The Ramsey Show - App - Never Rationalize Debt!

Episode Date: November 5, 2024

Welcome to the Ramsey Show where we help you win in your life. We're going to help you win with your money, win in your work, and win with your relationships. The phone number to jump in is 888-825-5225. 888-825-5225. I'm Ken Coleman. George Campbell joins me on this momentous day. America votes, or in George's case, millions of people. They've already voted, early votes.

And you are, from what I understand understand you're big on voting on election day yeah i'm a traditionalist i i like to uh wake up on this day knowing that i've got a civic duty to perform i respect a little pop a little circumstance that's uh kind of the way i roll as you know yeah christmas isn't the same when you open your gifts five days early that's right you know interesting you say that i don't like to open up gifts on Christmas Eve. Very traditional. I like to wait, you know? I respect it. But I tell you what, it doesn't matter who wins today because we'll be here tomorrow. And the next day.

And the next day we'll help you win with your money no matter who's in the White House. So calm yourself. You got your money questions. I feel like if they're listening to the show today, they're doing pretty good. Right. You know what I mean? Like mentally, you're doing pretty good if you're not glued to headlines and instead you're listening to us. That tells me something about how your life is going. How are you doing right now? I'm doing great. You seem to be a, you're a self-admitted anxious person. That's true. Are you anxious about it? The more anxious other people get, the calmer I get because like oh, gosh, I guess I'm not that anxious.

Okay. Yeah. That's kind of interesting. That's where I compare. All right. Well, we're calm. We're clear here today to help you win in those areas. Let's go.

Cynthia is joining us in Tallahassee, Florida. Cynthia, how can we help today? Hi, Cynthia. Sorry. Thanks for having me. I'm kind of nervous. You're doing great. Okay. I feel like I'm sorry. Thanks for having me. I'm kind of nervous. You're doing great. Okay. I feel like I'm stuck. I am here in Florida. I'm originally from Texas. I moved to

Florida in 2013 to help my parents. They were aging, so I wanted to be closer to them. Subsequently, we got married. We bought a house in 2017. And then both of our houses, my parents' house and my house got damaged by the Hurricane Michael in 2018. It took us three years to get both of the houses back together. And, you know, with the help of my husband, he was able to help us get it repaired, which was an ordeal that I never want to go through again. My question is this. I don't want to live in Florida anymore, but my parents are elderly. My husband passed away two years ago, so I don't have him to help me anymore. I'm a full-time caregiver to them. I have a full-time job. Should I sell my house to kind of get that burden off of me. The responsibility of having two houses, caregiver, full-time job is a bit overwhelming. If I sell my house, I'm thinking of renting until I can convince them to go back to Texas

or, you know, God forbid, until they pass away, which, you know, none of us know how long we have. But is it a good idea to at least get rid of my house, bank the money, put it in CDs, and then just rent and not have to think about, well, if another hurricane comes, at least I won't be responsible for that house or two houses again. What's going on with the other house? That's my parents' house. They're living in that house. But you own it completely. Is there a mortgage on it?

No, they own it completely. Oh, so you don't have two houses. You keep saying, okay. Their house, no. I think she means she's responsible for her parents. She's kind of their chief caregiver. Yeah, and you would rent. Would it make sense for you to just move into the parents' house

if you are the caregiver? It would be difficult and be more stressful. Okay. I mean, I see no problem with you selling this house and renting. Now, we got to look at the long-term future of you becoming a homeowner again to reduce your largest fixed expense as you enter into your retirement years, especially. But right now, you've been through a lot, Cynthia. Yeah. I mean, between the damage to the house, the passing of your husband,

have you had time to even grieve all of this, or you've just been in survival mode taking care of mom and dad? Survival mode. You know, COVID hit. Mom got COVID really bad. It was horrible. My husband passed away, and she had a major blood clot, and she had a stroke, and it's just been biblical. So sorry for you. Thank you.

But I'm blessed. I am blessed. What would it look like to rent? What's it going to cost versus your current mortgage payment? Can you financially handle it? Yes. I'm looking at apartments that are around $2,000 a month. Okay.

And what's your take-home pay every month? Around $5,000. Are you working full-time? I am. Okay. And did your husband have life insurance? Do you have any other assets? He had a small amount of life insurance.

I do have an emergency fund. I have about $50,000 in savings. Good. Maybe about, I carry five in checking. Do you have any debt other than the mortgage? I have one credit card that has about $900 balance on it. Remind us again, what will you stand to make on this house if you sell it? What will you clear?

I'm thinking around $200,000. And you would just put that in a high-yield savings account? Yeah. For a year or so? Put it someplace where it would draw interest but be safe. I was thinking CDs haven't really gone that far with it, but, you know. Well, your high-yield savings account will have competitive rates while keeping it very safe. It's FDIC-insured, and so it's not going to disappear. You're not investing this money,

and it'll just help it grow with sort of the pace of inflation. If you're talking about 4% right now is what the rates are at. Cynthia, I don't know, George, what you think about this. I don't like the fact that her rent's almost half of her take-home pay, but yet I understand she wants to kind of get out of this house. I wonder if buying a condo or something that's much— Get her payment lower. Get your payment lower, less expensive,

not have to worry about a single-unit house and any kind of storm stuff, be a part of something. Have you thought through that? Do you understand our concern about your rent being almost half of your take-home? Yes, I am concerned about that as well. What about my idea? There might be a better version of my idea, but what do you think of my idea of buying something much, much smaller,

maybe more of a not a single unit home? It's not a bad idea. I don't know the availability in my area. I've not researched it, but I'm willing to do some research on that. I think it's worth kicking the tires, don't you? Mm-hmm. Absolutely. Because what would your ideal number be to pay rent?

What would be ideal? Oh, if I could be at $1,500 or less, it would be awesome. Yeah. That's what I'd be aiming for. What's your mortgage payment now? I'm around $1,500, but I send in a little extra every month towards the principal, so I pay about $1,850. Okay, what's left on the mortgage? $166. Okay. Yeah, I would do some more homework, but either way, you know, you're going to be okay. But again, we don't just want too much of your world being eaten up by that rent to where you can't accomplish other financial goals. And then you have a new version of stress, which is financial stress.

Yeah. So I think we're going to have to do some homework. I mean, it's a rock and a hard place here, and I hope it's just a season for you and we can get you to smoother ground soon. Yeah. So sorry, Cynthia, for all of the storms you've been through. But it seems like you've got a really great attitude. And that's what it takes to walk through these times of pain and come out on the other side. So thank you for sharing your story and time with us. Quick break. He's George Campbell.

I'm Ken Coleman. This is The Ramsey Show. There's a time in your life and at the baby steps for renting, but you don't want to do it forever because when you rent, you're still paying for a mortgage, just somebody else's. Plus, rent means instability in your budget because it always goes up, never down. So when you're ready to buy, make sure you work with a mortgage partner you can rely on, Churchill Mortgage. Churchill is Ramsey-trusted to help you make the move from renting to home ownership wisely. Churchill understands that when you buy a home the Ramsey way, your mortgage payment will be a consistent,

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Thrilled to have you with us. How you doing out there? How you feeling? It's a big day today, I think. Isn't it? A lot of emotions. Something going on today? I don't know what's going on.

I've got to check the calendar. It's National Something Day, isn't it? Something, what is something going on today i don't know what's going on i gotta check the calendar it's national something day isn't it something what is it what do they call it election day it's is it called national election day no i was just poking fun at the fact that now we have a national something day every day we have like a cyber security awareness month so i feel like we've lost the plot yeah we've lost the plot tell you what. Tell you what we haven't done too much about, and that's celebrating Christmas. That's something we can say. It's nice. We're moving into Christmas.

And that says to me, and I've got some notes here. Once again, Ramsey, with the amazing deals around Christmas time, we call it the 50 days of Christmas deals. 50 days, George. That's a lot of days. That's a lot of days. So whether you're shopping for yourself or maybe you're looking for the perfect gift this year, the gift that keeps on giving, if you can tell me what movie that's from, you get a bonus point.

Oh, boy, the gift that keeps on giving. Christmas Vacation. You got it. Very well done, George. A sticker for you. Send me to Trivia Night. James will get that for you later. You can get up to 30% off on our best-selling products.

That's what you're going to get in the 50 days of Christmas deals. Break your feet from broke. Hello. There you go. That's right. On sale for the first time ever. Yeah, because it's now reached its capacity of new book status. Almost there.

We decided to just let it go. It'll release in January. We're putting it on sale for the first time for our Christmas deals. How about the Get Clear Assessment? The very popular tool that we created to help you figure out what's that right place on the bus, right? Right seat on the bus. How can I do work that I'm really good at and I get paid well? Those are just two examples of some of our best-selling products. Go to ramsaysolutions.com slash store, ramsaysolutions.com slash ramsaysolutions.com store or click the link in the show notes do you folks know that the show notes it's kind of like being under the christmas

tree you get to the show notes george and it's like seeing christmas tree on christmas morning i never thought lots of good things every show has a few gifts in it in the show notes you got to go to find out what's in that description. So there you go. Thank you for that. RamseySolutions.com slash giveaway. Or just go to the show notes. We make it easier for you.

You don't have to remember all the links. George wants a link. You don't need a link. You know what you need? Show notes. There it is. All right, let's go to Rob in Los Angeles, California. Rob, how can we help?

Yes, hi. How's it going? Pleasure speaking with you guys. You bet. Yeah, California. Rob, how can we help? Yes. Hi, how's it going? Pleasure speaking with you guys. You bet. Yeah. Wonderful. So the situation here is, you know, I've been with my current company. I work in finance. I've been with them going on about going on 12 years in June. So about 11 and a half years right now. And I have two different paths that I can go at the current moment. But I have a little bit that I can go at the current moment, but I have a little bit of a dilemma

trying to figure out which way to go. So in my current role, I'm doing pretty well and I'm making enough money to be happy and comfortable. And I can go into my next role, which would kind of be a step up in a different division of my company, which would be a situation where I'd work with be doing a similar thing, but working with larger clientele, which potentially can get me, you know, give me a 20, 30%, you know, pay increase. Or my other situation is that I can stay in my current role and potentially move into leadership,

um, with my current company. And the situation there is, you know, I would potentially make a little bit less doing, doing that compared to what I'm doing now as the leadership role is more of a base salary position with an annual bonus at the end of the year. And my current role is I'm more on the sales arm. And I'm doing really well with the sales part of my job. So going into leadership, I might make a little bit less upfront. However, what I'm struggling with is

if I moved into leadership over the course of my lifetime, right? My total lifetime earnings might be higher. So it put me down that career track where I can move into, you know, leadership and then potentially, you know, to an executive role and make more later on. So I'm just trying to figure out what to do and to throw another curve ball into the mix is that I've only been in my current role with my company for about, uh, 11 months out of the, you know, um, you know, 11, 12 years I've been at my current company.

So I just try to figure out which direction to go. Well, which one do you want? Well, I think I'd like to go into leadership more than anything, but I would be potentially taking a pay cut. How much of a pay cut? Potentially $80,000 to $100,000. Whoa. And this is with your current company?

They've offered you this role? They haven't offered me the role in writing, so I applied for it. And what they told me is, you know, you're doing a good job. We can see you doing it, but we're not going to give it to you right now. So what they're going to do is there's an opportunity for me with another leader in the company who's going to be, they're not going to be around, let's put it that way. I don't want to give out too much information, but they're not going to be around for seven, eight months. And what they're planning

to do is let me take over for that person. And that's the first thing you gave us. You gave us two options. Is that the first option you just told me about? Yeah, that's the first thing you gave us. You gave us two options. Is that the first option you just told me about? Yeah, that's the leadership track. The other one would basically just be continuing to do sales in my company with larger clients. And I think I would make more money for the next few years staying on the sales side. But I think over the next 10 years, I would make more in leadership. Yeah, I think that's right, but I don't like the idea of you taking an $80,000 to $100,000 pay cut for that. There's other ways to get into leadership. And it's been my experience just observing, taking literally over 10,000

calls on the Ken Coleman Show, and it feels like half of them were these kind of questions. If you eventually want to get into leadership, you will have an opportunity to get into leadership. And here's how it works in the American workforce. You keep getting promoted because you're doing a good job and eventually they promote you into leadership. So I don't like the idea of you kicking the tires for what sounds like seven to eight months as a tryout. And even if you win the tryout, your reward is an $80,000 to $100,000 pay cut. If I'm a leader in your company, I would look at you and go, Rob, I'm not going to give you this job because this is dumb. Yeah. So for that reason, George, tell him that I'm out. For those reasons, I'm out.

What are you making right now, Rob? What's the total comp? What did you make last year or in this past 12 months? Last year, total was around $250,000, and this year it'll probably be around $280,000. And if you take the new sales job with bigger clientele, you're saying you're going to make 300, 350, 400? Potentially, yeah. I mean, so I've built up a pretty good system doing what I'm doing now, moving into this next, you know, larger sales role doing what I'm doing. But leadership, you're saying they'd pay you like a $250 base and maybe some bonus on top

of that? No, it's less than $250. What are we talking about? I think it's more like $150, $180 base plus a discretionary bonus at the end of the year, and I have no idea what that would be. I doubt the bonus is going to be your total comp. It's called discretionary. I don't like discretionary bonuses.

I like bonuses based on percentages and things that we agree to. Yeah, I'm with Ken on this. I wouldn't take this giant pay cut. No. Rob, do you not see a ladder by you taking this bump in sales, bigger clients, bigger responsibility, bigger paycheck? Do you not see that that's going to lead to opportunities to lead, whether in your company or outside?

I mean, I suppose I do. I suppose I do. Yeah. I mean, I do see an opportunity to do that. I just don't know when to take that, how to take that leap. Cause I think, you know, it's not a leap. It's not a leap. I could see you're still struggling with this because you're a guy who really wants to lead people. I do, yes. I do want to lead it. I know. And I think that's great because not a lot of people who take leadership positions want to lead. They just get pushed into it. That's what's wrong with corporate America. If you're really good at sales, they go, great, you're going to be a sales leader. And you're like, I don't want to lead people. I just want to sell. You want to lead. Yeah. And for that reason, Rob, there will be no shortage of opportunities for you to lead.

I think you think that you're going to pass up on an opportunity to lead. That will never come back to you. And I got to tell you, man, you keep performing in a sales role. It's like showing up at the train station. Here's what I can guarantee you, George. A train will show up. So yeah, Rob, no, please don't get impatient here. Take the bump. It's a bump in every way. Influence, income, and opportunity. Take the new sales gig. It'll turn into the leadership influence that you want. You're a good guy, Rob. Trust me on this one. I'm older than you, unfortunately. This is The Ramsey Show.

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George Camel is alongside, and we are here for you today to help you continue to win in life no matter who wins at the polls today. It's a good reminder. There you go. Vincent is going to be the next caller here in Colorado Springs. Colorado, Vincent, how can we help? Hey, guys. Vincent, how can we help? Hey, guys. Huge fan.

My wife and I are in baby step seven, and we are SPU coordinators. Wow. And thank you. Oh, of course. We are taking a break this year because we're having another baby. Oh, congratulations. Thank you. This is really a future estate question.

Let me explain. My brother and his family have completely cut off contact with my parents and now with me and my family. And they've given me the power of attorney, et cetera, to deal with their estate once that time comes. And here's the tricky part, though. My parents bought and paid for my brother's house almost 20 years ago and still own it and are still paying for taxes and insurance, et cetera.

They didn't buy me a house, which is not a big problem, but my parents won't give me much more direction other than he gets the house and I would inherit their house upon their death. But my parents have a rental I'd like to have. That's not in the will. My question is, how do I make these decisions from a moral and financial standpoint if they won't give me direction and my brother's basically gone AWOL from the family? Well, I think it's pretty simple. The stuff that they're not giving you direction on, you sit down with them and go, mom and dad, this is not fair to me for you to put me in charge of

executing on your will and having some things that need to be dealt with upon your passing that aren't specifically laid out in the will, so please do so. And whatever isn't clear, I'm going to just use my best judgment on. Then you're, you know. Yeah, then there's no moral problem. If you bring it up to them and they don't make these changes, to George's point, then you do what you think is right. But I think this is just a sit-down conversation. Is there some reason why this hasn't happened or why you haven't gone this route? I have spoken to them about, I need some more direction, this needs to be out in the air, and I can't get any progress with that. Then don't worry about it. Have you done all that you can do on this? From my standpoint, I believe so. I just don't like the pressure.

There's no pressure. Of when it happens. No pressure. I'm getting some undertones here that you're resentful towards your brother. Number one, for cutting off all contact. Number two, for being financially irresponsible and then somehow benefiting from it all with mom and dad funding his life and buying his house.

Am I incorrect? I would be. I feel I'm resentful toward him putting myself in your shoes. I think I'm more mad about it than Vincent is. So is what you're saying, hey, I don't want him to get the house, but that's what they're wanting, and I have to follow their wishes? I'm okay, I think, with him getting the house they already bought him.

I don't want to deal with that. But you're saying he shouldn't get other things. Right. I think it's the rental. I think it's the rental, unless you're not telling us what else is unclear. But one thing we know is unclear is we don't know who gets the rental upon their death. Correct. And you want it. And I just don't want that to go through courts. I don't want it to go through all the things if it's not in the will. I agree. Again, I think

you stay on them about it to the point that one of two things is going to happen. Either they're going to deal with it because you keep pestering them about it, or they go, okay, you're no longer involved. And then you go, that's not my problem. But you need closure on it. Closure. And so you need to drive for closure. Okay. To be unclear is to be unkind we like to say and so we need clarity here do you agree george have i absolutely i mean you need to go say put the rental in the will i would have the will out going all right we're going to update this now maybe it's in the the presence of an estate attorney where you go hey we're going to knock

this thing out once and for all and make sure that the i's are dotted the t's are crossed and say that is my job as power of attorney this is what I've been tasked with. And you're not allowing me to do this job properly until we get all the details out there. And then you can make suggestions and say, here's my suggestion. Clearly, brother has not been financially responsible. He has cut all ties. And therefore, I believe it makes the most sense for me to acquire the rental. He can keep his house. He can keep his house. He can keep what he's got going on, but we should not give him any more to manage. That would be unwise.

Would you agree? I would agree. Then lay it out there. I appreciate that. Lay it out there along with the boundary of, guys, either take care of this or take me off the situation. I don't want to be stuck with this. I do not want to go to court after your death

because you didn't put everything, all of your assets in the will. That's just incredibly insensitive, and you're putting me in a tough situation. I would just hold firm on that. Okay. Yeah, appreciate the call. It's far more relational than it is a tactical thing because it sounds like mom and dad still love the, you know, they love their son, even if he has been misbehaving.

And the other brother says, I don't want to enable and incentivize this poor behavior by giving him more to manage. And yes, but I also think the biggest contention, George, is that he doesn't want to go to court. He doesn't want to fight his brother over this asset that's not been stipulated in the will, and he doesn't want to deal with that. I think he's just exhausted from whatever this drama is. I think that's the driving force, and I understand that. Things like mom and dad might be kicking this can down the road because they're not ready to decide. They're not ready to deal with it either. Michelle is up in Seattle, Washington. Michelle, how can we help? Hey there. Thanks so much for taking

my call and thanks for doing what you guys do. I really appreciate it. Thank you. How can we help today? Hello? Did we lose you? Are you there? Uh-oh. We are here. You're in a tunnel. Michelle, are you talking to your phone?

Oh, shoot. I just flipped over. Okay, there we go. Now I have you. All right. Can you hear me? Yes. Hey, thanks for doing what you do and being there for all of us. I really appreciate it. Yeah, no problem. What's going on? Well, I'm nearing the end of my divorce and I owe my ex $226,000 to buy the house. Whoa. Currently, we owe... No, no, this is a good thing. There's lots of equity in it. Currently, we owe $24,000 on the house. Whoa. Currently, we owe... No, no, this is a good thing. There's lots of equity in it. Currently, we owe $24,000 on the house. And my question mainly is, I'm 55. I have plenty of money in my 401k to pull out money to pay him off. But tax-wise, tax implications, I don't know if that's my best choice. Should I pull the money out of my 401k or should I just refi? Can you do a cash out refi?

Yes, I could. That would be a better option than taking the money out of your 401k, mathematically, and for your future. Okay. Can you afford the payment if you do a cash out refi? Yes, I can. I make about $10,000 to $12,000. $10,000 very conservatively a month. Okay. And what do you think the payment would be if you did the cash out refi? Probably $1,900 to $2,200 a month. So we're talking 20% of your take-home pay?

Yes. That's way better. That's way better. Not wanting a house payment. I know, but I also don't want you to pay a 35% tax to rob your retirement and unplug all the future growth. You pop that in a calculator and you'll be like, oh my gosh, okay. Yeah, let's not lose a million dollars by making this move happen. So the cash out refi is the, you know, sort of the least evil of the options. It's still not fun, but that's what we would recommend in a divorce situation.

Okay. And guess what? You're probably going to knock it out pretty fast. You know, I think I will. I'm pretty disciplined and all right. And you want to keep the house. Interest rates are killing me. Yes, I do. Well, the way you're going to pay it off, truthfully, Michelle, if you crunch the numbers on this as aggressively as you're going to pay this down, making an extra payment or three every month, this thing's going to get knocked out so fast that the interest is really not going to be, it's going to be a nothing burger at the end of the day when you own this house free and clear and you didn't touch your nest egg. Okay. All right. Just curious.

I really appreciate you guys in here. Real quick, we only got about 40 seconds, but I'm curious, what is your 401k nest egg? What is that? $850 in my main one and $ 000 in my other yeah how old are you 55 yeah unplugging a quarter million dollars and taking a 30 plus percent tax hit no way you are going to be set you just leave that money alone you are going to be a very happy lady. Okay. And so I can just rent my little guest house out for income to help me pay extra on the house. I like that plan.

There we go. George's favorite words. He likes that. What's the word? Well, you're either always like, get a roommate or rent your thing out. I love that. She's getting creative. That means that mortgage payment isn't going to be that much when you look at your total budget.

Bring it home. Ten grand. She's going to be making double, triple payments on this thing. It'll be gone in a few years. I wonder what she can get for that little guest house. I bet you it's close to the number of her mortgage payment here. A hundred percent. I like that.

All right, quick break, and we'll be right back. This is The Ramsey Show. What does the future hold for business? Ask nine experts, and you'll get 10 different answers. Economic growth or a recession. Business taxes will go up or down. AI will help us work or it will replace us all. But there's no such thing as a crystal ball.

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And when you're closing the books in days, not weeks, you can spend less time looking backward and more time focusing on what's next. And speaking of what's next, download the CFO's Guide to AI and Machine Learning at netsuite.com slash Ramsey. It's free at netsuite.com slash Ramsey. Welcome back to the Ramsey Show. Thrilled to have you with us. 888-825-5225. 888-825-5225. So we always have a live audience that come to the lobby here at Ramsey Solutions and they watch the show, listen to the show. we go out during breaks and say hi and take pictures. And we just met an awesome guy named Clark, and Clark brought us gifts.

And there they are. That's me and George. These are custom Funko Pops, which I was explaining to Ken. It's a very popular figurine brand. Which I was unaware of what Funko Pops were until moments ago, and now I'm glad i know about him and he also brought a themed candle for you george and i feel like you gotta explain smells like horse girl energy so if you remember my famous call where i told a girl to sell her horse

and other unkind things uh and it literally somehow the candle smells like i'm in a barn for good and and for bad i smelled it it. It's, it's wonderfully done. So thank you, Clark. You're very thoughtful. Amazing. Very fun. And so they're going to sit here and the hair is on point.

I just got to say, he's got some really, he's got, he's got your hair. He's got my hair down. He's got us glasses. I'm known jackets. I'm known for a paper crinkle and he's got that.

And I'm known for my iced coffee. And you got your iced coffee. Nailed it, Clark. Very fun. So those are going to sit there during the show. In fact, we talked about every time we co-host together, we may bring those in. I think they have to be staples on the desk. Because we need our own custom desk ornaments when we're together. Fantastic.

So there you go. A new tradition has started. All right. Speaking of traditions, George, you know I like when you talk nerdy. You do like when I talk nerdy to you. today's what are you going to segment i'm told you're going to talk nerdy to me what is the topic anything nerdier than the s&p 500 standard and poor baby that is if you know you know yeah well said so we hear about this term all the time in the news they know the s&p 500 a lot of people's eyes glaze over.

So I'm going to give you the talk nerdy to me, kind of put the cookies on the floor for everyone listening. Because we do talk about it a lot. And it's important for you to understand. Maybe the bottom shelf. Bottom shelf. Nobody wants to eat cookies that have been on the floor. Five second rule. Yeah.

All right. So the S&P 500 is an index that measures the top 500 companies and how they perform. And Standard & Poor, that's who's running this thing. And so an index fund, when you think about it, Ken, we talk about mutual funds a lot. We're talking about a giant group of stocks pooled together. Investors pool their money to purchase these funds and shares. And so an index fund is a type of mutual fund that buys stock in these 500 companies. And when we think about mutual funds,

we have the actively managed, professionally managed funds that we talk about a lot on the show. You work with a smart investor pro, an investing professional, they purchase the funds for you. And then there's the S&P, which is considered a passive form of investing. These are passively managed funds because it's just tracking the index. There's no one that is handpicking the funds and companies that go into this. They're just tracking the index. There's no one that is handpicking the funds and companies that go into this. They're just tracking the top 500 companies. And the S&P 500 now represents about 80% of the total stock market value. And it's largely, if you're talking about the largest companies, these are large cap companies, companies with a large market capitalization. And so if you invest in the S&P 500, your return is going to mirror

whatever those 500 companies do. And you will own all 500 stocks in that index if you have an S&P 500. And the average annual return, when you look at the history of this thing, has been around 10 to 12% since its inception. So when we say on the show, hey, if you invest this much, you expect a 10 to 12% return, it's not out of thin air. This is not our opinion. This is just based on the show, hey, if you invest this much, you expect a 10% to 12% return. It's not out of thin air. This is not our opinion. This is just based on the historical average annual return of the S&P 500. Some years, it's going gangbusters like we've seen the past few years. Some years, it's going to be down. But over time, we've seen to 10% plus 10% to 12%. And so the pros of this are you're diversified across investments. When you think about 500 companies, 11 major industries, so you're reducing your risk since

your money isn't dependent on one fund's performance. And they're pretty predictable because you're just going to do what the market's doing. Yeah. So you kind of know. Now, the cons are you're settling for the average returns. So the goal of these actively managed mutual funds is to beat the S&P 500. That's what these investment pros are trying to do is to handpick the companies and funds they think are going to outperform the index. got a whole hub that's totally free for you. ramseysolutions.com slash invest. And we have a complete guide to investing that's totally free. This is a very in-depth resource, but we only give you what you need to know. And you can also click the link in the description, in the show notes,

Ken, if you're listening on YouTube or podcast. I've been talking about the value of the show notes. It's where the magic happens. Go there. You'll get this free complete guide to investing. We'll give you a link to the hub and you'll feel a lot smarter next time you're at a dinner party. Your friends bring up the S&P 500. You'll go, oh, do I know about the S&P? And you're going to say, and they're going to go, how do you know all this? And you're going to go, because George Campbell talked nerdy to me one day. On the Ramsey Show.

On the Ramsey Show. So there it is, folks. It's one of the hottest segments on the show. If you want more of George talking nerdy, let us know. Comment, like, subscribe, share, all that. And are you adjusting our guys there? Yeah, I was seeing if it bobbles. There's no bobble.

I was excited to see. Because I think you've got a great bobble naturally, Ken, on your actual head. So I was excited to see if Ken's does a little wiggle. I'm just going to try to do that in between calls there. Stephanie's up next in Phoenix, Arizona. Stephanie, how can we help? Hi. I just had a question, General. So I was in a car accident not too long ago, and because of that, I do have a backup car that I'm currently in, and it's a 1996 Chevy Blazer, and it runs good. It has a heat.

It has a heater. It's perfect as is, but I do commute a lot, so I'm looking to buy a car. I do have money cash to buy one, but my dad used to be a car salesman and he was saying that I shouldn't use this money to buy the car out cash that I should get comfortable with paying a little bit of down payment and then make it adjust. So that way I'm comfortable with the monthly payment that I receive. But I don't like the idea of debt. I don't like the idea of paying interest because you're paying money for essentially money that you don't have. So I don't really understand that part, but I just, I want a second opinion.

Well, I'm going to caveat this by saying, I'm sure your dad is a lovely, wonderful, intelligent man, but he has been brainwashed by the car industry. And can I tell you, car salesmen have some of the worst money habits, if I had to generalize, that I've ever seen in my life. Have you seen these TikTok videos that have been going viral? They go to car dealerships, and they go to the staff at the car dealership, and they say, what is your payment, what car? These people have like $900 a month payments on these cars.

They are so all about their ego, they want to look good. Then they say, well, you got to get a new car. It's like asking a dentist if you should get your cavity filled. And so I would strongly encourage you to not take your dad's advice when it comes to buying this car. I think it's kind of like somebody who packages drugs telling

you that a little bit of drugs are okay. Yeah. You know what I mean? It's a little bit too biased. He's a little too close to it. And this idea that we have to just get comfortable with the payment is insane. That's why we're so broke in America is because we said, well, if I can afford the payment, I'll be fine.

And then one day something happened. Life happened. You couldn't afford the payment. You realize you have no margin to actually live your life or invest. And so I would strongly encourage you to use the money you have to buy a car with cash you can actually afford. That's how grandma did it encourage you to use the money you have to buy a car with

cash you can actually afford. That's how grandma did it. So how much cash do you have? I'm comfortable spending 15, but I could spend up to 20. Oh, you got 20 grand in cash. That's a great car. Just to spend on the car. This is outside of an emergency fund? That's a little, the 5,000 extra would be from the emergency fund okay 15 is separate let's call it 15 out the door is what you're wanting so when you go to shop for a car you're always looking for the out the door price and here's the here's the first question they're going to ask what payment are you looking for right first question they ask if you if you call

a car dealership that's the key word that you're about to get scammed because all they're looking to do is get you comfortable with the payment and you are then not focused on what the car is actually costing you right that makes sense so that's it i would be searching an independent used car dealership for this car and searching online to do some research i want to throw an idea at you george that i've been kicking around in the old noggin okay i've always wondered what's going on up there. Well, nobody really wants to know. Quick question. If you use cash and you buy an older car, a classic, not an old junker, but a classic antique car, fix it up. That car now becomes more valuable the longer you have it. Potentially. No, if it's the right car.

I've got one in my garage. Yes. It keeps going up in value. Cars can hold their value if you're buying some of these antiques. I'm just saying, I think people ought to be doing more of that. It's not a depreciating asset. Then I'm scared to drive it. No, it's totally fine.

Think about it, George. Come back to me later. This is The Ramsey Show. Hey, you guys. I'm not a fan of the big banks, and you probably already know which ones I mean. But I do like credit unions because they're nonprofit organizations that focus on their members. And I'm proud to endorse Fairwinds Credit Union

because they share the Ramsey mission of helping people get out of debt and live generously. In fact, they design products to help keep you from going into debt in the first place. Fairwinds has been in business for over 75 years and they serve hundreds of thousands of members worldwide. You can feel secure because your deposits are federally insured by the NCUA up to $250,000. It's easy to join and Fairwinds partners with more than 5,000 credit union locations around the country so you can bank in person wherever you live. But if you prefer the online experience, you can log on to Fairwinds

and do anything you could do at a physical location so go to fairwinds.org slash ramsey to learn more and while you're there look at the combined checking and savings account bundle they created just for ramsey fans to help you take control of your finances. That's Fairwinds, F-A-I-R-W-I-N-D-S dot org slash Ramsey. God bless America and welcome to the Ramsey Show. This is where we help you, America, win in your life, win with your money, win in your relationships, and win at work. I'm Ken Coleman, and George Camel is alongside 888-825-5225 is the phone number, 888-825-5225. Let's go to Julie in Jackson, Mississippi. Julie, how can we help? Well, my problem is we are doing very well.

Me and my husband, we've been married 31 years, and everything together we're worth about $4 million. Woo! Wow. About half of that is his inheritance. And about half of that inheritance is a million dollars for a company that they inherited that was then bought out. So my question is, I don't have that much in my name. I have an account.

I have about $100,000 in my name alone, and then I have about another $100,000 in retirement. And that's it. And the rest of it I think of as his, and I know that's not right. I know that's not how I need to think about it. He doesn't think about it that way. He's told me, as far as I'm concerned, it's half yours. Are you the beneficiary?

I don't know how to make this. Do you guys have all that worked out to where you each are the beneficiary of each other? Is it actually your money, or is it all in his name and nobody even knows that you're there? I want to say the business money may be in his name only. Well, does he have a will?

He won't do one. I made him do one during COVID, but we sat with a lawyer, talked about it, drew it out, and I've not seen it since then. So I haven't signed one. Does that seem strange to you? It does. I think he doesn't want to admit he's going to die and his father was the same way well i have heard that if you don't do a will then you never die so he has there's some

merit to that argument so you're telling me there's a chance okay so there's one piece of homework we need to get him to finalize this will get it signed sealed delivered and that'll get will help you both sleep better at night number, we have some homework to do because you said, I want to say that's not going to cut it. We need to figure out where is this money? What are the accounts? Is your name, are these joint accounts? Are you a beneficiary on these accounts? I think you have a right to know in a marriage. Right. And so we need to get to the bottom of that part. And then on the other side, we need to figure out what is your next goal? Are you looking to spend more?

It sounds like you feel like you have nothing to your name and that you're broke when really you have a $4 million net worth. Right. And I don't know why that is. I don't know why I feel that way. Well, what is your household income? I bring in about $2,000 a month and he brings home $100,000 a year. So he's bringing home something closer to $7,000 or $8,000? Mm-hmm.

Okay. And do you guys have a joint checking account where all this money goes? Not all of it. A section of it, there's a checking account that i write from that my social security money goes into and that's all that goes into it and his name is on that account but he doesn't use it and then there's a joint account where he used to put all his bonus money in that I write joint household expenses from. But now with the company buyouts, he's not going to give me those bonuses anymore, so I don't know yet how I'm going to straighten this out.

You guys have created a real complex financial situation with 19 accounts floating around out there. I think it's time to streamline and simplify and go, I think it's time for you to fly to their house and spend an afternoon with them they don't get to get up from the table until they've walked through all this stuff george you were talking about this earlier this morning that's what this calls for yes now that's not going to happen uh but julie george is going to give you a checklist if as if he were flying to your house and locking the doors and taking care of business with you two you guys have got to figure this out put it all on the table and go, what are all the accounts? What's in every account? What's in my name? What's in your name? How can we simplify all this? I want

to be on the same page. We've been married 31 years. We've done really well, sort of accidentally. And now I want to do better intentionally. And that means having one account, all the money flows in, all the money flows out of this joint checking account. That'll give us both transparency, accountability, and it's going to change our marriage for the better. Okay. Because I'm no longer going to be in the dark. You know exactly what's going on with my money. I know what's going on with your money. Do you think he would be upset with that conversation? Would he shut down? I mean, 31 years. I think he would want,

I think he would really, his actual reaction would be, why are you worried about it? Well, it's not a worry. It's just that the best marriages have full accountability, full transparency. And okay to good marriages can survive with 19 accounts floating around. Well, George, but play that out, though. Go deeper than that. I think this is what's going on. So pretend as though you're talking to Julie's husband, and he goes, well, why does this even matter? Why is she so worried? Go deeper than good marriages and all this. There's some real reasons as to why this thing is so disjointed and why bringing it together. What would you say to him if he pushed you? Well, I would say that we're not here to attack you and get you defensive because we don't trust what you're doing with the money. It's just that you are clearly in the dark

after 31 years of being married. You have no clue what's going on out there. And if something were to happen to him, that would put you in a real bind. While you're grieving, you'd be trying to pick up the pieces from 19 different accounts, trying to find policy numbers. Is that true? Does that sound right, Julie? Yeah, it would be difficult. I know where all the paperwork is, but yeah, and this is something we're going through still with his dad's estate. His dad's estate was still the same way. It still messed up two years after he's dead. Right. You want to avoid that. Yeah, understandable. You guys are searching for coffee tins in the backyard with money. It's a disaster.

I don't want to have it be a full-time job to pick up all the pieces. Right. And if we can just get ahead of this now, the next 20 years is going to be a dream because we are fully on board on the same page. We know where we're going. We know what's going on. Yeah.

Okay. That's the angle. And then I think there's another piece where you need to stop acting like you're broke, because you're not. You guys make six figures, and you need to be on a budget that you both have say in. Right now, you're living like you get an allowance. Right? If you wanted to go spend some money, is it a conversation?

Do you just go spend it without telling him? What happens? Yeah, I do. I spend, but it's my money that I spend. So as long as you spend only your money. Yeah. Well, that feels wild, doesn't it? I feel like I have to ask him.

So he gets to spend five times what you spend because he makes five times more? Is that how it works? Yeah, but that's been working. Oh, boy. That's a problem. How long have you been married? 31 years. Oh, boy. That's a problem. How long you been married? 31 years. Oh boy. We didn't come in with so much money until a couple of years ago. My wife now stays at home with her child.

If I said, well, honey, you don't bring in any income. So I get to spend all the money. I'll give you a little bit of allowance for some fun, but I get to spend like 10 times more because I'm bringing home the bacon. You know where you'd be? My guest bedroom. That's where you'd be. I'd be lucky to be inside of a house. Well, we'd take you in for about a week. I might be in a tent in the backyard at that point. I'd let you stay in the backyard. So I want you to know you have a vote in this marriage. And so far, it sounds like you've had the idea of a vote.

But we need to make it very clear, especially on Election Day, that you have an American right to vote in what happens in your marriage. I see what you did there. I think this is a clean this mess up with camel. This is a show where people bring you in and you just fix everything. You just get it all. I like this. You say, listen, Julie, you sit there.

Clarence, you sit there. I feel like her husband's name might be Clarence. It's like hoarders, but I clean up your finances. And you just kind of walk through. All right, Clarence is what we're doing. Julie is what we're doing. You just clean it up. You're the cleaner.

Good pitch. We'll think about it. This is The Ramsey Show. I've been doing this show for over 30 years, and some of the saddest calls I have taken are from situations that are completely preventable. Yeah, and what's so hard is I feel like one of those, especially the ones that I'm like, oh, it's terrible. People that call in and their spouse has passed away suddenly and they don't have life insurance. When you have to think through how

am I going to pay my bills in the middle of next week, in the middle of all that grief, like it's just it is it's terrible. So life insurance is the one thing, especially as a mom with three little kids that I'm like so big on for people to get because it's inexpensive. Zander is the place that Winston and I actually get all of our life insurance. And it doesn't cost much because Zander shops among a gazillion different companies. It doesn't cost much. You just have to admit that someday you're not going to be here. You got to say it out loud and you got to say, I'm going to say I love you to my family by taking care of them and taking the time to put this stuff in place. The cost of stinking pizza. To get a free quote, call 800-356-4282. That's 800-356-4282.

Or go to zander.com. Welcome back to the Ramsey Show. Thrilled to have you with us. 888-825-5225. 888-825-5225. All right. I've been told that sometimes I come across like an alpha male, George. Literally never heard that in my life.

You've never heard that? I appreciate that. Yeah. It's very generous of whoever said that to you. Yeah. Well, you know, I was thinking, you think about alpha because guess who's on the line right now in Los Angeles? Omega. Line four.

Tell everybody. Omega is on the line in Los Angeles. Omega is on. This is very fun. This is very exciting. I've never, ever actually talked to an Omega before. Welcome to the Ramsey Show. Heck yeah.

Come on. I love your introduction. See? That was epic. Thank you, because I'll be honest with America, James, the producer, was rolling his eyes a little bit. He had a little cringe going on behind the glass. He's a very nice man. He's very kind to me, but he had a little

cringe on that. But I knew you would appreciate it, and so would America, if they stayed with me. So thank you, Omega. I appreciate it. I appreciate it. You better. You should. You've got a great name. No, a lot of people make that joke, but the way you made it was special. He's a special guy. Take that, James. You just made a friend for life, special. He's a special guy. Take that, James. You just made a friend for life, Omega.

Omega's my friend, and I'm her friend. So how can we help you today? We're friends now. Well, wait. Did you guys get my question already, or should I say it all again? We don't know your question. No, we don't know your question. They tell us nothing.

We're flying blind. Oh, okay. So basically I, um, I'm a remote closer, basically sales online. So phone sales, sales and DMs, basically my goal is to help people make better decisions so that you can improve their life through sales. Right. Right. And so usually the goal is to work for programs that, you know, offer some sort of solution to someone's problem. And so I am new to the field. And so I recently started applying for jobs. And one of them was for a leadership program where they teach leadership to people so that they can lead their companies better, right? And so in order to be a part of their team as a remote closer or a DM setter,

the woman I spoke to on the phone said that I have to invest in their course first. All of their employees have gone through their course. Their course is $5,000. No. I have budgeted. Go ahead. Hard pass. Please don't give them a dollar. This is a scam, Omega. Do. I have budgeted. Go ahead. Hard pass. Please don't give them a dollar.

This is a scam, Omega. It's a total scam. This is how they're actually making money as a company. They're not helping anybody lead. It's like a multi-level marketing thing where they go, hey, you got to pay us $5,000 as a startup cost to take this course to then sell this course. Don't do it. You know what? Dave Ramsey hires people.

He doesn't charge them to go through Financial Peace University. Yeah. He goes, hey, as part of a team member, you're going to go through this course. We're paying for it. And Omega, legitimate companies, they hire people that they believe they can invest in and get a return on the investment. They don't make people invest in them. They hire them and then they

train them. Legitimate companies hire people and put real manpower, real resources behind training someone. And so this is all backwards. And I want you to run from this. I cut you off because there is zero reason for you to continue considering this opportunity. It's not an opportunity. It's an absolute trap. And I hope you know this, but in the industry you're in, there are a lot of hucksters out there. In this DM center, online sales, I think you're in a legitimate field,

but I'd be very cautious about what companies I work with. Okay. Are we still friends? Okay. We're still friends. I appreciate real truth. That's true friendship right there. I don't want you calling us saying I paid $5,000 for this course to get a job. Did I get scammed? Yeah. You should never pay to get hired. Okay. So that answers that question. Can I have a follow-up question? We will allow it. Okay. So when I was on the phone with her, she was telling me all about it, right? And, um,

I told her that my one concern was that I only had a hundred dollars to spend. I have money in my account, but it's all budgeted. I have it in my, in my emergency fund, which by the way, saved my life a week ago hey hey all right we like hearing that uh-huh yep and so um i have it all budgeted so i can't spend that so i only have a hundred dollars that i can spend and i made it a goal um earlier like at the beginning of the summer that i was not going to go into debt. So I told myself I'm not going into debt. Good. And then when I was on the phone with her, she, I told her that I was like,

yeah, I mean I could, I could do that, but I don't want to make my parents go in debt for me. I don't want to go in debt for myself. Like I'm going to like make the money and then pay for the course. Okay. So what's the question? So the question is when I told her, she basically was like, well, when you're in sales and you're trying to grow, you're young, you need to invest in yourself. And right now is the ideal time to invest in yourself. And the way she said it was so convincing that it made me like...

Yeah, she's in sales. She's a huckster. Did you do something with it? Why are you asking this follow-up? We've already told you what we think. Is that it again? Why are you follow-up? We've already told you what we think. Say that again? Why are you asking us this? We've already told you don't spend $100, don't spend a cent with these people.

You're saying, well, she's saying I should invest in myself. Is that not true? Is that what your question is? Well, my follow-up question isn't regarding the course. It's regarding investing in order to get a return later. Yes, you should. You should invest in an actual course. Not from a fake guru selling a $5,000 DM setting course. If you want to invest in a certification from a legitimate training school or a trade school or something like that, that is directly

tied to, I now have a skill that I need to be able to climb my ladder, the professional ladder. Yes, invest in yourself. But can I also say this? I would like you, before you ever spend a nickel right now investing in yourself as a salesperson, I'd like you to get books from libraries. Libraries, they're free. They're free on sales books, okay? Or get used books on amazon you can get them at a fraction george or how about podcasts on sales and and things of that nature there's so much youtube that you can do for free and now we're investing time uh and investing our focus not investing a hundred dollars so you're good kiddo okay you're good so even as a rule of thumb like i can just be confident in like never going into debt even if it is alluding to the fact that i'm investing myself like just find a way around

to go into debt you should never you should never rationalize investing in yourself to to allow yourself to take out debt you should never go well'm taking out debt, but I'm investing in myself. That's actually not the truth. George, what would you call that? It's a shmarmy sales tactic they're using to go, well, you got to invest in yourself. If you want to make a hundred grand, you got to put five grand in. That's just how it works in the business. That's the kind of stuff they're telling you and you need to run far away. I don't know if this industry is even for you because it's mostly for people that fall for scams and that's not my friend Omega. Yeah. So I would find a different sales role that's legitimate with a real company

that sells a real product yeah not this we sell sales offers and appointments you can invest in yourself by by paying cash you can invest in yourself by taking free resources. All of that's an investment. It's a false narrative, a faulty notion that you have to go into debt to invest in yourself. So there it is, Omega. Thank you. You are a bright, bright soul. I love it. She's so hungry to win, and she's going to win.

But you talk about this a lot in Breaking Free from Broke. You call them traps. If you follow the trends, you'll fall for the traps. This is a trap that has now become a trend. Well, a lot of young people are falling for it. They're hooking people on social media. It's the get rich quick, all this kind of stuff. And there's so many of these guru hucksters out there being like,

I'm going to increase your sales by 100x. And if you just, I can help you get 900 offers. And it's all just a scam and here's what they're doing they're selling their course yeah they're not actually helping anyone no they're just getting a bunch of people to take a course yeah and literally trying to trap this young lady well you've got to invest in yourself this five thousand dollars you spend with us will be the best investment you ever make i can hear the crap right now so uh because we're friends with omega i mean she and I are friends,

you are kind of like an acquaintance because you're, you know what I mean? Thank you. But if you're okay with it, I would like to gift her your book, Breaking Free from Broke. Oh, I'd love that. Great call. I think it'll keep her out of these trends and traps. So, Christian... Can we also gift her your book, Find the Work You're Wired to Do with the Get Clear Assessment? Let's give her the

assessment. Omega, let's take the assessment as well. I was going to say that, but thank you. Help you avoid some traps, help you get some clarity around your career. Find the work you're wired to do. Take the assessment, Omega, and read the book. It's like me coaching you through and then break you free from broke, you got to read it. I'll coach you up on money. George is going to keep you from getting into all

of those trends and traps. So, it's nice to make friends. It's very sweet. You know what I'm missing right now? What's that? My Mr. Rogers cardigan. We can get that on the break. Yeah, maybe we'll do that. This is The Ramsey Show. Welcome back to The Ramsey Show, America.

Thrilled that you are with us. I'm Ken Coleman. George Camel is with me. The phone number is 888-825-5225. The Ramsey Show Question of the Day is brought to you by Y-Refi.

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Wow. a month with our friends at YRefi. Go to YRefi.com slash Ramsey to learn more. That's the letter Y, R-E-F-Y dot com slash Ramsey may not be available in all states. Today's question comes from Cameron in Arizona. My best friend has bounced around schools trying to pursue his dream of being a sports team mascot. He has a math degree, $100,000 in student loan debt, and a terrible living situation with his parents. He can't manage to get any reasonable paying job for a person with his education.

He currently earns 17 bucks an hour counting money at a casino. Several years ago, I inherited $5.5 million, which I've safely invested and I've since grown to over 7, which I've safely invested and have since grown to over $7 million. I've never touched that money except for the house that I paid for in cash, and I live off my real income of about $110,000. Can I gift or lend my friend $100,000 to pay off his loans? If not, why?

A lot going on here, but we'll stick to the question at hand. I'll go first because you're the money guy. I feel like we're going to agree on this one. The question is, can I gift or lend my friend? You can give it. You can lend it. But I think the question is, is it okay? And the answer is, I'm going to go 50-50 split on this one.

Okay? It's okay for you to gift the $100,000 to pay off the loan. If it is truly that, a gift, and you don't expect anything out of the friendship, you don't expect anything other than, I care for my friends so much that I want to help them this way, and there's no emotional strings attached. You can do that, and I'd be okay with it. But no, you're not lending it, because now you're just replacing the, you're moving the debt from one pile to the other, and it could create a lot of risk.

And the chances of him ever paying you back is zero percent. Is zero, so I don't like that. But if because of the money that this Cameron is telling us, if that's what you want to do, you want to give it, that's fine. You can give it. You got a lot of money. You can give them that. I'm not going to say no to that.

Now, if you're asking me what I would do, it would be based on the relationship to where if I felt like this would be a massive hand up to somebody, then I'd probably consider it. I don't know that I'd do it, but the question is, George, that I'm wrestling with on this, and I'm really 50-50 on it, given the net worth and all this kind of stuff,

the question is, would it be a hand up? Like, would it revolutionize this person's life? Because it sounds like this is a professional surfer. And I don't mean that knocking surfers. I'm saying he's just kind of riding the next wave and the next wave and the next wave. I think he needs to grow up and he needs to make some real commitments to growing up, to adulting. So from that standpoint, George, I'm a little nervous about that. Does it really help him that much? Agreed. What are your thoughts? Yeah. Are you no-no? Based on principle, I would not do this. Like you said, can you? You can do whatever you want, but I think it's going to hurt the relationship when you kind of have this handout to him without ever really changing his habits, his behaviors. Right.

And clearly his growth is stunted here. And just handing him $100,000 to pay off his debt or do Lord knows what he would do with it if you just gave it to him, that's a dangerous scenario. I would not do that. He might use it at the casino he works at. That's frightening. Yeah. So, again, I don't think that's, the student loans are just the symptom of a very, I agree, a much bigger problem, which is this guy has no real

life purpose. He's got all this debt. He's living with his parents. He's got the degree with nothing to show for it. He's trying to be a mascot while counting money at a casino. He needs to aim higher in life. And you giving him this money does not solve any of those problems. Most likely, and that's what I'm getting at. So if it was a true hand up to where his life had changed and it was going to be like, man, this is helping somebody that cannot in this situation help themselves, he can. So I understand the heart behind this. I think it's a really, really kind thing to do. Feels like we're enabling misbehavior.

But you would have to know that you're essentially agreeing to burn a hundred thousand dollars exactly and this relationship may not get better and in fact it probably will get worse because of this transaction he's gonna feel a level of guilt i feel like a softy i can't believe i went harder on that one than you i would never do it personally i'd never advise anyone to do it yeah but you know it's a free country you can do what you want when you get seven million bucks that's the only reason I'm even on that fence. But again, that money was given to you to manage through inheritance, and you want to manage it wisely. I don't think giving this money to this person is wise money management.

Yeah, all right. It's my take. I like it. Sarah's up in Bozeman, Montana. Sarah, how can we help? Hi, thank you for taking my call. You bet. What's going on? Yeah, so my husband and I are on baby step number two, and we're hoping to buy a home in about three years. So my question is about our credit. We each have one credit card each,

and we've recently realized it's really not a good thing for him to have a credit card. So he cut it up the other day, which was great, and we'd like to close the account. But my concern is that we want his score to go down to a zero. What I've read online is that it can take between like two and ten years to do that. You read the wrong blog, my friend. It's more like six to twelve months. Yeah, so It's more like six to 12 months. Yeah, so it's more like six to 12 months. Once you have paid off all of your debts, all the accounts are closed,

so no open lines of credit whatsoever. Six to 12 months later, in general, your score will become indeterminable. It doesn't actually go to zero. It'll probably take some dips, and then it'll just fall off completely. If I check my credit report right now across all three bure bureaus it's just going to come back indeterminable okay so when i was in your shoes sarah answering the question yeah well i want to tell you when i was in your shoes i paid off my debt and i went to go buy a house with no credit score and i went through a process called manual underwriting and that's where they just go through your actual

tax returns, you know, your utility bills. As long as you have proof of making payments on some trade lines, like your utility bills or cell phone bills, and you have proof that you've made on-time rent payments every single month, then they'll grant you a manual underwritten loan and give you a no-score loan. So I wouldn't let that stop you, and I wouldn't let it keep you, you know, playing the credit card game just to keep up a score. Okay, great. I know you guys are not about the car loans and our goal is to never finance a car ever again. We owe about 17 left on my current vehicle and then

we're hoping to be done with the car loans forever. However, we do want a big family, so we're going to be hauling a lot of kids around someday. So we're just kind of keeping that in the back of our mind. If we ever hit a point where we needed a larger vehicle like a van and we didn't have the cash to pay for it, if we have an indeterminable credit score, are we able to finance a vehicle or is that off the table? I feel like we're asking the wrong question here, Sarah. The real question is, what must be true for us to be able to pay cash for a reasonable van? The answer then becomes, oh, I guess we're going to buy the $10,000 van with more miles on it and we're going to do a pre-purchase inspection.

Do you see how the mindset shift changes as you get out of debt and decide you're done with it? When it's no longer an option, you get creative and you start to go, what can we actually afford? I know four years from now we're going to need the van because you don't have a bunch of kids yet, right? Right. We just have two. We've got two. So now if I know, hey, two years from now I'm going to need a minivan, I want to buy a $24,000 minivan, that looks awfully like saving $1,000 minivan. That looks awfully like saving a thousand bucks a month for 24 months. Okay. That's how successful people actually hit their goals. That's right. Not how can I get the lowest payment? How can I get my score high enough that they give me the

best financing? That's broke people talking. My friend Sarah is not a broke person anymore. She's done with that life. Do you agree? Yes, I agree. And Sarah, you've already got two kiddos. How old are they? I've got one who's going to be two in December and a three-month-old. Yeah, so you already know how quickly a two-year-old destroys the inside of a car. So we don't need a $25,000 van. We need a functional van from a good automaker that is a reliable car.

Just Sienna, a Carnival, an Odyssey. Yeah, they're going to destroy the inside of it with all the little, you know, the goldfish and the things, you know. And everything's sticky. And it's like, I try to tell young parents, don't go buy a nice car to haul the kids around. They don't care. They'll just be upset when they draw on it with Sharpie. Yeah. That actually happened to our friend Rachel Cruz.

Has Mia done this? Not yet. She doesn't have access to Sharpies. Good father. This is The Ramsey Show. Rachel, do you ever get these sketchy text messages that are like, hey, you need to update your address and verify so we can get you the package you didn't order? Yes, I have.

George, sketchy and never trust them. And that's why we recommend Delete Me. They help with that. Yeah, I have. George Sketchy and never trust him. And that's why we recommend Delete.me. They help with that. Yeah, they do. Delete.me actually goes in and removes your information from data broker websites. And it is an incredible service that everyone needs. And there's a lot of shady companies out there that solely exist to sell your personal data to bad guys. And that means your info, like your email address, your home address, your kids' names, your name, everything is just out there for scammers and spammers to find. That's right. And then once they remove your information, then they're going to send you a

detailed report telling you where they found your information, when they removed it, how many hours they've saved you. I mean, it is incredible. So detailed and it's beautiful. I love these reports. So far, get this, they've reviewed 27,000 listings on my behalf, removed me from 240 data broker sites, and saved me 77 hours of time. It's incredible. Absolutely amazing. And Winston and I now get fewer texts, weird emails, spam calls, all of it. I love it. So you got to be sure to check them out. Ramsey fans get 20% off their annual plans. Just go to joindeleteeme.com slash Ramsey. That comes out to less than nine bucks a month. Super affordable. It's amazing. So again, that's joindelete.me.com

slash Ramsey. Make sure to check it out, you guys. Thank you for listening and watching the Ramsey show. 888-825-5225 is the phone number. Excited that you're with us. I'm Ken Coleman. George Campbell is joining me. And boy, oh boy, we've been talking about this. I mean, we've got to be getting close to set and sail, aren't we, George? The Live Like No One Else cruise, March 22 through 29, 2025. This is a premium Caribbean cruise. Holland America's new Staten Dam ship with all the great foods, all the fun things to do, world-class content that you can expect on a great cruise like that.

Plus, you've got all the Ramsey personalities speaking. We're going to be doing some fun stuff together. Country music legend Deanna Carter, Stephen Curtis Chapman, Trey Kennedy is a great comedian, kind of known for spoofing Dave. And world-class chef Manit Chauhan will all be joining the Ramsey personalities, including George and I. So, ramsaysolutions.com slash cruise is where you get your ticket.

ramsaysolutions.com slash cruise. And it's going to be a lot of fun. So, we're hitting Turks and Caicos, Puerto Rico, St. Thomas, and the Bahamas. Have we validated whether or not James is coming? James, the producer? I don't think he is coming. Let's get an official word.

We're not doing any live Ramsey show, so he's off the hook that week. He'll probably be having his own vacation here. Are you doing the show while we're on the ship? I don't think so. It's a little too far out to tell. We'll all be on the ship, Ken. There'll be no one here to host the Ramsey show. Will he be doing the show?

I'll host it. James will do it himself. I feel like he could do it. It'd be a very chill, very nice version. Love to see his impressions of us. Oh, he could do it. It'd get dark real quick. He could do it. It'll just be me and Kelly Daniel will do a tell-all of all our history here. Yes. That would actually get the most viewership. I think it would actually

blow up, actually. Probably would. That'd be really great. Alright, so you can check it out. RamseySolutions.com slash Cruz. Alright, Carlos is joining us now in phoenix arizona carlos how can we help hi how you guys doing we're having a blast how are you pretty good here so i'm actually in a little bit of um i guess situation here i'm trying to see what the best course of action would be to make the best decision possible so i have i'm currently i have a car payment right now it's a truck payment i got it i kind of did the baby steps a little bit out of order with my fiancee we got a house supposed to be emergency emergency fund and now we have that car payment but my biggest issue here is my work i currently am a plumber full-time i like doing it everything

like that but it's not really my passion so i kind of wanted to see if i should turn back the car in to like trade it back in get rid of that debt and that's finally we're over debt maybe that's true or if we should uh look for another, I keep the car, but I might be taking a little bit of a pay cut. No, we're definitely not taking a pay cut while in baby step two. Period. Okay. Ever. So in baby step two, no, because in baby step two, and I'm going to go ahead and say baby step three as well. I would never take a pay cut in baby step two or three because those steps as baby step one also requires intensity. And so we want to make the most money we can. And in this situation, you're good at it. You may, and it may not be your long-term play,

but I want you to stay being a plumber and then see if you can pick up extra hours uh extra jobs maybe work for a couple different plumbing companies i mean i know they're just about every major city in america there's a demand for plumbers so in in my case if i were you i'd be working extra using that very skilled trade what do you make per hour? I'm actually piece rate. That's the big thing. So anything I do or everything I do is what I get paid for the day. And it makes pretty good. I think overall in the year I make about $80,000.

I mean, so my point is you could get extra work as a plumber, true or false? Yes. Yes. So that's what I would do. Now, I want George to weigh in on this because I tend to be more aggressive on cars. So in other words, I would get rid of the car, not keep the car payment. So if I were to get rid of it right now, it's worth around $25,000 and I will $30,000. It's a truck.

And the reason I actually got it was for the plumbing, like side jobs and everything like that. Because I have a company work truck. So you don't need this car? I don't need it right now. Get rid of it. Get rid of it. When you say it's worth $25,000, are you talking about trade-in value or if you sold it private party? If I sold it private party, maybe I'll get, like, $28,000, $29,000.

Let's do that instead. And then the difference that you can't cover, the part you're underwater on, we're going to use the savings to cover that. How much do you have in savings? I have about $20,000. Oh, perfect. You got $20,000 in savings. Perfect. So you're pretty close to just being able to pay this whole thing off.

Yeah, that was my other question. Should I completely just go super intense, pay this off? I mean, I'm pretty sure within like two months I can get this. So let's say you need to save up another $10,000 to go ahead and just get this thing paid off and leave you with a few thousand in the emergency fund. Then we'll restock the emergency fund. Okay.

So basically we're doing the baby steps in order. I changed my opinion, George. You know what I'm going to say now. Keep the car and aggressively pay it off. Stick to the plumbing jobs. Once you're debt-free with the emergency fund, then we can think about the new career path. Yes.

And I would liquidate it now. I mean, go down to $1,000 in the emergency fund, put $19,000 down on that car that leaves you with $11,000 left. That's going to really put the fire under you. Yeah. Because number one, you're going, oh, my gosh, oh, my gosh, I'm not safe. There goes my emergency fund. And you go, oh my gosh, oh my gosh, I'm not safe. There goes my emergency fund. And you go, oh gosh, there's only $11,000 left.

I'm making good money between my wife and I's income, getting on a budget. We can knock this out in four months, right? Yeah, just about. And you bought this truck, you said, so that you could do side jobs. How many side jobs have you been doing? What kind of extra income have you been bringing in the last 90 days? The last 90 days, it varies, but it could be up to like another five to – it pretty much covers the car payment each month.

I got to say like 700. That's not a lot, my friend. I had a sneaky suspicion, and Carlos, I'm not being unkind. I'm on Team Carlos. I had a sneaky suspicion you weren't doing a whole lot of extra work. $500, $700 for a plumber is nothing. You're not busting it. Get out there and bust it, and then you're going to be able to do what George told you to do.

So we're revising our answer. I think in this case, keep the truck and pay it off. Keep the truck and pay it off? Okay. Now, what do you want to do long-term? When you say passion, that makes me nervous sometimes because I want to make sure you've got the talent to do it and that you're motivated to do it.

So do you have an idea about what direction you really want to go? That's not too – like I'm too sure about because I'm also a realtor. I have my real estate license, and I do it every year in there part-time and maybe close to about like three deals a year. So I'm not too much, but at the same time, like I've always been more into like learning about finance and all that type of thing. So maybe like a banker or even helping people out like with their finances. I'm not like the most educated person when it comes to that, but that's something I've always wanted to do. So it sounds like to me, right. So there's a way to get sure. And the answer is to get clear.

You've got to be clear on what you're really, really good at doing. What work really, really fires you up. And then what results you want to contribute to the world. And I'm going to give you, because I think you get some work to do on this, but I'm going to give you the book,

find the work you're wired to do. It has the get clear assessment in it. And if you'll commit to me to take the 15 to 18 minutes to take the assessment and then take 45 minutes to read this little book that I wrote, it's like me coaching you. It will give you some real ideas and give you a process to confirm which idea you want to go for. And that's going to keep you going in this season where you're working a lot, getting out of debt, but stay in the plumber job, figure out your next path, and then get the emergency fund fully funded. And then now we start cash flowing whatever training.

So let's say you decide you want to go into being an investment coach. I mean, i'm sorry what is the word george thank you no just an advisor like you're doing in retirement investment advisor investment thank you i'm i'm i'm in a hurry here and so uh carlos if that's what you decide there is training involved with that right and there's cost yep now we've got all of our debt gone we've got our fully funded emergency fund and so we now have discipline and we've got all of our debt gone. We've got our fully funded emergency fund. And so we now have discipline and we've got margin in cash to be able to pay for the training. And then we step from plumbing work right into this new path. That's what we want for you.

Make sense? Yep. That's the path. But you've got to pay this truck off and get out of debt. George, final words? I still consider selling it. It sounds like it's weighing on you and your goals mean more than this truck does. I'd probably just sell it and cover the underwater difference with your

savings. Well, if he sells it, he's got enough cash to go buy a $10,000, $12,000 truck and still have a nice emergency fund to build on. I like this plan. That's what I would choose too. I would absolutely choose it. Hey, we've got to let Carlos go and the rest of you remember this. If you are not on the radio audience right now, this is the

end of the show, but you can go get the rest of it on the Ramsey Network app. So just go to the show notes, click on that link, and we'll see you over there. This is The Ramsey Show. Welcome to The Ramsey Show, where we help you win in your life. We're going to help you win with your money, win in your work, and win with your relationships. 888-825-5225 is the phone number so we can coach you. I'm Ken Coleman. George Campbell joins me this hour, and we're thrilled that you are with us. 888-825-5225. All right, let's go to Austin, who's joining us right here in our neck of the woods, Nashville, Tennessee.

Austin, how can we help? Hey, guys. Really nice to meet you guys. I just, I've never actually, I'll be honest with you guys, I haven't actually done financial advice before or any phone calls like this. This is all very new to me. Well, you're going to do great. I appreciate it. Yeah, no, my question was kind of I'm building a handyman business. So this year has been a lot of experimenting.

I have a sole proprietorship, and I really want me and my wife to kind of get out of the debt. And I believe my answer is really building on this business. And I kind of would want to, like, tell you guys my situation and then see what you guys would do if you were in my situation. Go for it. But before you tell us, before you get into it, just tell us really quick how much debt you have. So right now we, I'm upside down on a truck. It's worth $15,000, but I owe $30,000 on it now. My wife and I, we have some credit card debt. We've actually cleared, I think, about almost half of it now. What's the balance?

I believe the balance is sitting at $15,000. Okay. Any other debt? No. That should be about it. All right. Now tell us what's going on. Right. So our current situation was I was working with a guy, this was about a year ago, where he was building a business as well here in Nashville. Took a lot of ideas from him and the training that he was showing me, but a lot of it started to become

unethical. Didn't like it, put us in a really bad spot, was barely getting paid for anything. So I started being self-employed on my own and I'm just trying to learn up a lot. So in a bad situation, this was back in January, we cleared things up where I started paying back on credit card debt that we had. Our credit cards were going to be, we were things up where I started paying back on credit card debt that we had. Our credit cards were going to be, we were just about to pass that 0% APR. And then we were really going to owe. My wife is more experienced in credit cards. I didn't really know anything. So if I didn't know it, I wasn't going to get involved. So I just thought, I'm going to understand what my mom, my, my wife does with credit cards.

Is she working full-time? She is. Okay. And you're currently working full-time as a handyman? Yes, I am. Self-employed. I try to work six days a week. I just try to have Sundays off.

We were in a situation where we did an upstart loan back in January where we pulled about, I think it was 12K. And it really just bought us time because our credit cards we owed was due like next week. So you're using debt to try to pay off debt, to try to pay off debt, to then take up more debt to pay off debt. That's the story so far. So far, it was just buying ourselves time. Okay, but I still feel, so get us right to the point, because I'm almost slightly confused at this point. Yes, sir. Yeah, no, I understand. I talk a lot in speeches. No, you're doing okay. I just, I want us to be able to help you. So what's the core question? The core question is, I'm very focused on trying to be a businessman,

and I wanted to know in the year of 2025 coming up what I can do to get us out of this debt quickly. Make more money and cut your expenses to the bone. Right, right. What are you wanting to do? So my thing is I'm a sole proprietor and i wanted to be an llc i guess there's a lot of different questions what is that that's got nothing to do with making money can i take a guess as to what you want to do austin so far with what your harebrained plan has been take on more upstart debt to grow the business because that's somehow going to solve your problems.

No, I don't believe so. What are you wanting to do? What do you think is the solution? I'm hoping to buckle down and take on as much work as I can. Good. What are you making? That's got nothing to do with llc or sole proprietorship um you you can go see a local uh smart investor pro from a tax standpoint

a tax expert and talk through that that's easy peasy that's not why you called right now what is your household income between you and your wife's jobs? What are you guys bringing in a year? Together, I am projecting to make $70K gross. And I believe for her, because she works in the medical field, she should be bringing in $50K. So how does a handyman make more money? I pick up odd jobs. I also am contracted through a company that lets me do odd jobs as well. My friend, you are working like a madman. You can make so much money just in Williamson County alone being a handyman. You're telling everybody everywhere all the time, everywhere, I'm available, and you're working 50, 60 hours a week minimum.

And then, George, they need to cut. Then you need to be on a written budget every month. Use the EveryDollar app. You and your wife both look at it and say, okay, we make $120,000. We brought in $8,000 after taxes this month. Where is it all going? And how much of it can we allocate toward debt payment versus just living? And we try to get our, like Ken said, cut your expenses down to the bone, food, utilities, shelter, transportation, insurance, everything else is going to go

toward paying off that debt. We're not going to overcomplicate it. We're not going to look for the next 0% APR. We're not going to look at debt to be an option. We're just going to look at paying it off. Do you see the difference? Okay. And on top of that, like Ken said, are you charging an hourly rate right now for your handyman business or is it project-based? It is project-based. I do wish to switch to hourly. I'm still trying to find the pricing estimate. What do you want to charge? What could you charge that would get you to 80, 90K? That's 45 bucks an hour, 50 bucks an hour, right? Correct. I was actually aiming for 60, 65. Yes. Good. Great. So your new hourly rate is 60 bucks an hour. Yes, sir. It's that simple. And you tell people, I charge 60 bucks an hour. My estimate for

everything you just threw at me, probably going to take three hours of work. Bada bing, bada boom. I'm timely. I over-communicate. I work hard. You will get more work than you know what to do with. That's your new slogan. And create a referral program.

Say, hey, if you send me someone, they said, hey, I heard about you through Ken. I'm going to give you a $25 gift card. It's this simple. Get in Facebook groups in your neighborhood and do a great job to the point where they want to tell their friends and and i gotta tell you the strategy that will work for you is go find the wealthy neighborhoods actually ken my handyman said he's in your neck of the woods and he said yeah they'll they're happy to pay like you know they want me to screw in a light bulb that's i got to get a ladder for and they don't want to do it yeah that's right and

they're willing to pay 90 bucks an hour i'm your customer you know why number one i can't do anything i can barely put a light bulb in i can do that but it's it's uh it's dicey it's stressful and you go to nice neighborhoods where people have excess money and they want more time. And you start doing a good job for them. And you say, look, I'll give you a 20% break if you post on Facebook or whatever, the neighborhood thing. And then you're going to have more work than you know what to do with. Just get creative. You get out of debt fast.

The key is take debt off the table. You played the game for far too long. It hasn't been working out. You guys worked too hard to feel this broke. I need to come over and do some work at my house, and then it's free, but then I'll post about it. There we go. I'll work a deal.

I'll work a deal with you. This is The Ramsey Show. Welcome back to The Ramsey Show, 888-825-5225. That's the phone number. We would love to coach you today. I'm Ken Coleman. George Camel is alongside. Ariana is joining us now in Grand Junction, Colorado.

Ariana, how can we help? Hi. Okay. So basically my husband is ready for kids and I'm kind of scared. I think we're doing everything okay financially and some for some reason, I care about your radio opinions. That means a lot. At least somebody somewhere cares about George and I's opinion today. Our wives don't care, so we're glad someone out there does.

My kids don't care. Most of the audience doesn't care. This is a special moment for us. That's why we show up to work. Yeah, that's why we're here, for you. We've been listening to y'all for a long time, so it really does mean a lot. Thank you. What's going on?

What are your fears around having a kid financially? Okay, so I think right now I just see so much opportunity for growth in both of our incomes. And I see the conflict of time. When you have a kid, there's less time to work in some fashion, right? So like totally complicated there. I think we're doing everything okay financially, but I don't know. Well, is there some sort of pressure coming? Is it like, is your husband ready to get started having kids or are you, and now you're second-guessing it, or what's underneath this? I mean, he's a sweetheart.

What? He's a sweetheart. I just think it's more of an identity crisis for me. I'm a person that really identifies with work and what I do. And I think that change of identity, although it wouldn't be any less meaningful, the change itself is pretty scary, right? So do you want to have kids right now i would say like a year would make me feel better well good go for it takes some time for it to bake so i mean it's not going to happen tomorrow yeah but i'm with her i and i listen if you were my

sister i would say then wait a year to start try Try it. How old are you? Can I tell you guys my financials? 29 as of Saturday. Okay. The way she said that, she thinks that's like getting up there. Did you hear the way she said that? She was like, 29? Ken has socks older than you. I do have a pair of boots that are older than her.

I really actually do. They're J.Crew. You know those boots. I know them well. 32 years old, folks. Resold them three times. They're classics, by the way. So tell us your financial situation. I don't think it's going to change my mind, but go ahead. So right now we owe just our mortgage and we owe $250,000 on that. In the past year, we were able to pay down $19,000. Good for you. And so I'm hoping to kind of keep up with that trajectory.

Great. We have $42,000 in high-yield savings, $16,000 in cash. And then I know, George, you're not going to like this, but with $5,000 in Bitcoin, that was a gift. Relax, George. I'm not mad about it. It was a gift, George. I'm happy for you. That's great.

So I'm kind of just going to let that sit there, and we're going to pretend like it doesn't exist. And what's your income? Tell me your incomes again. We probably met right around 110. Our income fluctuates. There's like six months out of the year where we're only making seven grand a month. And then our income goes up significantly in the summer and fall months. What do you do?

My husband's occupation. I work for a local college and I handle the logistics for the entirety of the outdoor education program. And then I'm a part-time fishing guide. Cool. So this identity thing you mentioned, tell me more. You're worried about losing something. This is not a financial question. It isn't. All green lights. You're going to be fine. It's in the budget.

Don't say you need to wait financially. This is really a career thing. You said you put your identity in your work, and you'll lose that if you have a kid. What is that? What are you worried about losing? I think it is more financial. I think we live in a really expensive place, and I feel that if our income was diminished in some capacity because of my lack of availability to work in the same way that I am now. Are you working 90 hours a week?

I mean, it can fluctuate. I average 40 hours a week right now, but in the summer months for like six months, that can go upwards of like 65. That's because of the fishing guide stuff, right? Yeah. Okay. Which makes more money per hour, the fishing guide or the college job? The fishing guide, for sure. But the college provides stability, like benefits and such. Yeah.

But again, I'm not trying to keep coming back to this, but I'm just curious why you said you put so much identity in your work, but then when George and I kind of said well that's what this is about you went well no it's actually this so i'm telling you it's not financial scarcity mindset either you guys pay for daycare and you know that that's going to what the cost of that or you one of you stays home and you adjust your lifestyle you adjust your lifestyle so if you can't live in Grand Junction, Colorado, which I don't think that's the case, but let's just say... We live in a mountain town north of there. Okay. But my point is this. Okay. But I'm trying to walk you through your fear. If for some reason, baby comes, okay? Comes along, here you go. Now you've decided you're

going to stay home. Great. And it's going to affect your income potential. If you cannot live where you guys want to live, then guess what? We change the location of where we live. Whoa. Yeah. No, I'm just saying it. Like, am I right or am I wrong, Ariana?

Come on, you're smart, lady. You're right. You're right. So you walk through this and you go, well, that's nothing to be afraid of. It's something we have to deal with. Two very different things. And that's what George is saying. And if you want to keep working and cover daycare, okay, well, it's going to be an extra $1,200 a month.

You guys take home $10,000 a month. We're going to be okay. What's your mortgage payment? It's $2,100 when we don't do any extra payments. Okay. So it sounds like that's right in the parameter, 25% of your take-home pay. You guys are bringing in $8,000 to $10,000 a month. Can you live on less?

Would you be able to find $1,000 or $1,500 in the budget for daycare once we get to that point? Totally. I mean, even in our slowest months, I have $2,000 of margin. There we go. And so don't tell me that you need to wait financially. It's just not true. Yeah. You're just scared because this is all unknown. No, you're right then. It is my fear. Yeah, 100%. And it's a very rational fear. You're not crazy. A lot of people have this fear of,

I don't know what life is going to be like when I have a kid. And what if I stay at home and I realize my identity was in my work and now it's not. These are normal things to struggle with. The way I define fear, Arianna, is I'm worried that something bad is going to happen if I move forward. And so that's what's going on. I'm worried that financial calamity is going to happen to us if I become a mom. Okay? So we've got to write that down. In the back of my head, I was hoping for Rachel, but y'all did a phenomenal job right there.

Well, you know, that's all we can do rachel would have been much kinder and compassionate yeah yeah probably and probably better advice but you know ariana you get what you pay for today you get she's a working mom she's a working there's a different spin there but but uh don't don't miss what i just said ariana you need to write that fear out and when you write it out you can write it in the way you want to write it, but that's what you have to do, and you've got to look at that and go, what evidence exists that says that this fear is in fact the truth and protecting me, in other words, telling me, don't have a baby or you will go to financial ruin?

And it seems silly when I say it that way. No, I think my mom's been projecting that. You are? So here's how to dispel the fear with facts. it seems silly when I say it that way. No, I think my mom's been projecting that. So here's how to dispel the fear with facts. Do a budget tonight with your husband as if there was a baby in your life and you had to pay for daycare and some diapers and some formula and some clothes. Great. We got that one down. Now on the career side, let's paint both pictures. What happens if I keep working? What happens if I stay at home? And you're going to realize, oh yeah, I guess we're going to be fine either way. We've put ourselves in a position where this is not going to be stressful. It's going to be different. It's going to be, it's going to have its own challenges

bringing a kid into the world, but I don't want you to hold off for the wrong reasons. Yeah. And I, Arianna, I have no sense, and George, I don't think you do either, that she's got a financial irresponsible bone in her body. I think she's just very vigilant. A little bit of fear is good, right? Well, it's easy also to go, well, you know, money's tight. I don't know if we should have a kid right now. That's the easy excuse, but we just laid it out on paper. They're doing great.

Arianna, thanks for trusting us. I know Rachel's not here. We're going to get James to get that clip of the call to Rachel. We'll see what she thinks. It'll be an ego boost, if nothing else, for's not here. We're going to get James to get that clip of the call to Rachel. We'll see what she thinks. It'll be an ego boost, if nothing else, for her. Yeah. And we'll see if she approves of our advice to you. But thank you for putting up with us.

More bad news for the rest of you. It's just me and George the rest of the show. No, Rachel. We'll be right back. Welcome back to The Ramsey Show. Alongside George Camel, I'm Ken Coleman. Thank you for being with us, America. 888-825-5225 is the phone number.

888-825-5225. All right, question for you, George. Hit me. What is the best way to make the most of your money? Is this a trick question? Because I'm falling for it. Yeah. A budget.

No. Yeah. And here's the thing. People, the dreaded B word comes up. People get a little, you know, a little sweat on the brow. I like that you called it the B word. Yeah. It makes people a little jittery. It just gets them to tighten up a little bit. And here's the thing. All this is, it's simply paying attention to your money. It's an intentional

spending plan so that you don't have to wonder where your money went because you told it where to go before the month began. And EveryDollar is our app that makes it really easy to plan your spending, track the expenses, and save for what matters most. That's all it is. It's a reflection of your values with dollar signs. That's it. And so if you want to keep a pulse on your spending, you want to make progress on your money goals, go download EveryDollar for free in the App Store or Google Play. And even better, click the link in the description in the show notes if you're listening on YouTube or podcast.

You know I love the show notes. How many times have I said that the good stuff is in the show notes? Underrated, undervalued. A lot of goodies in there. And by the way, we're having fun with this, but if there's anything we ever talk about on the show, and you go, I didn't catch that, I didn't get the link, you know where you go, George?

The show notes. The show notes. Because James and the team, I'm telling you, Thanksgiving is upon us. It's like a cornucopia of good resources. The show notes. Was that your $10 word you had to sneak in today? No, it's just Thanksgiving.

It's that time of year. I thought there was a $5 bet on the line and you pulled out that word. Ken, I got a bone to pick with you. Uh-oh. Real quick, I want to air my grievances. We did a segment on October 25th. It was about dogs, and it was one of your, I gotta tell you. Oh, yeah. You know, dog ownership, very expensive, crazy what the kids are spending. I remember that.

Well, because, you know, we're on the Ramsey Network app right now, streaming, we have a listener from the Ramsey Network app emailed in, subject line, pro-French bulldog on Georgia's side. Here's the message. Oh. Just listening to the October 25th Ramsey show. emailed in. Subject line, pro-French bulldog on George's side. Here's the message. Just listening to the October 25th Ramsey show, I live in Sydney, Australia and spend the Australian equivalent, $210 a month, on our French bulldog. She sleeps in the bed

and we wipe her butt after a walk because Frenchie's digestion is something else. George is not crazy. Frenchie owner life hits different. Thank you for that from live all right that's very nice of live did i say you were crazy on the show a little bit no no you can't say a little bit either i did or i didn't i think you were alluding to the fact that it was oh asinine that i do this i didn't didn't use that word Thou doth protest too much.

I'm putting words in your mouth. Yeah. For those who are playing catch-up, George admitted, by the way, I didn't out this. You admitted that you wipe your dog's butt after they do their business. And to be clear, you brought it up. I never brought it up. I brought I got to tell you up about the dogs. You brought up the wiping. Did I bring up the wiping? Yes. I brought I got to tell you up about the dogs. You brought up the wiping. Did I bring up the wiping?

Yes. I have it on good authority. All right. I stand corrected. I don't mind being wrong. Point is, it is nuts. Now that you're asking, I think it's nuts. But the things we do for our pets are wild.

But again, I'm willing to do it. I like my dog more than you. Not true. You don't sleep in my bed. My dogs do. That's what I'm just saying. I thought you meant you like your dog more than I like my dog. Oh,'t sleep in my bed. My dogs do. That's what I'm just saying. I thought you meant you like your dog more than I like my dog. Oh, no, no, no.

That's not a competition. I know you like your dog more than you like me. Yeah. I get that. And I really like you, Ken. I think we made that very clear. Wow. But that just shows you how much I love my dogs.

You stay away from me with the wipes, all right? All right. That's all I'm going to say. All right. I just want to let you know I'm not crazy. Thank you for the listeners that supported me during my time. You've got one. You got one email from the other side of the world.

All the validation I need. I think most of America went like this. Ooh. When they heard that you do that. Well, to that, I'm going to make you smell the horse candle I got. Let's go to Carrie. That's good. Let's go to there.

There it is. Oh, that does really smell like a horse. Uh, let's go to Carrie in Des Moines, Iowa. Carrie, how can we help? Hi, I have a question about life insurance. Um, I'm 42 year old, two years old and I'm divorced and I have two kids, 12 and 15. Um, my term life is just about up, like about to expire, and I'm wondering if I should renew. Okay. Are you self-insured where if something were to happen to you, you have enough assets to replace your income?

Well, so I'm divorced. So my kids would go to their dad, and he doesn't need extra money to take care of them, and actually he would get like a bonus because he wouldn't be paying me child support anymore. So, um, so, and I do have assets, right? I have my house. So that would sell. I think that they would get conservative, conservatively, conservatively about 150,000 each. Um, if I were to pass away right now, um, obviously that would only just go up. So I'm just trying to decide.

Well, I think, are you a healthy 42-year-old? I am, yep. Okay. For the peace of mind in my household, I would do it. And you can do a shorter term. You can do a 10- or 15-year term, and it's likely not going to cost all that much if you're healthy at 42. And so I would jump on to Zander.com and get

a quote. And you can do these now with, you know, for what's your income right now? Like 65. Okay. So we recommend 10 to 12 times your annual income. So you're looking at, you know, $650,000 to $800,000 face value on the policy for 10 or 15 year term. They're going to basically divide out what it would cost to insure you every single one of those years, and then divide it out into one level payment of, you know, 30 bucks a month for the next 15 years. Right.

And I think for your world and where you're at, it would give me peace of mind, and it's a great way to say I love you to my family, and I hope that you never need it, and it expires again, and we just, we are where we count our blessings at that point okay all right sounds good thank you absolutely thank you great question let's go to philip now in fort wayne indiana philip how can we help hey um so i do have a question i own a small trucking company and i am basically starting things over again i'm on the baby step number one i was able to get a thousand dollars saved up but my concern is if i do stick with just a thousand it only takes for one tire to go out and that could if it's on roadside that could easily be the whole

thousand if not a little bit more should i save up more than the thousand owning a business or what should i do there that's a good question you have any debt in the business itself i i was debt-free at one time and i tried getting drivers again and now I am no longer debt-free. I do have, I want to say about 60,000 to 70,000 is where I'm at now again. Well, I would separate your business life and your personal life. So your personal life, we have $1,000 saved. On the business side, I would have some savings, some retained earnings to make sure that we can cover business expenses. Okay. So in that regard, yes, I would save up enough to cover some

of the ankle-biter emergencies that would happen in your business. And I'd put that in a separate business checking account. And that's what I have. I've always always been told 10,000 minimum for the business but I've had a lot of ups and downs along the way I've been running my own business now for almost eight years and I just can never seem to really get ahead I get ahead and then all of a sudden one thing happens after the other and then I'm making payments on maintenance. That's the biggest thing. All right, so let me jump in and ask a question because you do have eight years of experience. What do you think is the right – forget our opinion for just the moment. What do you think is the right amount of money that would make you sleep easy at night if you had this set aside in the business for one of these situations that you've experienced before?

If you could just poof, make it happen, what would be the amount of money set aside in the business for one of these situations that you've experienced before? If you could just poof, make it happen, what would be the amount of money set aside in the business savings account? Minimum, starting over again, $10,000. Okay, but I'm not starting over again. I'm saying if you at all times had $10,000 in there, not $15,000, not $20,000, if you had $10,000, you'd go, I can weather most business emergencies without having to go into debt. I think comfortably, yes. Okay. I just wanted George to have that information. I was curious as well. Here's what I would do personally, if I was in your shoes,

Philip, I would continue the baby steps in my personal life. And on the business side, I would set up a sinking fund for maintenance. And if it's 10 grand, I'm going to put $800 a month so that in 12 months, I've got $10,000 sitting in that account. That's what I'd be working toward. And then anything other than that is going to go toward my debt. So it might slow down your debt payoff, but it'll also build this nice maintenance sinking fund for you as well. Is that the answer you wanted to hear, Ken? I think so. Well, no.

Not that I wanted to hear, but I think that's the right answer. That feels good in my heart. He needs that. So we're separating these two, but one's got to be healthy for the other to be healthy. 100%. Really good question. Thanks for the call. All right.

Quick break. George is going to floss. He'll do a little mouthwash and check his email, and we'll be right back with more of The Ramsey Show. Welcome back to The Ramsey Show. Alongside George Campbell, I'm Ken Coleman. Thank you for joining us. 888-825-5225 is the phone number. Our scripture of the day comes from 1 Timothy 2, verses 1 through 2. I urge then, first of all, that petitions, prayers, intercession, and thanksgiving be made for all people, for kings and all those in authority, that we may live peaceful and quiet lives in all godliness and holiness.

And then our quote of the day from the great abolitionist Frederick Douglass. A man's rights rest in three boxes. The ballot box, the jury box, and the cartridge box. Ooh. That'll make you think. Hello. I guess that's the right to bear arms there. I mean, Frederick threw that one out there.

If there had been TV back in that day or social media, that one would have gone viral. That's what we call hot take. That's a hot take is right. No pun intended. Paul is joining us now in Los Angeles, California. Paul, how can we help? Hey, guys. Hey, Ken and George. Thank you so us now in Los Angeles, California. Paul, how can we help? Hey, guys.

Hey, Ken and George. Thank you so much for taking my call. Sure. First off, I just want to say thank you so much. Because of Ramsey, I was able to pay off $315,000 worth of debt. Wow. And we're in baby step three, and it's going pretty well. Awesome.

Thank you so much for all you guys do. Yeah, good for you. Yeah, you guys did the hard work. You did everything. Way pretty well. Awesome. Thank you so much for all you guys do. Yeah, good for you. Yeah, you guys did the hard work. You did everything. Way to go. Yeah. The crazy thing is that that debt was not a house. It was just student loans.

So my question is this. So I'm married and we have four young kids and we're just renting right now. And living in the People's Republic of California, it's pretty expensive out here. Yeah. So we got an offer from my parents and living in the People's Republic of California, it's pretty expensive out here. So we got an offer from my parents. So they're getting ready to retire here in a couple years.

And they offered for us to kind of take over the mortgage payments on their house and move into their house. And what we would do is maybe build like an accessory dwelling unit in the backyard for them to live in. So we would live in the main house. They would live in the back house. Just wondering what your thoughts would be on doing that. Is that a good idea?

Would you guys, would they transfer the home to you? Yeah, so the house would be transferred to us. We would basically assume the mortgage deed and everything would go in our name, but they would basically... Is it an assumable mortgage? Yes, it's an assumable mortgage that they've got. Oof, I would tread very lightly.

This feels like it would get messy very quickly. Does this really solve all the problems? If you guys are living in L.A., you've got to be making L.A. money. So what's the household income? So right now I'm averaging probably about $180,000 gross per year. Is your wife at home with the kids? Yeah, she is. Yeah. Okay. What is their, what is their house worth if it were to go on the market today? So if it were to go to the market, it'd go for about 750,000. And, uh, the, the house is, um, I think it's got about like

300,000 worth of equity. They've got about 12 years to pay it off. And this whole plan would happen in two years. So we would take over the mortgage payments when there's about 10 years left. And what would the mortgage payment be? Mortgage payment, like this would be like interest and mortgage and everything, about $3,000 a month. And what do you bring in home every month? For me?

Oh, combined. So I have... Well, it's only your income, right? Oh, is it only you? Okay. Yeah, yeah. So it's only me. So we bring in probably around like $10,000 a month after like deductions and everything. Okay.

I still wonder, because they're going to have to sell this house to you, correct? Yeah, so it wouldn't be, like, a sale. I think it would be, like, so I would just assume the mortgage. I would just have to qualify with their bank, and I just, like, my credit score, whatever, would need to be a certain amount. And if I get approved, then they would just put me on the loan and take my parents off. But they would have to put the house in your name. Yes.

And the house would go in my name. I would be working with my parents would be in the back there with a good real estate agent and estate planning attorney before I move one step closer to this. The whole thing feels like it's not going to go the way you hope and the way you plan. And I don't want you to make a big financial mistake. Because there's also a step up in basis. And if they had just left you the house, you know, in a will, it's going to be treated

very differently than if you, you know, basically inherit the house while they're alive. And so it just gives me some pause to where I'd want to do a whole lot more homework before I ever move forward with this. Gotcha. But let me, I'm a fake devil's advocate, George, just because I've honestly never heard this call before. If he does his homework, and I appreciate your caution, and you run it through and it's that simple. So where they're simply assuming, I think the, I think the mortgage pay was a little high for their income. We haven't talked about that. Well, you'll need to also with an assumable loan, you'll have to come up with the equity in cash. So that's the part that makes me go, I don't see, that's what I didn't understand. I don't think you're going to be able to do this unless you guys have the

cash ready to go. Do you have the cash? So we don't have the cash. So basically my parents would basically just give me like the house and they would let me kind of have the house from them without paying them their equity. And the benefit for them would be they get to live in the house in the backyard. I don't know if the lender is going to allow that with an assumable loan. So that's the homework I'm talking about here. I don't know the lender is going to allow that with an assumable loan. So that's the homework I'm talking about here. I don't know the lender is going to go through with this. And I didn't know either, which is why I was playing the advocate here to go

Yeah. I mean, there's truthfully a lot of unknowns, and I'm not the expert when it comes to the nitty gritty of these details, but I would say these are the kinds of things you should be thinking about. So I'm not giving it a hard no. Get on the phone with their banker is what he's saying. Start there. Get on the phone and get some details.

Find out what's going on there. Because here's my question, George. If he doesn't have to come up with the cash for the equity, and it literally is as simple as he kind of made it out, they just literally transfer the deed, and he picks up where they left off, where would you be on that? I'd be okay with it if everything worked out perfectly.

It's just rare that everything plays out perfectly in real life. Well, I don't think it has to be perfect if you get the answer to these questions. And then on the estate planning side, I want to make sure that when you guys sell this place, what are the capital gains going to be because of the way this was all handled. So just more homework to do, Paul. It's not a no from me, but I would definitely tread with caution. Yeah. Any concerns you guys have about me moving in with my parents and having them in the backyard?

Well, I was going to get to that. It's a lifestyle change in your moving locations. Okay, hold the phone. I hear you say your wife has got concerns about your mom and dad living in the backyard. Yeah. Okay, then I would be— She's kind of okay with it, but, you know, we have different philosophies on— Oh, what's it going to—you know, it's going to cost a few hundred thousand,

and they're not going to pay for it to build this dwelling in the back. And that's if, you know, you have an HOA, if they have an HOA, they may not even allow that. So, again, there's a lot of just— I press pause pause i wouldn't do it if my wife the if you describe that accurately and i believe you did that would be a no for me she's not going to change her mind and keep in mind this is your mom and dad's house to them it's their house we're just in the backyard now and and dad walks in anytime he wants. I got to tell you, if my wife was uncomfortable with it, it's a hard pass. And we're essentially having to build a second home in our backyard in California,

which my guess is probably going to cost you $300,000. Yeah, something like that. I was fine with George's checklist if you did it, but now I'm not. Dad, they're not going to pay $ pay 300 grand and not make you pay any of the equity are they in a position to do that um they would probably be able to help us with with some of the cost of the adu um but in my mind they'd have to pay for it so now you're taking on an extra loan to cover that on top of the mortgage and now it becomes see i was under the assumption paul that the parents were going to pay for their little house in the back.

That was my assumption. I was wrong, obviously, but that's what I thought. And there's no way I'm paying for it. Yeah. This is not a great idea. But number one reason for me is your wife's not okay with it. Okay. Okay.

Have you heard the phrase happy wife happy life before yeah i've heard that before well i can tell you it's true okay one one quick thing while we got paul guys in the audience the studio audience are you for this move or not yes or no every dude in the place is shaking his head off his shoulders and the ladies but we got the guy vote we got the female vote all the votes are counted george i ladies. But we got the guy vote. We got the female vote. All the votes are counted, George. I feel like I'm on the right side of history here, Ken. Yeah.

George is our winner today. Big winner, George. Thank you. I got the electoral college and everything. I think you get best advice to the show today. I'm willing to give it to you. Population. Not a problem.

Oh, it's great. Good show, Ken. Hey, great being with you, my friend. Thanks to James Childs and our fearless crew that keep us on the air. Thank you, America. God bless America. This is The Ramsey Show. We'll see you next time.