The Ramsey Show - App - My New House Is a Money Pit! (Hour 1)

Episode Date: December 21, 2021

Saving, Debt, Relationships, Investing, Home Buying, Home Selling As heard on this episode: Sign Up for a FREE trial of Ramsey+ TODAY: https://bit.ly/3rZTUAx Tools to get you started:  Debt Calculator: https://bit.ly/2Q64HME Insurance Coverage Checkup: https://bit.ly/3sXwUn5 Complete Guide to Budgeting: https://bit.ly/3utmVXi Check out more Ramsey Network podcasts: https://bit.ly/3fHhbVE

Live from the headquarters of Ramsey Solutions, broadcasting from the Dollar Car Rental Studios, it's the 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. Ramsey personality George Campbell is my co-host today as we take your questions about your relationships, your work, you, your money, and how these things all are intertwined. It's called The Ramsey Show and life happens here all the time. Starting this segment off, one of our good friends over in San Francisco, Mike Rowe from Dirty Jobs.

Hey, Mike, what's up, man? Well, Dave, I'm living the dream merry christmas yeah merry christmas to you so you're getting ready to launch a whole new set of dirty jobs i saw the discoveries picked it up it's going big again huh well just when i thought i was out they uh they pulled me back in after 10, we've got a new season coming out. And, yeah, it's hard to believe, man. A decade ago, I swore I was done. You know, we shot 300 of these things and filmed in every state. But the lockdowns, the talk of essential workers, a lot of people wrote in to say, you know, it would be fun to see what work looks like again out there in the real world through the eyes of an apprentice.

How could I say no? Yeah. Well, I mean, it is kind of a psychological disaster that we declared people not essential. It's a little bit humorous, too, when you indicate how stupid the government is. Well, humorous in the way you laugh you know when you fall down the stairs right i mean it's just uh yeah exactly it's like when you back your car into a dumpster yeah oh god oh something else something else well we wanted to tell you uh tell folks that the series is back out it's on discovery right it is it'll be um right where i

left it actually uh sunday i think january 2nd eight o'clock and then they got their discovery plus thing and uh it'll be over there too but yeah that's the plan now the trailer looks um as always interesting good trailer any teases mike that you can give us? Was there one that you're like, I'll never do that again? You can't pay me enough money. You know, I mean, looking back, I'd say probably half of the 300 we did, I sort of checked in terms of not like a bucket list, but just like, okay, I'm glad I did it. I won't be doing it again. This season's not much different.

Remember, I'm not the expert on the show. I'm not even the host, really. I'm more like a guest. And the goal really hasn't changed. It's an attempt to give folks an honest look at a day's work through the eyes of an apprentice. So when you don't really know what you're doing and you show up cold, you make a lot of mistakes, but it's in those mistakes that people can see just how challenging, how important, and how difficult the work can be when you see somebody who knows what they're doing getting the job done next to me. Hey, thanks for appearing on the Borrowed Future documentary.

It has been a big hit. We've had over 150,000 folks view it on Google Play and Apple TV and Amazon Prime. And I think we really stirred up a ruckus together, and we appreciate you participating in that. Hey, look, like I told you the first time we spoke, Dave, the only four-letter word that was really off-limits in my house growing up was debt. And when I see what's happened to so many people today, kids and grown-ups, what is it now, $1.7 trillion in student loans on the books. And now we've got, looks like close to 11 million open positions that don't require a four-year degree. It's just mind-boggling that we're telling the same generation again and again that the best path for the most people is the most expensive path. And we need more content like the stuff you guys are churning out. And I was privileged to be a part of it.

Thank you. Well, we appreciate it, folks. Be sure you tune in. Sharon and I have got a whole list of things we're going to try to watch through the holidays. Y'all will probably like that, too. And you can just put Borrowed Future on there if you want to learn the truth about the whole student loan debacle. And, George, you were square in the middle of that as well. Oh, yeah.

When we did the podcast, which was the precursor to this, and Mike was nice enough to let us use a clip. And he shares this incredible story back when he was in school and what those teachers told him. And your clips, Mike, are some of my favorites in there because you just go, oh, finally, someone with a head on their shoulders who's saying the truth. And so it's just so refreshing to hear voices like yours speak to those young people and say there's a different path it doesn't have to be this way it doesn't have to end with two hundred thousand dollars in student loan debt and then i open my email and i find out that my work two worlds have collided my buddy john rich my buddy mike rowe get together and do a song which

little known little known fact about you you're a big-time singer. I mean, like Broadway. Professionally trained. Yeah, opera singer before you were doing dirty jobs. And so you and John hook up and did a song which has become the number one song in the U.S. And I'm not exaggerating. You bumped what Christine Aguilera or whatever off the chart, right, off the top slot with this song. And I got to tell you you it's a lot of fun but the fact that it's number one's a little ridiculous it's preposterous dave and look it's just one of those life lessons you know you can sit down with your idea and your hopes and your

dreams and you can work on whether it's a book or a tv show and maybe people like it they probably won't right and then one day you walk into a bathroom with a knucklehead and a cowboy hat and you're right. Santa Claus got a dirty job and you record it. The Oak Ridge boys come in and the next thing you know, you're at the top of the charts. So, you know, you can plan all you want, but so much of the good stuff that's happened to me in life has happened because I throw a lot of mud against the wall and I'm never quite sure what's going to stick. But this crazy song, you know, John's given his half of the money to Folds of Honor, which is a great charity that he's been

supporting for years. And I'm giving my half to MicroWorks, which goes right to the student debt crisis. And so I think between the time of the year, the fact that it was all for charity, and the fact that a guy in a baseball cap and a cowboy hat wrote the song in a bathroom, basically on a dare, I mean, how do you say no to that? Yeah, well, apparently people aren't because they're lining up for it. So I had dinner with my wife and I had dinner with john and his wife the other night and uh we were laughing all the way through dinner that this thing i mean john has written probably what a thousand songs or something um he's had quite a few number ones and a lot of people don't

even realize he's as prolific a writer as he is because he's an artist but from big and rich and fame and so forth but and then pulling the Oak Ridge Boys in, that was genius. Well, the thing is, you know, first and foremost, John's a patriot. And, you know, I realized that. He was interviewing me for his show on Fox Business when we started singing songs to each other. That's what started this whole thing. And, you know, I've always been a big proponent that way leads on to way and you know you got to play the cards that you get and John just happened to have the Oak Ridge boys in his

Rolodex and you know it's funny too Dave the first time I met you I think I spoke at one of your things and Larry Gatlin was in the audience yeah and he and I have stayed in touch. So worlds collide, man. Like you say, you really never know. Thank you, brother. We appreciate you hanging out. Crank this thing up as a bump music

out of this break and check out Mike Rowe. Dirty Jobs comes out January 2nd. Speaking in, speaking out for 24 hours straight. Gotta outrun them big guard dogs

Gotta do whatever it takes Don't you know that Santa Claus got a dirty job Santa Claus got a dirty job Santa Claus got a dirty job You know, I heard a sad and touching story recently. Zander Insurance has set up a scholarship for children whose parents died without life insurance. Last year, they gave away over $165,000 to help kids avoid debt and go to college to pursue their dreams. It's touching, but also sad since it's a situation that occurs all over the country and can be avoided in so many cases. This is the reason why I talk about Zander and term life insurance

every day. It's not expensive or complicated, and it's gotten even easier with many companies no longer requiring medical exams. Zander shops and compares all the top term life plans and stays with you the whole time to make sure your family is taken care of. That's why I've used and recommended them for over 20 years. Go to zander.com or call 800-356-4282. So I don't have to keep talking about these sad stories. George Campbell Ramsey personality is my co-host today. Open phones at 888-825-5225 our thanks to mike rowe for uh coming on hanging out with us for a little bit he's a busy dude and uh we appreciate him participating in the borrowed future documentary again put the borrowed future documentary on your list of things to watch through the holidays. It is the full rundown on truly how student loans are killing the American dream. Yeah.

And if you want to skip a Hallmark movie, this is the one to watch right here. 88 minutes. And it'll help you avoid some awkward holiday conversations with the family. And instead, this documentary will spark conversation. I will say that. It is stirring up a holy ruckus and i love what we're hearing in just the feedback of saying wow this has given me a way to talk to my kids in a way that i could never have on my own so i love what this might do for

the future of america well it's waking parents up do not allow allow and not participate in their kids falling for this ridiculous epic failure called the student loan system. It is abusive. It's out of control. It's in bad shape. And it's leaving people in a mess. Yeah. And February 1st, student loans are getting turned back on.

I think it's going to rile up people once again to get angry about this whole situation, get angry at their debt. Hopefully we see a lot of people get aggressive and pay it off but i'm hoping this documentary gets another spark as we head into that season of people going oh my gosh sally may's back well merry christmas america we're glad you're with us open phones at 888-825-5225 tasha's in pennsylvania hey t, what's up? Hi, Dave. I need help. We'll try. How can we help? So here's the situation. I recently bought a primary residence. I have a rental property that I've owned since 2013. It used to be my primary.

But this new home that I bought is turning out to be a bit of a money pit. And I need cash to help do renovations on it. I'm hesitant to sell my rental, but I know that if I do, I could be debt free. Um, but I'm not sure if that's the right choice because I do make money on it. I also have 47,000 in student loans. So I've got debt, I've got equity and i'm just kind of frozen and i don't know what to do well i yeah if you can sell the rental and have the cash to finish the money pit and not be a money pit anymore and have the cash to knock out your student loans then i'm selling it uh the question i've got is are you going down a rabbit hole with this money pit thing and you need to sell it?

It's something I've thought about, but in its current state, I would be losing tens of thousands of dollars. So I don't know. You tore it up after you bought it? So I bought it knowing it was a fixer-upper thinking it was going to be cosmetic but once i started taking some things down i discovered some serious structural issues so there's no equity in the house and to sell it as it stands i probably won't even recoup you know what little I've done. What'd you pay for it? I paid $96,000. What would it sell for today as is?

I mean, I think $50,000, $60,000 tops. Okay. So I would be losing upwards of $30,000 to $40,000 right off the bat. I think either way... It probably needs about $50,000 in work, too. And then at that point, what would it be worth if you put all this money into it? Are you going to recoup it anyways? I would have no equity, but I think I would break even if I put in $50,000. I think it would be worth around $130,000, $140,000. So I'd probably break even no equity, and I'd have a nice home to live in. And you'd be happy with the home at that point?

I would. I would. Yeah. It's just a matter of funding those repairs. And I'm hesitant to sell the rental. I could do a cash out refi and have money to do it. I know that's probably not Dave's choice, but... Well, you've got all this, you've got a pile of debt too sitting there with the student loan. So I like the idea of paying off the, of selling the rental. Could you pay off your student loans and have a pile of cash if you sold the rental? So my rental, I bought in 2013 for $150. I only owe $104.

And in this market, it's probably worth $350. I could be debt-free. I could pay off the mortgage on the new house with it. I could be totally debt-free if I sold it. I like the sound of your voice even saying that. It sounds like this anxiety is not worth the money coming in from the rental. You could clean up the student loan debt, have a pile of money, and have some money to fix your primary residence.

That's what I would do if I was in your shoes. Yeah. Because it sounds like this is just not a fun time for you right now, as is. It's not. And on the rental, I net about $700 a month. So I feel like it's decent, but it could also solve all my problems if I got rid of it. i think that's the answer that that last sentence that's what sums it up right and um you know basically this bad decision has forced you into a corner on which next decision you make and you don't want it to be a bad decision so you know if you don't want to lose thirty thousand dollars selling the house as is and move on with your life and keep the rental then um then i would sell the rental and i'd

finish fixing this place up i'm a little bit afraid that it's more than 50k for you to fix it up but you're going to have more than 50k so that's okay here's what's interesting when you're going to have more than $50,000, so that's okay. Here's what's interesting. When you're doing the fix-up with cash from the rental that you kind of are pissed about having to sell it, you're going to be super careful with the renovation, and you're not going to go overboard because you're using, like, real money that came from a source that you didn't really want to have to do. And so it's going to kind of make you very, very wise in your renovation process, and you'll be a lot calmer in your renovation process, too,

because you're not doing it all with borrowed money. The chances are you do a cash-out refi, and then let's just add to this equation a bunch of debt. Let's add to this mess a big pile of debt. No, that would just be you're just compounding the stupid then. And no, I wouldn't do that. But yes, I'd sell your rental here, and let's get this mess cleaned up, get the mortgage paid off, get the house fixed up, and get the student loan paid off.

And you've got a lot of peace in your life at that point. Kate's with us in ontario hi kate how are you hi dave i'm great thank you so much for taking my call today sure what's up well um my very dear grandmother has recently passed away and i found out i'm going to be inheriting between 150 and 200 000 canadian dollars and my husband and I are recently debt-free in the last two weeks. Wow. So I'm just looking to see how we should proceed with this really wonderful gift from her. So are you guys in baby step three now? Are you saving up for that fully funded emergency fund? Yes, we are. We have $2,000 in savings. Okay. Well, we can check that box off. And once you've

got that three to six months, you guys will start investing. And that can just come out of your income. That doesn't have to be part of this inheritance. And we're moving on. Do you guys have kids? No, we don't. That's not in the cards for us. And you have a primary residence with a mortgage on it?

Yes. We have about $168,000 left on our mortgage. This sounds like you could be in Baby Step 7 instantly. Fully funded, emergency fund, and a paid-for house, thanks to Grandma. Wow. Yes, that's a huge gift from her. In Canada, we have different investing options. Should I be considering putting $25,000 of this in a tax-sheltered investment account? I can do that, and it would reduce my taxable income for the upcoming tax year.

Only if that doesn't mean you can't pay off your house. If you can't pay off your house by doing that, then no, you need to pay off the house. Okay, so the priorities are fully fund the emergency fund, the remaining balance that we need in there, and pay off the house? Yeah, if there's money left after that, then we can get to tinkering, because you're at baby step seven, then we can get to tinkering because you're at baby step seven. Then we'll get to tinkering with your investment options and your retirement options and all that kind of stuff. But, no, let's get that house done, girl.

And you've got to know that Grandma's smiling. I mean, she's in heaven looking at this going, they just paid off their house. That's pretty cool. And, by the way, you're on a budget and you're taking what used to be a house payment you're investing it and you'll be a baby steps millionaire in no time Thank you. George Campbell Ramsey personality is my co-host today. Open phones at 888-825-5225 jamie and cara are with us in portland oregon says on my screen you guys are debt free congratulations oh thank you so much thank you well done well done how much have you paid off uh just under 250 000 dollars wow how long did that take? Five years.

Five years. And your range of income during that time? We actually started at around $50,000, and this year we're expecting to come in at $150,000. Oh, good. What do you all do for a living? Well, I had a change in careers at the moment. I'm doing several things, anywhere from data analysis and information security to keeping bees on top of rooftops. That works for me. Good.

So what about you, Kara? Oh, I actually changed careers as well. I started out in higher education, and now I'm a financial analyst for a technology company. Oh, good. Cool. Cool. Wow. So what kind of debt was the $250,000? It was everything. We had about $5,800 in personal family loans, $35,000 in small business, which are loans which are actually also personal loans. I had about $32,000 in student business, which are loans, which are actually also personal loans. I had about $32,000 in student loans. And you?

Yeah, about $90,000 by the time Sally Mae was kicked out of the bedroom. Okay. What else do we have? And then we had $90,000 was actually a small mortgage we also had. On your current residence or? No, past residence, manufactured home, actually. actually oh had to clean up a mess back there so you still have your mortgage yes so you're debt-free everything with the mortgage way to go yeah uh we're gonna uh we actually just moved to portland oregon from uh from arizona arizona it was a um one of our dreams

that we wanted to to move up. But as you say a lot, you don't get a pass on math in higher cost of living areas. So we knew we had to get rid of our debt in order to make this move and to accomplish a lot of our goals. So that's what we did. Wow. That's awesome. We're so proud of you guys. So take us back five years ago. What happened where you went, all right, we got a quarter of a million dollars in debt sitting here. We got to clean this up. Well, that's a pretty good story there. I'll try to keep it short. Basically, we had a couple of kids. We had one on the way at the very beginning of this.

And I wasn't too sure of how we were going to move forward and provide some security for the one on the way, started out by just looking into life insurance. And I was driving on the road and visiting various businesses for something I was doing at the time and listening to a lot of Dave Ramsey. So that's how the conversation actually started was, hey, we've got a kid on the way, well, how about insurance? And one thing led to another, and we took it from there. Wow. Not every day you hear a story start with, well, I was looking for insurance, and here we are.

Debt free. That's incredible. So what was the journey like for you guys? I mean, you're throwing $50K a year at this thing. What were the sacrifices you made along the way um not eating out i guess uh was was one of them um just kind of saying making the decision to evaluate uh do we actually need this thing uh now or can it wait um we were running a farm at the time. That was one of my business. And so although it was flexible, it was taking on some debt. So we decided no more debt as far as taking on business debt.

We're going to cash flow everything and start hacking away at the debt that we did have for the business. You stopped the bleeding and cut some expenses and just buckled down for five years. Yeah, immediately. Way to go, guys. Proud of you guys. How does it feel now that you're free? Amazing. Yeah, yeah.

It's a lot. We wouldn't have been able to make the move up here, actually. There's so much to do up here that it would have just been a disaster because especially a lot of people here complain about the rain and the cold, but you have a different outlook and perspective on wherever you're at if you don't have, you know, a big ball and chain of debt.

It's always sunny when you're debt-free. There you go. I love it. Way to go, you guys. Well, we're very, very proud of you. Congratulations. We're going to send you a copy of the new book, Baby Steps Millionaires. Want that to be the next chapter in your story,

How Ordinary People Built Extraordinary Wealth, How You Can Too. It comes out January the 11th, but we're going to go ahead and send you your advanced copy now and also a copy of the Total Money Makeover for you to give away to somebody and get them started on their journey as well, okay? Awesome. Thank you. Merry Christmas, you guys. We appreciate you calling in very very cool jamie and cara portland oregon 250 000 paid off over five years quite a

journey changed their whole life their location and everything making 50 to 150 count it down let's hear a debt-free scream. Three, two, one. We're debt-free! Well done, boys and girls. I love it. Excellent. Excellent job. Jacob is with us in Chattanooga.

Hi, Jacob. Welcome to the Ramsey Show. Hi, Dave and George. Can you hear me all right? Absolutely. How can we help? Thank you. I look forward to being with you on January 13th in Nashville as well.

Cool. I'm glad you're coming. Yeah. Yeah, thank you. Real estate question. I'm wondering what would be the best way to get a property, a house into my daughter's name that we own? Is there a mortgage on it? Yes, there is. Okay. Are you going to pay that off? Well, eventually it will be paid off. It's on a 14-year fixed at the moment, about a little over 3% interest. Who's the loan with?

Investment property. It is with TVFCU. Credit Union? Federal Credit Union. Okay. Yes, Credit Union. Here's the thing this if they used a boilerplate standard deed of trust which they probably did in tennessee um it has a due on sale

provision in it it's usually paragraph 17 oddly enough i'm such a nerd i know that uh so look at paragraph 17 on your deed and you you'll see it's standard Fannie Mae boilerplate. Okay, but either way, almost all deeds today, almost all mortgages today, state that if the property is transferred, the loan is called due in full instantly. And so you cannot transfer the property entitled to her unless you make arrangements on this mortgage. Well, if you took her down to the credit union would they qualify her for the mortgage no that was the original problem okay why uh we raised our kids to be you know uh financial peace babies and, and so she is 22 years old. She owns her own business, uh, has, has, uh, pretty good savings. And, uh, but, but at 22 and recently having bought this

house and moved out of our house, she never had any credit established, nor did she have any trade lines established. Oh, she'd been in the house uh we closed in september she moved right in okay she's not been in there long enough to establish trade lines now and her job is her is self-employed and so she's gonna have to have two years of tax returns that show enough income to qualify yes and she doesn't show enough income to qualify you can't put the house in her name okay unless you pay it off i see yeah and uh and that was that was the other dilemma i should we uh you know we had been on baby step seven and but we're Ramsey Millionaires now, but most of it's in retirement accounts.

How old are you? I'm 49. Okay. How much is owed on this house? About $165,000. I'd sell it and put her in a rental, Let her go rent something. Let her start her life. No reason for her to be saddled with $165,000 debt at 25 years, 22 years old. I'd move on, dude. Well, we all know the story of the tortoise and the hare, and we all know who wins in the end.

But we often gloss over the downfall of the hare. He didn't lose because he was slower. He lost because he took a nap. He took his eye off the prize. He quit being goal-oriented. And if you're starting to lose steam, this is your wake-up call. We want 2022 to be your best wealth-building year ever. And if you're starting to lose steam, this is your wake-up call. We want 2022 to be your best wealth-building year ever.

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Shop the $10 sale before it ends at RamseySolutions.com. Open phones at 888-825-5225. Jackson is with us in Atlanta. Hi, Jackson. Welcome to the Ramsey Show. Hi, Dave. Thanks for taking my call. I'm 18 years old, and I'm part owner of a family business,

and we're taking on some part-time employees. We're also growing quite a bit, and we're looking into getting some heavy machinery that's going to help us with the process, we think. And I was wondering if you could help me know what's the best decision here to do. I'm sorry, I don't know what your best decision on what. Is this a financial question, or is this more about the business in general? Yeah, so basically we want to know whether we should buy this machinery. It's a CNC machine, and it would make the process, it would make it a lot easier,

and it would cut down on the man hours quite a bit. But it also costs a lot of money. Like, we're looking $5,000 or $6,000. And last year we netted about $100,000, I think it was. And so, yeah, we're just wondering, is this really cost effective? Well, I would look at it in terms of, first of all, obviously you're going to pay cash for this, right? Yes. We're not going to pay cash for this, right? Yes.

We're not going to go into debt. And second of all, if you look at, you know, what are you going to recoup by getting this machine? Is this machine going to make you $6,000 in the first few months? No, probably not. Probably it would be more long-term. This would be a year or two out? Product development. Okay.

Yeah, something like that. Well, in business, we don't buy anything for fun. In business, we buy things that give us more money than they cost back. A return on investment is what we're always looking for. So if the machine, you spend $5,000 on it, will make you back more than $5,000 in a reasonable period of time in your mind, then that's an investment in the business and you're paying cash for it. And yes, I would do that.

If it's just like a boy's excuse to get some toys, which sometimes boys use their business as an excuse to get some toys. I might be guilty of having done that in the past. And, you know, the budget's real tight at home, but we had to have this one for business, baby. So, you know, I mean, if it's stuff like that, then no, we don't do that. And so, you know, we're always looking for in business you should you should never have expenses you should just have investments so everything that you're putting out you're doing to cause your business to grow and that's an investment sometimes it saves expenses

or saves saves costs it's a cost savings mechanism it sounds like this will save some labor maybe you want to hire as many people so if if we spend $6,000 here, it keeps us from having, or $5,000 here, it keeps us from spending $10,000 on labor. Then that's, you know, that's a good investment. And that's the way you'd look at that piece of machinery. Yeah, you don't want this just to be a wet finger in the air saying, I think this is going to be a good idea. Do the math on paper and go, hey, this is going to save us this much per hour that we would have paid an employee, and we can create this much more product and woodworking products because of this. Make it a very logical, factual thing.

I'm forever telling our Entrez leadership audience, don't rationalize the purchase of stuff by using your business and, quote, calling it a business expense or calling it a tax write-off. And, you know, the world's worst is I grew up in the real estate and construction business. And, you know, you got a guy making nothing, and he drives up on the construction site in a freaking $60,000 pickup truck because he saw a Silverado running through a mud puddle on a Chevy commercial and felt like he had to have one. And that's just dumber than a rock because as soon as you park that sixty thousand dollar pickup on a construction site some moron

and a bobcat's gonna back into it and leave a nice dent in the side of it and he works for you by the way so i mean this is how life works so you know you know who the richest guy on the construction site is is the guy with the cheapest most beat-up pickup know who the richest guy on the construction site is, is the guy with the cheapest, most beat up pickup. That's the richest guy on the construction site because he don't care what you think. He's there to make money and he's there to run a business. And that's the one that, man, I'll never pull. I pulled up a guy, drove up and I swear to God, I don't know how this truck was actually held together. It looked like a baling wire and duct tape hold a patch in the

thing together it was probably a hundred dollar pickup and i'm talking to the old boy and and he's like he's he's laying bricks over here and i'm talking to him and then the more i talked to him i realized all the entire crew they're laying bricks and there was about 30 of them uh it was a big job uh worked for him he owned the company the bricklaying company and had the worst truck on the site they're all driving nicer cars than him yeah yeah and with payments yeah so that that's the thing you want to avoid is that kind of mentality when you're in business construction or otherwise uh any business you can pick on any business if you want to i can i can talk to you about lawyers that are stupid in their business and doctors

that are stupid in their business you don't have to be a bricklayer to be stupid um there's lots of stupid out there to go around and i've done plenty of it myself so you just have to really dial back in and go okay well you want to buy flowers for the whole office well that's great and that'd be nice and they'd smell good and'd look good. So are we going to have a boost in morale equal to the cost of these floral arrangements? Or is this an expense we can just survive? What's the point in that? And a lot of people do it on credit cards, and they go, well, I'm a business owner. I get great points.

I get great rewards. I never pay for flights. That's asinine. James is with us in Dayton, Ohio. Hi, James. How are you? I'm fine. Thanks for taking my call.

Sure. What's up? Well, I'm 62 and a half. I'm raising two boys. They're 11 and 15, 5th grade, 9th grade. I'm going to be officially retired at the end of the month. I owe about $19,000 on my house, and I really haven't done much for their college. I've only had them about five years.

And I just got enough cash flow in the last year and a half to where I could start putting some money away. Did you say $62,000 or $52,000? $62,000. $62,000. Right. 62. Right. Okay. So I'm wondering, I've got some investments, and I'm wondering if I ought to just take some money out of there and pay that house off.

Yes. And then I was thinking if I did that, I could just start hitting that college plan thing with the state farm. Yes and no. Okay, so yes, I'm going to take the money out of the investments to pay off the house but no we're not doing a college plan with state farm you don't do any investing no no no the state the state oh no you don't do this you don't do you don't do prepaid college no we don't do prepaid college you need to do it you can do a 529 where you can invest the money in a good good growth stock mutual fund and get in touch with one of our smart investor pros to help you that

and then also gear up your retirement yeah and this is a good question david that we get a lot on the show people saying should i cash out my investments and that's it there's a pretty easy filter if it's retirement do not touch it well it is if you're over 62 there's no penalty yeah so he can take the money out regardless yes hopefully he's set for retirement even if he's not it's 19 000 bucks get it done won't set him back too much if all you got is 19 000 you got other problems that's true so um and we got some other stuff to catch up on so yeah just take them take the money out of the retirement we wouldn't do that if he was prior to 59 and a half because he had a penalty but um but right

now or you know it's a big mortgage we start talking about how much of this. It's $150,000. How much we're cashing out. Yeah. But, you know, but if it's $19,000, just pay it off. Yeah. And then let's completely focus on retirement savings and college savings. Retirement savings and college savings. Sit down with your SmartVestor Pro. Click SmartVestor at RamseySolutions.com.

Get that started, and here we'll go. That puts this hour of the Ramsey Show in the books. Thank you to George Camel, to James Childs, Kelly Daniel in the books thank you to george camel to james childs ellie daniel in the booth i am dave ramsey your host and we'll be back Have a friend or family member that needs a daily dose of Ramsey advice in their life? Let them know about the Ramsey Call of the Day podcast. It's a quick hit of advice about life and money in under 10 minutes. Check out the Ramsey Call of the Day podcast wherever you listen to podcasts.