fingers and fast forward all of this that you just kind of laid out, what is it?

What would it look like day to day? What is the message that you're sharing, and who are you sharing it to? So I guess it may be twofold, and I don't need to make a decision on this, but the writing that I have been doing lately that does seem to speak in a very deep way to people is I write from a very personal perspective, talk about, and I'm very self-aware, so I talk about maybe different emotions. And that seems to resonate with the little blog that I have that goes out to a few people. But the other thing that might be a bigger platform would be fitness. I was a fitness instructor for about four years. So I know a little bit about that, and I had some success with that as well.

Yeah. Well, what is your financial situation? Do you need a full-time role, or do you have the financial flexibility to go after this right now? I would need to keep my full-time job for a while, so this would have to be a part-time gig until I can get it up to maybe full-time pay. Got it. Well, then here's what you need to do. I think you've really identified what it is you want to do, and I think that I can see the public speaking slash teaching slash writing. That's all essentially the same function. What it is is an act of communication.

So really what you have to focus in on and get 100% confidence and clarity on is what is the message that I most want to speak about, instruct on, write about? And then who is that ideal audience? So the question I ask my audience a lot is, what's the problem you most want to solve? What's the solution you most want to provide? What's the solution you most want to provide? Who is it that you most want to help? And I think you've given us a bit of an inkling here when you say fitness. And so who is it that you want to help the most?

And then once you determine that, you already know how you want to help them with the speaking, the teaching, the writing. So I think I'd like to see you part-time start to begin to experiment, try different avenues to help the people you most want to help. So for you, whether that's a fitness instructor, or maybe you begin to write more about fitness, maybe add in some nutrition, things of that nature, you've got to just try, try, try, experiment, experiment, experiment,

get around other people who are doing what you want to do. And by the way, you can do that with people that you never meet. So who are some of the national fitness voices or nutrition voices that you read and that you love? If you do that, then what's going to happen is it's going to be very, very clear about which direction you want to go. And then, as Dave likes to say, you want to get that boat close to the dock. This is not a Geronimo crazy leap. This is a part-time play until you get where it is you need to be with your qualifications and financially where you can step out into that.

So it's a part-time play, and then eventually it's full-time once you know what it is. Yeah, and I would say you're at a great position, and anyone starting out on something on the side where it's like, I think I want to do this, there's not a lot of risk. I mean, the risk is having to get up in the morning earlier, you know what I mean? So you can do this part time, go to your job, maybe work late at night. But there is no risk. And so, Karlyn, you even said, you know, something about it, you wrote blogs about emotion. That was the very first thing you said. And it's like, okay, tapping into that or fitness. And it's like,

write about both. Because you don't really have a huge audience. You're not going to confuse them because there's not a ton of people right now and see which one does pick up and which one you see traction on, one that you genuinely enjoy. Because I can tell you all three of us sitting here enjoy the message that we get to deliver on a daily basis. And that's what keeps you fueled. If you're talking about something

and writing about something that you're not that passionate about, suddenly it just becomes another job and it's exhausting. And so really finding that passion and doing all avenues, because I know we've all figured out as well in this world of speaking and writing and all that you want to meet people where they're at and so that's every platform that can be youtube you can have an internet blog like literally you're just writing you can be out

speaking but hitting people where they're at because they're on tons of different platforms and you know really in a sense you know, I don't know, spreading, spreading yourself out, if you will. Well, I want to take this to Anthony because you didn't just start out as a youth pastor at a mega church in Florida. There were the early days when you said, I want to speak to young people and you took any and every gig I imagine that you could. Any and every gig free.

Free as is. I did that too, right? You never say no. If someone's to ask when you come to speak, you say yes. Yes, absolutely. So, I mean, hey, everyone? You never say no. If someone's to ask when you come to speak, you say yes. Yes. Absolutely. So, I mean, hey, everyone starts from the beginning. Look at Oprah Winfrey.

She started right here in Nashville, Tennessee at a very small place. And now look at her, one of the strongest names in the TV industry. So, you guys are hitting it dead on. All right. Quick question from Sabrina on Twitter. I'm a recent high school graduate about to start college. I already have an emergency fund, for college and a Roth IRA. How about that? Yeah, seriously.

Are there any funds that you recommend I start next? That's amazing. How about that? Yeah, I would say, and Anthony, you're a pro at this season of life for people. I would say college is a very transitional time. There's going to be expenses that come up that you are unaware of. You don't know if you're going to be moving, what kind of apartment you want to be in. And so really, besides that Roth IRA, if you're working full time, which you probably won't be having a 401k

match, I wouldn't worry about that. Because I don't know if that'll be an option for you. But I'd say during that college time, you just save cash like no other. Because even that transition four years later of college to the real world is a very expensive transition. So having some money in cash that you've been saving for, you have plenty of time to invest more. So once you get out of school and you have cash sitting there, maybe it's a down payment on a home. You know, it really just leverages you for your future instead of tying it up in investments.

Rachel, I agree with you. I'm going to echo that. I'm also say this on a side note. Enjoy a little bit of it. You know, you've worked hard this long. I mean, take yourself out to the beach for, you know, spring break. But when you come back, do exactly what Rachel said. Stack this money up.

Get ahead of the game. Get set aside three months of expenses. Coming up next, a very powerful email from a parent to Anthony O'Neal. You don't want to miss this. And Leo's on the line, an 18-year-old who has a question. Where to start? All that and more. This is The Dave Ramsey Show.

Guys, let's talk about that timeshare pitch that you fell for. They promised you exclusive access to travel anywhere you want. Tropical beaches, mountain getaways, or whatever. Oh, my gosh. They claimed it was the affordable way to travel anywhere you want. Tropical beaches, mountain getaways, or whatever. Oh, my gosh. They claimed it was the affordable way to travel, and then they convinced you it was a good investment. But here's the deal. Search any auction site for your exact timeshare and see what it's selling for.

It's listed for a dollar with no bids. That's not a good investment. Now, I know I'm just adding salt to a very old wound, but, look, if you tried calling the resort and they won't take it back, if you tried selling it and no one will buy it, call Timeshare Exit Team. Timeshare Exit Team will get you out. You'll have to be patient. It can be a long process, and it costs money, but it works. They're so confident in their exit service that if they don't get you out, you get a 100% refund.

Call 844-999-EXIT. It's free to talk. 844-999-EXIT. TimeshareExitTeam.com. Welcome back, America. This is the Dave Ramsey Show. Thrilled to have you with us. I'm Ken Coleman, sitting in for Dave Ramsey this hour.

Also joined by Rachel Cruz and Anthony O'Neill, fellow Ramsey personalities. We're here to take your phone calls about your life, money, career, education, you name it. It is your show. 888-825-5225. That's 888-825-5225. That's 888-825-5225. Now, going into the break, I told you folks to stick around. I hope you did. You're going to be glad you did.

And Anthony's doing some great work all around the country with The Next Generation. And Anthony, you've got an email that you received from a parent. And we wanted you to read that because it's pretty great stuff. So take it away, sir. Definitely, definitely. So let's get started. I want to share with you how Dave Ramsey has changed our family tree, not just in terms of money. We started with the Dave Ramsey tribe long ago, but 2014 was our year to really start doing it.

I listen to the podcast every day, anytime we're in the car. And the kids were included in every budget meeting. They know what's going on and are actively participating in a D.R. lifestyle. That's pretty dope. A few weeks ago, my 11 year old asked for a cell phone, not a free cell phone. Can Rachel mind you? No, no, no. He wanted a Galaxy seven or iPhone so he can play games. Of course. Yeah, clearly. Okay. So we were quick to tell him no. We were not about to spend $500 to $1,000 for him to play Pokemon. So he's going to middle school. You know, that's the end thing for them to have is a cell phone.

So he came to us a few weeks later and said, hey, what if I pay for it myself? We thought about it and said, okay, here's the deal. The money you earn has to be real value, not little kid work. hey what if i pay for it myself we thought about it and said okay here here's the deal the money you earn has to be real value not little kid work and the minimum phone now costs about five hundred dollars and it'll cost about twenty dollars per month so it was okay cool no problem here's where he here's his conditions we have to buy the baddest teen entrepreneur toolbox in the world for his birthday and provide transportation so we agreed he spent a few days with the one and only me anthony o'neill um and in my app and after about a week

he comes to us with the priceless and a business plan he had a litter box service two dollars per litter box dog yard cleanup ten dollars vacation services ten dollars per visit um and then also window cleaning a dollar each. I mean, this young guy was doing some good stuff. Not only that, you guys, he even worked in $5 for gas costs for his parents. So they were very, very impressed. So she puts in here update number one, Rachel. She says, here's here's the update.

So today was his first day in business. He found multiple people in the neighborhood who need mulch in their gardens long story short on day one he has already made his quota for the week to get a 500 phone by august 1st this kid averaged 35 dollars an hour like that's good money that's pretty good money a lot of adults listening that would love i'm in the wrong business anyways um so continue reading email she said uh we have a slew of teens who live in our neighborhood complaining about not being able to live on what they make in fast food you want 15 we'll go get it the hard way an 11 year old made more than three made more in three hours than what you did in a day.

You hear Dave say this all the time. More is caught than taught. And it could not be truer. Instead of hearing, no, you can't have a cell phone. This little guy said, I'm a live like no one else. And he has more appointments already lined up for tomorrow and could not be more proud as parents. Update number two. He made just over $100 today in four hours. He is even considering subcontracting his little brother, eight years old. Now, that's my favorite part of email. Yeah, that's so dope.

And check this out. He's not going to pay him chump money. He's going to give him 50% of the money. Oh, that was my next question. What is he going to pay his younger brother? Because I know I would have shortchanged my younger brother. Oh, come on. I would have given him 20%. I would have been a bit greedy.

I wouldn't have let it happen. You're going to give Daniel 50% of your money? No, I was going to say I wouldn't let Denise give me No. She was standing up for all young siblings. All young siblings out there. I love it. So he also ordered about 100 free business cards from Vista Prince already. So the young kid is smart. Okay. So update number three.

The little guy has just over $300 and he's still going strong. He has also found a cheaper source for mulch. He is killing it at this rate. He should have his cell phone in the next two weeks. All right. Update number four. Kiddo had a great weekend.

He is at $480. his phone is guaranteed at this point so i asked him what are you going to do with after this after you make the money he said mom and dad i'm gonna save for a car so we told him we'll give him 50 match i think we need to put a reasonable cap on it clearly because this kid just made 500 and less than a month and has six years to save yeah at that rate mom and dad are gonna have to come up 40 grand exactly to be exact they need $36,000 in six years if he's making $500 that's incredible that's a that's a great car that's awesome so at the end of this day you know ken and rachel the kid saved up for his money i mean not for his money set up for his phone and not only did he get the $500 he made a lot more.

And that's exactly what the Teen Entrepreneur is about. It is we're teaching young people how to get out there, live like no other teenager, so you can live and give like no other teenager. Where can parents and kids that are listening go get the Teen Entrepreneur? You can go to Amazon, anthonyneal.com, orderdayramsey.com forward slash.com, or to DaveRamsey.com forward slash store. There you go. DaveRamsey.com forward slash store. That's awesome. And it is a great product.

Great product. We're hearing a lot of great stories, so thanks for sharing that. Yes, sir. All right, more of your calls, 888-825-5225. Let's go to Leo, who's on the line in Jackson, Mississippi.

Leo, how can we help? Hey, how you doing? I'm 18 years old. I just graduated high school in May, and I'm headed to the military next week. I go to basic training August 14th. I don't have a plan for my money. I'm not that good with money. I'm good at saving to a certain extent, but all my money ends up disappearing.

I just want to know what would be a better plan for me to do with my money. Yeah, that's a good question, Leo. Man, the very first thing I'm going to say that has nothing to do with money has everything in what you're speaking. Start saying, I will be good with my money? Yeah, that's a good question, Leo. Man, the very first thing I'm going to say that has nothing to do with money has everything in what you're speaking. Start saying, I will be good with my money. I am good with my money. I will make the smart decisions with my money. You have an advantage.

You know, you're going into the military, so you're going in debt-free. And here's the very first thing I want to tell you. Nine times out of ten, especially young kids, as soon as they get out of basic training, the first thing they do with their money is they go buy a very nice car. And I think that is the dumbest decision any kid can do as soon as they get out. Okay. Cause when you get out, get out

of basic training, man, you're going to have your shelter covered. You're going to have your food covered, man. I would say stack three months up front of your expenses because pretty soon within a matter of a year, two years, once you release from, you know, the barracks, you can move out on your own. So you want to go ahead and have a nice cushion as soon as you get out. So just follow the baby steps, which is for you. You're going to jump to baby step number three off top, which is set aside three to six months. Yeah.

And Leo, I'd say to download every dollar. It's our free budgeting app. Yeah. And be tracking your expenses. I don't know exactly what expenses you'll be having. I think there'll be a little bit, not a ton, as you go into basic training, but at least to know, okay, if you have some time off, if you want to spend some money, whatever it is, but start the habit of budgeting so that way when you get out

that you have that lifestyle under control. And a lot of people, they fall way when you get out, that you have that lifestyle under control. And a lot of people, you know, they fall for, you know, the payday loans and all of those things are always all over, so close to military bases. And so I would say stick to doing your budget, stick to saving that money, getting that three to six months of expenses, and that will get you a long way, especially in your season of life. But even awesome that you're asking at 18.

Some people don't even care about money. They're not even thinking about that. So it's awesome. Well, Leo, thank you for your decision to serve our country. And as a small token of our appreciation, hang on the line. I'm going to have Kelly give you a copy of Dave's book, Total Money Makeover. Even though you're not behind the eight ball, you are starting out. And that book needs to be your guide.

Rachel and Anthony gave you tremendous advice. But Dave lays out a game plan. And for you, sir, you can get way ahead of the game. And even though you can't maybe concept the idea of being a millionaire one day at 18, even in the military, as you start off and begin to live the right way with your money, you will end up living like no one else. So great, great, great call to get from a young man. That is so encouraging. Anthony, when you hear an 18-year-old ask that question, what does that do to you when you hear that?

Man, it does two things to me. I get upset. I mean, I just get fired up. And then I get excited. I get excited for him, then I get upset at myself. Like, I was not thinking that way at 18 years old. I'm like, what the heck, man? I'm like, Anthony, I just want to – I know it's a Christian show, but I sometimes want to just cuss my youngest up. I'm Like, what the heck, man? I was like, Anthony, I just want to,

I know it's a Christian show, but I sometimes want to just cuss my younger self. I'm like, what the heck? What were you doing? Yeah, but just to see that this younger generation is hearing our message, you know, and following our plans, following Rachel, living like yourself, loving yourself, loving your life, hearing Dave's baby steps,

hearing my heart to be debt-free, it just gets me fired up for this younger generation. Good stuff. Coming up, more of your calls. Don't move. hearing Dave's baby steps, hearing my heart to be debt-free, it just gets me fired up for this young generation. Good stuff. Coming up, more of your calls. Don't move. More of the Dave Ramsey are term life insurance and disability insurance. Both plans make sure that you have income to pay bills and take care of yourself and your family if something were to happen.

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Welcome back to the Dave Ramsey Show. I'm Ken Coleman, joined in studio by Rachel Cruz and Anthony O'Neill as we take your phone calls. It's about your life. It is your show, America. 888-825-5225. 888-825-5225 is the number to jump in on the conversation. And we go to Alex, who's on the line in Richmond, Virginia.

Alex, how can we help? Hey, how's it going, y'all? I've got the whole team. This is going to be great. That's right. Yes, all of us. Thanks for taking my call. Yes.

Cool. So my wife and I, we are on baby steps four. And recently one of our cars broke down. So we're down to just one car for the two of us. And it's currently working because she works from home and I work, you know, in a typical office. But she would like to change jobs here in the future and will obviously need a new car to be able to drive to that office. And my question is this. We want to buy a new car. We want to buy it, not a new car, but we want to buy a car in cash.

Should we throw everything we can at saving for this car? Or should we increase our pace on paying down our mortgage so that we can pay that down in 15 years and only take the extra bit we have towards saving for this car? I would say, since you're on baby step four, continue funding 15% of your income into retirement. So don't stop that. And I would say, yeah, I think you can be less aggressive paying off the house to get you guys a second car because that's going to be something you're going to need in the future and that is a necessity is what we say around our place um so it will be something but if you have cash and maybe your emergency fund you want to take out or if you guys know that you have the ability to leave the emergency fund alone and

then just pay a little bit less on the house obviously not getting behind on it by any means but just a little less aggressive and save up and get, yeah. How much do you guys make a year? We make $70,000 before taxes. Yeah, that's awesome. So, yeah, I would save up and buy a car for sure. Yeah, what's the number amount? I'm assuming, Alex, that you know what it is.

After you do the 15% that Rachel is suggesting, how much can you put towards saving for a car right now? About $1,200 to $1,300 a month. Oh, my gosh. Yeah, that's awesome. Save for a couple months. Yeah. For sure. Yeah, Alex, do not touch the emergency fund.

You make a good amount of money. I'm thinking about a good three to five months. And, hey, you may even be able to squeeze some other stuff down. Sit down and look at your budget and see, hey, maybe we can stop going out to eat on this date these days and times and squeeze it out i mean a good i see a seven to ten thousand dollar car that they can buy in the next few months and uh you'll be good but yeah definitely attack it and you'll be good i love that good stuff yeah triple eight eight two five five two two five is the number up next is pete in dallas texas pete how can we help i got a quick question for you thanks so much for taking my call um 888-825-5225 is the number. Up next is Pete in Dallas, Texas.

Pete, how can we help? I got a quick question for you. Thanks so much for taking my call. My wife and I just recently started doing the plan, and we're wondering our house payment is we only owe like $50,000 on the house, and we have student loans that are at $74,000. So we're wondering, should we try to pay off the house first and flip it or do we stick to the plan and try to pay off that student loan?

Pay off the student loan first because I would rather, yeah, I'd rather you guys have no student loan debt and a small mortgage that you can attack quickly after that than having a paid-for house and Sally Mae is still around. So in that instance, yeah, I would for sure say go ahead and just pay off the student loan because you're going to have time with the mortgage. And again, student loans, it's one of those things people just – it just sticks around forever. And so the faster you can attack it and get it out, yeah, for sure the better off that's going to be. Yeah. Question, Pete. How much is the house worth?

House is in the area going for about between $2,000 and $2,200. That's fantastic. Just by paying off the loan, Rachel, and their normal mortgage payment. By the time they pay off the loan... They'll be able to cash flow that house. You may pay off the house fast.

It must be paid off in a year. It's unbelievable with that kind of value. You were saying, why that question? Because he's a sharp guy. Why that question? Because he's looking there going, well, I can flip the house. I can pay off that 50 faster than flip it and pay for the house.

Well, I'll say this. You're not going to go wrong either way, right? If you choose to pay off the house early and then you pay off the student loan, you're going to be debt free. I mean, these things are going to be quick because most people, their mortgage, you know, $200,000, right, that they have left to pay or whatever. And so mathematically, we still say just stick to that consumer debt and wait for that house to be paid off because once you guys start funding, I want you to start getting that three to six months of expenses, start funding retirement. If you guys have kids, kids, college, all of that, and then attack the house.

That's right. Yeah. Well, there's just not that much difference between the $74,000. It's a $24,000 difference. And what we were just saying, what's amazing is if they just stick with the plan and follow your advice, they're living in a paid-for house. Exactly. And then everything else gets fast-forwarded. It's unbelievable.

Oh, so fast. But I get it. People have a desire to get rid of it. It's like, ugh. There's a difference between your 70s. It just feels different. Yes, absolutely. You've got to be careful.

Walk the steps. How many times have you said it? Just follow the baby steps. Follow the baby steps. They work every time. 888-825-5225. That's the number. 888-825-5225.

Rachel Cruz, Anthony O'Neill, Ken Coleman sitting in for Dave Ramsey this hour. Up next, we go to Olivia, who's on the line in Greenville, South Carolina. Olivia, how can we help? Hi. So I'm going into my second year of college. I go to a private school, so I pay about $20,000 a year, and that's all in student loans. So I have about $5,500 in savings right now,

and I'm going to put about $500 in my emergency fund. So knowing that I'm going to have quite a bit in the future of debt that I'm going to have to pay off for my student loans, should I start making payments towards that, or should I continue to grow and start investing in mutual funds? Now, Olivia, what you're going to do is you're actually not going to do neither one of those. What you're going to do is take that $5,000 and what you're going to do is put that towards your college. Okay. So what you're going to, you're not going to pay off college loans right now. You're going to put that towards any colleges, maybe like your dorm room, maybe some books.

So figure out something that you could pay cash so you could stop borrowing money and stop adding more debt to yourself. So the key thing here is, and Rachel will agree, it's like, we want you to stop borrowing money. Which means, Olivia, my answer is radical. You can't afford the school you're going to right now. Yeah. And so you're about to enter your second year. If you're going to rack up three more years of student loan debt, I have a huge stop sign in front of me.

And I'm like, stop, Olivia, stop. Which is going to be very uncomfortable. Very uncomfortable. Because August, classes, stop, Olivia, stop. Which is going to be very uncomfortable. Very uncomfortable because August, classes are starting probably any day now. Have you already taken out loans for this year? Or just the semester? Yeah. Just the semester or the full year?

The full year. The full year, okay. So I would say exactly what Anthony said, put that money toward, you know, you've already taken out the loan, right? And you won't get interest in all of that repayment. But I would say, unless you're going to hit the lottery or you get a scholarship or grant or something happens, I'm going to be looking to transfer schools in the next year. It's a little late right now in the game because you've already taken out the loan for that year. So go through the year, but I would

make my second job to be transferring, which again, I know stinks. You've built your, you know, if you're in a sorority or you have roommates and friends, trust me, at the end of the day, going $40,000 deeper into debt for your junior or senior year, it's not going to be worth it. Not going to be worth it, Olivia. So I would say make it your part-time job, find another school to know that you're going to transfer. And then from there, start looking at that $500 to $1,000 emergency fund, and then start

putting any savings you have towards saving up for going into a state school or even a community college for the remainder of your college. Let's stay right here. You just said something that needs to be accentuated. It's not worth it. And the reason is, both of you know this. I don't know the data. I'm going to tee you up to talk about it. But you guys have talked about research.

Dave talks about it. The degree with the name on it does not equal in the job market what you think it does. So she's paying $20,000 a year and the reality is the name, whatever the name is, doesn't provide the value. Is that correct? Oh, 100%. And not to

rag on private schools. Unless it's like a Yale or Princeton, I still wouldn't go into debt for those schools. But that at least is known. I've gotten, and Anthony too, at these colleges. And no offense to the colleges out there, I've never even heard of them. And people are going 30, sometimes even 40 a year to a school that no one's even heard. It's not even like it holds this big weight out in the job market. No, because majority of places that you're going to work probably is going to be a small business, right?

Or in the medical field or something. And it's just like know yeah it's so not worth it's going in it's just i would even say though to that candace is the culture teaches you know private high-end schools what we're teaching is affordable get the education because here's here it is yale harvard does not make you you make yourself. So you can go to a community college and come out smarter in making just as much money and not in debt as someone who went to Harvard or Yale. If you grind it, you work hard.

It's all about status and status doesn't matter when you got to go get hired. Good stuff. Thank you so much for your calls. One more segment coming up this hour. Rachel Cruz, Anthony O'Neill, Ken Coleman sitting in for Dave Ramsey. This is the Dave Ramsey Show. Can you believe this real estate market?

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Call 888-LOAN-200 or visit churchillmortgage.com. This is a paid advertisement. NMLS ID 1591. NMLS consumeraccess.org. Equal housing lender. 761 Old Hickory Boulevard, Brentwood, Tennessee 37027. This is the Dave Ramsey Show, where we talk about your life and your money, one caller at a time. I'm Ken Coleman, joined by Rachel Cruz and Anthony O'Neill, as we sit in for Dave Ramsey this hour. Thrilled to have you aboard.

888-825-5225 is the number. 888-825-5225. Going to get to your calls, but real quick, we're very excited about a survey that we're doing with you, the listeners of the Dave Ramsey Show. We want to know what's important to you. So we launched a brand new survey, and we would love your feedback. Check it out at DaveRamsey.com slash survey. What is the survey? Glad you asked asked it is a term life survey want to know more about that particular offering how it hits you where you live so again we just launched it uh you want to go to Dave Ramsey dot com and slash a survey

Dave Ramsey dot com slash survey now here's the deal. We always reward you folks. It only takes a couple minutes, and there's a $100 Amazon gift card up for grabs. That means one of you folks is going to get $100 to spend on Amazon. Who doesn't want to enter for that? I was going to do that. So we need your information, and when you take the survey,

you're entered to win the $100 Amazon gift card. So here's how you do it two ways okay you can go to visit excuse me you can go to dbramsley.com slash survey or you texters out there rachel cruz uh text the word survey i like to text you love the text i'm efficient texting's efficient you got some fast thumbs do you know what i've interrupted myself i gotta get back to finish this and then we'll talk about it because this is a true thing. If you're Rachel Cruz, you're going to text the word survey to 33789. The number is 33789 and you text the word survey.

Then what happens is we'll send you the link and you can take the survey. Or go to DaveRamsey.com slash survey. Back to your fiery thumbs. Okay. What I was going to say is texting, I would not like to think of myself as like some high school kid who doesn't have you know, I'm worried about some like middle

school, high school kids these days because they just talk to each other through texting. I'm not that. I am a normal person that can talk to people. My social skills I think are fine. I think. You took that way too seriously. It was a compliment. No, listen, but texting is so efficient, but what's hilarious, I don't know why I was thinking of this. Do you still have people in your life that call and leave voicemails and tell you who

they are? Yes. A.K.A. my mother and my sister both do this. They call and leave a message and they're like, hi, it's, hey, Rachel, it's Denise. I'm like, I know. I know it's you. My phone. Yeah.

Yeah. Right. Dave, no texting. Dad? He is a zero texter. He's a zero. That's true. He knows how to text.

You email if you need Dave. Well, it's actually funny. He will send you an email in a moment when the most of it, like we're on a live event. We've gotten emails from him before. Yeah, and it's like, hey, meet me in the lobby. I'm in the lobby. And he sends it via email. This is behind the scenes stuff.

Dave Ramsey won't text something. He does not. I don't even know if he knows how to text. He can do Twitter. He can do Twitter. But man, yeah. He knows how to text. Texting is efficient.

So text it in for this survey. Yeah, text survey to 3379. We want to know what you think about term life insurance. And get a gift card, people, to Amazon. Well, not everybody. You don't get a gift card. You could win it, though. You could win one.

You could win one. But I don't want all of America to be texting in because they think they get a gift card. That would be dangerous. It's the best place on earth. Amazon. Fun stuff. 888-825-5225 is the number to jump in on the conversation. Up next is Mike in San Francisco.

Mike, how can we help? Hi, guys. Thanks for taking my call. Sure. So right now we are on baby step two, and we have $62,000. That's like $12,000 on a car, and we have about $50,000 on student loans. Wow. And with our income, I think we can pay it down within like two and a half years. Okay.

But what I want to know is like we are we are thinking of, like, selling our house, maybe downgrade. If we have, I think we have too much of a house. And, like, our house payment is, like, $3,400 a month. How much is your take-home pay? Our take-home pay is about $102,000. Say that one more time. $102,000. $102,000.

No, sorry, your payment per month for the house. $3,400. Oh, for the house, $3,400 per month. Oh, $3,000. No, sorry, your payment per month for the house. $3,400. Oh, for the house, $3,400 per month. Oh, $3,400. Okay, so that's your mortgage. Sorry, what is your take-home pay per month? Per month, $8,500. $8,500.

Yeah, you have too much house. Yeah. That's getting bumping up to about what, 45% ish, which in San Francisco, you're in one of the highest real estate markets in America. And so I would say to look to see what cheaper option you have, because the house is eating up a good amount of, of your income that you could to paying off debt.

And so we don't always recommend people selling their house. But when it's upwards getting bumped into that halfway mark, half your income is going to a house, it gets really, really tough to gain traction. And so it's a radical move, if you will, to do that. But it will definitely give you some breathing room, not only in your monthly budget, but also some money towards paying off his debt. Yeah, yeah, yeah. You know, and Rachel and Ken, I hear it in his voice. He believes he has too much of a house. So I'm going to say, hey, if you feel as if this is too much,

then go ahead and sell it and downsize to where you can get to a comfortable position. And the key thing here is learn this lesson. Do not go back to this feeling. Because you're saying you can be debt-free in a couple of years. Your income is great. Your shovel is great. You can knock down that debt. In San Francisco, we teach about 25%.

I'm cool with 25% to 30% of your take-home pay. That's a great, comfortable mortgage, and you can build into the future. Which won't be a lot of house in San Francisco, but it's ratios to income. We'll channel Dave for a second. You're not exempt from math

no matter where you live. Because we do. We travel to LA and all these places that the real estate market is very high, but you're not exempt from math in that case. Even though Mike could pay it off in two and a half years, if you decide to stay, you can work that plan, pay it off in two and a half for sure, but for some breathing room for you if you're feeling that way, like Anthony said.

Yeah, that's it. All right, next we go to Danny who's on the line in Richmond, Virginia. Danny, how can we help? Hey, I'm a service technician. I work on office equipment, and my company reimburses me for using my own car with a run-timer style plan. From a brand-new car at six years old, I get about $300 a month for wear and tear reimbursement plus mileage, 15 to 18 cents a mile, and that varies price of gas every month. It changes.

At the end of six years, I can stay on the plan if I get another new car, or I keep the car in, which will be six years old and have 150,000 miles on it, and only get paid mileage. But I'll lose $300 a month, which is just not quite in the car. So I'm wondering which way I should go. Yeah, for your new car, are you having to buy that outright? Will you take out loans? I'd have to have a loan for that. Yes. Yeah. I would say stick with the car,

stick with the car. You have 150, even though you're losing, losing some of that money, it's not worth going and taking out a loan for a new car. Um, because you still are going to be reimbursed with mortgage, uh,

or I'm sorry, with mileage. And, uh, that's 100% what I would do. Yeah. I wouldn't go take out a loan for a new car. Heck no.

I'm not borrowing no money. I'm sticking with my car. Okay. I mean, because I'm really not losing money because the $300 is going towards the car anyways. So I'm not losing anything because it was never coming into my pocket. The mileage is great. Yeah, exactly. And the mileage can now go into your pocket.

A little bit of it because you had to pay gas and, you know, maintenance on the car, but, I mean, I'm going to stack this mileage check. Man, no. 150 miles. That's good. My car just hit 120.

Oh, really? My car's at 180. Whoa! Really? What's yours? Man, I feel a little guilty about saying I'm at 147. Oh!

I'm not at 150 yet. I'm the bougie one at the table. I'm at 120. 147. I love that we're on at the table. I'm at 120. I'm at 147. I love that we're on, yeah. Hey, listen, we just sold our beloved Betsy the Burbs, suburban. Are you serious?

218,000 miles. Still running like a top, by the way. It just had some dings and things that Mama wanted to upgrade. And got to upgrade it. So you know what we did? So what'd you upgrade to? Yeah, I want to know. A suburban with 172,000 miles on it. Hey, and it's great. You know what? And here's the thing, I want to know. A Suburban with $172,000 on it.

Hey, and it's great. You know what? And here's the thing. I want people to hear this. Okay, we got that Suburban, and it looks gorgeous. You'd never know. Actually, I saw it in the Zaxxie parking lot. We saw you.

Yes. It looks great, doesn't it? It's black. It's nice. Oh, no. It's 2007. 2007. What's Ken doing?

I mean, look at this new SUV he got. 2007. See, see. $172,000 miles. I can tell y'all are married with kids. I'm single. I'm not purchasing a car with 180,000 miles on it. I basically have to have a barge. I'm not purchasing a Suburban.

I get a lot of kids and a lot of stuff. With 80,000 miles on it. Anthony O'Neill, Rachel Cruz, thank you so much for joining me. I want to say big thanks to our producer, James Childs, and our associate producer, Kelly Daniel. I'm Ken Coleman. We've had a lot of fun with you. Big thanks to Dave, also, for letting us hang out here. Absolutely. And you, America.

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