The Ramsey Show - App - Make One-to-One Connections Instead of Networking

Episode Date: May 10, 2019

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Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the Dave Ramsey Show, where debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice. I am Dave Ramsey, your host. Thank you for joining us, America. We're so glad you're here. Open phones at 888-825-5225. That's 888-825-5225. Mary starts off this hour in Salem, Oregon. Hi, Mary. Welcome to the Dave Ramsey Show. Hey, Dave. Thank you so much for taking my call. I'm honored to get to ask you a question today.

I'm honored to have you. How can I help? Well, my husband and I made a really stupid real estate decision back in 2008. We bought a piece of vacant land for $179,000. The desirable features of this land are that it's a great view property and it's a pretty affluent area. But the downside is we bought at the height of the market and for whatever reason this land has never recovered we've had it on and off the the market for about three years trying to sell it we know for sure we never want to build there and we've dropped the price now to 140,000 and darn it we just we still have not been able to find any buyers

my question for you today is should we just go ahead and sell it to some neighbors who want to spend $100,000 on it and be done with it? Or should we continue spending the $400,000 to $5,000 a year on property taxes and mowing and that kind of stuff that we've been doing to keep it up? What's your household income? We make about $145,000 a year. And I should disclose that we are everyday millionaires-ish from the standpoint that we have a net worth of about $2.6 million, but some of that was inherited, so we don't really count. No, you do count. You're there.

It's just where it came from is different. That's cool. All right. Way to go. So you're in good enough shape. You can take the hit. We feel like we can. Yeah.

No, there's no question you can. So it's a simple thing of what we call a sunk cost analysis. What you paid for it does not enter into this decision except it's emotional. Okay? The decision is not based on the past. The decision is based on the future. And so you have a property that is not sold at $140,000. Do you think that it is going to go up dramatically in the future

or suddenly sell in the reasonable near future? I don't. I don't either. In general? Okay. You would know better than I would. Yeah. I don't know. But, I mean, is a real, okay. You would know better than I would. Yeah, I don't know. But, I mean, the story you told me about the way this property has behaved

and the way this neighborhood has behaved is not positive. Well, and Oregon's a real hot market, but I think we could be waiting five to seven years and we'll have spent another $50,000 in property taxes. And by then, it'll be worth almost nothing. While Oregon is a real hot market, what you really is little portions of oregon are a hot market well said that's true and this particular section isn't hot because there'd be a line of neighbors and be done with it yeah there'd be a line of people standing up at the street out there going give me this lot for 200 grand if it was hot yep Yep. And so it's not hot.

This neighborhood is dead as a hammer for some reason or another. I don't know why. And so, you know, what you do is you look and you say, gosh, if I hold on to this for four more years, will I get more increase in value than I am spending to hold on to it? Another way to ask yourself is if you had the opportunity to buy this lot today, knowing what you know, putting aside all the wounds and the emotions of the fact you've taken a bath on it, but if you just said,

hey, I can buy a bargain lot over there in that neighborhood for $100,000, would you do that? No way. Then you need to sell it for $100,000. All right. This has been unbelievably helpful. Yeah, because here's the way I always look at that. If I don't sell it for $100,000, it's kind of like I just bought it again for that.

That's really well said. Yep. I can see that. Yeah. Sell it. Okay. I feel better. Thank you so much.

Thank you. Patrick's with us in San Francisco. Hi, Patrick. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you so much. Thank you. Patrick's with us in San Francisco. Hi, Patrick. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you for taking my call. Sure. What's up?

So I have kind of a unique property in the San Francisco Bay Area. I've got 30 acres with two houses. Oh. Well, yes and no. The problem with it is that, you know, it was a family inheritance, and one of the houses my mom lived in, and after going in and taking a look at the houses, there is major remodeling that needs to be done.

I finished the remodeling on one of the houses. I'm living in it. The other one I've got stripped to the studs right now. Kind of a bad situation happened about five years ago. I had to take a home equity line of credit out. And so right now I've got $153,000 on the HELOC. And I just started listening to you and I probably listened to about a month's worth of podcasts. And so I know that your answer is going to be do not take anything else on the HELOC anymore. But the question I run into is should I sell the property as is with one house that is stripped to the studs right now, or should I work on getting that house up and possibly increasing the value of the property another $500,000 to $700,000? What's the property worth?

I was told I could sell it within 90 days for $1.5 million if the other house is pristine condition, $2.25 million. So fixing the other house increases the value $700,000? Yes, it does. And it costs what to fix the other house? It's probably going to be another $100,000 at the most. The problem that I run into is I'm the one doing the work on it myself, and I have a very demanding career.

Well, why don't you not do the work and make it $150,000? Do you have any money? I have probably about three months' worth of expenses. Can you split the property? No. No, not without major headaches. I talked to the county already about it. That would be another $90,000 venture.

What's your income? $160,000, I think, is what my w-2 said family or single single okay well i mean here's what's on your plate all right if i'm in your shoes now you can do whatever you want to do obviously a lot of people would go borrow the 150 000 keep keep your demanding career going and pay somebody to fix this house, spend $150,000, and make $700,000 more. Okay? If those numbers are sure, that's obviously some fairly good math. I don't borrow money, and I don't tell people to borrow money because I'm in your shoes, what I would have to do would be to, you know, delay, either sell it as is and just say, hey, a million and a half. It's a good day.

I got some money. Or I'm going to delay this while I use my 160 to come up with 150. So it sounds like it's a two-year project to me. So do you want to screw with this for two years and commit a large portion of your income to it and some of your time in order to get the work done by someone else so that you do the $160,000 manning career? Or do you take a little less and get it on the market and get it sold? It doesn't sound right to me that that one house is increasing its value this much

for that little bit of a spend. I'm not sure those numbers are right. I'd check those carefully. Are high health care costs getting you down? Are you confused trying to navigate your options? Do you wish you could find an affordable, biblical solution to your health care costs? Based on New Testament principles, Christian Health Care Ministries, or CHM, helps Christian families, churches, and ministries join together as the body of Christ to share their major health care costs. Christian Health Care Ministries is the original health cost-sharing ministry. A Better Business Bureau-accredited organization,

CHM members share to pay each other's medical bills. It's not insurance. It's Christians financially and spiritually supporting each other. It's what Christian Healthcare Ministries has done for over 35 years. And our members have shared over $2.5 billion in medical bills. To learn more, visit chministries.org. That's chministries.org. Christian Healthcare Ministries is a proud sponsor of Dave Ramsey Live Events. expert Ken Coleman hosts the Ken Coleman Show on SiriusXM and on a podcast that is very popular.

Every day answering your questions about your career. Getting lined up in a way that you get to do something that you love and make the most money you've ever made in your whole stinking life. That's the whole idea here, baby, is have some fun with this and make some money i mean if you're going to work you might as well have fun and make money these are things you ought to do you shouldn't make less money just to have fun and you shouldn't have you shouldn't have to go someplace you hate just to make money you don't have to do that his new book comes out next week, The Proximity Principle, the proven strategy that will lead to the career you love. Ken, book tour time, baby.

Next week, you're going to be in New York Monday, right? Yes, sir. We are off and running. Going to be all around the country and national media. And we're just excited to get out there and share this message with people. New York Monday for national media. Then you head over to chicago on tuesday back here and then back down here in nashville to do some stuff we'll do a signing here a signing in

chicago the next week you'll be out to phoenix arizona doing a signing there in mesa that's right and doing media there and then over to sacramento and all the events can be found all the details can be found at ken coleman.com slash events or, of course, DaveRamsey.com. We'll be giving away stuff at all the book signings like we always do. And no purchase necessary. Must be present to win. So find out where Ken is going to be. Come out.

Get your book signed. Exciting launch, baby. This is a big deal. I tell you, writing a book and launching a book is like having a baby elephant it takes a year and it just and and it's just a dadgum big project and so when the day finally comes that's right it's here baby yeah it's so exciting and we're so excited about the book because we've been testing it as you know day to day caller after caller on the radio show and the proximity principle actually works we had email stacks and stacks of emails and social media messages of people that are applying it.

And I want to say this to folks. We are offering the chance to win $450 cash plus a $50 coffee card, which you can start having key meetings where you can sit down over coffee and learn more maybe than you've ever learned and get the opportunity to actually do more because that's where connections happen not at networking events where it's like a meat market on steroids you know this is about one-to-one connection so we're really excited about that and all these uh book signs it's going to be a lot of fun i think they ought to put up a disco ball at the at the networking things oh because you know how it goes. I remember early on as I was pursuing broadcasting, Dave,

I walked into my first one and I was, and I'm an extrovert. You know this. I'm an extreme extrovert. And so these things tend to be easier for us. And I walk in

and I already had some anxiety about it because I didn't know anybody and I had no qualifications. And I remember a guy seeing me right away and he came up to me and he made me feel like the most important person in the world

for about 37 seconds because that's how long it took him to realize that i could do nothing for him and and he asked me a question first i started telling him and he was looking over my shoulder he moved on oh i was i went from the most important person in the world to the most useless invisible person in the world that's what everybody feels like at those things yeah so you we're not we're not advocating that kind of network and you're not with the proximity principle you're simply are saying get around the people and the places though that what you want to do is happening that's right now that sometimes that can be just a real short thing yeah and you just

simply say hey i'm going to intern at a company that uh is going to see my skills and they're going to hire me that's a real short version. Absolutely. A long version is you're kind of hanging around the industry a little bit. And, you know, the old Chris Christopherson was the janitor at the music label. That's right. Until someone noticed his songs. Until he could get somebody to hear the janitor's songs. And then he becomes Chris Christopherson. That's right.

Not overnight. But, I mean, he was in proximity in the place. Well, absolutely. I mean, think about in proximity in the place. Well, absolutely. I mean, think about the Beatles. They were a band for quite some time. And then I'd love to know the proximity story. What was the personal connection that got them on the Ed Sullivan Show? And it was history after that.

I mean, it's amazing. And so we actually have five people, Dave, archetypes, types of people that are easily identifiable and you can actually connect with them. So we identify the five people in this book. We also then give you five specific places. Give me an example of one of the places. Yeah, so I love this one. One of the places that most people overlook, one of the right places, is where you are.

Meaning where you are right now. A lot of people think, Dave, that I've got to move somewhere to go somewhere. I'll give you an example from a caller on my show recently. A guy called in from Charlotte, North Carolina. He said, Ken, I know exactly what I want to do, but I don't think I can get there. I said, okay, tell me. He said, well, I love video production. I specifically love to produce and direct videos.

But I have a wife, three kids, and where I'm at financially right now, I can't move to New York or L.A. And I said, well, let me ask you a question. How many production companies are in Charlotte, North Carolina? And he paused for a second, and then he chuckled, and he said, probably a couple dozen. I said, if not more. And I said, what you've got to do is actually practice this proximity principle, and you've got to, where you are, in your zip code, start connecting with people there at those production companies.

Offer to work for free a couple nights a week. Work on the weekends. Hey, I just want to get in this space and so I'm willing to give some of my time. And so he began to reach out and I got an email from him about eight weeks later and he had accepted a position with one of those production companies.

So this idea that I've got to move outside of my zip code to now you eventually might have to but not to get started. And Dave, you know, this few people ever cross the starting line, forget the finish line. The proximity principles to give people hope that there is a plan. There's a habitual action that you can take by being around the right people in right places that'll get you moving. So we talk about that specific place, the place where you are, that everything you need to get started is already around you right now. Wait a second, Ken. You're telling me that I want to switch careers completely, and you're telling me I can get

started right where I am? Absolutely. And the book unveils the people, the five people that are in your zip code, and you can get around them. Yeah, and it's just, there's someone that can mentor you and show you. There's somebody. It doesn't matter, I mean, what your long-term goal is. The first step is probably within your zip code.

Absolutely. It's getting started. You can't finish. You can't reach the finish line if you don't start. Same thing, call after call here on the show. There's a reason why it's baby step one yeah we got to do that first well my friend sean hannity started on radio in huntsville alabama that's right um and he became a big deal there and uh then made a couple moves and and then lands in new york obviously and broadcast his talk radio show from

there until he lands a Fox show. That's right. And now does both. Right. So he eventually made the New York move. Absolutely. I never did. Right.

Because I said, I'm not living in New York. I like New York. You need to. And I like L.A., but I'm not living there. That's exactly right. And I don't mind visiting, and I love you people that live there. You want to live there, that's fine. I like Nashville.

It's home. I'm not leaving. And so I'm only the third largest talk radio show because I'm – and Rush left New York to get out of taxes. Oh, yeah. He's down in Florida. Broadcast from Florida. Well, give me an example then if that's the place where you are. So right where you live.

What about a person? One of the people in the book is the producer. This is somebody that is winning in the craft, the field that you want to be in. And so there are multiple producers, people that are winning in your field, in your area, and you want to go meet with them and say, hey, what was your path to get there? What qualifications do you think I need, knowing the field the way you do? Who are some other people that you think I need to sit down with and pick their brain. Can I hang out with you for a day? You know, I recently taught at a local high school class here in Nashville, and we had two young ladies that were going to go into nursing.

They didn't know exactly what they wanted to do, and I said, here's how you use the proximity principle. You start hanging out over summers and Christmas break with nurses. You want to hang out with a nurse in the ER? You want to hang out with a nurse who delivers babies? You want to hang out with a nurse who's in surgery? You want to hang out with a nurse who delivers babies you want to hang out with a nurse who's in surgery you want to hang out with a nurse who's checking the patients in you want to get all aspects of the different roles in nursing and by doing that getting in proximity you're going to learn do connect and more importantly clarify that this is in fact

something you want to do see yourself to be scared of in terms of being in proximity to things too it's not i mean we've got just a second being in proximity to things, too, it's not. I mean, we've got just a second, but the Internet has shrunk the world. Oh. And so you can be, you know, utilizing the web. You can be in proximity to things without necessarily physically being there. The book is The Proximity Principle. Ken Coleman starts his book tour next week.

Be watching for it. Chicago on May 14th. Nashville on May 16th. Phoenix and Mesa, Arizona, May 21. Be watching for it. Chicago on May 14th. Nashville on May 16th. Phoenix and Mesa, Arizona May 21. Sacramento May 24. $450 cash given away at each of these. No purchase necessary. You better get the book as a preorder before May 13th and you get all the free stuff.

Check it all out at DaveRamsey.com or KenColeman.com. Congratulations, Ken. Thanks, Dave. Appreciate it. This is The Dave Ramsey Show. Thank you for joining us, America. Jennifer is on the line in Pittsburgh. Hi, Jennifer. Welcome to the Dave Ramsey Show.

Hi. Thank you for Ramsey Show. Hi. Thank you for taking my call. Sure. What's up? We just closed our business, and I didn't realize how much we're drowning in debt. But luckily, we have the building to sell. So once we sell that, we'll kind of wipe almost everything out. But it's not selling.

But the thing I'm calling about today mainly is we had a minivan that we were using for the business, and we really don't need it now that our kids are gone and everything. But it's paid for, and we were talking about getting rid of it and me buying a cheaper car, but as a side hustle, we've been driving Lyft and Uber. So if I do, it's probably going to, and if I sell it, I'd probably want to finish paying off our second car, which we had like $3,600 on, and then just get a cheap car. But I don't know, since we finally paid it off, if I should sell it, since it's still worth something or not. What's it worth? Probably $10,000 to $11,000 we could get for it.

And so what are you guys' career now that you're closing your home or close your business? I'm just doing retail. My husband's a chef. So what is your next 12 months you think you're going to make, household income? Probably about $5,000 a week. I mean a month, I'm sorry. So $60,000, $70,000 a year? Yeah.

Okay. All right. No, I would not sell the car. Okay. Not because of Lyft or anything like that. It's just a small enough amount in the overall situation that it doesn't really move the needle. Okay. You guys getting organized and saying we're going to systematically work through these debts until the building sells,

and when the building sells, we're going to finish them. That is more important than selling your car. Okay. That's going to have a bigger effect. You guys being on a budget, listing all your debts, smallest to largest, attacking those as if the building wasn't going to sell, and when it does sell, whew, now we're done. Okay? That's what it sounds like, right?

Any good things to tell us how to sell it? We've had it on the market for over a year now, and it's zoned commercial, like commercial and residential. So technically somebody could put it back as a house. But I know it's on a main street, and it's a busy street, but it's not in a busy. Why has it not sold? I don't know. Obviously, we must see. Why do you think it has not sold?

Do you have a theory? Probably it's not in the main part of our little city. It's off. There's like an auto repair and a chiropractor nearby, but... So what do you owe on it? We don't owe anything. We owe it outright. And what's it worth?

We bought it for $100,000. You got it on the market for what? $100,000. Right now, we just brought it down to $159,000. Okay. Or $157,000, I'm sorry. From what? Originally we had a realtor for a year, and she said, oh, you should be able to get $189,000. And now I've dropped it all the way to $157,000.

And we got rid of the realtor thing because we had some friends that said, oh, we have a person for you, and we thought they were in that loan, but they didn't get a loan for it. So we've been trying to sell it, and I don't know if we should go back with the real estate. Okay, you need to get a high-quality, high-octane realtor. Go to DaveRamsey.com and click on ELP for Endorsed Local Provider. You'll find one or two or three in that area, five in that area that we recommend. Interview two or three of them and find one of them that is on fire and convinces you that they really can sell it,

not that they're just going to get some unrealistic price. They're going to come in there and tell you the thing's worth $98. They're going to come in there and tell you it's worth $128, and then they're going to get a buyer for it. You have an unusual property, and that's going to cause the price it's going to bring to be less. Because it's kind of not either. It doesn't know what it is.

It doesn't know if it's residential, and it doesn't know if it's confused. It doesn't know if it's residential or if it's commercial. And when I look at it as a buyer, I don't know what it is. And so it's probably not residential because it's probably not a nice place to live. Right. And so it's probably commercial, an inexpensive piece of commercial property. And you don't owe anything on it. So how much debt have you guys got?

Too much. $140. Okay. All right. So the building's probably... Mostly related to the business. So the building is probably not going to wipe out all the debt. Yeah, probably not.

Okay. So you need to decide what it is going to... But we are on a budget now, so... Okay, good. And you're working your butts off, and you're going to work it. You need to just be including the $3,600 on the second car. Everything is in one pile. We list it smallest to largest.

We pay the minimum payments. You keep everything afloat, and then get a good real estate agent, and let's get this building sold. I have no idea what it's worth. I suspect you've messed up the market a little bit by listing it too high to start with, and you ran off your first set of buyers by listing it too high with the unrealistic realtor before. But it may be that your 157 will do it, but it probably needs professional marketing from a high-quality, high-octane real estate agent that knows what they're doing. You're probably going to struggle to sell this as a fizz bow that's what it sounds like to me um i believe in the value of

a real estate agent if they're a good one and that's why we only uh endorse and vet out to get good ones that we can endorse tony's with us in buffalo hi t, Tony. Welcome to the Dave Ramsey Show. How are you doing, Dave? I have a spouse. She passed away. Oh, no. The home is free and clear. The home is valued at maybe like $200,000.

Wait a minute. Sorry. When did your spouse pass away? Last month. Oh, no. And the home you're living in? Yes. Is worth $200,000? Yes.

Okay. Is it paid for? It's paid for. I wanted to get rid of it because of memories. I can imagine. How long were you guys married? 20 years. Oh, my Lord.

I'm sorry. So you're going to sell your $200,000 house, and then what? Taxes are $6,000 a year. I want your advice. $6,000 a year is just too much for taxes. Should I rent? First of all, it downsizes. There's too many rooms in there for me anyway.

So what would I do? Would I buy another home from that money? What would be your advice? Well, if you rent long-term, you are paying the taxes because you're paying them for your landlord in the form of rent. So you don't really get away from taxes. They're always passed through. Taxes are always passed through to the end consumer.

That's the misnomer and so um anyway the um the thing i tell folks tony is i mean sharon i've been married 37 years and if something happened to her i wouldn't be able to breathe for a little while it's been two months you're still trying to breathe yes and um so i uh i try not to i tell people to try not to make big decisions in the early days after losing someone because every day that goes by, every month that goes by, the fog in your brain clears up just a little bit more from grief. Like a year from now, your brain will be clearer than it is today. Does that make sense?

Yes, it does so um if if you have 100 don't want to come home to that house i understand that and you've made the decision you're gonna sell it i that's fine go ahead and sell it what i would do is say in the name of making a good decision i am going to rent for a year i'm going to take all the money from the house and just put it in a cd at the bank and i'm not going to touch it a year. I'm going to take all the money from the house and just put it in a CD at the bank, and I'm not going to touch it for anything. It's my house money, and then I'm going to spend a year as a renter and cry. Okay.

And after that year, my brain will be working better from grief than it does today, and I'll know better. I'll make a wiser decision on what to purchase and yeah you're probably going to move down you probably don't have the same needs that that um you know that you guys had when you bought that house originally uh and so you're going to buy something cheaper you might buy a condo where you don't have to fool with anything i don't know what you're going to do any of that's fine with me you might want to buy something newer so you don't have to fool with anything. I don't know what you're going to do. Any of that's fine with me. You might want to buy something newer so you don't have any repairs. I don't know.

You can just decide. But you don't have to decide that. You can just park the money in a CD and rent something, go get you a little apartment and rent that's a nice place, and it's just for one year. You're not going to do this for the rest of your life. And just give yourself some time to heal so you make a better decision because i don't know that you're going to choose the right property to buy today i wouldn't be able to if i were in your shoes my brain just wouldn't work that good

for a little while it'll come back but it wouldn't work for a little while amen i'm so sorry this This is the Dave Ramsey Show. Our scripture today, Matthew 5, 16, In the same way, let your light shine before others, so they may see your good works, and give glory to your Father who is in heaven. Leonardo da Vinci said, It had long since come to my attention that people of accomplishment rarely sat back and let things happen to them. They went out and happened two things.

Leonardo da Vinci says you're not a victim. You're a victor. Shannon is in Minneapolis. Hey, Shannon, welcome to the Dave Ramsey Show. Hi, Dave. Thanks for taking my call. Sure. What's up?

Hi. A long-time listener, and my husband grew up near Nashville. He's been listening to you since the 90s. And we're debt-free. I'm 36. He's 38. I've got three kids. And we have an extra minivan.

We're considering lending it to missionary friends who are coming home to the States for a year, but we're also concerned about our personal liability if they were to get in an accident of large measure. Wondering if maybe signing over the title to them for a year would be a good idea. That would certainly get rid of the liability. Of course, the other thing you can do is talk to your insurance agent about just buying a liability umbrella policy. You can buy that for a couple hundred dollars. I don't know what it costs to transfer a title in Minnesota and Tennessee. It would probably cost you that to transfer the title.

So you can buy, you know, like a million-dollar umbrella policy that covers liability uh but even in that case you're you're you know tell your insurance agent your insurance broker whoever you're working with for your car insurance what you're talking about doing and ask how you can best insure over that and it may be that the liability umbrella policy will take care of everything you need uh but certainly taking it out of your name, that would do it. I mean, you no longer own the car. It's up to them. And they would need to have proper insurance then at that point.

And you can have an agreement, you know, a handshake agreement. They're going to title it back to you when they're through using it so that you can bless someone else with it if you want, or they could pass it on to someone else themselves. I don't care whatever you come up with on that. But, yeah, obviously when it's no longer in your name, it's no longer in your name. That's, you know, pretty easy. Tiffany is in Salt Lake City, Utah.

Hi, Tiffany. Welcome to the Dave Ramsey Show. Hi, Dave. Thank you so much. Sure. What's up? So I have a few questions. We are a family of six.

I am 27 and my husband is 29. We have four kids ages 2 to 9. And we are living in a two-bedroom, one-bath, 700-square-foot house. So things are a little cramped. We will be finished with baby step number 3 this summer and when we finish that if we were to skip baby step 4 and 5 we'd be able to pay off our house within 2-4 years

and then with all that extra money we could save up quickly to either add on extra bedrooms or buy a bigger house so is that something that you would advise us to do, or should we just continue with the Baby Step program as prescribed? Well, mathematically, if you bought a bigger house and you paid it now, and you paid it off as quickly as you could, you're going to be there at exactly the same rate as if you pay this house off and then save up and buy a bigger house.

It's the same amount of money. Your house plus whatever you put on the bigger house is the total, and coming up with that much money or paying off that much money is going to happen in exactly the same period of time assuming you do the exact same amount but i mean whatever you're going to save x a month if you put that on the debt in x a month and so if you buy a 15 year fixed rate mortgage where the payment's no more than a fourth of your take-home pay and you go ahead and move up you know that's a possibility. Or you could go another route. This is what Sharon and I did, and it's not that big a deal.

You can go either way. We were trying to get into a different school system in our case. Our kids were about your kids' age when we did this, and we sold everything and moved into a rental. And we rented for two years. We homeschooled, so that's not a huge concern of ours. But I'm saying, school system aside, all I'm saying is you could get into a rental that has more space than you've got now for probably not much different in spend as a temporary measure while you save up cash to buy. You can do that.

But no, I would not not delay you have four kids if you look up and they're you know starting to be 16 15 14 and college is staring you in the face because you did this little gyration on the house and haven't addressed college at all and baby step five you're going to regret that so you need to address baby step five and you certainly have got to start addressing baby step four so moving up in house or renting while you're doing baby steps four and five and saving or paying down your new mortgage one of the two any of that's fine with us it all lines up within what we teach and you'd be just fine so hey thanks for the call. Open phones at 888-825-5225. Cammie is in Raleigh.

Hi, Cammie. Welcome to the Dave Ramsey Show. Hi. Thank you for taking my call. My question is I make $42,000 a year, and I have about $29,000 in debt. Half of it is credit cards, and half of it is student loans. American Express has gone to collections, and then I have a student loan in collections. So I'm wondering, do I wait to pay that off until I have the lump sum or how do I address those ones that are in collections?

Okay. How far behind are you though on the ones that are in collection? The one in collections for American Express, I talked to them today, it's been eight months. Okay. All right. And they were willing to settle for half this morning. I bet they were. And they're trying to get me to pay $20, and I said no because I've listened to you. So I want to see if I can negotiate lower.

Yeah. Yes, you can negotiate them down to probably a quarter on the dollar, not 50 cents on the dollar. And you need to get that in writing because you can tell American Express is lying if their mouth is moving. And so get it in writing and do not give them electronic access to your checking account. So you lump sum settle that one. The student loans are not going to lump sum settle unless they're private. Are they private loans or are they Sallie Mae loans? They were gate loans. Gate? lump sum settle unless they're private are they private loans or the sally may loans they were

gate loans gate and they were gate g-a-t gate loans and they were they were consolidated with a certain company um and then they i didn't even know that that loans could the sewer could go to collections because i was talking to them continuously telling them i couldn't pay and deferring them of course they can go to collections. I don't know what a gate loan is. If it's a federally insured student loan, you're not going to get a discount on it. You're going to pay it. And so you need to get in there and start paying payments as soon as possible.

American Express or credit cards that are in default for eight months, you will be able to negotiate those lump sum. So the answer changes between the two things. Now, why did you get so far behind? So I had my own business, and I was investing in it for about three years, and I'm putting it all in my own credit card. Oh, so you've not made any money until now. Correct. Well, I decided to go back to work and continue to work on my business on the

side good but that's all i got so far behind has the business made any money ever it yeah it has but my investment was more so when i did my taxes it was always more than what i made yeah okay so my point is is is it even a decent side hustle? I changed direction. So it was in fitness and nutrition, and I've shifted. Are you making any money that you can put towards your debt with your side hustle? Yes, yes, I am. Okay, above what you're putting in it?

Correct, because I've also cut a lot of expenses. I realized in the beginning I was listening to the marketing. In other words, you don't need a different part-time job. This is a decent part-time job. Yes. Okay, good. So you roll up your sleeves. And I'm looking for a higher-paying job as well because I'm in sales, and I believe I could make $150K a year.

There you go. Now you're on track. I love that. Okay, now you're on track. You're that. Okay. Now you're on track. You're doing good. Okay. So you and I are both working here to get your income up so that you get these defaults behind you and then you get this debt behind you to never return. That's what's coming for you.

So I'm going to send you a copy of Ken Coleman's book next week when it comes out. It's called The Proximity Principle, The proven strategy that will lead to the career you love, help you find that new higher-paying job. Hold on. We'll pick up and get that to you. That puts this hour of the Dave Ramsey Show in the books. We'll be back with you before you know it. In the meantime, remember,

there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. This is James Childs, producer of The Dave Ramsey Show. Once again, you made The Dave Ramsey Show one of the top five most downloaded podcasts last year. To get your daily dose of motivation and inspiration, subscribe today.