The Ramsey Show - App - Pay Off the House or Invest the Money? (Hour 2)

Episode Date: June 24, 2022

Dave Ramsey & Ken Coleman discuss: What to do if your 401(k) contributions were sent back to you, Selling your home, Investing in gold, Paying off the house or investing instead, Leaving a job to start your own business.   Want a plan for your money? Find out where to start: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where debt is dumb, cash is king, and the paid off home mortgage has taken the place of the BMW as the status symbol of choice. I'm Dave Ramsey, your host. Ken Coleman, Ramsey Personality, is my co-host today. As we talk about your money, your job, your career, your mental wellness, your relationships, your life, right here on the show. 888-825-5225 is the number. Columbia, Missouri starts off this hour. Obie is with us. Hi, Obie, what's up? Hi, Dave. Hi, Ken. Thank you for taking my call. Sure. How can we help? Well, I just want to start by saying that we're debt-free.

Paid off our home mortgage late last year, and we're hoping to get on the debt-free stage one of these days. Great. How can we help? Well, I have two questions. One, I received a letter from my 401k plan, and it says that the IRS service requires plans to pass non-discrimination tests each plan year. And it says the test places percentage limits on the amount a highly compensated employee may contribute and have allocated to the 401k so basically it gave me some money back saying that i over contributed because i guess some people in the company are not contributing to the 401k correct um so i guess my question is uh does the IRS set this limit,

or can a company decide what they consider as highly compensated employees? No, there's a formula. The IRS sets a formula. It's a regulation in the 401K regulations that say it keeps all the big bosses from making a pile of money and dumping it in where the little guy is not putting any money in, and the big boss is just using the 401K to screw over the little guy and that's what it's for that's why it's there uh but it the the math you know you know can really work out big time against you so you are in the highly compensated category and uh and so that means that you do not have enough participation with the folks that are not highly compensated in the 401k that are medium, whatever. How big a company is this?

It's a family-owned home improvement retail store. Got about over 300 stores. So what, 5,000 employees uh probably more uh okay the place where i work has about uh 177 okay okay yeah you're just you're just limited it's that simple you don't have any control over the situation and the guideline is not it's not arbitrary it's not set by the company it is a formula that the irs regs hit and basically what you're telling me is this retail operation and so you got a lot of turnover at the entry level position so they don't ever bother with the 401k a lot of them working part-time jobs that kind of stuff and so it's going to keep this

thing screwed up one antidote is for them to bring in something like our smart dollar classes where you teach the employees how to handle money get them out of debt so they start their 401ks at any level uh and we've got companies your size and companies small and large all across america that are doing it for instance costco all of their employees have gone through our smart dollar and so so it's basically the Financial Peace University type lessons on getting on a budget, getting out of debt, and that enables people to begin investing then and shows them the importance of investing. And so it's really a very cool thing.

So you could talk to them about, talk to your leadership team about bringing in something like smart dollar because education and getting people out of debt so that they can invest is the answer to the formula long term but that's probably a two to a three year process to get this to where you still where you'll pass the non-discrimination tests and the discrimination is not racial or or sex discrimination the discrimination is math discrimination. It's high-income earners are discriminating against low-income earners or medium-income earners is the concept. That's what the word means in this context. I also want to point out, Dave, that recent studies show that employees want financial advice and guidance from their employer. That's something

they're looking for. So what you've got here is also a tremendous benefit for companies like this, not just to help the individual in that situation, but to keep people staying with them longer. You're going to build loyalty. It's a real perk. And a lot of individuals, I mean, you have to understand, if an employee looks at their employer and says, you helped me get my money life in order.

They're going to be happier. They're going to be more effective at work. And they're likely to stay with you much longer. This is a straight-up benefit that people are looking for. And SmartDollar is poised to be able to help right now. I mean, instantly. We were the first ones in the financial wellness space. I own financialwellness.com.

So we were the first ones there and teaching companies uh setting companies up to be able to teach their team how to handle money whether it's got five people or five thousand people or fifty thousand people but i gotta tell you ken it's fun when i go to my local costco over here and i walk through and uh the guy or gal checking out my stuff is like seeing the videos hey dave what's Dave, what's going on, man? Thank you, man. Yes, that's great. That's pretty cool. That's pretty cool. I get recognized sometimes at different places, but that one feels pretty good.

Do they ever follow it up with, really, Dave? You really need that many ribs? You really? You really? Dave, you really need that much water? Seven cases of water. I'm going to Lake House. I'm going to Lake House.

That's great. All right, here we go. Seven gallons of peanut butter. Amanda's with us in Minneapolis. Hi, Amanda. How are you? Hi, Dave. Thanks for taking my call. Sure. Amanda's with us in Minneapolis. Hi, Amanda. How are you? Hi, Dave. Thanks for taking my call.

Sure. What's up? I'll try to keep it brief. With the housing market going on, my husband and I have about $285,000 in equity in our home. We've always done the work ourselves, so our house has kind of ballooned, and we've never pulled equity from it. So we carry very little debt. After we would pay our debt off, we would have roughly 144,000 left over. We're just trying to figure out if it makes sense to sell. We're in a good financial position. We own an electrical company. We make

good money. So we really don't need to sell. But my husband's really entranced by the idea of putting a lot of money into savings and buying our next house with pure cash. What would you advise? You know, if your net result is that the two of you can find a home that you like as much and you end up with zero mortgage and you've taken advantage of this white-hot market, and it causes you to be able to do that, that's okay. If the end result is that you end up in a house you don't like because your husband got all flipped out about this real estate market, that is not a good result.

Right, and that's my worry. We do own some commercial properties. He wants to, for a couple years, live in one of the commercial properties, which I'm not completely sold on. Nope. Nope. It's just, yeah, we'd have to go back into renting for a couple years. Nope.

Nope. You're not broke. You're not broke. He's just going too hard. Dial it back a notch. You're going to make plenty of money. You're going to make plenty of money. You're going to have plenty of money. You've already made plenty of money.

And this house is going to do nothing but go up in value from here. You don't need to live in a warehouse so he can take advantage of the market. Nope. Right. I've got to tell you, Sharon Ramsey's not doing that crap. Yeah. It ain't happening. And I love that. I mean, I like taking advantage of a hot market. Ramsey's not doing that crap. Yeah. It ain't happening. And I love that.

I mean, I like taking advantage of a hot market. I'm with you on that idea. But this guy, he's just pushing it over the edge, and it's going to cost him back down the road later. Nope. Nope. He may be debt-free, but he'll be sleeping on the couch. In a warehouse. Exactly.

Down by the river. This is The Ramsey Show. Hey, guys. George Camel here, and I'm so excited to tell you about the newest product from Ramsey. It's called Gazelle, and it's a digital banking experience that will help you spend and save the Ramsey way with banking services provided by Pathword NA. You'll get a single spending account with no monthly fees, and it's FDIC insured through Pathword NA. We're offering early access to our beta customers,

so you can help us make it the best experience it can be. Just go to ramsaysolutions.com slash gazelle to sign up for the waitlist today. Ken Coleman, Ramsey Personality, is my co-host today as we talk about building wealth, doing work that you love, creating real relationships, all right here on The Ramsey Show. Phone number is 888-825-5225. John is with us. John's in Tampa. Hi, John. How are you? are you good sir how are you doing today better than i deserve what's up so i have my wife in the background listening she works in mortgages some prior marine corps veteran we recently sold our property that we owned and we stood to gain

175 000 from the property we own another house and our goal is to be debt-free. We follow your principles. We both go to church and we owe about $120,000 in the property and an $18,000 car payment. Today, when I finish work, I'll be going to pay off that car? Our question collaboratively is, do we do a recast and put $50,000, $60,000 down on the house and pay it off in a year, or do we go out and pay it off outright? Our savings, we have about $30,000 in savings. So just sort of wanted to hear your perspective. So if you pay it off outright, how much is left in savings? There's about $35,000. So you wouldn't have to touch that?

No. Okay. As a whole, there'd be. Okay. So why would you not just pay off your house and your car today? Our biggest worries is that if we find ourselves in a recession or a housing market issue, we wanted to have money to potentially go and buy a house on the cheap, potentially not refinance, what do you call them, a foreclosure.

Would you want to hear your perspective? So you would not pay off your house in order to maybe buy a foreclosure if the housing market tanks that's our idea or our idea is to have you know have that amount of money set aside okay i would tell you regardless of inflation and regardless of recession that your best goal your best process is to never buy a rental property except with cash and to never do that until your personal residence is paid for. And so that set of principles that I've used in my life and for millions of other people would lead me to pay off your house and your car today.

So pay off the house. If it wasn't a rental property, it was a secondary house. I would be debt-free before I wrote any checks to buy rental property, and I would only pay cash for rental property then. So the point being, we're going to pay off this other property. We're going to pay off your house. You're going to pay off your car. You're going to be 100% debt-free, and if $35,000 is left in the bank,

you've got all of your income now to start saving to buy a foreclosure when the housing market goes down someday. I don't know when it's going to go down. Not soon enough to change this answer. Okay, so what you're saying is give you a call back in a month and scream on the air that we're debt-free. There you go, brother, or next week if you want. Or tomorrow if you want, because you're debt-free. go brother or next week if you want yeah or tomorrow

if you want but yeah because you're debt free pay off everything that's what i would do listen something's the uh the worry the angst that you have around the economy you're watching the news too much number one you turn the channel off but number two uh the worry in the it's real but there's no sense in just bathing in the blood every night the blood of the newscast and so uh uh uh you know the angst that i hear what what you're what you don't see coming is that when you pay off all of this stuff you're going to get peace yes and you don't even realize that that's there. So because 100% – we've done detailed research. 100% of the foreclosures occur on a home with a mortgage. It's amazing how that works.

Suzanne is with us in Pensacola. Hi, Suzanne. How are you? I'm fine, thank you. I just turned 74. I'm a disabled vet and a widow. And the debt I have, I'll make a payment this month and it'll be under $3,000. So if you don't mind, I'd like to add something.

And that is my husband met his wife before they were married. And this is what I told him. I said, son, you hold the ones you love with your arms, but because we're Christians, the Lord gave you a divorce decree. That's your waistline, not that you're supposed to use it. But as your grandmother would say, my mom raised seven of us. What do you think the good Lord gave you two feet for? Don't you think you ought to use them? I said, your daddy and I used that at Carmel and we had 48-plus years. So I know finance has placed a lot in marriage, and you're bound to disagree because you're two individuals.

Just don't forget the feet, and you'll come out okay. All right. How can I help you today, Ms. Suzanne? My question is, I don't understand, you know, stocks and bonds, and that's my next thing. And it keeps talking about investing in gold, and I don't understand what cryptocurrency is unless it's by bitcoins or whatever. So is there a book I can, you know, get to help me understand any of this before I invest?

Okay. That's a really good question, and it is the proper question. Never invest in something until you understand it. That is a rule. Go slow. That's a second rule, so that you don't invest in something you don't understand. If you're going to follow what we teach and what I personally do, Suzanne, I'm 61, is I don't buy anything except good mutual funds and real estate that I pay cash for. I don't buy gold. I don't buy silver. I don't buy bitcoins.

I don't buy anything that has a long track record, unless it has a long track record that is good. Gold does not have a long track record that is good. Real estate does. Mutual funds in stocks and bonds, some mutual funds have a good long track record and so i want you to buy like you were buying a home in a good neighborhood and bitcoin's a brand new neighborhood that's unproven it may turn out okay but it's brand new the houses all may fall down too but to push this metaphor to the brink but um but it's it's

you know i don't own any bitcoin not one and i don't own any gold except i got on a little bit of a gold ring from my class ring and that's about it i'm not even big on jewelry so uh you know it's pretty simple for dave now as far as the book to read, there's obviously entire libraries full of financial books out there that you could read, and you could really go down the Alice in Wonderland rabbit hole. If you want to get a basic understanding of what I'm saying, you could watch the investment lesson, and it gives you enough detail to understand how mutual funds work, how stocks and bonds work, so that you can begin to get a grip on understanding and beginning to talk about investing.

I will give you that as my gift, and we'll sign you up for Ramsey Plus, which puts you into Financial Peace University. You can watch all the lessons. You can do the budgets in there. but certainly jump over at a minimum and watch the investing lesson. It will show you the ABCs of investing in a way that helps you really, really understand it. Yeah, I think that's really smart. I think she needs a really healthy dose of wariness. Don't let anybody look at you and go, just trust me, Suzanne. No, don't ever trust them. Make sure that you understand it from a crystal clarity that allows you to then be confident and say, this is what I want to do.

I think that's the great lesson from Dave. I think an investing lesson is going to give you the strategy. It's very easy to understand, and it's time-tested. We had a meeting the other day. We were talking about the strategy that you've been espousing for years. I mean, it just flat-out performs. It works. Well, it does, and a guy came up here at the commercial break just a minute ago and brought us a book it's true financial peace university book from 1997 he

went through the class uh now a baby steps millionaire oh yeah and uh the lesson that is in that book that three ring binder that he brought up here that we used to hand to build those in the office because that we were teaching it with an overhead projector in 1997. The investing lesson that is in that book is very, very similar to the lesson that you will get on Financial Peace University today. And that doesn't mean that Dave Ramsey hasn't kept up. It means that the advice still works. Hello.

That's correct. And it's still what I do to this day. I did it in 1997 personally. And, you know, it's like, do you do that with your own money? Yes, I do that with my own money. That's an acid test right there. I mean, you should really, are you putting your money in this? Yeah, I am.

Okay. Then that makes me think about it. Good questions, Ms. Suzanne. You hold on, Kelly. I'll take care of you. Ken Coleman Ramsey personality is my co-host today. Thank you for joining us, America. We're so glad you are here. Landon is with us. Landon is in San Diego, California. It says on my screen, Landon, that you are debt-free, man.

Way to go. That's right. I am debt-free now. Very cool. How much did you pay off? I paid off $147,532.76. Good for you. And how long did that take?

It took approximately 22 months. Good for you. Whoa. And your range of income during that time? Started off around $73,000, and by the very end of the journey, I got up to about $119,000. Cool. What do you do for a living? I'm a certified public accountant who works in tax. Good for you. Okay. Okay, so in 22 months, you barely made enough to pay off $148,000, so you must have had some money in savings or sold something. How'd you do this?

Correct. So I actually am by nature a saver. So I had a really healthy emergency fund around $10,000 at that time. And then I had a bunch of money tied up in single stocks and a brokerage account around $30,000. It took me some time to like let go of the brokerage account just because i'm a favor my nature and i just um really love spend so much time accumulating all those stocks all of those years so it did take me some time to get plugged into to really let go of that amount cool cool and and then you went on business beans and rice rice and beans what kind of debt was the 14 So $19,000 was a car loan, and then the rest was all school loans. Cool.

Did you keep the car? I did keep the car. I just realized that the school loans were the problem. Yeah, the car was a big debt, but the school loans were the tail that wagged the dog. Amen. You're exactly right. Good conclusion. I agree with you.

Well done. Well done. Well done. How old are you? I'm 25. What made you decide to do this when you're 23 years old? So in my household, my parents went through FPU many years ago, so your name wasn't like an unknown. And my home church from time to time will sponsor, um,

FPU classes. Um, but like the, the real key turn was when I went to the mailbox one day, actually, and I got a magazine, it was a, a money magazine and it had your face, this crazy guy on there with cutting up credit cards. It was, it said, um, the debt slasher, how broke millennials are flocking to financial guru, Dave Ramsey, and is his advice sound? And I was just like, like something just clicked there. And I just had to listen to the show. And I was like, is it true that Dave Ramsey helps people pay off tens of thousands of dollars of student loans? And I just was listening, binging podcast after podcast. And I just heard a lot of stories where people or couples um singles like

me were just paying off tens of thousands of dollars and i just it kind of was off to the races at that point good for you very cool very cool well the interesting thing was that article was written to trash me yeah yeah it's absolutely right but it turns you on makes you listen again because you're a financial peace baby you came out of a home where parents did this and you'd remember hearing it at your church so even that article turned out to be good for me who knew so great they trash you and and and then literally and then landon ends up getting out of debt he's the exhibit a yeah you know the you know actually are you a gen z or millennial uh millennial, you're right there on the edge, so good for you.

Wow, way to go, Landon. You're a stud, man. You knocked this out. So what is the secret to paying off $148,000 in 22 months? You pull $30,000 out of a brokerage, $10,000 out, so that's $40,000. That leaves us $108,000 to knock out. That's $50,000 a year, making $73,000 to $119,000. You were on beans and rice.

Yeah, I definitely would say the butt is super important um but for me was more about perseverance and staying dialed into the plan in the process um since it was never going to be a quick two to three months um but more of a year's long journey i think when i first looked at it, I was thinking three years time frame. And you guys always talk about on the show how it's a marathon, not a sprint. And for me, it was looking for small wins and momentum boosts throughout the past two years. I think things from going from asking my manager, my boss, like, can I please get double overtime? Can I get time in half? Can I get any extra hours to delivering a pizza and getting a $30 tip? Those were just little victories along the way. And I think the biggest momentum was like listening to the

debt-free scream after debt-free scream, listening to the podcast, trying to dial in and see if there's anything I'm missing. Is there any tips and tricks that tips or tricks that other people are doing that I can apply in my own life, um, from selling things on eBay or doing Amazon or anything like that. And I definitely won't say it was an easy journey because I think for most of the process, it was, um, consistent 80 to 90 hour, um, work weeks in and out. And there was many nights where I'd only get maybe three hours of sleep. And when tax season ended, like a lot of my friends were like, oh, we need to go party, we need to go drink. And I was just like, no, I got to go do my food delivery job from like six o'clock to midnight every night. So it was definitely about staying consistent, staying dialed in.

And I think the major momentum boost for me probably was around the two-thirds mark. So when I was around $50,000 left, I think I was able to switch jobs at that point. I got a really good buying bonus and a pay raise and a promotion that my old job wasn't going to give me. And I think that was when I truly believed I was, I could see the finish line there. I think through most of the process, I was like, yeah, I think I can do it. I'm just going to keep sticking to the plan. But it was like, at that moment when I was only 50,000, which sounds like, which is still a lot, but I truly believed in my mind that I could do this. It was just a matter of time. Um, and it was going to be

no more of borrower slaves to the lender. And I was just so fed up of having my entire paycheck just be eaten by debt payments, eaten by debt payments every month, every, every biweekly period. It was, it just drove me insane wow all that sacrifice all that hustle all that grind how's it feel now that you're the other side um i i can't express enough how the word financial peace um sounds it's it's lovely it's like when my first direct deposit and i was, it's kind of in the mode where I was going to log on to SoFi, and now it's so long. So long, SoFi.

I like that. I'm going to keep that one going, yeah. So that's where the old student loan was sitting, over there at that wonderful company called SoFi. Oh, brother. Wow, way to go, man. Way to go. So it was worth it, the hustle, the grind, the hours.

Now you're free, you're 25, and you're 100% debt free. Yes, I am. Way to go, brother. Very proud of you. We've got a copy of Baby Steps Millionaires for you, how ordinary people built extraordinary wealth, how you can too. I definitely think that is your future. I will predict that for you. It's coming your your way also a copy of total money makeover for you to give away to someone stir up a ruckus as you've been talking about this

who was your biggest cheerleader as you went along um i think it was my parents and my immediate family um they were very supportive and they would always ask like how much how much how much you've gotten down how much how much uh student loans are left yeah your mom and dad got to be proud of you man you're a stud yeah yeah well done and then i i told my friends and they were all like a little skeptical at first and but they would they were supportive and they weren't like encouraging me to do um go out and spend all my money and so very good cool stuff man all right landon in san diego 148 000 paid off in 22 months 73 up to 119 with a raise and delivering some pizzas count it down let's hear a debt-free scream three two one i'm debt free.

That's how it's done. So we need to change our tagline around here. The Ramsey Show, getting people debt free for generations. That's exactly right. This is the Ramsey personality, is my co-host today as we answer your questions about your life here on the Ramsey Show. Calvin's with us in Raleigh, North Carolina. Hi, Calvin. How are you? Hi, Dave.

I'm very honored and extremely grateful to be speaking with you today. And your ministry has literally changed my life. So thank you for that. Well, thank you. We're honored. Thank you. My question today is I need advice on a plan. So I want to, I'm calling it semi-retire, but I'm not passionate about a 30-year career that I am wanting to end. And what my question is, should I make a career change at my age that

will probably reduce my income dramatically, and it may even go to zero, while I'm contracting a house? And what I want to do is be a builder owner. Sorry, build my own house. And also, I want to begin a process of becoming a financial coach. So I like to give you a little bit of background. I've been with the same company 30 years. And as I said, I'm not very passionate about it anymore. I feel like all I'm doing is showing up and making a large corporation a lot of money, which, you know, I'm very grateful for the 30 years that they've given to me, but I'm not passionate about doing it anymore. What do you really like to help? I'm sorry. What do you make? As far as salary? What's your income? $200,000.

Okay. And how old are you? I'm 55. Okay. And what's your net worth? Probably $3.6 million. Okay. And is a lot of that invested where you can live off of the income that $3.6 million creates?

So some of it I probably could. About $1.1 million is in 401ks that I obviously can't live off for my age. Right. um, for my age. Um, but another million is, um, well, another one, yeah, 1 million probably to 1.4 million is in either cash or, um, or investment accounts. And another factor is my wife, um, will still be working while I do this, and she makes approximately $130,000. Okay. And your goal is to build a house for yourself? Correct.

Okay. So that's kind of an independent variable. You're going to do that either way. Well, it's either that or stay employed and let a contractor build the house for me. Oh, so you would be the general contractor on the house. Yes, sir. That's right. Okay.

But the business that you want to start up for the remainder of your income is you want to be a financial coach. Yes, and I'm not even sure I want to charge for that. I've listened to your webinar, and I want to probably sign up for your master financial coach curriculum. But I'm not sure if I'm ready to charge people for that or just do that as, you know, a free thing for people who need assistance. What do you do now, the position? What kind of work that you've been doing for 30 years?

I manage business systems for a large corporation okay you've earned the right to do whatever you want 3.6 million you can do whatever you want to do okay so there's there's no uh downside so what you're trading out for is you're walking away from 200k for potentially zero income um right and that's the only disturbing part of it, just because it sounds like a bad use of you, not because you need the money. And I wouldn't tell you to stay in the $200K long term, but I might tell you to stay in it another year

and get the coaching business up and running, because I think you'll feel better about you if you're at least earning half of what you used to earn and you get moving again because you're just a guy that moves things around. I mean, no ball screws on you, dude. You've been moving stuff around for a long, long time, and you just kind of hit the wall emotionally on this one gig.

But I think you'll feel better about you if this doesn't go to zero. I think that might create some kind of a backlash inside your emotions it wouldn't mind if i went to zero what do you yeah why why are you so uh what's the emotional pull to be a financial coach what's that desired result in your words when you coach, what's that desired result? When you're done coaching somebody financially, what do you want to see people do? To put people in a position where money is not the sole focus so that they can focus their lives on something better than just money. Where you are. Yes. Right you are. Yes.

Right, right. I mean, 20 years ago, I listened to your show, and I'm a nerd, so I put it in a spreadsheet, the debt snowball, and honestly, I didn't even follow the baby steps. But I passed it by a friend of mine, and he said, that's not real life. That will never happen.

And in five years, I was out of debt, and from there, I've just kept going. So I want other people to feel the freedom of that. So, Calvin, here's why I asked those two quick questions. I agree with what Dave is saying. I don't know that you have to have this narrative in your mind that it's zero and it's just ministry or it's just personal. With the money you all make and the discipline you have, if you want to step away from this job where the soul has been sucked out of you, there's no juice for you. And I think that's kind of creating a little bit of confusion. If you want to go build the house, however long it's going to take to build the house, you've got the cash and all that, maybe that would be a little bit of a break.

But I would really challenge you to look not just at financial coaching, but even like the men and women we call smart investor pros, where you get into true retirement investment advice as well, where you can have tremendous impact there, but also make a really good living. Because at your age, I think there's just so much more impact there, but also make a really good living because at your age, I think there's just so much more impact there. But I would encourage you to not just see, well, for 30 years, I've given so much to this company. And as it stands right now, I just don't feel like I've got the juice. I get that. But that doesn't mean we swing all the way over here and not make any money at all. Or more importantly, it's not about money for you. I think it's contribution, which is what I talk about all the time on the Ken Coleman Show and what we do here at Ramsey Solutions as it relates to work. You know, work is a contribution to make the world a better place,

and we can hear that in you. And I just think there's more options here. Amen. Well done, sir. Proud of you. Good work. Sharon's in Auburn, Alabama. Hi, Sharon.

What's up? Hey, how you doing? of you. Good work. Sharon's in Auburn, Alabama. Hi, Sharon. What's up? Hey, how you doing? Thanks for taking my call. Sure. I'm a school teacher in an elementary school, and I was planning on retiring in three years, but a little thing happened. My husband decided he didn't want to be married anymore. So I'm trying to make sure that I'm going to be on the right track financially. I don't have any debt.

I do have an emergency fund set up. And I have $60,000 put in an account for putting down a house, which is not enough in Auburn. But my question is, I'm trying to decide, should I be putting more money in my retirement and not, you know, just keep renting, or should all my extra cash go toward down payment for a house i'd put it as a down payment on the house and put it on as short a term as you can 15 years maybe 10 years if you can because i want to get it paid i want to get it paid off as quick as i can but um and use the 60 000 which probably came from the sale of the marital house didn't it uh yes yeah yeah and so yeah i would use that as your down payment on the next house buy something conservative and get it paid off as soon as you can while

you're funding retirement and that's what we call baby steps four five and six you're putting 15 percent of your income away for retirement and any extra money you can find beyond that you're paying on the house and get the house paid off i'd'd love for you to have a paid-for house and a juicy nest egg when you get to those retired retirement years. That sets you up for a lot of stability and a quality, quality retirement. But for sure, you want to be in the real estate business. No question about that. Because rents aren't going anywhere but up. And you don't want to be on that cycle long-term.

Not a good long-term cycle good question thank you for joining us ken coleman good hour this is the ramsey show so Dave here. You can find all of our shows with the Ramsey Network app on your smartphone. It's the only place to listen to the entire back catalog of episodes. Download the Ramsey Network app in your favorite app store today.