The Ramsey Show - App - My Husband Never Told Me How Much Debt He Had (Hour 3)

Episode Date: April 29, 2024

🎵 Live from the headquarters of Ramsey Solutions, it's The Ramsey Show, where we help people build wealth, do work that they love, and create amazing relationships. I'm George Campbell, joined by Jade Warshaw. This is your show, so call us up at 888-825-5225 and we'll help you take the right next step for your life and your money. Anne is going to kick us off in Albuquerque, New Mexico. Anne, thanks for taking the time to chat with us. How can we help today? Hi. Yeah, I was hoping for some guidance on how to navigate a difficult conversation with my husband about finances. I just found out that he has a business credit card with about $10,000 of debt on it. And this

is like the third or fourth time that there's been financial deception throughout the course of our marriage. And so I'm... What were the other times? After we got married about five months in, I found out he had about $10,000 in credit card debt. And then a few other things, like he borrowed $6,000 from his parents and another $3,000. So how are you finding out about this? is he telling you or you're coming across some information on your own this time he did share with me um the business credit card and that was after we've been working the baby steps for about four months the other times were his parents mentioned it at thanksgiving or so he was actively trying to hide it yeah the other times so okay so you found he he came to you and told you about the 10k that he has on the business card now you said it was uh you guys have been actively trying to work the baby steps my question is is this old debt or is this debt that he has

acquired while you guys have said you're working the baby steps? The credit card for his business, I think, is about a year old. Before? Prior. Yeah, prior. Okay. But we went through everything while we were trying to figure out how much debt we were in and trying to get it all, you know, work on getting it resolved. And that was something he just didn't share with me then too. And when this happens, do you say, hey, why did you hide this from me? Yeah. Does he get defensive? Is he open? What's his response?

Kind of a mixed bag. So he'll get defensive and then it goes to, well, I was really embarrassed and this and this, and I should be handling my business better. And so it's not, you know, with him, I'm like, okay, well, I understand that, but we're also a partnership and and I need to know what's going on, too. Nine years. Okay, so there's been a pattern since you've gotten married that has not really gotten better. Yeah. Let me ask you this, Anne. Okay, you said you guys have been married for a good little minute. Do you feel like he's, like, is there goodwill here? Like, is he, do you think that he's keeping Do you feel like he's in, like, is there goodwill here? Like, is he,

do you think that he's keeping this from you because he's afraid of how you'll react? Is he feeling remorseful? Like, you know, shameful? Or is it like, I am intentionally trying to do my own thing on the side here?

Like, do you feel like he's done with this behavior and it was just one last thing that he was feeling some type of way about telling you? Or do you feel like this is going to be behavior that's going to continue? I would like to say I hope it's over, but I'm a little concerned that, you know, with his track record. Well, I think it's fair that you don't have full trust and faith in him right now. He hasn't earned that. Yeah. And so I think you need to talk to him and say, listen, so far there's been a lot of financial infidelity in this marriage and I'm done with it. And we're going to put all the cards on the table, and you're going to tell me every single penny. You're going to give me full transparency and accountability into our finances. And by the way, business debt is our finances, because he signs the dotted line, not the business.

Yeah. It's personal. And so that conversation, you need to have that come to Jesus conversation and he needs to act like an adult. If I were you, I would hop on BetterHelp and I would look for some couples counseling and I'd bring that to him. I'd say, you know what, I love you. These are the areas like George highlighted. And I'd like for us to go to counseling and just get some clarity and have somebody who's right there in the middle that's, you know, not biased so that we can figure this out. What would you say to that? Please broach that subject a few times.

And it's, well, I don't want to do couples. I'll do individual. And then he doesn't take any steps to find a therapist. And I've offered to help support him, but I also don't want to be his mom and do it for him. And so that's like crushing feeling for me. Like, yeah, well, I do think I do think that if he won't go with you, I would still go individually so that you're having a sounding board and you're getting the best next right steps. And they can give you some tools to use. There is something to be said by leading by example. And so maybe, I'm not saying that you beat them over the head with it, but if you say,

listen, if you won't go to counseling with me and if you won't go to counseling on your own, I'm going to go because I want to work on this marriage. And I know that that starts with working on myself. So I think there's a lot that you can do to lead by example. And then I do think that there's some firm language that needs to come up with it where it's like, listen, I need to know that you're invested here and that you're interested in making this marriage better and I'm interested in seeing actions and I think that making that very clear,

I want to see actions, I want to be able to see with my own eye you doing things differently and if that involves counseling, if that involves clear communication whatever that is i would make that really clear that you're worried and have you made it clear that you got or is he really aligned that he wants to become debt-free aggressively yes um he really we really do um and it's that every month looking at every dollar, I'm like, we make way too much money to be in this much debt.

So the next time this happens, you go, you violated our family value and goal. You violated my trust. We said out loud, this is our goal. Here's our value. We want to live a debt-free life. And you went backwards, behind my back. And that's not okay. And I think it's okay for you to share how you

really feel. And what he's going to do is he's going to feel all the shame. He's going to sort of cower down and feel bad for a while. But how he reacts is on him. But you need to be very honest. I'm not sure you've really told him how scared you are, how upset this makes you, how frustrated you've been in this marriage. And tell him, I want to win in this marriage. I want to see us grow as a couple, and money is just a symptom that's holding us back right now. And we make too much to have money be a problem in our life. Okay. I like that. Thank you. Have you guys been through Financial Peace University? I have. He declined. Oh, that's different.

He just said, not interested. I'm good. I'm crushing it. Yeah. He was too busy. Wow. That, that to me is a sign of disrespect. Because it's something that you care about, that you've asked for his participation in,

and he said, nah, don't have time for that. I'm going to go get into some business credit card debt, BRB. Do you work? Are you working, Anne? Yeah, we both work, make about $150,000 combined. I bring in like $85,000 of that. Okay. Okay. So I'm just trying to get his mindset. Is he thinking, oh, she's not working. I'm in charge. I don't need her help. I'm just trying to think. I'm trying to put myself in his mindset. I don't like it. I. I'm in charge. I don't need her help. I'm just trying to think I'm trying to put myself in his mindset. I don't like it. I'm not going to lie.

I don't like the way you're being treated. I feel like you're being a little bit belittled in this relationship. He's not done things that have earned trust. And I hate that for you guys. But again, only counseling is going to help this. George and I, you know, this is something that you and your husband have to dig into if you want to see your way out to the other side. When's the last time you went through FPU, Anne? About five months ago. Okay. Well, if you don't have access, hang on the line. Our team will

make sure that you still have access. And I would do one last plea to go, please go through this with me. Otherwise, we're going to have major problems. This is The Ramsey Show. Hey, you guys. Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay true to their values

and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget. That's chministries.org slash budget. Welcome back to The Ramsey Show. I'm George Camel, joined by Jade Warshaw. Open phones at 888-825-5225. Sarah joins us up next, all the way in Sacramento, California. Sarah, welcome to The Ramsey Show.

How can we help today? Hi, thanks for taking my call. Sure. So my husband and I are in our mid-20s, and we have a substantial nest egg that is from inheritances, and we're already doing the basics. We have a separate emergency fund. We budget. We don't have any debt. So our question is, how do we maximize this nest egg that we have? Wow. Okay. How much are we talking?

When we inherited it, it was around $800000 and it's grown to 1.1 million. Wow. When did you inherit it? How did it grow that much? We inherited it maybe four or five years ago. Well, we each had a bit of inheritance that's now combined now that we're married. And so I inherited mine maybe eight years ago and he inherited his maybe five years ago. And yeah, they're invested and we also try to add to it as much as we can from our income. Okay. Is this in a brokerage account, non-retirement and in index funds or mutual funds? It's mostly in index funds, but we do have some in individual stocks.

Okay. And that's where it's been. It's grown substantially over the years as it's been sitting there invested. And you're saying, should we be doing something else with this? Yeah, I think one option is to just have it sit there, but we also know a lot of people go and invest in real estate. And it feels like there's so many options of what we could do with it to maximize it, and I guess we just want to be smart with it as much as we can and have it grow as much as possible. Yeah. What's your household income? Combined, we make around 230 grand. What's your living situation? We rent currently. Interesting. Well, I'd definitely be looking into a home ownership situation. I feel like that's

something that you guys can afford to do. And, you know, whether you decide that you're going to pay cash or you're going to put a hefty down payment. My other question briefly was, how much is in stocks? Like what percentage would you say is in stocks, single stocks? It's hard. We made a few good decisions where now the stocks have grown a lot where there may be larger in our portfolio than we'd like them to be. Like 25% um like 25 percent larger more than that wow okay but yeah i my only thought here yeah go ahead my only thought is i if if you have a huge portion of this or even honestly i wouldn't want more than five percent of this to be in single stocks i would consider working with someone to to reinvest that into mutual funds or index funds like George said.

Okay. And I guarantee you, those single stock companies, they exist in those same index funds. That's right. But you're just really diversifying and lowering your risk by doing that. And you've done really well. And so it's easy to get starry-eyed and think, well, we'll just keep it in there. It's done well for us. But I would be losing sleep at night knowing that Elon tweets something the wrong way or X's something the

wrong way. And all of a sudden, the stock tanks on Tesla, which was our bread and butter. And so that's just too much brain calories for me. I don't need that living in my rent free. So I'm with Jade. I would look into home ownership as the next step. And I would also move those stocks into index funds and mutual funds for the long haul. And the truth is, nothing says you have to go into real estate investing. I do want you to have a paid for house. I think having that in your early 30s is a huge win for you guys while making 230 living in California. That's unheard of. And it'll give you more options later on. Because truthfully, if you just invest 15% of 230, you're going to be multimillionaires anyways. This inheritance will be a drop in the bucket compared to what your net worth will be.

So then it becomes, what is the best short-term goal? And to me, that's home ownership in California, which is wildly expensive. This just got you an amazing sort of fast pass to being homeowners in California. And there's nothing that says you have to go put this into real estate. I would, right now, keep it in index funds until you're ready for that step. Because the rule of 72 would say that your investment will double. If you get a 10% rate of return, it will double every seven years. If you get a 7% rate of return, it will double in 10 years. And so if you just leave it there, you're going to have a huge nest egg that you can use later on in life. Yeah. So what are your thoughts on this home ownership?

If we were to pursue that, I guess I get there. We're both very risk averse, which you typically goes well with money. Well, it shocks me that you have a bunch of single stocks. If you told me you're risk averse. Yeah, those were almost on accident. And some of them were inherited. Okay. But I guess for the home ownership piece,

I'm nervous about liquidating a lot of it and putting it into a home. What makes you nervous about that? Being less diversified, maybe. The question is, do you plan on staying in Sacramento? Is that something that you guys want to do long term it's a more expensive area is there are your jobs keeping you there or is there a way that maybe down the road you can transfer your skills elsewhere and buy a home that's more affordable and you're not liquidating as much of this although again you're in your mid 20s like you're to ge's point, you have plenty of

time with your income, which is only going to go up, by the way, for you guys to build a multi-million dollar net worth. So I don't want you looking at this like, oh, this is the only money I'm ever going to get. And even if you guys said, we're only going to put half down on a mortgage, that's your choice to make. It's not to say that you must pay 100% cash for your mortgage. That's your choice to make. But I do think that if I were in your shoes, I'd be looking to put at least 50% down on the home. Okay. Yeah, that's good advice. As far as risk goes, if it makes you feel better, Sarah, real estate is one of the safer assets when you look at just a primary home. Go look at what the real estate prices have been in Sacramento over the last 20 years. And you'll see that it has had an amazing return even compared to the stock market. And so

I wouldn't be scared to put your eggs in that basket. And truthfully, over time, your nest egg will eventually outgrow your home as an asset. And that's where we're at as a family. Whitney and I, we have a paid for house. And right now it takes up a huge chunk of our net worth. And I'm okay with that because our nest egg just hasn't had time to catch up yet. Yeah. Because you're going to experience compound growth in that investment account versus the real estate market, which is just based on capital appreciation of the market. So I'm not worried either way. But I do think home ownership is your next best bet because rent is going to be a moving goalpost in Sacramento versus locking in something in your area if you plan on staying there long term. Yeah. All right.

That's good advice. Thank you. Thank you. Thanks for the call. That's a fun problem to have. It really is fun. I got a million bucks sitting there. What do I do?

It's an emotional thing, though. I mean, she's seen that money grow from 800 to 1.1 million it's been around i think she said eight years for her five years for her husband so they're used to seeing that like there's a as weird as it sounds probably a comfort that they have seeing that in their account in their investment accounts and i i imagine it could feel some type of way to say i'm going to liquidate the majority of this to buy a house even though we understand like this is a great move that there is an emotional component there that it's totally fine to feel that way. So. Yeah. Well, there's also the sort of FOMO of a, what if I had done this? And there's

always the regret over what could have been and what if I had done this? I just don't think it's worth it to live like that. It's just too many brain calories burned when you're doing okay. Yeah, they're fine. And And you know, it's funny, I was, there's some finance YouTubers out there. And as I've talked to them and studied them, I found that there's sort of this chasing of the next thing. Like once you get to a million dollar net worth, you're around people potentially who also have a million dollar net worth or a $3 million net worth. And so now you're comparing yourself to how your friends are doing, how your mom and dad are doing.

And it's just this endless chase. There's also an interesting component to it. I mean, they'd run the math out. But if they said, all right, rule of seven, this 1.1 is going to double in seven years. We also know that the average person who walks the baby steps through has no debt. They pay off their mortgage in seven to 10 years.

So the funny thing is, is if they use their own income and said, you know, we're just going to use our own income, we're going to buy a house, pay it off in seven years and let that money sit and double. There's some fun compound interest that's happening. When you think about if they buy a house in cash and then they can invest 30, 40% of their income into investments, well, that's going to make up for it. That's true. That's true. So you're going to be okay either way. But what you don't want to do is sit there and do the math on what could have been. The grass was greener on the other side, maybe. I would just rather have peace, be content with where you're at.

Being in your mid-20s and having a million plus net worth, just celebrate that. Yeah, that's excellent. Live and breathe. Go on a vacation. Enjoy your life and be consistent with your investing. You're going to be okay. That's what it's all about. You got to have balance as you live out this plan.

This is The Ramsey Show. Welcome back to The Ramsey Show. I'm George Camel, joined by Jade Warshaw. And in the lobby of Ramsey Solutions on the debt-free stage, we've got a smiling face. We've got Madison here. How are you, Madison? Good. How are you guys?

Doing great. Where are you from? I'm from Kansas City, or from Chicago, but I live in Kansas City now. All right. Yeah. You got to shout out the roots there. Mm-hmm. That's street cred.

All right. So how much debt have you paid off? $125,000. Come on. That's a lot of debt. It is a lot of debt. What kind of debt was that? I'm just curious. I know. All school loans. I knew it. Yes. Get you every time. Wow. And how long did this take you? Two years. Oh my gosh. Yes. That's amazing. All right. And what was your range of income during the two years? So it started, I am a nurse. And so I started making like 40 grand new grad. I was on days. And then towards the end, nurse has like a lot of flexibility. And so I was picking up so many shifts that I was making like 120,000. Awesome. Yeah. Kind of ended with a lot.

That's amazing. Yes. Well, be proud. You've earned every penny, especially over the last two years. That is impressive. Okay. So you're a nurse. This is all nursing school student loans? Yes. So I did an undergrad with a health science degree.

And then I did an accelerated nursing degree at Mizzou. Wow. And here you are to tell the tale. So two years ago, you're the average, you know, nursing school grad. You got a bunch of debt and you went, I'll pay it off eventually. What made you go, no, I'm going to get aggressive about this? Yeah. So it's kind of crazy because I didn't know how much debt I was actually in when I was in college. I was like, oh, you know, maybe eventually like I'll pay it off or I just didn't know how much I had. And then after college, I just sat down and I was

like, oh my goodness, I have $125,000 of debt. My parents sat me down and I was just started bawling. I'm like, this is a lot of money. But I started looking into my faith my freshman year of college and honestly just started to see it like in a biblical lens of why it's biblical to pay off your debt. And so that gave me like motivation to be like, I have got to take care of this. And so, yeah, it just sent me on this like journey of just attacking my debt. So what was your, like, tell us what your life was like. Like, what was your living situation?

What were you spending? Because hardly anything to do this so fast. Yes. So I did night shift. So I barely got to see a lot of people. So I was living with four other girls. So there's five of us in this house. So trying to live like as cheaply as I could in Kansas City. I moved in with my friend and her mom when I first moved there. So try to like really not have that much. And then, just started yeah just kept paying it off so so you're

like i started at 40 000 i'm gonna keep living on 40 000 yes even though the income is going up and that's i mean that's the hardest part right you see everybody else going out having a good time with their hard-earned money and you're buying houses getting nicer cars going out every weekend and you're like nope i'm gonna keep living like a broke college student. What did your friends think? The girls you were living with, when you told them, what did they say? They were great. I mean, they were like my support system. So they were like very encouraging.

And just like, honestly, if I didn't have them, you know, I don't know where I'd be. But my co-works are the most surprising. I just, I didn't realize like how unpopular it is to pay off your debt. They're like, oh, you know, just wait for the government or you'll be in a different tax bracket. So you don't want to like pick up shifts. And I was like, wow, I don't know if that really makes sense to me. But so yeah, it was just crazy different advice that I was given like over the years. Wow. So what got you connected to Ramsey? Yes.

So my friend, actually, I started to share my faith like my fifth year of college and just started building a relationship with one of my good friends. And so after school, I realized how much that I was in. And so we were talking about it and her and her family are just Dave Ramsey. Yes, they knew everything. And so they like really just took me underneath their wing and was just helping me throughout the whole process, telling me about all the baby steps, sending me all the videos of what I should be doing, which one I should be attacking first. And so yeah, really, my friend has like been the biggest

cheerleader for me. So you're amazing. Like you do understand that plenty of people, I mean, the majority of people, they come out of school with 125 or more of student loans and they just, they're so overwhelmed by it. They do nothing. And then 20 years goes by and whoever's in administration doesn't forgive it. And it's just this chain around their neck

and you completely went against the grain. I'm just blown away. That's amazing. Well, thank you. And I love the way your faith played a part in this whole thing. Yes. That's incredible. What was the hardest part paying on this 125 grand off in two years? I think honestly, probably like I was working four to five shifts a week. I was, I was living on nights. So like I was sleeping all through the day a week. I was living on nights. So like I was sleeping all through the day. And so that was like, there was so many, you know, moments.

Just physically, mentally exhausting. And I'm like, man, I want to, you know, I was still trying to make like church a priority and wanted to still like be involved in like serving and stuff. But there was just certain times that like I had to like just work during the night and I like couldn't physically do it but I think that was probably the hardest part is sometimes just feeling a little bit like isolated because you're trying to pay off all this debt. Are you still going this hard because you went from 40 to 120 have you maintained that now or are you sort of like all right I'm backing

off I need to rest a little bit. I feel like I oh sorry this is gonna um I feel like I honestly started to kind of I'm like working my three shifts. I've kind of taken a little bit of a back of just, I don't need to be like killing myself anymore. Yes. So what do you tell the people who, like I said, you're not normal, you're different, which I love. What do you tell the folks who are sitting there watching going, ah, you know, I'm going

to wait or, you you know maybe when I make a little bit more money I'll try to tackle it or my least favorite easy for her to say I'm not Madison so yeah what do you say to that person yeah I'm like man it just it's so free to finally get here I felt like just you truly are a slave to the lender. And I just felt so enslaved. And so I'm like, man, it only starts with like one step. And so I knew it's like the big number is a lot to think about sometimes, but man, if you just like, just that $100, just that one extra loan, like you can, you can get there. Like it is possible. And so, yeah, I think that was just like the most encouraging thing of like, it is not my

own strength, but it's really like, God, that is in me. Like I can do anything. And so I'm like, man, that's possible for each and every person too. I love that. Yeah. Cause it shows you an inner strength that you have. I'm sure that you feel like you can tackle anything now. There's like an invincibility you get when you have agency over your life. When you take control of your money, you go, well, I can take control of this area of my life too in this area versus life just happening to you forever. Yes. That's huge.

I know. Good stuff. You have some cheerleaders here. Who are these nice people? Yes. So this is my friend. This is, yeah, we met in college. And so I started to share my faith with her and her and her family are the ones that adopted

me and helped me with the Dave Ramsey. And yeah. That's a friend for life right there. Yes, it is. It really is. That is beautiful. with her and her and her family are the ones that adopted me and helps me with the Dave Ramsey. That's a friend for life right there. Yes, it is. It really is. That is beautiful. Well, we are so proud of you. You're an inspiration. I feel like your joy and freedom is contagious, not only to the people watching right now in the lobby, but to everyone listening and watching online. So thank you for sharing your story. That's huge. Well, we've got some parting gifts for you. We've got two every dollar premium subscriptions because budgeting is the key. Yes. Making a plan for every single dollar.

And so we want to gift that to you. You're free to use it or gift it to someone else and get them started because I think that's kind of how this is going to go. There's a ripple effect that has played into your life that will continue to play into other people's lives. Yeah. Well, thank you so much. And we're honored to have you here to share your story.

It is Madison from Kansas City. $125,000 paid off in two years, making $40,000 to $120,000 with her whole life ahead of her to live and give like no one else. Madison, count it down. Let's hear a debt-free scream. Three, two, one. I'm debt-free!

Yeah! Love it. Three, two, one. I'm debt free! Yeah! Woo! Love it. That was cool. And she did a little Snoopy dance. A little dance to go with it. That's what I'm talking about. I feel like we all should have celebratory.

I should not be seen dancing in public, but I think it's fine for people that have the rhythm. If you got the Snoopy dance, don't hold it in. Don't hide it under a bushel. But man, Madison's one of those people you're just like, I people like that in my life no that's right well you're the some of the people you hang around and clearly she had some support the girl she was living with understand her best friend understood the assignment thank you and now we see the result of it you get a bunch of naysayers in your life they just say nay why would you do that?

Wait on the government. Why pay off your loans? And really what it is, they don't think it's possible for them. That's right. They don't want it to be possible for you. Oh, stealing that hope. No hope stealers here. You get around people who are hope givers, who have the gift of encouragement and support.

That's right. That's what it's all about. Find you those people, whether that's in an FPU class or in your local community. It really makes all the difference as you follow this plan. This is The Ramsey Show. Welcome back to The Ramsey Show. Our scripture of the day is Psalm 104, verse 24. Oh Lord, what a variety of things you have made. In wisdom, you have made them all. The earth is full of your creatures. Albert Einstein once said, Two things are infinite, the universe and human stupidity.

And I am not yet completely sure about the universe. Now that one I'll take. That's a little bit of a burn. It's a good diss. Well, when you're really smart, you can say things like that. But I think Albert was onto something. That was shady good diss. Well, when you're really smart, you can say things like that, you know, but I think Albert was onto something. That was shady, Albert. Because I think, you know, depending on where you are and where you're looking, you will see an increase in human stupidity sometimes.

Oh, facts. Yes. Oh, boy. All right. Let's get to the phones. Allison joins us in Hartford, Connecticut. Welcome to the show, Allison. Hi. Thank you guys for having me. Yeah, how can Jade and I help? So I'm over half a million dollars in debt right now, and I have a rental property, and I guess my biggest question right now is whether I should be selling this rental property to start paying off my debt. I just have a really great interest rate and it's income producing. So I don't kind of like weigh the benefits. I'm going with yes, but let's hear a little bit more. Where are you currently living? What's your personal living situation? So I currently own a place in Connecticut and originally I had bought a place in Boston. So that's where that big,

a lot of my debt is coming from the Boston property mortgage. Okay. And that's the one you're renting? Yes. Okay. So your primary mortgage here in Connecticut, what do you owe on that? I owe about 200 on that. And then the one in Boston, what do you owe on that? And if you sold it, what would it bring? I owe about $300 on it and I could probably sell it for about $420. $420? Okay. What's your Connecticut home worth? It's worth probably like $240.

Okay. And what's this half a million dollars in debt that you have? So it's the two mortgages that I have. I have about $20,000 in student loans and $12,000 in car loans. Okay. So it's mostly in mortgages versus consumer debt. Mostly, yes. That gives me some great peace. I know.

That's right. What's your income? I make about $75,000 at my full-time job, and then this rental property gets me about $7,000 a year. A year? Okay, okay. I could find that in couch cushions and do an Uber. I don't think this is worth it.

Girlfriend, if I'm you, I'm selling this Boston residence. I'm getting the $420 i'm getting the 420 after fees however much it may be probably end up with about 100 well you said you'd profit did you say you'd profit 420 or did you say that's what you that's what i could sell it for yeah you sell for 420 you have 300 left to pay so you probably walk away with about 100 or a little less which helps you knock out the student loan and car loan and leave you about $60,000, $70,000, which becomes your emergency fund plus. Yes. I think this is the plan. Easy. Easy peasy. It's not worth all the risk.

It's income-producing. It's only $7,000 a year. There was a kid in my neighborhood running a lemonade stand that made more than $7,000. That's nothing. I don't think this is, and I know you got a low interest mortgage, but this is a lot of risk and a lot of pain. You're not making any money.

Listen, I said this the other day, George, I think you and I were on the show together. I think that real estate people get this idea. It's almost like they just like being able to say, I have an income property. When I'm like, think about the risk that you're carrying for $7,000 a year. That, I mean, it's not even a thousand bucks a month. That's not even an Uber side hustle. You know what I'm saying? Like that's not even a side hustle. If I tasked you with making five, 600 bucks a month, you could go do that pretty easily with a side hustle. And so you're taking on a lot of risk and a lot of,

you got $500,000 in debt and you're calling because you're stressed about it. And so we're giving you a way out with really no harm to your life. And you can always go get a rental later, but I think it should be after you have your primary home paid off and we save up and pay cash and we get your income up. Because making 75 and paying mortgages on half a million bucks, that would scare me to death. Yeah. Because one thing goes wrong with this tenant and you're long distance, number one. And so you got a property management team, I'm guessing you're paying right now to deal with that?

No, I'm actually doing it on my own. Oh, dear. So you're traveling, you're going over there. This is not worth the hassle. Okay. I think we put the real estate guru dream down for now and let's focus on getting our income up and getting our primary mortgage paid off and getting the consumer debt paid off because i'm guessing you've gone through your whole adult life with all this debt

yeah i mean i'm only 24 but i i got a long way to go even more reason to get this cleaned up because you have so much time to build wealth the right way and this was just a quick little drop in the bucket that was a detour in the wrong direction but you've got your whole life to to go on the right path and honestly become a multi-millionaire whether that becomes you buying real estate in cash or it's just you investing in your 401k the boring way and between your your uh consumer debt interest and your mortgage interest, you're paying more than seven grand in interest right now. And so I want to see all that go away so you can start earning the interest and doing this with way more cash flow. And so the good news is you're in a great

spot. I mean, you're going to be totally debt free with a whole bunch of money in the bank and ready that you can even attack your own mortgage with some of that money left over. Yeah. Yeah. That's a good plan. And you'll be there in no time. And you're only 24, like you said. And so who knows, maybe by 30, you've got enough to pay cash for rental property or 35. That's okay. But I like this plan a whole lot, way less stress, way more peace. George, I feel like real estate is like the the it's the person that you date they're good looking and on paper it seems right but then you get in the relationship it's just not it's just not hitting right they're not you know you know it's not going in the direction of marriage but you stick with them because it's the idea was there and it's like well it's the like well

he comes from a good family yeah that's not enough to sustain marriage material he's got a stable job yeah but you know you know good and well that's not the right sustain marriage material he's got a stable job yeah but you know you know good and well that's not the right person for you i feel like real estate people get into it because it looks good on paper and it's everyone is saying like this is the thing for you and meanwhile people are losing money barely making any money and they're carrying all of this risk and they're tied to it for years and years for what yeah that's a lot of mental and emotional weight all right let's try to take uh one last quick call from jennifer in los angeles jennifer what's your question today hi um i'm wondering if i should use uh money in a 403b for my previous employer to pay off credit card debt how old are you 40 oh how much credit card debt. How old are you? 40. Ooh, how much credit card debt is it?

It's about $19,600. And then I have student loan also. How much is the student loan? $43,000. What's your income? A month, about $45,000, $70,000, take home. Okay. Is it just you or you have family, kids? I have two kids, single mother. Okay. So you're bringing home about 55K and you have about 63,000 in consumer debt. Yes. So I would not use your 403B. I wouldn't touch it because you're essentially, it would be like taking out a loan at 30 something

percent interest because of the penalties and fees you'll pay because you're not of retirement age yet. And so they like to ding you for that. And I know it sounds like a smart shortcut because you can get rid of your debt faster, but I would look at literally any other way to pay off this debt. Savings, side hustles, selling stuff that you have, but do not touch the 403B. Okay. That was a simple answer. Are the credit cards out of your life? You cut them up? Yes, they're gone. Good, good.

So making $55,000, have you done a monthly budget yet to see how much you'd have left over if you were paying attention? Yeah. Yeah, I have a good amount. I guess my other question is, I did all the stupid refinance things with the student loan and it's giving me a $0 minimum balance. Oh boy. But I should not be doing that, right? Right.

That means you're racking up interest. Whatever it was before. Yeah. Yeah. Because the interest is still accruing. You want to pay as much as possible, not as little as possible. That's how you know you're not as little as possible. That's how you know you're making progress. Thank you. That was my second question. I was like,

I don't think I should be doing zero because I was wondering if I should put that minimum balance toward my snowball, but I should just keep the snowball at what it should be. Keep the snowball moving. Separate all the debt, small to largest balance, ignore the interest rates, and you might need a side job in order to get the income up because 43K making 55, that's take home, which is great, but you need to be throwing, I want this debt gone in two years or less, which means about 20K a year going towards this. And so you can start to reverse engineer that as to how much margin you need every month to attack that goal. And that will help you stay on the path. Say, I'm going to put two grand a month on top of this

debt. And if that means a side job, I'm going to do it. And those kids will be watching mom be a hero the whole time. That puts this hour of The Ramsey Show in the books. She's Jade Warshaw. I'm George Camel. Thank you to all the folks in the booth keeping the show afloat. And you, America, we'll be back before you know it. Thank you.