The Ramsey Show - App - Is Your Debt Turning You Into an Anxious Mess?

Episode Date: September 13, 2024

From Ramsey Network, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Camel, joined by Dr. John Deloney this hour. Open phones at 888-825-5225. If you're new to the show, here's how it works. You call in, we talk to you, and hopefully we help you take the right next step for your life, your money, and your relationships. Sydney's going to kick us off in Huntsville, Alabama. What is going on, Sydney? Hey, guys. Thanks for taking my call. Absolutely.

So I think this is right up Georgia's alley. My husband and I are in a disagreement about how much to contribute to retirement. We're a little background. We have about $420,000 between both of our retirement accounts right now, and then $160,000 in non-retirement savings. We don't have any debt besides our mortgage, and then we also have started college funds for our children. Wow. He thinks that once we reach a certain point, and that number in his mind is about $200,000, $250,000 per person,

that we can take our contributions down to one percent. And I am not for that at all, of course. But yeah, I'm just trying to... Why one percent? Why not just go to zero, man? Well, I guess his thought is that he can... We're still contributing something, but when he does like the compound interest, in 30 years, it's still like $4 million or something like that, and he thinks that's going to be enough. Wow. Well, it sounds like 15% is not going to damper your lifestyle at this point. If you just invest 15% until the house is paid off, then you can invest even more beyond that or give more. What's the harm in that? It sounds like you guys have a great income um well that's another factor is i like

am kind of wanting to stay home with our kids so um all the more reason to invest is it not on in my opinion yes so i'm trying to win the argument to him. Do you kind of want to stay home or do you all the way want to stay home? So all the way, but okay. So my company, they contribute 15% of my salary, which is about $120,000 to my 401k, regardless if I contribute anything. But I also contribute 15%. So that's a big holdup for me is I'm getting 30% of my salary every year into my retirement. And so I feel like I'm giving up a huge chunk.

Why are you contributing an extra 15%? If they're already contributing 15% of your own money, that's the same as you contributing 15% of your own money. Correct? That's correct. Yes. Yeah. So what if you dial back to 15%? Is he beyond 15% right now with his income? No, so we are, he's probably, he just started a new company, so he's actually not able to contribute yet. The past few years we've maxed out, and then like just this year, so he works in the mortgage industry, so obviously things have slowed down a lot.

So he dialed back his contributions to that 1%. Well, that's my big thing is we don't know what 30 years from now looks like. We don't know if he's going to be able to work three years from now. We don't know what life is going to throw at us. And so I like the idea of just investing 15% until we get the house paid off. We can increase it there. And we've had very few calls where someone said, man, I hate that I invested 15%. We have too

much money. Help. That's my favorite problem to deal with. We get a lot of calls of people saying, hey, we're 62. We have to work because we thought our retirement was going to do this, but then our account did this and we didn't realize that our funds weren't in the right spot. And there's too many variables that I don't like about just not investing or investing 1% because you feel like you can ride it out. Right. Can I ask you, what is he going to do with the rest of the money? So if I did leave, if I quit working, all of our benefits, family benefits, everything are on my side. And with his company, the benefits are, I mean, it's like triple what we pay. So it would kind of even out to dial it back to that 1%. So what does he make?

The insurance. It varies. I think this year it will be probably around $250 maybe. Just on his side. So if you stay home, household income is at $250. Yep. With just a mortgage. What's left on the mortgage?

$280,000. And what's the non-retirement funds for, the $160,000? So we just sold a piece of real estate, and we plan to buy some land and eventually build. So we're kind of just holding it at our high yield savings right now. Why not pay down the mortgage? We also have a brokerage account that we may just move it there too. I don't really know yet. Okay. Well, I would be focused on getting rid of the mortgage, which is only going to make your life staying home even easier, way more margin. And I would continue investing 15%. And one of the reasons of many is we don't know

what 30 years from now looks like. We don't know what inflation is going to do. We don't know what taxes will be. And so I would rather have a bigger pile of money. Well, it's not hurting your lifestyle here. You know, we're not talking about 60%. It's 15. And you guys have done such a great job already. So I applaud him on that. But now is not the time to let her foot off the gas. So you would even put that towards the house even if we plan to move in like the next two years? Well, are you going to keep the house and buy the land? Would you sell the house when you get the land? We would probably buy the land, build, then sell the house.

Okay. I mean, I don't like the idea of you guys having two mortgages. If you get the land, are you going to be able to pay for the land in cash and build in cash? Yes. Not build in cash, no, but we would pay for the land in cash. Okay. There might be a weird little period there where you've got the mortgage still, plus you've got a new mortgage as you try to build. So I would consider that as well as part of your near-future plans.

But I don't know that I can convince him to invest more. He can crunch all the calculations he wants, but this is all, you know, conjecture at this point. And so I would recommend you guys sit down with a third party, like a financial advisor, and have them walk you through big picture. Here's where you're at. Here's where you're telling me you want to go. Is there a gap right now? What's it going to take to get there? And he might say, hey, you're 110% on track. Let's scale back. Or he might say, I'd continue down this path.

But two knuckleheads on the radio may not be able to convince him. That's the problem. No, I appreciate it. Here's the biggest convincing. Six years ago, I was three jobs and two states away. And if you had told me six years ago that I would be a YouTuber or that I'd be sitting on the radio next to George and the largest call-in finance show on planet earth, I would have laughed at you. And so I think it's easy to be like, Hey, I don't want to do this principle now. Cause I got this thing that's going to happen in five years. And what's pretty cool is I didn't say, Hey, I, I might want to be a YouTuber someday. So I'm going to quit going to college.

I'm going to quit showing up to my day job. I'm going to practice YouTubing. I kept doing my, the day-to-day principles that I knew, which is to continue to go to grad school, continue to write good papers, continue to show up in my job. And then when this opportunity came along, it was cool because I had the foundation. And like George said, like no one's ever called us and been like, man, I just put too much in retirement. I wish I hadn't done that. Yeah. But our show only exists because people don't, they have some scheme that in five years,

I'm going to buy the land and I'm going to get the goats. I'm going to do it all in cash. And so I'm not going to put anything in retirement. You don't know if you're pregnant with twins tomorrow and everything in your life changed. You see what I'm going to buy the land. I'm going to get the goats. I'm going to do it all in cash. And so I'm not going to put anything in retirement. You don't know if you're pregnant with twins tomorrow and everything in your life changed. You see what I'm saying? So just keep playing the chords in a four four time. Just keep doing the things that you know are right. And then on top of that stuff, then opportunities show up because you just kept doing the right thing day in, day out. It's diet and nutrition. It's just the same boring thing over and over again. And then suddenly 10 years later, you're a millionaire, right? It all works out. So keep just showing up, keep showing up. And I know he's smart and

wants to hack his way to it, but it's just not possible. Thanks for the call, Sidney. More of your calls coming up. 888-825-5225. This is The Ramsey Show. Hey, you guys. I'm not a fan of the big banks, and you probably already know which ones I mean. But I do like credit unions because they're nonprofit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union

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So go to fairwinds.org slash Ramsey to learn more. And while you're there, look at the combined checking and savings account bundle they created just for Ramsey fans to help you take control of your finances. That's Fairwinds, F-A-I-R-W-I-N-D-S dot org slash Ramsey. Welcome back to the Ramsey Show. I'm George Campbell, joined by host of the Dr. John Deloney Show. Dr. John Deloney himself is with me. Hey, did you hear? I heard, yes, 825-5225, but I heard James may have been a finalist for the presidency of the Smashing Pumpkins fan club.

No way. Congrats. He's one of the best. I know. It's been a long time coming for him. He's a huge, huge, huge fan. Decades. He's awesome.

888-825-5225. We're live. And that is called trolling, my friends, fan. Decades. He's awesome. 888-825-5225. We're live. And that is called trolling, my friends, in case you don't understand sarcasm. All right. Carol is up next in Tucson. What is happening, Carol? Hi, guys. Can you hear me okay?

Yeah. You could do a little better, but we can hear you. Okay. I'll talk as loud as I can. Just right into your phone is what's helpful. Right into my phone. How's that sure okay um i'm a little nervous so um you take your time okay so i i was forced into an earlier retirement due to some medical reasons. But fortunately, I kind of set myself up with the anticipation of that. I've been a low wage earner most of my life, no college degree,

waitress and all of those things. Finally ended up in a customer service position that, you know, got me by paycheck, kind of paycheck. But I had, you know, Dave Ramsey kind of mindset about just saving every penny, save every penny, save every penny. And I ended up with a small savings of about $70,000 that during the 2008 housing crash, I decided to funnel it all into buying real estate, which paid off big time because I got three single family homes that were bottom dollar, either foreclosure or short sales, and they're all paid in full now. Awesome. Yeah. And they've been rented? Oh yeah, they've been rented the whole time.

I've been doing rentals. This has been since, well, right around the 2009-ish timeframe. I also, early on, bought a duplex that I lived in the front and rented the back door. How capped? That. So I never really have paid a mortgage or a rent because the renter has always paid for that. And that's now paid in full as well. So you have four paid for properties, including the one you're living in.

Yeah, three single family homes and one duplex that are basically all paid in full. I do have a small mortgage on one of the single families. It's about $50,000 or so. So I'm working on kind of paying that down. It's about $50,000 or so. So I'm working on kind of paying that down. But I ended up in an early retirement. And it worked out because I was able to because I have about $4,000 coming in from the long-term rentals. And I turned the back of the duplex and then an also little area in the back into Airbnb's, which brings in its own money. So what's your total monthly income from all this real estate?

I mean, it varies because Airbnb's fluctuate based on seasons. I tried to kind of average that out. And the average is roughly because some months I'm doing 10,000 a month and some months I'm doing 150 a month, you know, so it's really all over the place. But I average it out to around either $18,000 to $2,000, maybe a little more per month as an average year for the year on the Airbnb. Okay. And then the rentals, the long-term rentals bring in, again, this is gross, but you know, it's pretty close, about $4,000 a month. Okay. So your gross income, let's just call it for easy numbers.

We're going to say you're making $70,000 a year. Okay. Let's go with that. And what is your question today? Well, I have no debt. I have no car payments, no credit card payments. I have a have no debt. I have no car payments, no credit card payments. I have a small medical, um, debt. I'm questioning whether I should be to simplify my life,

sell these long-term rentals, sell these houses, which I'm guessing would get me close to a million dollars in hand. I'm concerned about capital gains, because I'm going to make a fortune on these. Yeah, from what you bought it for and what it's worth today. Astronomical. Exactly. Astronomical. And if I do, is there a way to protect so I don't have to, and is that a wise idea, is that a bad idea? Should I just keep

going the way I'm going? Or should I really kind of rethink and simplify and put it into something that earns interest? Well, there's nothing wrong with being, Dave loves real estate and most of his net worth is in real estate. A lot of his income comes from real estate. And I would also say it's wise to be diversified. And so maybe you split the difference. Maybe you don't go, I'm going to liquidate all the real estate and pay the taxes and put it all into the market. Maybe you go, I'm going to sell two of these and put that money into the market so that I'm diversified. And I have some income from the real estate, some income from the stock market, and they can balance each other out in that way. If the real estate market takes a dip or you got a bad renter, well, your investments are still trucking along

the stock market. If the stock market takes a big dip, but real estate spikes, well, we've got a good hedge there. So I like that mentality for now. And as it becomes more of a headache, you can liquidate more real estate. As you get older and you don't want to do landlord stuff, you can get rid of more. Okay. There's no way to avoid capital gains on that scenario, though, right? There's, you know, 1031 exchanges, and you can do that until the cows come home. But at some point, someone's going to have to pay the taxes if this thing sells. And I would be working with a tax pro as well as a financial advisor to develop the best game plan. Because you've built a sizable net worth here and some

real assets. What is your total net worth? I mean, right. For somebody who's never made money in her life on a career, like on a W-2, I'm a millionaire. Good for you. Well, there's a lot of paths to get there. And you did it. And Dave bought a lot of real estate during the crash. And it panned out for him just like it did for you. And he bought, you know, 100x of what you bought, probably. So I don't think there's anything wrong with diversifying. I think it's a smart move. And I would look at the tax implications and see, all right, which one do I want to kind of dip my toe in the water with? Let's sell this property. Here's the taxes I'm going to owe. I'm going to put it into the market. Here's the general rate I might see over that time. And that kind of guarantees that you have

some level of income from real estate and the investments. Okay. And what type of investments do you recommend for something like that? Like, is it like a boss thing? Or I mean, I'm not, here's the thing. I'm really naive about investments, so I really would have to 100% rely on the trustworthiness of a financial person. Yes. Well, we have a whole network of those. If you jump onto RamseySolutions.com and click on Trusted Pros, you can connect with one that we trust to help you with this stuff. And what they're going to recommend is mutual funds.

And so these are giant piles of stocks. We're talking like 200 plus stocks in one of these funds. And that keeps you diversified. What they're not going to do is say, hey, I heard that Tesla is going to go skyrocket after this move they make. We don't recommend that. You want to be diversified among the best top companies out there that we're all rooting for. And even then, they'll diversify you amongst different mutual funds. Maybe there's an aggressive growth one with smaller companies that are more startup. Maybe there's growth in income, the big companies we've all heard of for the last 50 years. And so that will help you sleep better at night and avoid

giant roller coasters in the stock market. Okay. And do I get dividends from that every month? I set it up that way so that it kind of supplements my income or is that something that should be continued to just kind of roll over on itself? I'm more a fan of reinvesting the dividends. You're not really getting any benefit there. What's happening is they're selling off the shares, and then they're going to give you the profits. So instead of sharing the profits now,

I'd rather see those profits reinvested and add to the compound snowball that's happening. Okay, but then that means my monthly income is really going to take a dive if I get rid of... Potentially, depending on when you need the money. And so that's another thing to think about is, are you not going to touch this money for five years or do you need this money next month? And that's the kind of stuff the financial advisor will walk you through and go, here's the plan based on what your expenses are, what your needs are, and your age and your time horizon for retirement. And so that's where, you know, you want a big holistic picture and a third party looking at that's really going to be beneficial for you. Right. Well, I'm in retirement

now, early due to medical reasons. How old are you? And I'm not expecting to security. So I do rely on this income. Yeah. And that might be part of the picture. That's why I would say, let's not go liquidate it all and then go, oh, gosh, I need this income right now. So get connected, RamseySolutions.com. Click on Trusted Pros, and they'll steer you in the right direction. But you've done a great job, even if it was accidental, John. I'll take that. That's still a win.

Still a win. So thank you so much for the call, Carol. More of your calls coming up. This is The Ramsey Show. This is The Ramsey Show. This is The Ramsey Show. Open phones at 888-825-5225. Our question of the day is brought to you by YRefi. YRefi refinances defaulted private student loans and builds a custom loan based on your ability to pay. Now, you guys, private student loans are different than federal student loans like Sallie Mae. So to learn more about this custom refinancing option and a lump sum payoff option you could qualify for after 24 months, go to YRefi.com slash Ramsey.

That's the letter Y, R-E-F-Y.com slash Ramsey. Might not be available in all states. Today's question comes from Victoria in Kansas. Victoria asks, my son is 21 and has been living with his girlfriend since they graduated high school. She's taken over his life and money to the point that he has cut off contact with me three times. She grew up, oh man, already she stepped in it. She grew up with limited means and I was a single parent but did well financially. I showed him how to save money and be frugal. I raised him to earn the things he wanted. Before cutting off contact with me this time,

he said that they have leased brand new matching cars and he now has credit cards to build credit. At this time, if anything were to happen to me, I would not feel comfortable leaving him any of my assets. This girl has driven a wedge between us and I don't want her to have a single red cent of my hard-earned money. I fear he will give her everything. Any advice on how to get him to come home and if he doesn't should i go ahead and remove him from my will oh yeesh all right so um a couple of things here dave's talked about this pretty eloquently and i won't be as eloquent but when your son's 21 and

he moves out, you are now in the influence business, not in the dictation business, in the dictator business. When you have a 16-year-old in your house, you can kind of say, here's what you're going to do, right? When they're 21 and they've moved in with a romantic partner and they're out,

they don't have to do what you say. So Victoria, you worked really hard. Single mom, you busted your butt. You want to make sure they learn some lessons, some real important stuff. It's heartbreaking to watch your son living a life that you worked so hard for him to not live. I get it. It's heartbreaking. You have some hard choices to make. So A, you got to grieve it. You had this picture of how it was all going to work out. He was going to marry someone who's amazing. Y'all are going to be close. That picture is not reality

right now. Number two, I say this with all due respect, your best bet is to become someone who is likable. And what I mean by that is if every time you're with him, you're lecturing him. If every time you call him or talk to him, he knows you hate his girlfriend and you want to make sure he, nobody wants to be around that person. If he knows, yeah, I know where my mom stands on these issues. We don't share values, but my mom loves me. And I feel, whew, after being around my mom,

then you've got a better chance at influencing. And that's not, being likable doesn't mean I'm going to sign up for everything he's interested in. I'm not going to say, oh, sure, to all of his crazy ideas. But he knows I love him and I'm not going to lecture him every time. I'm going to hug him.

So that's number two. Number three, here's a hard thing, man. If you don't want to give him your money, don't give him your money. If he is living a life and is expressing his life with values you don't agree with, then don't give him your money. Don't not give him his money because you hate his girlfriend, right? That's a weird, I guess here, his girlfriend is going to spend it doing dumb things. And I get that, but I think victorious

is worth having a conversation. And if I'm a parent as I would start it I have divided us up over issues and I'm sorry you know how I feel about moving with your girlfriend you know how I feel about leasing cars you know that you're my son and I love you to the end of time I've got some I've got some pretty hard and fast rules

around my money and I'm making my will before I just leave it all to you you got to know i can't i can't i feel like i'm enabling these behavior if i give you this money you gotta have that hard conversation don't leave it to the executive of your will to have the hard conversation for you that conversation is gonna break it to him 30 years from now yeah you die you get nothing you get nothing because you moved with your girlfriend you're 21 like don't do that have the hard have the courage to have the hard conversation. You're the parent.

But this is about influence now. This is about love and connection. It's not about, I'm going to tell him, because he's 21, he's out. He's no longer living by your rules and in your home. And that's so hard for a parent, George. You and I both have young kids. I can't imagine that. You know what I mean?

It's tough. And the other thing is, I hope this is a season. I mean, season i mean he's 21 you know at 18 when you're dating a girl it's very different than at 25 or 35 when your prefrontal cortex is fully developed yeah you know what i knew at 21 i knew everything i knew everything and uh there's that old that great i'll screw it up that old great mark twain quote when my dad was 14 he was the dumbest man who ever lived and when i talked to him again when i was 21 i was stunned at how much my dad had learned in seven years right like like that's true at 21 you're a moron so here's the thing the chances of this relationship not working out strong to quite strong and if you have burned the

bridge he knows you are not a safe place for him to come home to not that you're gonna agree with everything you're not a safe place for him to come home to. Not that you're going to agree with everything. You're not a safe place for him to come home to. He won't. He'll go somewhere else. He'll go into the arms of some other goofball, or he'll run to a house full of knucklehead men that, you know, whatever.

Let him know, come hell or high water, you're my son and I love you. Always, and you can always come home. She can't come with you. I don't like her. You can always come home. I'm reminded of the prodigal son. I can't help but think about that parable.

And there was no caveats where he went, well, if you lease a car, you're not coming back here, son. Don't even think about it. There'll be no feast for you. I'll meet you in the street because I'm so excited to see you. Exactly. And so obviously the analogy breaks down pretty quickly here. But I still think there's an element of that just open-handed love and connection. Don't make it about the financial matters.

Make it about the love and the relationship. Because if you make it transactional and go, well, you're only going to get this in the will if you don't lease a car, the relationship's over. Right. Because you've made it transactional. I will exert my power over you even after I'm dead. Well, then, cool. Keep your money. I'm going to move on with my life.

And if I sign a piece of paper that says, I get X, Y, Z when you pass away. Well, our relationship is largely over. That's what it's based on. If it is, I'm your mom till the end of time. And hey, I can't, you know me well enough. I can't put money in that account if that's how you're choosing to live. You know that. I know that. And that's a different conversation there. Thanks for the question. All right. Let's get to a call here from Chris down the road in Nashville. What's going on, Chris? So my question is, can I retire? And my net worth just exceeded $4 million. So I've got $826,000 to pay for property.

The rest of this is mutual funds. I've got $995,000 in Roth, $1.6 million in pre-tax, and $610,000 just in regular investment, mutual funds. That's outside of retirement. You've been busting your butt for a long time, Chris. Yeah, brother. You're what we call rich. I've been working at this company for going on 38 years. Wow. And how old are you?

I'm 61. Okay, so you can access these funds. George is not even 38 years old, Chris. Yeah, that's pretty wild. Before I was born, you were working hard. I started here when I was 24 in 1987. I'm proud of you. So your question is, can I retire at 61? Sounds like you're ready to. I've been here a long time. Yeah. What's next? The question is, what are you retiring to? I don't know. I don't know that. Are you single?

No, I'm married. My wife is 54. She works full time. What'd she have to say about this? She wants me to retire. She wants me to. It sounds like she could retire along with you if she wanted to. You guys got a big pile of cash. Well, you got to have the insurance.

Well, here's the deal. If you just crunch the numbers on paper, we could go, all right, we have the insurance. Well, here's the deal. If you just crunch the numbers on paper, we could go, all right, we could cover it. We're self-insured. Yes, it's going to add a monthly expense. Here's what healthcare will be. What does the next 30 years look like? These investment accounts, they've been producing on average, you know, 8% a year, 9%, 10% a year. Here's what that means if we retired. We could pull this much to cover our expenses. Have you crunched all those numbers? Yeah, yeah. I mean, I think I can do it. But, you know, it's just hard to pull that trigger because, you know, I would stop all my investments

and, you know, start pulling money instead of putting money in. Here's the hard, here's way harder than that. What do you do for a living? I'm an IT guy. Okay. That's the problem. Chris, you're wealthy beyond most people's imagination. You're a multi, multimillionaire with a paid-off house, so you've

captured the risk side of this equation. Okay? Your identity has been, I'm an IT guy at this place for four decades. Yes, sir. George's question to you is really important. Who are you going to be the Monday after you retire? That's the question you need to ask.

And that's a question you and your wife need to do together. But it's an identity question. Who am I going to become? And I would really recommend you not quit to do nothing. Quit to go do a new thing. I'm going to go work at Chick-fil new thing. I'm going to go work at Chick-fil-A. I'm going to go do a thing even for six months while I get my feet under me. But you got to have something you get up and go to every day and not just do nothing. But it's about

identity. You got the money, brother. Yeah. Financially, you got my green light, but we just got to figure out the rest. But man, that's a big step. You've done really well. I'm proud of you, man. This is the Ramsey Show. You know, one of the first things I discovered working in the financial world is how absolutely devastating it is when the breadwinner of a family dies and there's too little life insurance or none at all. Grieving families are suddenly left behind scrambling to pay bills and trying to make ends meet. I also discovered that there are a lot of rip-offs in the life insurance world, like that whole life crap posing as an investment opportunity.

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or for a more personal touch, give them a call at 800-356-4282. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. John, I'm on social media a lot. I know you're less so, but I like to watch all the funny videos that people send me, that I come across, and one of them makes fun of us, and I like a good razzing. One of them? All of them make fun of us.

A lot of them make fun of a lot of them make fun and i don't know why the algorithm says show this guy ramsay show spoofs and gags but i like it i think the social media algorithm knows who is the most insecure oh so they show him to ken coleman oh oh it was me all right all right didn't i didn't pick up what you're putting down there well one of these videos is from one of my favorite online comedian content creator guys, and his name is Trey Kennedy. Have you heard of him? I have. He's hilarious.

He did a video spoofing Dave sitting in this seat, and I want to show it to you. Let's do it. All right. Here we go, America. We got Trey from Edmond, Oklahoma. How you doing, Trey? Hi, Mr. Ramsey. How are you?

Better than I deserve. What's up? So I'm kind of debating dropping out of college. Gosh, Trey. Well, I got to hear the story about how you befriended a few leprechauns because apparently you found a pot of gold. Dropping out to do what? To be a content creator. Social media influencer. I don't know if you've seen my vines.

Dads be like, it's kind of going viral. You know what dads be like, Trey? Dads be like providing for their family. Dads be like saving and investing debt free. I don't know. Maybe I could try to do a comedy tour. You know what? You are funny, Trey.

Maybe you should be. Because this is hilarious. Everyone in the studio laughed at him. Brilliant. Brilliant work. And lucky enough for us. Man, that felt really close to home. Yeah, it was a little too real.

I'm glad Dave's not in the seat. He may have taken offense, but I think he would have had a good laugh. And I think Dave likes it because we've got Trey coming on the Live Like No One Else cruise to do comedy. Excellent. And I think he's on the line if we've got him. Trey, are you with us? Yes. What are you doing? Oh my gosh. This is amazing.

Good to be here. Thanks, guys. How we doing? We're doing great. Good to have you. Do you have any financial questions for us? Sell the truck, Trey. Sell the truck, Trey. As a comedian, I obviously was very financially driven to do this.

That's always a good idea. What did your parents think when you were getting into comedy? Was it, hey, you're going to go to college and get a real job, or were they cool with you exploring this? Well, you know, I come from a great family and a man who really taught me finances, and I got a finance degree. So it was like, it was ingrained in me. So the whole time, I was never threatening to drop out of college or anything.

I was doing the videos and finishing my degree. So they were fine with it. Wow. As long as I was doing that. And I'm glad you're using your finance degree to join us to do comedy on the Live Like No One Else cruise. That's perfect. Let me be clear. My finest degree,

I got it, but I don't know how well I got it. Comedy's a better fit for me. Trey, from the outside, be honest with us. We kind of make it pretty easy, don't we? You know what's funny? You try everything as a

comedian. I was like, you know, all my friends, everyone I know, they know you guys. I have so many friends who have gone through all this curriculum. And I was like, let's spoof Ramsey. I feel like we teed the ball up for you. A little bit. A little bit. But, hey, I'm with it, okay?

I'm a frugal guy. Yeah, did you kind of grow up Ramsey? Like, did you know, did you go through financial peace? What was your first sort of interaction with this Ramsey fella? My dad is, like, the ultra-conservative, frugal guy. So he's so frugal, him and Ramsey would be buddies. He's like, I already know the Ramseys. Like, he got the book, like, used from Goodwill in the library.

He's like, I'm not going to pay for it. That's incredible. He ingrained it in me, and I've had a bunch of friends go through it. Especially where I come from, Oklahoma Church. I mean, you guys dominate. You got people in envelopes everywhere. I went to lunch

once with a buddy, and he pulled a PBJ out of his pocket. I was like, this is going too far. Not even in a baggie. Yeah, right. Hey, Trey, on behalf of everybody, I just want to say in a moment when

I think the debate ended the other night with if you vote this way, the world ends. If you vote this way, the world super ends. Can I just say thank you on behalf of humanity for bringing joy and laughter into, like, just bringing some sort of joy to our world in a desperate, and I don't want to get all existential, but thank you.

Like, on behalf of a guy who's just two little kids, like, thank you for bringing laughter into the world. We need it, man. Thanks, man. That's really nice. Yeah, I mean, if something big's happening, it's just, you know, I thank you for saying nice words, but to me, man. That's really nice. Yeah, I mean, if something big's happening, it's just, you know, thank you for saying nice words, but to me, the debate for me is not about the future of the country.

It's just like, yes, I can make some content. Perfect. It's like a very selfish show. That's all that's at stake here, just like, all right, how good is this Instagram reel going to do? That's incredible. There it is. I'm grateful, man.

Well, you just wrapped your Grow Up Tour, and you filmed a stand-up special in Salt Lake City back in April. What can we expect from you on the Live Like No One Else cruise packed with Ramsey fans? Man, I am so excited. You know what? Comedians everywhere know when you get booked for a gig, nine times out of ten, you're like,

you just got to go do what you got to do. But I am pumped to come hang with you all and get on the of ten, you're like, you just got to go do what you got to do, but I am pumped to come hang with y'all and get on the cruise. Were you surprised? You're like, wait, I made fun of them like seven times. They want me to, okay, all right. Yeah, you know, it's funny. I've been making all these Travis and Taylor bits and stuff with Ramsey. You know, you wonder, like, will Ramsey, Dave even see this?

And then if so, he's either going to love me or hate me. You can hear him laughing from his office upstairs. Good, good. By the way, many people will be drinking the Kool-Aid on this cruise, but we've got a special Kool-Aid IV drip for those of us in the green room, so we'll get you hooked up. Okay, perfect. That's amazing.

Yeah, I wrapped the tour, so I'm about to have a kid here, so I'm off the road for a couple months. Whoa. I'm going to get back on the road. Yeah, two under two. Well, our gift, we're going to send you Ramsey Plus for one year. We're going to send you FPU. Good, good.

So, yeah, if you've been seeing me this past year and you're coming on a cruise, it's going to be all new material, all new fun stuff. I'm sure I'll have something up my sleeve specific to the Ramsey crowd. Yes, please, please make fun of them. They are just dying for it. All the rice and bean jokes, all the frugality, all the Dave cars. And make fun of Dave especially, and we'll make sure he's in the room for it. Absolutely. Hey, man, we wish in the room for it. Absolutely.

Hey, man, we wish you the best. Congratulations. Hope everything goes well with your new kid, and thank you for bringing some light and levity into a world that desperately needs it, man. We're grateful. Can't wait to hang out this spring. Really grateful for the honor of doing the cruise,

so I can't wait. You bet. We are pumped. All right, Trey Kennedy, go follow him. Join the three million on Instagram who have chosen to do so. Trey Kennedy, live like no one else, Cruz. He'll be doing comedy with some other comedians as well. March 22nd through the 29th, RamseySolutions.com slash Cruz is the place to go.

We've got some cabins left before it sells out. All right, John, I got to make, this is my contractually obligated announcement that this hour, we've got some hot calls coming up. You excited about it? Hot calls? Well, the board is filled up. We got Nicholas, we got Jasper, we got Dan, San Antonio, Charlotte, Alberta. And I got to know before we jump on here, what's the over-under that we get a call about a horse? Well, we've got a call from Texas and a call from Canada, so I think the over-under is a quite strong possibility. Pretty high.

Yeah. All right. Those are two horsey regions. That's not a... Okay. Yeah, that wasn't good. Not a word at all. But we'll get there.

That wasn't good. Well, I don't know if we have time for one more call, do we? Is it a little tight? Producer James says too tight. Okay, let's get to a social question, John. Do you have those with you? I got one here. This one's from Kian on Twitter. Kian? Recently sold my house. We don't know.

Recently sold my house. I got a new home under construction. Do I take the profit from the recent sale, pay down my construction loan with a very low interest rate, or do I take that cash and invest it into the market? You know, when people sell a house, they feel like they just won the lottery, and they forget that that money should be used to put into the next home. It's like people who total a car, and they get a check, and they think they won something. Yeah. Like, no, you have to go get another car.

Yes. You need a car. Yes. And you don't need a much nicer car with a bigger loan. So absolutely keen, if you will, I would take the profit from the sale and pay down your mortgage, the construction loan. That's the goal.

The goal is to become totally debt-free, mortgage and everything. It's not only about anything. That's it. So we'll do our investing separately. Let's not try to combine the two and take home money and put it into the market. That puts this hour of The Ramsey

Show in the books. Thank you to Dr. John Deloney. Thanks to Trey Kennedy for joining us at the end of that hour. That was fun. And to all the folks in the booth keeping the show afloat, we'll be back with you before you know it, America. This is The Ramsey Show. From Ramsey Network, this is The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by bestselling author Dr. John Bologna. Give us a call at 888-825-5225, and we'll help you take the right next step for your life and your money. Nicholas is going to kick us off in the great city of San Antonio, Texas.

What is going on, Nicholas? Hey, guys. How are you doing? Doing well. Cool, cool. How can we help? I had a question about a horse. Oh, no. There's no way. Really?

Please tell me you're joking. No, no, I don't. Oh, man. I was about to earn $100. George bet me off air. That was going to be awesome. Next caller, please. No, my real question is about trying to get into a house. My wife and I make about $57,000 a year household income, so pretty small income for the two of us, but we need to move somewhere. We have to get close to healthcare so we can get another AV on the way. We have about $28,000 in debt. That's about $18,000 for a car loan and $10,000 for student loans. And my wife has great credit because she's been paying our student loans for a while.

I have no credit. I've never had any debt, never had any utility bills in my name. So I've got no credit at all. And we're trying to figure out how can we afford a new place to live with our current situation and how do we get to where we need to go with some speed. What's the issue with renting? Well, I don't know that we could, I don't know what we would get with how much I can afford to put in each month. We were looking more towards putting that money toward equity than towards... Well, here's the deal. If you can't afford rent, you definitely can't afford to be a homeowner.

And so that's the worry here is it's not apples to apples. If you go, well, we could get a mortgage for $1,500 and live in a shack that needs to be renovated versus rent. Rent is the most you'll pay. And that mortgage is just the beginning when you factor in maintenance, repairs, HOA, the PMI, all the things that you might encounter. So I would tell you right now, you're not in a place to buy a home. I want to get you in a place to buy a home. And what that looks like is knocking out the $28,000 in debt, getting our income up, getting an emergency fund, and then saving up a down payment and stepping into home ownership. So how long would that take?

That's, I don't know. Currently, we're on track to pay off our debts, but only at the minimum payments. But we can step it up. I mean, minimum payments, you're talking a 20-year payoff plan. I'm talking like a two-year payoff plan. What would it take to pay off $28,000 in less than two years? We could do it. If we keep saving the way we do and... How much are we saving a month?

Well, right now we have a poor sampling. We're going through a house claim and paying for repairs for a house that we're living in now. So you're cash-flowing repairs? I'm sorry? Are you cash-flowing the repairs? I'm not sure what that means. I'm sorry. Are you paying cash for this, or are you going into debt for the repairs? We're paying cash.

Okay, good. So my thing is, making $57,000, it's going to be hard to repairs? We're paying cash. Okay, good. So my thing is making 57, it's going to be hard to pay off 28. And so that's where I think we need to get the income up. What are you two doing for work? I work in insurance. My wife stays at home. We have a baby. Okay. So it's just your income? Yeah, just mine. Okay. So what does it look like to get your income up in the insurance world if you choose to stay there? I'm on track for that. I'm on my way to some promotions. I finished some training in the next few months. I hope to bring with it some more pay. I don't know how much. In order for me to make something substantially more,

I would just need a few more years at my job. But I have no clear timeline as to when that might happen. Can you do extra jobs on the side when you're not doing insurance? Oh, gosh, I don't see how. It's a pretty demanding job. How many hours are you working? Well, it's not just the hours of the job. It's the hours spent doing training and learning on the side. So it's already quite a bit invested other than the job itself. Okay. Yeah. Well, here's the spark notes of the call here. You're asking about improving credit buying a house.

I would not worry about improving your credit right now. I would worry about getting rid of this debt and getting a foundation with an emergency fund. That is the best thing you can do. And the credit score is not a great scoreboard for how we're doing financially. Because you can have a great credit score and still be in a place where you'll be a broke homeowner. And I'd rather see you step into this next chapter as a homeowner making good money, and if she wants to stay at home, that's great, but we just need to figure out how to get all the things we want

in a way that doesn't destroy our life. The tricky part for us, though, is that we can't have another baby until we move, and we really want another baby. I know, but Nicholas, here's what you're not hearing you don't have a home problem you have a math problem you get what I'm saying you don't make enough money that's me being a jerk they're saying it that way but you don't make enough money and George and I would not love you as just a just a just fellow dad we're both dads if we said hey the best thing

for your family is for y'all to artificially inflate your value to a bank which is all a a all credit score is did you know if I gave you 10 million dollars in cash right now your

credit score would still be zero has nothing to do with how much money you have it has to do with how well you've been a boyfriend to debt. That's it. And so what George is telling you, what I'm telling you is your house needs to have more money, which means if we really want to be a one income family, you, my brother, have to say, I got to make more money somehow. If y'all really want to have a house so you can have a second kid,

then your wife's going to have to say, okay, I need to be a part of bringing in extra dollars and cents. And we have this dream of being a homeowner and being a stay-at-home mom. Okay, cool. Then the lion's share, the bulk or all of the money earning comes from you. But there's a math problem here. And just because there's all these different exit routes into all of these awful traps that George writes about in his book, it doesn't mean that it's safe or it's smart or it's wise. And brother, listen to me. I've been in a home with a toddler and another baby on the way that I can't afford because I owed a hundred grand in student loans. And I'm telling you right now, I was a nightmare.

I couldn't breathe, dude. And I became an anxious mess. And so when we sold our house and we moved into a tiny, tiny, tiny little dorm apartment, I actually had more peace. I was a better dad there. Okay? And so I get how you feel trapped, but it's a math problem

that I want you and your wife to tackle it's not a credit problem it's not a finding the right bank problem it's not is a math problem dude and it's a math plus values problem actually want to be a stay-at-home mom want to have more than one kid want to have every kid have his own room cool then we got to make that much money you get what I'm saying? Yeah. Yeah, I was printing some numbers and even with the math that I was doing the only thing that we could have tried to pay for with a mortgage was the absolute cheapest house

we could find. That's right. Which is gonna be a nightmare house that you're gonna have to sell because you're going, we can't afford the 100,000 repairs that this thing needs to make it livable. Don't do it, man.

Don't do it. It's gonna be a vortex needs to make it livable. Don't do it, man. Don't do it. It's going to be a vortex of pain, my friend. Please don't do this. This is The Ramsey Show. There's a time in your life and at the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage just somebody else's. Plus, rent means instability in

your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on. Churchill Mortgage. Churchill is Ramsey trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent, manageable part of your monthly budget. Plus, when your home is paid off, that was your largest expense. Now it's extra money in your pocket and an asset towards turning you into a Baby Steps millionaire. So get started on the American dream of home ownership today at churchillmortgage.com. That's churchhillmortgage.com.

This is a paid advertisement. NMLS ID 1591. NMLS consumeraccess.org. Equal housing lender. 1749 Mallory Lane, Suite 100. RentWin, Tennessee 37027. This is The Ramsey Show. It's a show where we talk about you to you, about your life and your money. Give us a call at 888-825-5225. I'm George Campbell, joined by Dr. John Deloney. And next up, we've got Kim in Chicago. What's happening, Kim? Hi there. I am married. And before we got married, I knew my husband had some student loans.

And then after we got married, I found out about some credit card debt he had as well. And I listened to the show occasionally. And I offered to pay off his debt. Like I know I married him and it's debt and it's my debt. I offered to pay that off for him. He declined. And I'm just saying like, he would feel guilty if he, if I did that and he would feel like he owed me the money, but if he just pays like the minimum payment towards it and he doesn't have that guilty feeling of owing like the credit card companies. And in general, like he's the spender and I'm the saver. And so like he pays the minimum payments and then spends the rest. So my question two parts is like any tips on how to talk to him about that? Cause like we, it doesn't like really end well when we try to talk about it. Um, and then also like, okay, assuming like his habits don't change and like, I love him and I'm not trying to change him. Like what can my strategy be with, with my income and my savings separate from that? I,

first of all, I, I think ego has destroyed more marriages and more business relationships. It's just so stupid. And so on behalf of all of us, I'm sorry that your husband's precious little ego, it's going to make me feel bad, is more important that he nurture and care for than your marriage. I'm sorry. Here's the deal. That's going to show up everywhere. It's not just going to be in your finances. And so I think the credit card thing is a proxy war right now for, because it's going to come up with how many kids and the size of your house. And I want to buy, I got to get this new

car because I don't want to be the guy in the because you'll make me feel bad and so it's just gonna be ego ego ego ego i think the conversation you'll have to have is um are you going to put our marriage ahead of your ego because if you're not then you're gonna you are right and already looking down the road and being like, I'm going to have to do some things to protect myself because this is going to go south. I think you're right to do that.

And what you're talking about early on is, it was, we call it financial infidelity, but was he hiding money from you or hiding debt? Just like I had seen his credit score and i knew he had student loans and the amount on that but yeah after when we applied for our home loan i became like seeing his credit report like next to mine i was like wait what's this and then it came out what was it was he buying um he said it was over like you know years know, years, like, traveling or things.

He's a spender. Like, he just has, he buys stuff. Did he spend any of this money while you were married? No, this, I mean, I found out about five months after we were married. So he has not gotten any further into credit card debt since you've been married. Can you tell me that with full certainty? I do. I do not know that with full certainty. I know that I,

I know his current amount of debt is 21,000, I believe. And that's less than it was last summer when I saw. And his grand plan is to make minimum payments and spend the rest. That makes him feel better like man i i wish i hadn't done this for so long y'all are headed in like y'all need to cut this off at the pass you guys are in different worlds with your financial values and where you want to go

he doesn't want to go anywhere and he's in a tiny prison that he's created and you are willing to post bail and he's saying no i'm gonna do my time in here i did what i did i should do the time and you're giving him a get out of jail free card as his wife but it's not even that it's a hey i want to build something new together and this thing's holding us back can i i'm holding these uh i'm holding these bolt cutters. Can I just cut this chain? And he's like, well, that would make me feel bad because I have muscles. And so I'd rather just be attached to this chain.

Where else does this ego show up in your marriage? I don't know. I mean, we have a pretty good marriage, I think. This is one of the... I didn't really prepare for that. Here's the big red flag. You are already preparing to create your own world inside of your marriage. And this is how it happens.

It happens with, she's always so mean to me. I'm just going to come home about 30 or 45 minutes later. I don't know how to, every time I'm around our newborn, I'm just, it's a failure factory. I'm going to go do, I'm going to go stay at work. It's when people inside of a marriage start creating their own little mini universes that you end up just by degrees, a thousand miles apart from each other. And so the fact that you're asking this question, that's why, A, I just have a personal, I cannot stand male egos that would rather blow up a marriage than just say, I'm sorry, I screwed this up. Thank you for being a person who was responsible for it. Let's move on. I hate that with all my guts because it's so stupid. So sick

of egos. Okay. So that's my bias. That's my drama I'm bringing to this call. Okay, not on you. But the bigger picture is I'm hearing you love this guy, want to solve this guy. You're just like a practical problem solver. And you're already starting to create, okay, what kind of spaceship do I need to build inside of this bigger ship so that I can stay safe? And I want you to hear me say that's a big red flag. The bigger conversation is, hey, we've gotten off on the wrong foot. We've been married for a few months. We have a great marriage. We love each other. We were great friends, right?

But already I feel us starting to separate. We got to be on the same page when it comes to money. We got to be on the same page about telling the truth to each other. Can we recommit? I'm in if you're in, do you get what i'm saying there and that is a different conversation than than the proxy war which is hey i'll just pay the minimums but i want to pay it off that ends up being a uh a look look over here look over here to the actual issue which is um my ego is more like massaging my ego is more like massaging. My ego is more important than us getting on the same page. Do you get that? Yeah. Okay.

And so I, I think it comes down with you sitting down and having a direct hard conversation, but using the word I to lead that conversation, which is, I don't feel like we've gotten off on the right foot. I feel like we're already building two separate worlds in the same house. And I don't want to do that. I love you too much. We get along too well. Our friendship is too strong for this.

Can we control alt delete? What do you mean? Dude, you brought in credit cards to this marriage I didn't even know about. And then you won't even let me take care of it because you want to have my money and your money. I want to have our money because I want to have our kids. I want to have our house. I want to have our marriage. And so let's just control it, delete it. Can we just, can we put that to bed? And if he won't have that conversation, you don't need to go have him to go see a marriage counselor. Cause you're, I just, you're just setting the stage for a long-term challenge here. Yeah. And that's, I mean, yeah, I've tried to have that conversation, but yeah, it just ended with like, well, it's

my money, so I'll, like, I saved it, so I spent it on something else. You know, like I kind of said. How long is this going to be my money and my problem? When is it going to be we and our? Yeah. Hey, this is our money. We pay the bills together. We set goals together.

We build wealth together. It's our home. It's our life. It's our kids. you see what i'm saying would he go through financial peace university if we sent it to you would he actually watch all nine lessons with you have the hard conversations and not just cower down and go oh it's making me feel bad you think he would do it okay i i have hope he would we're gonna send it to you that to me is it's this is the hail mary of like if he'll if he're going to send it to you. That to me is, this is the Hail Mary of like, if he's

willing to watch this, I think we can do the convincing. And Dave is a great salesman to get you fired up about your own mistakes and go, hey, let's move forward from this, but let's not make minimum payments and pay 22% APR on our mistake and never pay this off and never make progress. Because that's going to drag you down too. And you're a part of this marriage last time I checked. So hang on the line, Kim. We're going to send you Financial Peace University. Watch all nine lessons, have the hard conversation, get on a plan together, and maybe you can pull him out of this mire that he's created for himself. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down.

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open phones at 888-825-5225. You know, John, for several years here at Ramsey, I've been trying to uncover and expose a lot of the money traps that are out there. We did a podcast called Borrowed Future that we then turned into a documentary, Uncovering the Student Loan Crisis. I did a podcast called The Fine Print where I exposed all kinds of money traps out there. And so anytime we get a big one, I feel like we need to let the people know out there what's going on, what they need to know, and, of course, to stay away from this because I don't want them to be the next victim. And so we were made aware of this one, and ProPublica just broke this story, and it's about this company called Exeter Finance.

They're one of the largest auto lenders in the nation, and they specialize in high-interest loans to people with histories of not paying bills or defaulting on debt so this is subprime lending subprime lending their company is designed to overcharge people who struggle with um with being able to pay their bills and they wrap it up in this bow we're here to help you yeah life raft the other banks don't love you as much as we do right and other banks are saying hey hey you guys can't afford this um you need to find other alternatives and they're like no no we'll take you we'll take your business and we're gonna we're gonna bleed you dry and there's a lot of scummy companies lenders out there this one might take the cake they might take scum of the year for what they're doing to people here um and we're going to get into some of the details.

But this company has more than 500,000 active loans, and they have a partnership agreement with CarMax, which is the country's largest used car retailer. And they act like they are the provider of second chances. Literally, on their website, it says, we're here to help, except their practices often do the opposite. ProPublica says, when the company allows a borrower to skip payments, so they go, hey, I can't make the payment. They go, oh, we'll give you an extension. Go ahead and just skip that one. And they go, oh, my gosh, really? Thank you.

That's what's happening. Well, what happens is it typically adds thousands of dollars in new interest charges to the customer's debt. And dozens of customers told ProPublica that Exeter did not tell them about the added costs. So they'll say, absolutely, here's an extension, skip the payment, end sentence. They don't say, and by the way, this is going to add $2,400 as a balloon payment at the end of the loan. I think that's the biggest catch is the, as I read through this, it's not even, hey, you know what? My mom's got cancer. I got a kid who's very, very sick.

Hey, don't worry about it? My mom's got cancer. I got a kid who's very, very sick. Hey, don't worry about it. Don't worry about it. And there are companies that will do that, right? That will say, we're going to note this. We're going to add two months to the back end of your loan. So we said it was going to be done in May of 2027. It's going to be done in July of 2027. We understand, right? That does happen. And they say, no, no, that's super cool. We're just going to charge you thousands of dollars in interest and fees for that. And by the way, you're going to owe us as your last payment. And that's where this thing got really gross to me is you make your payment. They think you're a hero. You just saved my life. Thank God I can get my kid the

medicine they need. I can go to see my mom in the hospital. Thank you. And then you get all the way you pay, make the payment, make the payment, make the payment for the next two years, three years. And then your very last payment. Hey, you owe us $6,000. Remember that time four years ago that you had a crisis? You owe us $2,700 right now. And guess what happens when you're already broke and financially destitute? You can't pay, which means they repo the car.

So they win. And that's the whole setup, which is why this is gross, is, hey, we're going to charge somebody who we know can't make the payment. We're going to be graceful the whole way, and you're going to keep paying in payments. You're going to pay us two or three or four times the value of the car. By the way, it's already a loan at 25% interest in a lot of these cases. And then we're going to take the car at the end. So we don't even have to have a great loan because we're going to get the car, and then we're going to resell it at our we're here to help lot right oh it's disgusting i i it it's it's just preying on hurting people and it it it's it breaks my heart is what it does it's just that i can't i can't fathom that this

is how the people in the world operate and i'm glad there's folks like pro public out there trying to expose this filth so they try to make their final payment. They're faced with this huge surprise bill. They often can't afford to pay. Exeter then repos the car, sends the bill to a debt collector, and in some cases, the company makes more money on loans that default than on ones in which borrowers pay on time.

Is that because they sell the car at the end? They're making money everywhere from the person with the fees from the repo, and at first blush, their portfolio looks dire. Majority of its loans, more than 200,000 of them, are at least three payments behind schedule, a degree of delinquency that is roughly twice that of any other subprime lender in the data. That's crazy. Many companies would be preparing to count those loans as losses, send them to a collection agency and repo the cars,

but Exeter has turned what would have otherwise been a financial crisis into a profit center. The article says each time the company grants an extension, it resets the clock and reclassifies the loan as being, quote, on schedule. And ProPublica found that they've done this as many as 12 times over the course of a 72-month loan. So borrowers continue to make payments in hopes of catching up, and the records show that many customers paid the equivalent of the full loan or more only to see their cars repoed so they took out a fifteen thousand dollar loan they had paid fifteen thousand and it's still the car is taken away oh and even better a collection company then comes back after you for the repo payment like for i mean after the repo payment for the balloon keeping you in a cycle so you're just poverty for eternity yeah and they've this company exeter has always specialized in the subprime market.

But in the late 2010s, the company specifically decided, we're going to go after customers with really poor credit more aggressively than we have in the past. So it accepted borrowers with even lower credit scores. This is reminding me of the subprime housing crisis, John. They lent them way more money, as much as 50 grand per loan, and gave them longer to repay it. And some agreed to schedule stretching longer than six years, making the loans more costly. So let me just say, these people did sign on the dotted line. Yes, they were desperate. Yes, they deserve better. They didn't deserve to

be preyed upon, but they knew, hey, all right, I'll take on this seven-year loan at 25% interest. And here's an example. There was a disabled veteran, Don, who was living in Louisiana. In 2015, Exeter lent him $15,600 to buy a seven-year-old GMC Envoy. Over the next seven years, the company granted him 12 extensions by thousand dollars remember they lent him fifteen six he had paid twenty nine thousand eight hundred nineteen more than his loan contract outlined and the company told him he still owed more than nine thousand on top of that and so when he couldn't pay the balloon payment they repo the envoy after he can't make the balloon payment and now the collections company is pursuing him for the 5,800 bucks he still owes. Oh my goodness. I can't wrap my brain around this. And John, they've got a calculator on this article that I believe everyone should go check out. I want to make sure we say this.

This show, I think, is we have beaten the drum from day one about personal responsibility. You got to take ownership, right? And the one thing that I have always applauded this, all of us behind closed doors on the show is we do also understand, which is why the show exists. There are people that don't know, right? I spent 20 years working in universities. There were students that I met, thousands and thousands of them. They did not understand there was even an option

of not going to school with student loans because it's what their guidance counselors, their parents, their grandparents, their friends, their church members, that's the ecosystem they lived in. So they signed the dotted line. And so I do want to highlight, yes, people have personal responsibility

and there is an entire swath of this country that does not know you can get a car without a loan like that has never even entered into their into their mind and that's what the show's about right it's time to be there's other ways to do this and so there is personal responsibility and there's just flat-out predators right that go looking for people who don't understand or in a pinch have sick kids who have just lost their job and they go, yeah, yeah, yeah, we'll help you. Come, come, come here. Come behind the building. We'll help you. No one else is willing to, we stepped in. That's right. And we will destroy your life. We over depreciating asset, right? And here's what this really is. This is car loan deferment. We're talking about extensions.

It's the same exact thing. There is no difference between a deferment and an extension. You're just pushing one or more loan payments to a later date. And so the reason this is working this way, John, most car loans use a daily simple interest calculation. So you make a car payment once per month, and you owe a little bit of that per interest. And over time, more of it goes toward the principal versus the interest. Well, in these situations, they were basically making interest only payments and they were not touching the principal, which means their loan balance was not moving at all. And they had no idea because the agents weren't clear. The customer service reps were incentivized to get them off the phone quick. Don't give them all the information. And so you guys go check out this full article. It was eye-opening to read. It was heartbreaking. And I believe everyone should go read it. So we're going to link this ProPublica article in the show notes in the description wherever you're watching. They've got a calculator on that site to see just how bad these fees can be, and I pray that anyone you know stays away from this. This is the new payday lender, and this could happen to your cousin who just walked over to the CarMax next door.

So share this, spread the word, and let's take these scummy companies down. This is The Ramsey Show. What does the future hold for business? Ask nine experts and you'll get 10 different answers. Economic growth or a recession? Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball. That's why more than 40,000 businesses have future-proofed themselves with NetSuite by Oracle, the number one cloud enterprise resource planning system. Ramsey Solutions uses NetSuite and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite, and you should too. Whether your company's earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest

opportunities. With one unified business management suite, there's only one source of truth for the visibility and control you need to make quick decisions. NetSuite's real-time insights and forecasting help you see into the future with actionable data. And when you're closing the books in days, not weeks, you can spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's Guide to AI and Machine Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Welcome back to the Ramsey Show. I'm George Campbell, joined by my good friend, Dr. John Deloney.

Give us a call at 888-825-5225, and we will be about the business of helping you out with your life and your money. All right, John, let's get to the phones. Dan joins us up next in Alberta, Canada. Dan, how can we help today? Hey, thanks for taking my call. Sure. My question is, how would you recommend preparing for a large salary increase in two years? And should we change our debt strategy now with this in mind? We've about $120,000 in debt with a combined income of $250,000. We're making progress on the debt once we made a plan and start tacking it together, though we do know there is more wiggle room.

But my wife, she's going to finish residency in about two years. That's where most of the debt came from. And we can expect her income to go up dramatically afterwards. We also have our first baby coming soon, so that's causing extra stress because we know we won't have much family support with childcare. And we go back and forth about balancing intensity

versus comfort with our current plan. I'm also kind of considering a career change, but it would involve a pay cut, so I'm thinking it's better to just tough it out for the next two years. And we just aren't sure what is best in this situation and would appreciate your advice. Wow. Okay, we've got a lot going on all at once, don't we? I live out on some acreage outside of Nashville, Tennessee, and I've got chickens.

Actually, we just got rid of our last chickens. There was a hawk that took most of it anyway, but the number of times that I had 10 chickens and I went out to get 10 eggs and there was only six was every single day. And I got a ringside seat to that old, don't count your chickens before they hatch. And it's real easy to be at home and to say hey when this happens in two years and i just imagine the number of people in 2018 that were making plans for in two years and the number of people who are making plans in um 2021 for in two years do you know what I'm saying? Yeah. I would stay as steady as a drumbeat, as a metronome, and just keep doing

what you're doing. And if it all works out exactly the way y'all want it, amazing. That'd be so great. And you'll be able to just take this extra income and just start mowing down what you got left. But the alternative is there's a big swing in X,

Y, and Z. The Canadian government hasn't been super, super stable in the last few years, right? So who knows two years from now? I just would hate for y'all to make some plan based on some future salary that may or may not happen. It probably will.

It probably will. She's going to med school, right? She's finishing up med school? Yeah, two years and then she's a surgeon. Exactly. We think so. But also, it wouldn't surprise me if there was some sort of legislation passed to cap the insane

salaries of medical professionals in Canada. That wouldn't surprise me one bit. And let's do it at the average of the average working class because we're all the same. And that wouldn't surprise me one bit and let's let's do it at the average of the average working class because we're all the same and that wouldn't surprise me one bit to see that bill try to get pushed through and you either will it happen probably not but man let's I my recommendation George is just keep keep hammering away at this thing what do you think well my you said we have a current plan that we're sort of comfortable with and then there's the like gazelle intense

napalm option so walk me through what that looks like. Like, at your current pace, when will you pay off this $120K? A year and a half, maybe two years at most. Okay. Depending on how the, like, mat leave goes. And what's timeline for baby? Early next year. Okay.

So usually what we say when it comes to babies is you're in stork mode, which means this is your permission to pause the baby steps and stack up cash. Now, you guys making a crazy amount of money,

I would guess that you can stack up enough cash to make sure you get through this mom and baby come home safe and we can push play on the baby steps again and apply that money to the debt. Is that the case?

Yeah. So how much money do you have in savings right now? Outside of like retirement stuff that I had from before, I think she has maybe $3,000 and then I have about like $3,000. Most of the stuff is going to the debt. Okay. So what would it look like to say, hey, let's pause, we're going to stack up, you know, 10, 15 grand, and then we're going to hit play after that. How long would that take you? Yeah. Making 250? Yeah. I mean, to the end of the year, maybe, or, you know, probably right when the baby comes. And so that's what, that would, I would do that knowing that, hey, when the baby's here, mom's home,

let's just push play. And that kind of, it couches both. Number one, it keeps your intensity up, but it also gives you the comfort of, okay, we're not going to bring a baby into this world with a thousand bucks in the bank, not knowing what could happen. Yeah. And I think right now it's, there's a lot of emotions that fly around when a baby's on the way.

And I don't want that to cloud your long-term plan of we're getting out of this debt. I also want you to find a new job. What are you thinking about doing? I don't know, really. This is like a 10-year plan we're on with her med school and residency, and I kind of fell into this thing. It's obviously going very well salary-wise,

but I work from home, not really enjoying that too much and need to try to find something more in person. So it would be like a, it would definitely be a big cut. I love the idea. Well, a, I wouldn't, I wouldn't necessarily, um, I wouldn't start there. It might end up with a cut, but I wouldn't let that be your first entry into the potential new workforce. But man, you got 24 months. Imagine a 24 month, I can get retrained. I can take some evening classes. Both me and my wife finished grad school holding babies on a boppy. Both of us did. So you can start right now imagining a future that the plane lands in 24 months. Your wife gets her full-time gig as a surgeon, you can start making a jillion dollars,

and then you are able to launch right into this thing you've been prepping for. I love some sort of, so I love grad school, man, because it's got a deadline on it. You kind of know, and I feel like you can set that up for yourself right now. I got 24 months to dream, to plan, to have coffee with people, to ask ideas, to get new ideas, to like all that. I think you got plenty of time to do that, but I would be really intentional about it. Yeah. Chin up, my man. You got a baby on the way. That's exciting.

Your wife's about to finish and get into residency and be a surgeon, her dream. And so I think there's a lot going on and it feels overwhelming right now. But if you just parse it out, okay, are we doing good over here? We've got this goal. Yes, we got the emergency fund. All right. How's she doing school? I can focus on looking at what my job is going to entail over the next five years. I think that'll give you some peace versus feeling it all at once. And you and I, I want to call this out. You and I both have been through this, George. Our wives come in and say, guess what?

We're pregnant. And I don't know if you're like me, but I immediately went to hooray and oh no, and this is amazing. And how are we going to do this? What's going to happen? And there becomes this flurry of, I need to go do something,

but there's not a lot to be done in the first x y and then you start right and you're largely unhelpful i have a bad habit of creating problems that that i then need to solve in moments when there's big life changes on the horizon yeah and it's hard to have the discipline to stay in peace i did this recently i'm about to hit a milestone on my YouTube show. I can't do anything to push it. So I just created a spreadsheet so every day I can get up and black out a tab. But it gives me a thing that I did.

It gets it out of your brain. So I can go on to the next thing. So don't do something with that nervous energy that you're going to regret two years from now. It's just stay in the course and stay in the course and stay in the course. That's very smart. Well, hey, before we end this hour, let me let everyone know we've got a free webinar that I'll be leading on Monday, September 16th, 1 p.m. Eastern, 12 p.m. Central Time

on how to break the paycheck-to-paycheck cycle in 90 days, how to find margin in your budget even if you're out of debt. Hey, how do I find $1,000 that's sitting around? We're going to show you some really unique and practical ways to create that margin, to save more, to spend less, to find more room, to attack your financial goals. So join us. I'll be walking you through it using EveryDollar on Monday, September 16th. Here's how to sign up. Go to everydollar.com slash webinar, W-E-B-I-N-A-R, everydollar.com slash webinar. Save your spot. It's completely free. It's virtual.

You can join. You can watch the replay later. But if you don't sign up, we can't send you the replay. Everydollar.com slash webinar this Monday, 1 p.m. Eastern time. It's going to be a good time. Can't wait. All right. This hour is about to end if you're watching on YouTube or podcast.

So join us on the Ramsey Network app to finish the show for free. Full episodes over there. If you're on radio, stay right where yousey Network app to finish the show for free. Full episodes over there. If you're on radio, stay right where you are. We've got more show coming up. If you want to get the app, go to the App Store or Google Play and search Ramsey Network. Or of course, you can click the link in the show notes to check it out there. You don't want to miss what's coming up next. We got Jasper, Vivian, Julie, Hot Calls, and you guys got to go to the app to watch it. Ramsey Network is the place. We'll see you then. From Ramsey Network, this is The Ramsey Show, where we help people build wealth,

do work that they love, and create amazing relationships. I'm George Campbell, joined by Dr. John Deloney, and we're taking your calls at 888-825-5225. Jasper is going to kick us off in Charlotte, North Carolina. Jasper, how can we help you today? Hey, how you guys doing today? Doing great. Good. Hey, so I'll tell a few questions really quickly with where I am in life right now. I'm currently 20 years old out of Charlotte, North Carolina. I have about $20,000 in savings. I have $21,000 in investments. I do have a $23,000 car loan at the moment, but I am currently making at the bare minimum $2,800 per week.

I have six credit cards, two personal loans, three auto loans. All my credit cards are paid off. Both of my personal loans are paid off. And then two of my three auto loans are paid off. Both of my personal loans are paid off. And then two of my three auto loans are paid off as well. And for me, what I'm looking to do is actually buy my first house here going into about February of 2025, and then try my best at at least three houses by 25. I just want to know if I'm taking the right steps to doing that. Who trained you to be the Tasmanian devil of life goals?

You love using TikTok, don't you? This is crazy. Why three houses by 25? I've been by myself since 16. And then I was homeless. I just stopped. I ended being homeless at 18. I was homeless from 16 to 18.

And then from 18 and on, I got into sales. And right now, last year I made $112,000. This year I'm on track for $150,000, and then next year I should be touching the $200,000 a year range. Can I ask you a hard question? Yes, sir. And then what? And then what?

And then you make $250,000? Oh, yeah, 100%. And then you make $300,000? I could have made $300,000 this year. Jasper, you're not getting my point, man. And then what? What is this all going to do for you? I want to be set to where I'm at the point where I'm at 30 years old

and I want to work, not that I have to work. And then what? Start building a family so I can help my brothers out. Okay. What do you sell? I do solar. I run the number one integrated solar company in the nation. I run the Charlotte and Raleigh offices.

What happens in about four months after an election if one of the candidates decides to cut subsidies to solar? The way it's looking right now with the bills that have been passed in North and South Carolina, solar is going to be around until at least 2032. How old are you? I'm 20. Yeah. I'm twice your age.

Trying to guess what a local and state and federal government is going to do four years from now is about like trying to find a unicorn in a forest. It just, it's impossible. What I would tell you, what I, here's what I'm telling you. Tell you two things. I'm so fricking proud of you.

I would hug you if you're sitting right here. I spent my whole career working with 18 to 21 year olds. Many of them who were lost because they had tough, tough upbringings like you did and you are rare air, my brother. I'm proud of you. Thank you. Do you hear that?

You're like, yeah, let's do something. No, I'm being dead serious. I'm proud of you. Appreciate it, boss. But I don't give a crap about how much money you're making. I could care less. Because if you were a teacher right now, if give a crap about how much money you're making. Could care less. Because if you were a teacher right now, if you'd gotten your teaching certificate and you're making $42,000 at a low-income school,

I'd hug you and be proud of you then too. Okay? So it has to do with the fact that you've turned things around and you're starting to be intentional. But you've got to listen to me and George, brother. You've got to slow down. You're counting on things happening in the future, and I can guarantee you it won't map out that way okay and so it's just about now that you've turned the you've turned the boat around don't just throw the hammer down you still got

to be smart about rocks and islands and big waves and all that stuff coming because they are coming and George and I are just older than you man that we just know that they're going to come um I want you to be smart so that when you're 30, dude, you're as safe as can be, man. Your brothers are safe. Everybody's safe. Well, it doesn't matter. You've got a magical dollar amount. Who cares, bro? It's so much bigger than that. Go for it, George. Well, I'm just thinking about the fact that it's crazy that you were homeless 24 months ago, and here you are today. And you assimilated to the American consumer culture very quickly, and you collected all of this debt in a very short amount of time. What was the urgency to go into all this debt, and I want

to make all this money? What was the drive behind that? Was it just the scarcity mindset of I had nothing, and now I want it all? Well, I only have $23,000 in debt. And that's from my car that I currently have right now. I will definitely say I made an impulsive decision last December. Yeah, but you had the personal loans and you had the six credit cards. You have three cars, don't you? Three auto loans and two of them are paid off. Yeah.

What are you running after? So what I was going after was from 16 my dad always told me don't do credit cards and the research that i did when i was younger was that credit cards can help you if you use them the right way so my goal was to get as much credit history and build my credit as much as possible so what i did was when i was 18 i took a ten thousand dollar um personal loan out, and I paid three times the monthly payments for it, and I got it paid off within, I think it was 13 months,

to be able to boost my credit about 60-plus points. And I did the exact same thing after that. Hey, Jasper, what's a credit score? What is it? What my credit score is right now? No, no, no, no. I don't care what your number is. What is a credit score? A credit score is what I? No, no, no, no. I don't care what your number is. What is a credit score? A credit score is what...

I was in research for this, which I definitely regret kind of doing a few things with the... No, no, no. Hey, bro, what is a credit score? For me, what I know it is, is to help lenders and banks trust you with lending money in the future. Okay, it is a dating report on past girlfriends,

except girlfriends are debt. It has zero to do with your wealth. I could give you $10 million today and your credit score would stay exactly the same. It's a game. Your dad was right. And unfortunately, you've burned some of that money that you've made in the last 12 months on interest payments, making bankers and auto lenders rich. All while adding stress and risk to your life. Yeah, and you carried the risk for them. And that's what we tell you. It's like your old man was right on this one.

He may be wrong on a ton of other stuff, but he was right on this one, right? It's about exhale. You need one car. You need one house. You need one place to live, right? You need one place where you shop. It's just about, okay, man, I'm getting safe now. I don't think we need to become a real estate mogul in the next five years. Here's what I would do, Jasper, only give you very practical

advice. I would pay off your car loan and I would never go into debt again and I would cut up the credit cards. And once you do that and pay it in full and pay it fast, you can do that real soon. You got $21,000 invested, $20K in savings. Beyond that, I would set up an emergency fund of three to six months of expenses. That might be $15,000 or $20,000 for you. Beyond that, I would then invest 15% of my income into retirement. And beyond that, I would begin saving up a down payment for my first home. And I would get that home paid off before I jumped into investment properties. And even then, I would pay saving up a down payment for my first home. And I would get that home paid off before I jumped into investment properties. And even then I would pay for those investment properties in cash. And if you're making what you think you'll be making, all of this is not going to take 20 years, but I also is going to take longer than five. Problem is when you run

real fast, you're going to fall real hard. You're going to trip, man. And we've seen it time and time again from young, hungry guys like you. And I want you to be running for the right reasons and right now I feel like we're just running away from stuff and I want you to slow down and go okay what does a real picture look like not for the next 10 years what does Jasper's life look like and it doesn't all have to happen within five years or else you got more time than you think so just go slow be the tortoise instead of the hare and I'm going to help you with this I'm going to send you my book Breaking Free Free from Broke, that walks you through all of this, including the mythology around credit scores, why you should cut up your cards, and how to build wealth a much more peaceful way.

So hang on the line. Kelly's going to pick up. We'll get you a copy of that book. We're rooting for you, my man. I'm so proud of you for overcoming what you've overcome. That is a feat unto itself. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Camel, joined by Dr. John Deloney. This is The Ramsey Show. Give us a call, 888-825-5225. Well, we launched something new and exciting this week from our friend Jade Warshaw, The Graduate Survival Guide, Five Mistakes You Can't Afford to Make in College.

This is a must-have money book for every teen in your life. And here's the deal. Going to college doesn't have to mean going into debt. You can help them avoid five big money mistakes, student loan debt, credit cards, dumb choices, no plan, and no money. And our friend Jade will walk you through it with some oomph, as she tends to do. So don't wait until graduation. Every day counts. Gift your teen the tools you wish you'd been given. Get the grad survival guide at

ramsaysolutions.com slash store, or you can click the link in the description if you're listening on YouTube or podcast. All right, Vivian is up next in Phoenix. What's happening, Vivian? Hi, how are you? Thank you so much for taking my call. Absolutely. How can John and I help? Well, I would consider my problem a good problem to have, so I'm just looking for some advice. I have a friend who, they own quite a few properties, upwards of 40 and 50 properties, and they asked if my family and I, my husband and my daughter, wanted to live there, and we would take care of the property. We would be responsible for paying the electric, the utilities, but they

own all these homes free and clear. So basically, we would not have to pay a mortgage or anything because we would be taking care of the property. She said that we can live there as long as we want because they use this to diversify their money so that they can have it diversified for tax purposes in real estate. And so we're trying to decide if I should sell my home that we currently own or rent it. Wow. So why the generosity and charity here? Why don't they rent it to someone and make the extra income? Well, so I guess part of the tax rule or whatever is that you can't make any income on it.

So they wouldn't be making any revenue on it. It's to diversify that income they would be making if they were getting paid interest on investments. So they're using it as part of their portfolio to diversify their tax liability. So they have like 40 or 50 of them, so we can pick. Oh, you can pick of any of them. Wow, that's very nice.

I don't have friends. I have John Deloney as my friend. He has not offered that. And I make George pay me back when we go to Arby's together. So these friends are great, man. Wow. Okay. I've never experienced this scenario. So should you sell the house? Is the house owned free and clear or do you have a mortgage? So no, we don't. We have a mortgage. So if I was to sell it, my approximate profit on it would be $250,000, give or take, depending on what we sold it for. After you pay the mortgage, your net profit would be $250,000? Yeah. Okay.

So we wouldn't have any capital gains because our profit would be under $500,000. But if I kept it, like to rent it or whatever, and I decided later that I wanted to sell it, then I'd have capital gains on the money, plus I wouldn't have access to the money because it would be in a house. What happens, let's say, 10 years from now, and they go, hey, you got to move out? I'm not even worried about that. I'm more worried about in two years, one of them has a heart attack, and their kids come in and say, hey, we're taking over the properties. We need you to go.

Right. Well, it actually is the kid of the person that will. It's all family money, I guess. So anyway, so yeah, so that obviously being the conservative one, you know, it's like, okay, if we didn't have our home anymore, then is that going to be an issue? You know, we wouldn't be able to get the interest rate we have right now, which is 2.6. Yeah, but I mean, you would make that back in a year of living rent-free. You know what I mean?

Yeah. Oh, yeah, yeah, yeah. I'm trying to walk through the different paths. Let's say you sold it, you took the 250, and you just invested it, because you don't need the profit, right? Right. And let's say you could make 8% to 10% on that money

in the market. That's great. And you freed up your mortgage payment, which you can now invest as well. That's right. So there's a lot of green ding, ding, ding. That's great. And you freed up your mortgage payment, which you can now invest as well. That's right. So there's a lot of, you know, green ding, ding, ding. That's awesome. I already count that. Let's just say it was 10%. It'd be about $518,000 after 10 years, over a million after 20. You know, so at the most, she said 20 to 24 years. I would, I would not count on that. Yeah.

So the chances of things happening, the chances of somebody getting married and their spouse wants their cut. And so they're going to go to, yeah, well, they're already married. I know, but they get divorced and they want to split that like,

or anything, our whole life. Yeah. My, my two things are this. It's if, if, if it goes less than 20 years now that you've done the calculation and begun to dream you're going to feel like you lost something here and so i want to make sure this is all everybody's clear and in short steps and so

the only way i would get into something like this number one is if i took that 250 grand this is not going to make the most mathematical sense. I recognize this, but I would probably put it in an index fund or even a high yield savings account for two to three years. I want to make sure if I've, if this whole thing goes south real quick before we get our feet under, I can go buy a house, right? The second thing is, is I would not do this without a lease. A formal lease in writing that I'm guaranteed until 2028 or whatever, zero cost, I'm responsible, and I want it to be legally binding. And the only reason George and I have a show is because people have great plans

and everyone signs off on them. Handshake agreements. It all goes to crap. And there will be nobody cheering you on more than me and george in 10 years if you have half a million dollars in high yield savings or you know whatever wherever you got it by then oh sure sure that'd be amazing and what if they come out and say they want to renew the lease every year i think that's being a little i'm doing a little wrench in this spokes here, right? So they say, oh, we'll do it every year.

My wife and I did that. I would do it. I would do it. We sold our house. We moved into a residence hall that had a one-year re-up. Now, the only catch to that was I was over housing at the time, and so I was the one signing off on the re-up. But that's what it was, and I was willing to make that trade.

But I also had money in the bank in case we need to get out so John do you think I should still sell the home or keep it and rent it it depends on if you want to be a landlord I think people get caught up in the money they're going to make I really don't then sell your house that's the question most people don't ask I want to have a I want to get a duplex I'm gonna live in live in the front. Do you want to have roommates? No. Okay, well, that's your real answer. And even living rent-free, there's still risk. You've got the mortgage.

You're in charge of all the repairs and property taxes going up, insurance going up. So there's still some headache there, and we love real estate around here, but I wouldn't do it just because of the income potential. I assume you guys make good money as a couple? $180. All right. And what does your spouse think about this? He wants to sell it. Sell it.

So he's excited about getting out of this house and having free rent. Yeah. Yeah, well, it was our first home. We built it, and we've been in it 24 years, so it's more of an emotional attachment, whereas if we have it and someone destroys it as a renter, which happens, you know, that we would be heartbroken. It's more of a, cut the ties, we're doing, we're just going for it, and if we have to get another house at some point, then we will. That's the big caveat. I would do this, it sounds awesome, but I would be ready to buy a house in cash one day when this thing falls apart for whatever reason it does maybe this didn't fall apart it just runs out of gas right right right

and i would also i would over this is just me and i'm i'm i tend to barbell i do things that are obnoxiously risky and i do things that are comically conservative um but i would have extra money in a high yield savings account for when the air conditioner blows up. And you're like, hey, y'all's air conditioner broke up, blew up. And then they're like, yeah, you're living there free. You fix it. And there's that. Well, part of it is in 10 years, they come in, they paint,

they give all new appliances and do all of that. Sure. And in 10 years, that is two and a half presidents from now. Think of it that way. That's right. Who knows what the world will look like? Yeah, but we do have money in the bank, and we would have, obviously, the proceeds from it.

Yeah, I would not see this as like a blank check, richy rich scenario. I would still be on the path of let's stay debt free, let's be investing for the future, let's not screw this up, and let's ride this pony train while we can. Yeah. All of the above. Wow, what a strange situation. That's ride this pony train while we can. Yeah. All of the above. Wow. What a strange situation. That's one of your favorite songs. Come on, ride this train. Thank you for noticing, John. No one ever calls that out. You play it all the time when we're

working out. That's three 90s references in like three seconds. During this break. Richie Rich. Yeah, we try hard, James. During the break, I'm going to find better friends who are willing to give me free rent. So we'll be right back. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Julie's up next in Tulsa, Oklahoma. Julie, how can we help today? Yes. Hi. Thank you for taking my call. Sure. So I have been a stay at home mother and wife for the past 18 years, and now I'm going through a divorce going on three years now. He obviously was a breadwinner, made a lot of money. He was very abusive.

I have four boys. We found ourselves locking him out of one room, whichever room we could get to every night just to be safe type of abuse um yeah so I had to find a way to make money so I do a dash now so I get up at three o'clock every morning just to start dashing at five o'clock in the morning and then I push pause on the dash to come back to the house and take my kids to school. And then I go back to dashing and then I'll pause on the dash to pick them up from school and then take them home and then go back to dashing until however late until I need to make, you know, enough to pay the bills

or on food stamps or on sooner care until I just found out we're not on sooner care because I make too much. But what I make is just enough of the bills. And I need a different career path, and I don't know where to start. I don't have family. I don't have friends. And I'm racking my head up against a wall. Yeah. Can I tell you, this isn't going to pay your water bill,

but you're one of the most amazing people I've talked to in a long time. It's, it's a high honor that I get to talk to you. So thank you. Thank you. Um, am I, is there not a settlement coming at some point? Are you, are you doing this in the interim? You said he's a high net worth.

Does he just have fancy lawyers that are going to block you out of everything? Oh yeah. Yeah. You have no idea well he our sons come home with bruises and i've called the police i've showed the pictures i've recorded our son's phone calls when he's begging you know saying dad's doing this and he says what dad's doing to him and the dal never has never once responded to any of my emails or the very clear handprint on our son's bottom. He's like, oh, that's not a handprint.

He could have fallen down. The judge or the... The GAL. The child advocate. The guardian at Leiden. Yeah. Yeah. Have you appealed to get a new guardian?

I can't afford this. I can barely afford the lawyer that I have. Where are you now? You're in Tulsa? Yeah. I want you to reach out to... Stay on the line here because there's assistance programs

for this kind of situation and there's also local, um, university, um, advocacy and, um, clinics that do just this type of thing. There's attorneys in Oklahoma and that light up like a Christmas tree when they get to take care of a mom and four kids who are being abused. Okay. Okay. They exist. All right. Um, I don't know't know i don't know i don't have names like i do in texas but i i know they exist they can't wait to take that kind of nonsense on okay well my son's been through the the advocacy programs where they take him in and interview him and my son clearly he has a speaking impediment but you can understand him very easily. He's not that bad. And he very clearly says and shows him with his hands, you know,

Dad hits me like this, and still nothing has happened. I'm so sorry. Yeah, I would reach out. We can talk about that off air. When it comes to your money money there's two situations here if there is eventually going to be a marriage settlement from the divorce

and this is just I have to just keep the lights on until a lump sum shows up or child support shows up that's one thing if this is the rest of your life that's another you get what I'm saying? so is there a light at the rest of your life, that's another. Do you get what I'm saying? Yeah.

So is there a light at the end of this tunnel? In terms of ending the divorce, there's a settlement at the end of the divorce. They keep moving the mediation. Okay. And it's been three years? When was it filed? In 2021, I believe.

Okay. And have you been through mediation? We went to one, but the guardian really wanted to make it 50-50 custody, and with all the abuse, I was not doing that. I was not going to settle with that. Okay. And so you rejected the plea agreement, and y'all moved on to another one? They're going do another one right but i can't afford to go to trial he would leave me dry and then ultimately get custody okay yeah i there's got there's some legal aid program in oklahoma i'm confident of it and my oh that's my hope let's let me say that that's my hope that's my hope and i know women like you in this situation fall through the cracks all over the place and I'm sorry I'm just sick to my stomach over it

how old are your kids well I was married first for seven years and those are my first three children the one that's in the custody case right now he's only seven he's about to be eight and the others are they older grown gone where are they at

the older two are grown and gone and the the other one is 14, and he's at home. Do you have any relationship with the older boys? Oh, yeah. All of them have a great relationship. They're amazing kids. They all know how to cook. They're great kids. Seriously, they're like from a book.

They're great kids. But are they, as young adults, are they in a place where you can move in with them for a season? No, no. My oldest one, he actually removed him from the home because he was sexually abused by my first husband and his grandfather. Okay. And he started doing it to my children, so I removed him from the home. Okay, well, then he's not a great young man. Yeah, I'm not talking about him.

I'm talking about the other two. Okay, yeah. Then, obviously, no. Obviously, no, we talking about him. I'm talking about the other two. Okay, yeah. Then obviously no. Obviously, no, we're not going to put our kids in an abusive situation. Yeah, that's why I don't have family. Okay. All right. We're just seeing are there options where the older kids could help in any way?

No. Okay. So let's say this is all on Julie. We don't know when alimony child support is going to happen, if ever. So what can Julie do? Okay. Let's look at those options, okay? Okay. How much are you making door dashing per month? About $3,000, give or take. And what are your monthly expenses? Everything you have to cover? I've got $940 in rent. I pay electric, which I just had to move into this apartment, and it was like $250.

It was ridiculously electric. It was crazy. I get food stamps, so that helps immensely. And then I also use a community food bank, which helps a lot. But to be honest, there's a bunch of little kids at this low-income house that we help aid, too, because they come knocking on our door, and they're like, we're hungry. So I'm not going to tell them, no, they're a little bitty kid. But you need to take care of your own family first.

Yeah, well, that's why I go to the food bank, too. We have... Have you tried applying for a job? Yeah, but the thing is, they don't pay as much as what I'm making with DoorDash, and then I can't just stop and go pick up my kids. But this isn't sustainable. You can't be working 14 hours a day waking up at 3 a.m. Right, but nothing is going to pay me as much.

Why do you believe that? Because nothing around here pays me what I need to. I have looked into it, and I've looked at stay-at-home jobs too, but they want me to stay home with these block hours, and I don't have any way to get my son to and from school. I know, but Julie, you've boxed yourself into a corner. Something has to give. I don't qualify for any high-paying jobs.

I disagree with that. Or maybe right this second you don't, but you work for six months for somebody, and you're able to establish work history, and you sit down and explain your situation, and they see how tenacious and how smart and how driven you are, and somebody gives you a shot. But if I work somewhere for six months to establish that,

within that six months, how do I pay the bills if I'm not making enough money? I just disagree that the highest paying job in Tulsa, Oklahoma for you is DoorDash. I'm not technically in Tulsa. I'm in the surrounding area. Okay. I would do a little bit of homework. It's not going to be easy, but I don't think this is sustainable, and it's the reason you're calling in. And so we're trying, we want to help you. Hang on the line. We're going to get you some resources. Number one is a free financial coaching session. It's going to be on us and someone from our team will be digging in with you into your finances, what resources are available to you, including some of those aid programs. So hang on the line. We'll get you connected. And John can help off air as well with some of these resources and let the team know where to start looking. Oh, Julie, I'm so sorry. You have been through a lot and you got a ways to go. But we are praying America's cheering you on

and we hope that you call back with a wonderful update. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Campbell, joined by Dr. John Deloney. Our scripture of the day, Proverbs 22, verse 3. The prudent see danger and take refuge, but the simple keep going and pay the penalty. I believe we call that a stupid tax now. A. A. Latimer said, a budget is a mathematical confirmation of your suspicions. I like that.

That'll hit. Thanks, A.A., for that one. All right. Derek is on the lineup next in Destin, Florida. How can we help you today, Derek? Hey, guys. Thanks so much for taking my call. So we are currently on Baby Step three, my family and I. We're working on building up our six month emergency fund, but we're kind of just broadcasting and kind of

looking into the future. Into baby step four, we were able to get out of a lot of debt last year, following the principles of just hammering down debt. So now we're pretty much committed to not borrowing whatsoever. Good. So we're currently in an apartment with, I have a baby boy and my wife and I. So we, we definitely want to get into a house,

but we're looking to get into a house in cash. So we're just wondering how you guys would structure Baby Step 4 for us, since we're currently in an apartment, we don't have a mortgage, but we would like to get that house in cash versus getting a mortgage on. Okay. So what you're talking about is Baby Step 3B, and that's where we say, all right, we have the emergency fund, and now we're going to pause quickly to save up for a down payment before we begin investing. Is that what you're telling me? How quickly can you save up and pay cash for a house that you actually want in Destin, Florida? So I'm definitely an entrepreneur, so I have kind of the ability to make more income. So we're kind of setting a goal right now

for it to be done in five years by 2030. And that'd be us saving about $5,000 a month would get us to about $300,000, which could get us a good starter home. Okay. Well, here's the problem that I foresee with this. I know the Destin, Florida area. I've got family over there on 30A. What if the property values double in those five years and now your goalposts move drastically? And that's fair. Yeah, so we're actually, we're not quite Destin. We're over in kind of a smaller town called Shreveport over here.

Okay. So values, they're definitely going up though, no doubt about it. But what would it take? Let's say you did it a different way. Let me pitch you a different option where you said, hey, we've got an emergency fund. We want to get a down payment saved. We're going to save up for a year. You can save five grand a month, you said? Yeah, I think we could save five grand a month. Okay. So that's 120K over two years. Yeah. What if you had $120,000 down on that house two years from now. And then we did a 15-year fixed rate mortgage,

and the payment was no more than a quarter of our take-home pay. And then we aggressively pay down that mortgage over the next few years. Yeah. That way you're locking in the home value, the price, the payment, and then you're going to knock it out quickly. I would rather you do that versus five years from now go, oh my gosh, our plans changed, market shifted, income, whatever. So I would rather just, not that I want you to be in debt at all, but I think five years is a long time horizon. If you said, hey, we're going to do this in two years and pay cash for a house, I'd jump on it. But I'd rather see you get on the path, get in baby set four, five, six, and knock out the mortgage quickly. And that's what my wife and I did.

We put 45% down on our first reasonable townhome. We knocked it out in 26 months, and that was it. Okay. John, what are your thoughts on this? I know John hates debt as much as I do. I think I'm worse. But five years is a long time. Yeah, I think I'm worse. It just makes me crazy. Yeah. Here's as I do. I think I'm five years is a long time. Yeah. I think I'm worse. It just makes

me crazy. Um, I, here's what I know. I know the N equals one experiment. That is my life. I'm a better dad and a better husband. When I go to bed in a house that I have no mortgage on, just that's just is right. And I've got experiences with both sides of that equation. And I just find myself being a little crazier watching the news a little more clicking on links about do you know what's like i click on i just do i just do and i find myself going to bed early uh and just falling asleep i don't owe anybody anything it's just it's just it just i can't put a price tag on that so here's what i would do derrick i I would rent a bigger place. If that's a

two bedroom apartment, that's fine, but there's no need to go. Got a baby boy. We need a 4,000 square foot house now. So people just get crazy when it comes to that. Yeah. We're currently in a two bedroom apartment and we have plenty of space right now for us. So you could stay there for two years. Yeah. We could stay here, you know stay there for two years well we could yeah we could stay here um you know for for a few years and really save up um so yeah i'm kind of i'm kind of uh with john a little bit in terms of the debt because we just had such a kind of a conviction on that of just not being in debt and it's just one of those things that you know practically it feels like yeah taking the mortgage on makes a lot more sense but it's just one of those things that, you know, practically it feels like, yeah, taking the mortgage on makes a lot more sense, but it's just one of those things where

I'm like, I'd almost rather just be renting. Um, and even if we're missing that opportunity a little bit, um, so I do think we're going to, we're going to try to save up, uh, cash still. That's kind of where, where I'm leaning toward. You know, but I guess with that, you know, George, you make a great point with the values going up. And another thing that I'm not trying to miss out on with that is the compounding interest ability with investments too. So we're trying to say, okay. But you end up trying to do everything all at once

okay right so it's like you're you're like the dude who's like i want to keep lifting so i can get big muscles but i also want to cut calories so i can get thin john that was a private conversation i know george has no idea what we were just talking about just send me and you um but it's like yeah you you gotta you you gotta and also i want to run a marathon too because i like i'm gonna get it at some point your body collapses because you can't do all of it at the same time right right and by the way here's here's the secret to living in an apartment with it with a kid you have to put down your screens and go outside because you literally don't have the space inside and here there's so many

amazing downstream benefits. Yeah. Right? You have to go on a walk. You have to go on a hike. You have to go pick up pine cones and bottle caps. You have to because your place where you sleep is too small, and by the way, your kids end up with some amazing memories doing that. It's amazing.

It's awesome. It's good. That's a good word. You do you, Tyler. The 100% down plan is awesome. Just make sure that you're moving from intense to intentionality fairly quickly. And I'll say this, George. I've made peace with the 50% down, right?

I made peace with that. I made peace with the 25. I mean, I'm not maniacal, but if I do put down X amount, I do want to know I've got a pretty aggressive plan to get it. Oh, yeah, exactly. And I just don't want them to look up five years from now and be like, they told me not to invest and they told me to save up and now I can't even afford a house and I didn't invest. I just, I feel that. I feel that rage coming on five years from now for our friend. All right, let's try to take a quick one from Tyler. Let's make it real quick. Sorry, we're up against the clock. How can we help? Hey, thanks for taking my call. Sure. Um, so I have three pieces of debt that I want to tackle.

Um, and I have about 9k in savings. So I have a student loan car and credit card debt. Um, the credit card is about 4k, a student loan 26, and the car is 22. So I know with what I have in savings, I can pay off the credit card, but I'm not sure if I should save that and put it in an emergency fund or kind of sprinkle that into the other... You are in an emergency, my friend.

You are in a pile of debt, and so I would apply it to the credit card. So baby step one, $1, dollar emergency fund. Anything over your thousand bucks should be going toward debt. Does that scare you? A little bit. Yeah. Good. You're on the right path. The problem is we get too comfortable in the little piles of poo we made with our debt over here and debt over here. And we got plans to pay it off. And when I went down to a thousand bucks, it freaked me out. And I went, I want to get out of this debt so bad so I can get to that emergency fund. And I found really all the paranoia of all the emergencies that could happen was largely paranoia. And within 18 months, I was debt free.

What's your income? Currently, I make about 76K a year. Amazing. But in two weeks, my income will go up to 110. Woo! That's some debt payoff money right there, my friend. Follow the steps. Don't look back. 1,000 bucks. Let's move on to baby step two. Debt snowball. Small is the largest balance. Ignore the interest rate. Throw all the margin you can at the smallest one one and call us back when you're debt free my friend that is incredible that puts this hour of the ramsey show in the books thank you to dr john maloney all the folks in the booth keeping the show afloat and you america until next time save intentionally spend wisely and give

generously sleep.