The Ramsey Show - App - Living In A Camper Won't Solve Your Money Problems (Hour 3)

Episode Date: July 21, 2023

Ken Coleman & George Kamel answer your questions and discuss:  Why you should never take out a 401(k) loan as a down payment for a house, from the blog: What Is a 401(k) Loan? And How Does It Work? "Should I feel guilty for not wanting to combine finances with my future wife?"  from the blog: How to Combine Finances as Newlyweds How to budget on irregular income, from the blog: How to Budget With an Irregular Income The core of your life, work, relationships, and finances comes down to your mindset, Why buying a camper to live in full time is a bad option to solving your money problems, "Should I file bankruptcy to get rid of $200,000 of debt?" from the blog: 6 Steps to Avoid Bankruptcy How to make a career change without going into debt, from the blog: How to Make a Career Change Midlife Support Our Sponsor: Neighborly Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Here's an EveryDollar deal just for our listeners: get a 14-day free trial PLUS $15 off your first year of premium. Click the link below and start budgeting today! www.everydollar.com/george Want a plan for your money? Find out where to start: https://bit.ly/3cEP4n6 Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Interested in advertising on The Ramsey Show? https://ter.li/s64ye3 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pods Moving and Storage Studio, this is The Ramsey Show, where we help you win in your life, specifically your money, your work, and your relationships. 888-825-5225 is the phone number to jump in. 888-825-5225. I'm Ken Coleman. George Campbell is my colleague and co-host, and he is with me this hour as we take your calls.

Brendan is up first in New York City, New York. Brendan, how can we help? Good afternoon, gentlemen. How are you? Doing well. How are you, sir? I'm good. So I'm recently married, and my in-laws, who are two of the best people I've ever met in my entire life, maybe besides my wife, have a financial advisor they really like and they've been very successful with.

Now, we had a conversation with that financial advisor, and it was very basic, but of course, being newlyweds, we have a timeline to buy a house. He recommended maxing out our 401ks to use that as some sort of tax advantage way to pull out that money to eventually use that as a down payment for a house. Now, I know Dave Ramsey doesn't like when we touch our 401k for anything besides maybe absolute emergencies. So in your opinion, is that something you would advise to do or something which would steer clear of in all case? I would run far, far away. And bless your in-laws, but I am not using their financial advisor for advice anymore. Yeah, okay. That's what I thought too. And of course, I mean,

the financial advisor is incentivized for you to invest with them. So there's already kind of like a, I wouldn't take my down payment advice from this guy. Now, Brenda, do you understand why George is saying run from this? Why this is a bad idea? I mean, I understand our 401ks can be some of the most lucrative ways we can build wealth in the long term, how it's a good route to becoming,

you know, as Dave Ramsey says, a millionaire. I understand the implications of if we don't repay that 401k loan in a certain time period. Yes. The horrible, horrible. That's the part. We agree that it's a great way to invest for the future. We don't like using it as a loan. It has all kinds of negative implications, and it puts unnecessary pressure on you. Why that route versus another route? It's just what he recommended. He said there was a good tax advantage way of doing that.

But at least from my understanding... Unplugging the growth of that money while paying yourself back with interest into the loan while putting yourself at risk is just unwise. And so if that's how desperate you are to get into a house, we need to pause and go, what is causing all this? Why can't we wait another six months to a year to just save up from our future income? Do you guys have any debt?

We have no debt. And you have a fully funded emergency fund? Fully funded. Great. So what is the down payment goal and how far are we from it? We need about maybe $200,000 to $250,000. My wife and I are both young, 22 and 24. We make a combined $200,000 a little bit over every single year. Okay. And do you have anything saved for the down payment yet? Maybe about $100,000.

Great. So let's just look at the facts here. You're $150,000 away. How quickly can you save up another $150,000 with no debt, making $200,000 plus? Maybe another two years. I was going to say 18 months max. Yeah, okay. You can live off $100,000 and put $100 put 100 away and do that for a year and a half,

and you'll get to your goal. And you're 22 and 24. That's impressive. You guys are doing so well to be where you are in a high cost of living area. When everyone says you have to go into debt and you guys are doing this the right way, you'll be a year and a half older with $250,000 down, putting you in a great financial position. And so I would just pause and go, all right, we're 18 months away.

Let's not do stupid with zeros on the end by doing this 401k loan tax advantage scheme this financial advisor told us about. Okay. Makes sense. There you go, my friend. Thank you for the call. Let's go to Jake now in Newark, New Jersey. Jake, how can we help? Hey, thank you so much for taking the call. Let's go to Jake now in Newark, New Jersey. Jake, how can we help? Hey, thank you so much for taking my call. Sure. So I guess a little bit about my story. So I've been with a girl for about a year, and I'm planning on getting engaged in the near future.

And we've had a conversation about combining finances when we're together. Currently, I'm 25. I make about three times what she makes, and she has about $22,000 outstanding student loan debt. And I guess my question is, I guess it's just uncomfortable because I'm not sure, should I be feeling guilty for not having a problem combining finances, paying with the grocery bill and rent and stuff like that, but having some hesitation when it comes to the remainder of the student loan debt?

Should you feel guilty for not wanting to do this when you get married? In other words, should you feel guilty because you don't want to pay off her student loans as her new husband? Yeah, yeah, that's correct. So let's say there's about 10,000 outstanding by the time we get married. I mean, again, I make three times what she makes. What do you make? I make $92,000, and she makes $30,000. Okay. I don't think the word is guilt.

I don't think you should feel guilt. I think that you should get over it, though, because you are going to come together. And when people aren't on the same page on their finances, Jake, it is a very difficult proposition to have a healthy and sustained long marriage. It's just very difficult. And so you've already acknowledged that you guys are having the conversation about combining finances. That's the best thing for your relationship. The numbers bear that out. That's not my opinion. And I think at this point, I get why you have this distaste for it. But once you guys walk down the aisle, it is our money. And so that means it is our debt and you didn't bring it. You make more

than her. None of those things need to be factors. The reality is, this is now our situation and combined, we can knock it out quickly and move forward in life. And you can't be walking around. And again, you're not saying this in a negative way, but you're calling us and asking for advice. But you don't need to be thinking a lot about how many more times money you make than her. That just needs to start to get out of your mind. Yeah, this is more on you than it is on her. And so I don't want you stepping in. Because truthfully, right now, the way you said all this, I'm like, this guy's not ready for marriage.

That's what I'm a little nervous about. Because what happens when she's like, hey, I want to add some clothing line item to the budget and you're like whoa not with my money i make three times as much and so i don't want that that's going to cause a lot of resentment and friction in the marriage and so you got to go into this going hey i know this isn't ideal but man we make great money now combined income of 130 grand we're going to knock out this debt really fast. We're going to have an emergency fund. We're going to be able to get to our dreams. And the amount of wealth you're able to build with dual income is amazing. And so look at this like an awesome blessing. There's an amazing person that you love dearly who's bringing all

this extra income to the marriage and that we can use to build wealth. So that's how I look at it. Yeah, I agree with a lot of what you guys are saying. I think also part of the, it's not necessarily hesitation. I guess it's a little uncomfortable, is that whatever the remainder is, for me, I wouldn't want to say, say hey let's continue your payment plan of you know whether it's 600 a month or whatever it is and keep accruing the interest i would want to get that out yeah just knock it out knock it out knock it out as soon as you're married have that money saved knock it out and move on with your new life new chapter very exciting stuff you're good man

jake if you're in you need to be all in, my friend. Thanks for the call. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. George Campbell joins me this hour. The phone number is 888-825-5225. Let's go to Sky, who is on the line in New Orleans. George, you ever been to New Orleans? Yes.

I used to live in Mobile, so we'd go there for little weekend trips. Beautiful area. I got distracted. I was about ready to take Sky, but I needed guys. He wants a beignet now. I do. You know what I was thinking?

A little jambalaya and a beignet for dessert. That's what I was thinking. That'll hit. I got distracted. Back to Sky, though. Thanks for the patience, Sky. How can we help? Hi.

Thanks so much for taking my call. You bet. What's up? I'm having a budgeting issue. I have an irregular income and I make an average about $3,000 a month, but sometimes, like some weeks I'll make $500, some weeks I'll make $1,000 and it's throwing my budget off like each month. I'm trying to like, I'm just confused. What kind of work do you do? It's actually a job that I'm trying to leave. It's just a gig job.

Okay. What kind of gig is it? It's food delivery. Okay. And you're saying, hey, sometimes it's great. The business is great. I'm getting a lot of gigs and some months it's tough cookies out there. Yeah. Are you actively looking for something specific? Yes. I'm actually looking for a graphic design job. Okay, good. Do you have the experience and education or skillset currently? Yes. Yes. I have a marketing degree. Okay. Great. Now, just because I'm interrupting here because I want George to kind of give you advice on both of these. What range of income do you think that you will be in when you land one

of those jobs? I'm hoping probably like anywhere from like, well, I guess around 50 or 60K. Okay. And what pace are you on right now? And I know you're not going to stay in this food from like, well, I guess around 50 or 60K. Okay, great. Okay. And what pace are you on right now? If you stayed, and I know you're not going to stay in this food delivery job, but what are you, what would you average that out to right now in that range? Wait, I didn't understand the question. I know.

I didn't ask it very well. If you look at what you're doing from a gig standpoint right now, what are you making per month on average it's like uh around three thousand but sometimes it'll dip a little bit below that all right so that's a good bit below a fifty or sixty thousand dollar job that's i just wanted to ask that for george because you're going to need to transition it's like you're going to figure this out but at the same time we're hoping we're out of this gig pretty soon yes yes yes do you have any debt um just um like i have a cell phone that i financed and some some old debts that i'm trying to clean up okay i'm wondering if

we find something more consistent right now i'll show you i'll walk you through how to do the irregular income budget it's pretty simple but i'm wondering if finding a retail job may be more helpful right now. I think another caller said that my resume, I don't know how to apply that to a retail job. It doesn't have to apply. Retailers want people who show up on time, who are courteous, respectful, good with customers. That's all they care about.

Okay. I did, a while back, I had submitted an application for Whole Foods, but I never did hear back from them. Well, again, quick thing on this. You don't want to just submit applications at this point. You want to be leveraging relationships that you have for some openings, and you get a phone call made on your behalf, an email on your behalf, someone they're looking for something right now, because the food delivery, the grocery delivery thing right now, that's a pretty decently low bar that you can replace that income. And

that's what George is saying right now, while we're waiting to, we're not waiting, you're actively trying to get the graphic design job. We need to get something that's like, boom, they need you in at this warehouse or this big box store or whatever, and you're making more, and it's consistent in this season of transition. Delivery is not a good transitionary job unless it's really a hot delivery job because you're already you're already you're making less than you need to make and not only making less it's you can't rely on it it's it's up it's down and that's really difficult and i just think what george is saying and i'm putting words in his mouth because his throat's killing him it's not necessary right now like you don't need something that's up

and down in this season we need something that's stable and consistent so that we can budget better and we're much more stable while we're looking for that better job. I did make a contact with a graphic design guy, but he's not a hiring manager. It was just on LinkedIn, but I'm not sure what to reply back to him. What do you mean you're not sure what to reply back to him? I just complimented him on some of his work, but I don't know how to go from that to say how to get a job at your company. Yeah. Well, I'll just reach out to him and say, hey, do you know of any openings at your company or other companies? I'm looking to get connected to other professionals in this area. And if you know somebody that'd be willing to have coffee with me or whatever, I mean,

that's the game. And I've got a great resource for you. I'm going to give you a copy of my bestselling book, The Proximity Principle, which is going to walk you through very practically how you begin to connect with people you know in that industry and outside the industry to find things. But as far as the irregular budget, I want to get George in on this because we do need to get you stable right now. Yeah. And I'm going to gift you one year of every dollar premium. And here's why. There's a great feature in there called paycheck planning that lets you lay out your income for the month. And then it'll show you exactly when you would run out of money based on your income and based on your bills and their due dates. Okay. Okay. So that will help you. But when it comes to a regular

income, you want to look at this like a prioritized spending plan and your four walls come first. That's food, utilities, shelter, transportation. Once that gets paid out, you go to the next priority. That might be your insurance bills or fuel on the car. Then you want to go to the next thing and the next thing until the money runs out. So you may not have money for any of the little luxuries, which it doesn't sound like you're in that spot anyways, living frivolously here, but that allows you to go, if I only have a thousand bucks this month, here's what I'm covering. I know I have to cover my rent.

I know I've got to cover the utilities. And if that's all you can cover that month and a little bit of food, that's okay. Okay. So that will help you kind of understand because a lot of people have a regular income. You're not alone in this. And those people need a budget more than anybody.

Instead of them saying, well, I can't do a budget. I have a regular income. No, you need an extra plan for every single one of those dollars. Yeah. I've been using spreadsheets and everything, but it's still, it's just, I don't know. It's just, I get, I'm having a hard time sticking to it. Yeah. Download the EveryDollar app and we'll hook you up with the premium version that has a whole bunch of features that will walk you through this. Okay. As well as that proximity principle book. I was thinking the same thing. Yeah.

Because that designer knows a bunch of other designers. That's the key. And they know a bunch of other designers. Yeah. Sky, that's the key. You want to hang out. Here's the proximity principle in a nutshell. In order to do what Sky wants to do, she's got to be around people that are doing it

in places where it is happening. So the people are like the one gentleman you reached out to, but we want to stay off LinkedIn as much as possible. Here's what I teach about LinkedIn. LinkedIn is a great resource. Okay. It is great for information that you can then use for a real life connection. Do you know what I mean? So you've reached out to, you know, what company it works for. You find out, do I know somebody that works over there? And then I reach out that way because a lot of times this stuff on LinkedIn can get lost and there's a lot of reaching out. And again, I think it's a great resource, but I want it for information so that I can make a deeper real life connection, not just in the app itself. And I think that's something to make sure of. But I want to get around other

people that are graphic designers. Do you have any social clubs that you're a part of or a church or things like that? And you'd begin to go, hey, do you know anybody? And you begin to find people that are in it and you go, hey, I've got a marketing degree. I'm looking to get back in the game and I'm looking for some opportunities. And the more I do that, eventually opportunities show up on my doorstep, not you trying to kick the door down. And this is a game of averages, right? The more I talk to people in the industry, the more they introduce me to more of the right people. They put me in the right places, get me interviews, things of that nature, online communities,

things of that nature in your area. I'm getting around those people and in those places. And then over time, opportunities are going to show up. They're going to go, Sky, hey, I got an opportunity for you. And it's time, opportunities are going to show up. They're going to go sky. Hey, I got an opportunity for you. And it's all because you stayed present. You stayed connected. That's the key. Not sending out resumes to companies that don't know you because then you just get lost. You're just a nameless, faceless person. And I know you're much more than that. Yeah, that's what I've been doing. And I'm really frustrated.

You might as well be spitting in the wind. You might as well be playing a lottery and hoping for that as your retirement strategy. That gets disappointing every Tuesday night when you don't get your numbers called. Frustration. So hang on the line. We're going to get you the book and read it and do exactly what it tells you to do, and I promise you opportunity is going to knock on your door very soon, Sky. All right, we've got to get out of here for a couple quick commercials. Don't move.

He's George Camel. I'm Ken Coleman. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. I'm joined by George Camel. The phone number to jump in is 888-825-5225. 888-825-5225.

Always good to be in studio with George. We were talking during the break. I posted a little something on the gram. And I reposted it. It was that good. Oh, you reposted it? Did you? You shared it?

I added it to my story because I was like, America needs to hear this. Well, and so George wanted to talk about it. So George, take it away. Well, you know, we've often pondered what the Ramsey Show is really about. Because we've always known it was more than money. Money was often a root symptom. But if you really think about what is the ethos of this place? What has Dave been building for 30 years? What is at the root of the calls? And you had this post that you found somewhere else on Instagram. Yeah. Just saw this little note and I thought, man, this is so good.

And so I posted it. So we can throw it on the screen if you're watching on YouTube. You can check it out at Ken Coleman. There it is. Yeah. Go follow at Ken Coleman. Always some great content coming from my friend Ken. But here's, I'll walk you through it. At the top, it says out of my control and it starts to list things, the past, the future, the result, what other people think of me, other people's opinion. And in the middle, there's another circle that says in my control. And it says my words, my thoughts, my response, self-awareness, how I treat others. And it was just such a simple yet poignant reminder of the core of what we talk about on the show. Whether it's your career, your work, your money life, your relationships, your mental health.

It's so easy to focus on those other things. The past, the future. Future is all about anxiety. Past is all about shame and guilt. The result, something we don't always have control over. What other people think of me, goodness gracious, we make a lot of stupid decisions based on that and other people's opinion. And that comes into play as we see so many people get gazelle intense and they have friends and family members who make fun of them, who question them, say it's a bunch of poppycock and just, you know, whatever they want to say and

just make fun of things. And so when we get too hung up in other people's opinions, what other people say and think, then it gets our eyes off of the prize. And one of the things we've said for a long time on the show is control the controllables. And this was just a great little illustration. And I just saw it. And I just saw it. And I just said, that's good. And I need to be reminded of that.

You need to be reminded of that. We are not above this going, see, we've mastered these virtues. Oh, no. No, we need this constant reminder. Yeah. And what's beautiful is that there is a lot in our control. And it may not feel that way because of inflation and the cost of living. And here's what, man, the politicians and the corporations. And when you can just pan back and go, yes, and in spite of that, I'm going to win anyways. And I'm going to have a great life anyways. And no one is going to control my destiny but me.

And so think about that. Here's what's in your control, America, your words, your thoughts, your actions, your response, the self-awareness you have, and how you treat others. And I think that is a recipe for success if we can focus on that stuff instead of all this other stuff that's fun to whine about and complain about but doesn't actually move us forward. So thank you for that great reminder, Ken.

Yeah, absolutely. Thank you. And it's a great reminder of myself. I post the stuff that I need to hear, that I need to read. And if we would get to a point of just only paying attention to what we can control, you'd have a lot less anger, a lot less anxiety, a lot less poor financial decisions, poor relationship decisions, because we just go, you know what? I want to focus on what I can control.

Good stuff there. Run your own race. Hey, let's go to George in Atlantic City, New Jersey. It's perfect. George. I love it, George. We're glad you're here. Talk to George and I.

What's going on? Hey, how's it going? I appreciate the call. Well, answer me. Yeah, I was going to say, you called us, but we're here. What's going on? Hey, so I just have a question. I'm currently renting right now. I've been renting for about four years. My rent just went up this month, so I'm paying about $1,800 a month. I'm trying to figure out, should I? I do want to buy a house, but I don't like big homes and I like smaller homes, but

they're even small homes are extremely expensive. And I don't like, I don't want to have to pay $300,000 for a three bedroom. So I'm trying to figure out, should I stay where I'm at for a while and try to save up a little bit more money and then see if the market turns around. Or my other option was I was thinking of buying a camper and just living in that for however long and just save everything I got. And then if I have enough cash to just, I don't know, put a big down payment down or if the market turns around, just go ahead and buy one. All right, so let's get a quick run on your numbers.

So what was your rent and what did it just go up to? So it was $1,500 a month. Now it's $1,800 a month. All right, so it's gone up. And then what would a camper cost you that you've got your eyes on? What are you thinking? What's your price range? I'm going to get one used.

I don't need one brand new. So I was thinking maybe $14,000, $15,000. All right, so now we've got to come out of pocket. Do you have the $14,000 and $15,000? I have $10,000, $15,000. All right. So now we've got to come out of pocket. Do you have the $14,000 and $15,000? I have $10,000 right now. The other four, I have like seven cars. I can just, they're all paid for, they're cash. I can just sell one of my cars and I can come up with the rest.

What are you doing to all these cars? I love cars. I buy them cheap and I just fix them up on my own. Hold on a second, George. I watch these car flipping shows. So I'm a minor expert on this. I'm not an expert at all. I can't even say that with a straight face. I just watch a lot.

I'm a chair expert. If you've got the right cars and you're fixing these up, and you do this cash, you could flip some of these and get that down payment on a house pretty quickly. Am I right or am I wrong? No, you're right. You're right. So let's just talk about the cars you have, not the one you're driving every day. What are these cars worth?

I could probably, like my one car, I could probably get like $8,000 for it right now. And I got one more I could probably get like $4,000 for. All right, there's 12. What about the other five? You said you had seven. I do drive back and forth to work. But there are the two cars that I can sell right now and I can make some money off of that are finished. And all these are paid for?

Yes, yes, they're paid for. Okay, there's 12, George, right there. Yeah, what other debt do you have? Just that. That's all I have is my rent. That's it. That's all I have. Okay, your rent.

You have no debt. And you have somewhat of an emergency fund with this $10,000. Yes. Okay, what is your income? I make $1,500 to $1,400 a week after taxes. Okay, so we're talking $6,000? Yes, $72,000 a year after taxes. So this $1,500 to $1 this 1500 1800 it's not killing you so i wouldn't go up your

entire life over 300 bucks a month and i wouldn't buy a camper george camel would you it feels like he's just no throwing cash i don't i'm not anti-camper but i feel like most people that call the show and they're like i'm gonna sell everything live in the camper it's a financial hack i'm like number one it's unsustainable number two it's a depreciating asset number three i just think there's better ways to go about this and that's to use your future income and have a better quality of life i have not met people who call on the show like i lived in a camper for three years it was the best thing i ever did they're usually like now you're a single guy right young guy no i'm actually i'm married but um you know

i've been i've been going through this plan with my wife, but she said as long as you got it mapped out perfectly, I'll go with whatever you want to do. So she's just going along for the ride? She's a good woman. She's a good woman, and I don't think she wants to live in a camper. Is she working as well? No, she stays at home. I take care of most of the things.

Okay, so you got some kids? Yes, two. So now we're going to pack that whole family in a camper? This is becoming a worse idea. No, this is a terrible idea. Yeah, I know. That's why I needed some advice. And you're saying a three-bedroom is too much.

You got two kids, man. Where are you going to put everybody? Yeah, I don't know. He was going to put them in the camper until he called us. That's what he was going to do. George, listen to me. You're a good man. Listen, I know your wife's home with the kids.

Maybe she could pick up a part-time job. You can sell these cars. Be patient right now. Buying a camper is a bad move. You're buying a depreciating asset, and it's not going to help. It's going to end up draining your cash, not helping you save cash. And so it's a bad move. Bad move. Yeah. I'm going to be patient. Let cash, not helping you save cash. And so I just, it's a bad move. Bad move. Yeah. I'm going to be patient. Let's get a down payment. And if it's a $300,000 three

bedroom, let's aim for that. Let's go for a 15 year fixed rate with a quarter of your take-home pay going towards that mortgage. That might be a few years. Buy yourself some patience. But the 300 bucks truthfully is not enough for me to go, dude, sell everything, sell every car, go live in a camper with a four-person family. That's aggressive. Yeah, yeah. Not a good idea. Love the spirit. He's not scared of work.

No, he's not. That always gives me hope that there's a solution here. And I love that he's got some cash cars. Maybe save up a little bit of money there, fix those cars up, even if he's moving those cars. $2,000 here, $3,000 there. Let's get rid of those. You know, I know he likes them, but right those cars. 2,000 here, 3,000 there. Let's get rid of those. I know he likes them, but right now- They're just sitting around. They're sitting there.

Probably paying insurance on these things. Yeah, yeah. Oh, that's interesting stuff. Thanks for the call, George. Appreciate it. Don't move. More calls coming right up. This is The Ramsey Show. Welcome back to The Ramsey Show. I'm Ken Coleman. I'm joined by George Camel. 888-825-5225 is the phone number to jump in. Our scripture of the day comes from 1 Corinthians 10.31.

Therefore, whether you eat or drink or whatever you do, do all things for the glory of God. Our quote today, sad but appropriate quote, Tony Bennett, the great american crooner dead at 96 hard to believe um top five artists for me i know i'm an old soul i know you'll make fun of that but uh tony bennett in my top five absolutely loved his stuff you love all the crooners but tony's up there yeah i mean i love frank sinatra, but I wasn't alive or old enough to know his work personally. But Tony Bennett, one of my all-time favorites, also Harry Connick Jr.

But anyway, Tony Bennett, American legend, dead today, 96. This quote, I think if you have a passion for what you do, then there are no limitations on how long or how much you can accomplish. I love that. He accomplished a whole lot in those 96 years. Yes, he did. All right, let's go to Liren. I hope I'm saying that right in Los Angeles. Correct me if I did not get that right. How can we help? Hi, guys. How are you? Good. Did I say your name right? It's pronounced Leron. Leron. All right. I'm hooked on phonics usually. I'm not at this moment, so now I've got it. Leron is how we say it. How can we help? Thank you so much for taking my call. I just have a question about my current financial situation. I want to know your opinion on the best next steps that I should take.

So I'm a mortgage broker. I'm 29 years old. I've been doing mortgages for about seven years. 2021, I did really well because the rates were so low. They were in the 3%. I maybe netted about 150. And I was able to invest into a real estate development that's going to net me about $40,000 at the end of August, this August. So it's coming up August.

And meanwhile, while I was doing so well, I did take a business loan to grow my business. Once the market turned and the interest rates went up, my business slowed down substantially. And I got into a large amount of debt. So probably around $200,000 in debt. And I only met it so far this year from the mortgage business, about $30,000. So I was either thinking, because it's such a regular income, to either file bankruptcy and close the business and try a new career that is more stable, or possibly take that $30,000 that I'm going to net in the end of August

and possibly try to still build my business. So that's my situation. And what is this business? It's a mortgage brokerage. Oh, so you want to start your own. So you're doing it for someone else, right? And when you went, hey, I could do this for myself and I'm going to go 200 grand into debt to do it. What was the loan for? No. So I've been a mortgage broker. I own my own business for about three and a half years. I opened it up. the loan was to grow. I was trying to just expand working capital, hire more telemarketers and better data to reach more refinances.

Okay, and that has not panned out? You have anyone working for you? I have a contract processor. Nobody really on the books. So it's just me. I'm a solopreneur, but that didn't really pan out for me. Okay. Well, bankruptcy is never the right next step. It's a last ditch effort when they are coming for you and the car's out of the driveway, they're taking your house. And Dave Ramsey famously went through bankruptcy back in the 80s, and it was a last-ditch effort. There was nothing else he could do. The bank called the notes. He didn't have time to flip the properties fast enough to sell them off. And so I don't like this as like a clean slate, file bankruptcy. Bankruptcy destroys your life.

I mean, this is going to be on your record. You go to try to get a job, they're going to pull your credit report and see that you just went through this bankruptcy. And so it's going to hurt your financial life in a big way for a long time. And so if there's anything we can do to avoid this, which generally there is, then I'm doing that. It's not this A-B scenario. Leron, what is that? Is this your last ditch? Is this the only thing you've got left, or do you have other moves you can make?

So with the irregular income, I have a little hope that I could turn my business around, especially when all my income goes to payments towards this debt. So why not just go work for a mortgage broker? Because most mortgage brokers are commissioned only. So it's the same scenario. I would make more money as my own solopreneur than working for a company. I've got friends in the mortgage business and they're doing great. And so I don't buy this idea that you can't make more going to work for someone else for a while to get on your feet. So. Because they're going to be feeding you leads, right? Is that your problem right now? No, I have leads. My expense is about $13,000 a month.

Why? For leads. Because my leads cost about $7,000. My rent from my office costs about $3,000. Dude, ditch the office. Stop paying $7,000 a month for leads and go work somewhere else. Yeah, but if he does that, I understand that, George. But he still has the $230,000 in debt under his current business.

Agreed, but if he can go make $100,000 working for someone else, you can clean this debt up a whole lot faster. So shut the business down. It's too expensive. Yeah, I agree. I mean, your expenses are going to compound this debt issue because you're not making $10,000 a month. You see what I'm saying? It's a simple math equation. You know you're in the mortgage business.

You understand how this works. You don't want to keep digging this hole any deeper. Exactly. Waiting for something to change. So I understand it's not ideal and you feel like your dreams are crushed because this business didn't work out. But the last thing you want to do is have this sunk cost fallacy where you just keep digging this hole. So I don't think bankruptcy is the option. If you need to go to another career field right now, go do that.

Go make somewhere you can make six figures and you can clean up 200 grand in a few years doing that. But I would not go to bankruptcy right now. Yeah. I don't think it's not an AB scenario. It feels like a get out of jail free car, but it really isn't. And it has longevity issues. It's its own prison. Yeah, it really is. I'm sorry to hear that, Leron. Let's go to Brian in Las Vegas. Brian, how can we help? Hi, Ken and George. Thank you so much for taking my call. I'll be quick. I'll try to be quick. I'm trying to decide whether to continue saving up to go to school for physical therapy as a career change, but I'm already 50 years old. I've been working 70, 80 hours a week over the last year and a half, and I'm just getting really tired and maybe a little discouraged just trying to decide if I'm too old. I'm thinking this might take me another five to eight years, and I just don't know if I can do it, just looking for maybe some wisdom.

Well, the question becomes at this stage, why physical therapy? There's a why behind that work, why you're interested. And if we can find something that's connected to that why, that doesn't require us to go to physical therapy school because it's very expensive and I love that you're working crazy to save up. But there's other ways to help people with physical transformation or physical healing that don't require this kind of work. And so the question is, was physical therapy an idea that you had that was kind of cool or is it a deep seated why? Like there's, there's a why behind you, why you want to help people this way. Um, yeah, I think I just, I do like helping people and I like the, the fact that you're moving around because I've been in a job where I sit all day for a long time and in the call center environment and just looking for a change and they were allowed that would accomplish

both things. I can move around. I can help people. Yeah. Okay. I've got some great news. I got great news, Brian. I'm going to give you some resources. I'm going to give you the get clear career assessment that I want you to take. And it's going to allow you to really dial in on your unique makeup. Okay. What you're good at, what you love to do and results that motivate you, that'll help. Because it sounds to me like you want to be in the people space. You want to work with people and you're good at working with people. Is that true? Yes. Okay, great. So helping them physically, helping them financially, helping them nutritionally, helping them in a variety of ways. Professionally, I want you to take a little bit of a breath,

and can you slow down that crazy work schedule where you're working all those hours to try to save up money? Yeah, I'm kind of resting right now. Good. I got so tired. I get it. So stay in a place of rest, and I want you to take the Get Clear Assessment. I'm going to give you my book, From Paycheck to Purpose, as well.

They are a combo. Think of the assessment as a compass and the book as a guide up the mountain. But I want you to take some time and really dive in. Who are the people I want to help? What problem do they have, and what are the solutions to that problem that I can get qualified for way less time and money? And then I'm going to dive into that. I think you're going to be really happy. Thank you, Brian, for the call.

George Campbell, thanks for pressing through. Thanks for bearing with me, America. He's struggling. One last one. We're going to get him a lozenge. Thanks, Austin and crew, for keeping us on the air and you, America, for listening. This is The Ramsey Show. Hey, it's Ken. This is The Ramsey Show.