The Ramsey Show - App - Quit Taking Advice From Your Broke Friends and Family!

Episode Date: August 6, 2024

Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm Dave Ramsey, your host, Ken Coleman, Ramsey Personality, host of The Ken Coleman Show, number one bestselling author, is my co-host today. Jack is in St. Louis. Hey, Jack, welcome to the Ramsey Show. Hey, guys, how y'all doing today? Better than we deserve, sir. How can we help? All right. Hey, my wife and I have spent most of our life pastoring small churches, and we work public works also. I did pastor full-time twice, and we've been foster parents and adoptive parents.

We have nine children, and we've done all this on a nothing budget. You know, most churches want to keep their pastors poor and humble. It doesn't sound like I'm complaining, but I guess maybe I could be. But we've had to move multiple, multiple times. And about a year or so ago, we sold our dream house to get rid of a bunch of debt. And some folks in our town wanted to raise foster kids there because of the size of the house. So we scaled down. But our bills keep coming in.

My wife had two massive widow-maker heart attacks. And she doesn't look like it. She doesn't fit the profile. They laughed and said she just had some gastric problems until she had one in front of them and about lost her. Anyway, we're loaded up with debt, and we have a house that we really enjoy and has been more affordable probably than we've had in years. And I can sell it and get rid of all of my debts, every bit of it.

I thought you paid off all your debt when you sold the other house. I misunderstood. I'm sorry, Dave. I paid a bunch of my debt down. I reduced my debt by about $60,000. Oh, I see. Okay. Yes, sir.

Yes, sir. And how much debt do you have today? Not counting your house. I have $155,000. $ debt do you have today not counting i have 106 uh 55 55 not counting your house not counting the house that's correct okay and how much do you owe on the home 105 and how old are you guys i'm 57 and she's 55 we still have two children at home, two adopted sons, and we've raised a lot of kids over the years. Well, you've given your life away, brother, for others, and for the kids, and for the churches that you've served, and you're to be commended for that. And it sounds like, no, I don't think you would sell your house unless you just hate the house

or something. Oh, we love it. We're absolutely love with it no i i think i think it's time uh for you to consider something you've never done in your entire life and that's gonna make some money and there's nothing ungodly about that that would clean up your debts and help you start to build a nest egg as you head towards your retirement years and you you need to do both, don't you? Well, I have stayed with the company. The position I've been with, this will be five years, and I've gradually worked my way up. And my wife just got her teaching certificate last week

and got her first full-time contract. So what will be your household income now? We went from about $28,000 to about $60,000. With her teaching and your job? And my full-time job, about $60,000 total. And in our area, we're in a rural area south of St. Louis, 4,000 people. There's not much here. So really, that doesn't sound like a lot of money to a lot of people,

but in our area, that's a decent living. Well, just what I'm comparing the 62 is the 55, and that doesn't matter what area you're in. Yeah. So I need some money to throw at that 55 so that you can keep your house. Right, right. And so I think that sounds like some kind of side hustle i don't know what that is in your area what you're constrained to or you know are for but i mean for the next three or four years if you brought i mean if for two years if you

could bring in an extra 20 grand on a side hustle 25 grand you can start to talk about clearing this 55 and of course if y'all are used to living on 28 and now you're going to live on 60, maybe that'll help, too. You could go that way. But, no, I think you keep the house and you figure out a way to work income up, don't you, Ken? I agree. I think the target you gave him, and I was thinking 15,000 to 20,000, something realistic there, that means he's doing some odd jobs, side hustle stuff.

Even in a small town like that, she's tutoring, she's teaching. And what we're talking about here is just over $1,000 a month to get to the $15,000 mark. $20,000, even in a small community like that, per year extra, plus the actual doubling of the income and a budget. They've lived below their means. He certainly learned how to do that over all the years. Obviously, they've had some debt with some health issues and things like that, but I think they can do that and get it out of there quickly. Jack, I would tell you to get on a detailed budget on every dollar,

and we'll give you a year of that free. I'll sign you up for it so you guys can jump on that app and you and your wife together can do that. But anything she can do to pick up a couple of tutoring gigs and you can pick up a little bit here or there. And you guys take the fact that your income has gone way up percentage wise, try to keep living down on nothing and throwing everything you can at this debt so that you keep the house. And then the next step is you build your emergency fund,

and the next step is you start to talk about really saving for retirement because you've got about 10 years. And, you know, you've got to start working on that nest egg. So it's not going to magically appear if you don't build it. And so I want you to somehow figure out a way to get after that. That's what I would do if I were in your shoes. Amen. Thanks for the call.

We appreciate you. What noble people, though. They gave their life away. Oh, yeah, just true ministry, and I get that. And by the way, I'd say one of his side hustles, he ought to get involved with his denomination, whatever that is in that state, Missouri, and he could pick up some interim preaching jobs where those are actually decent money, and he knows how to do that, and that's on Sunday. And that's real money. Yeah, just fill in the pulpit. I can tell you, Ken Sr. is doing it for fun because he's an old man. He's 72. He doesn't need it. They've got a great smart investor that's taking care of them all these years, and they're fine. But he's doing

it, Dave, just to stay active, and he's loving it, and it blown him away uh what kind of income not massive income but it's just like really been surprising for him how much money he can make in a month just filling pulpits yeah so what jack ken's dad is a retired prep pastor yeah and that's what he's talking about so this is not something he just the coleman just made up here on the spot no no it's an actual thing actually occurring so yeah get connected with your denomination. You'll be surprised. They have openings where churches are trying to figure it out, and they're looking for people that come in, and they fill the pulpit.

Oh, well, there's a lot of. Happens a lot. There's a lot of holes, yeah, that can be helped, and so forth. There we go. Yeah, good stuff. All right, open phones here if you want to talk about your life and your money. This is common sense for your life that's what we call it around here and nowadays common sense is so rare that having it is like

having a superpower so you jump in and we'll talk phone number is 888-825-5225 you can do that and hey those of you that have not heard um the final 40 minutes of the show has moved over to the, on talk radio, it's still going to be right where it always was, but it's moved over to the Ramsey app. And if you haven't signed up for the Ramsey app, it's free. You can listen to the whole show there, or you can listen to the final 40 minutes there. Starting this week, it has moved over there from podcast land and so you can download the Ramsey Network app at you know Google Play or in the Apple Store whatever you need to do and it's free you know it doesn't cost you a thing and that way you can hear the final 40 minutes every day and you can listen the whole thing there if you want and you can even email us a question we might get

it on the air you never know This is The Ramsey Show. This show is sponsored by BetterHelp. All right, so I was born and raised in Texas, and I love the myth of the lone cowboy. You know, the guy who doesn't need anyone or anything. It's a fun story, and it's a lie. In our self-obsessed society, we're obsessed about our own diets, our own workout routines, our own jobs, our own social media feeds, everything. It's easy to forget that no one can do life alone. And I don't care if you're an introvert, an extrovert, or whatever you want to call yourself, we all have to have a community and a support system to do life with. It's time to shift the focus from doing it all by ourselves to knowing that we can only be well and whole when we ask for help. Therapy can be a great source of help and support for any area of your life. And

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choices. Yeah, that's great. And $12 resources to help you find the work that really matters. Ken Coleman's Paycheck to Purpose is on the list. Check all these out at ramsaysolutions.com. Big sale going on right now. You don't want to miss that. Crystal's in Pennsylvania. Hi, Crystal. Welcome to the Ramsey Show. Hi, Ken and Dave. Thank you for having me. Sure. What's up? So I was calling on behalf of my

mother and I was just hoping to get some advice on how to get her back on track. My father left her after 40 years and kind of left her with nothing. And she's 61 now. So just trying to find out where we can get started and for her future. They have nothing? Well, I've been trying to encourage her to, I mean, it's going to be two years this December to see a lawyer, but she's kind of stuck in the moment still and seek counseling. But he took his 401k with her and left her with a house that has two liens on it. And she makes... So they're not divorced? No, they're not divorced. Okay. Well, to start with, she can't get on with No, they're not divorced. Okay.

Well, to start with, she can't get on with her life until she's divorced. Right, right. I've been trying to encourage her to get a lawyer, but I didn't know if there was anything she can do outside of that in the meantime. No, no. Okay. And he's responsible, too, Dave, for those liens. Yeah, he's responsible for all this.

And she gets half the assets and he gets half the problems he doesn't get just to say i'm gonna leave you with nothing and i get to do whatever flip i want to do that's not the way the law works and the law doesn't activate as long as he sits over there and does whatever the flip he wants to do and she does nothing about it so she can't move on with her life she can't heal and go to the next step until they put a stake in this thing. Right. It's the only, it's the only next step. And there's not really anything to do until you do that.

So that is the answer to your question. Mom, we're going to a divorce, a divorce attorney today. I've made an appointment. I'm taking you with me. Here we go. Okay. Yeah. Because he's getting away with murder here.

He is. It's disgusting. Yeah. is it's disgusting yeah and it's um it's wrong so and but there's no way you know he left my mom with nothing is not a true statement your mom has chosen to try to exist in a past fantasy that is no longer there called her marriage i'm sorry gosh that hurts so much and your dad man how are you how are you are you talking to him uh no i haven't spoken to him in a year in years oh wow a year just one year a year oh okay yeah so in the middle of all this then okay so he's lost everything yes yes so sad yeah i i i'm not trying to pick a fight but it's it's it's just a matter of uh what is right what is equity what is correct and what is correct is is that she gets you know half of the assets and half of the problems at a minimum

and he gets the same um and then she can move we can look at that and say okay what are her next steps from there obviously too uh she has to create an income so she's got to do some analysis and start talking about what she's going to do with her life uh because again the the grieving of 40 years of marriage man i've been married 42 years i told sharon she leaves i'm going with her man you're just tagging along yeah i'm just we're not we're not we're not doing that so right there's not gonna be there might be a murder but there won't be a do it it's like golly wow yeah i get that that's that and that's really tough stuff yeah that's and the thing is that's been going on way longer before that and he just finally checked out yeah uh man yeah that's

terrible yeah horrible so sorry jenny's in columbus hi jenny how are you hi great thanks for taking my call so my question is about um a gift that my husband and I have received from my in-laws. They had sold some vacation property and put the proceeds into an LLC, which is my husband is the sole proprietor or sole owner member, whatever the word is, sorry, of that. And so the money is sitting there and my husband and I would like to take that and use it towards debt. So I'm trying to piece together if that's the best way to do it, pay this debt in full. Yes. Or if we invest this and take the proceeds.

No. There is an asterisk to it. Okay. My in-laws basically told my husband that the money is for when they're dead and that they did not want him to spend it while they're still alive, even though it's no longer in their name. So we kind of have this moral obligation where we're feeling a little torn about that. My husband definitely wants to spend it, and I'm kind of trying to back off yeah i would just tell them uh we don't want the money okay i don't i don't

take gifts with strings attached okay because i i think in their mind it's still their money and we're just holding it and then when yeah now you're responsible for it and you're liable for it and anything that happens negatively is going to reflect on you. And if something happened with that LLC, they come after you, the people do, and all because you've got money that's not yours parked in your name. They should take that back. And I'm not sure they didn't do it. I'm not sure what they haven't exposed themselves to gift tax. Do they have any idea what the flip they're doing?

I'm not sure that they had the greatest guidance when this happened um it kind of hit us all with i don't think they had any guidance when this happened because you can't just hand somebody two hundred thousand dollars without paying gift tax on it or without going through the unified estate tax credit problem process and using a part of your federal estate tax federal estate tax exemption there's a process to do this you can't just hand people money and the llc does not fix that yeah it went through on our taxes and then we were liable for you know 35 000 of taxes that we didn't know were coming because all the income from that proceed went to on my husband's you know on our

filing our own taxes because it was transferred to that so why there's been a lot of lessons um so there's a lot of kind of feelings happening who paid that uh we took it from the proceeds that were with within that llc so the what was left in the proceeds we paid the man i think y'all need to get some tax planning advice and some estate tax advice because i think you all screwed i think they've screwed this up royally you can't just randomly move stuff around without getting ham and you know what the gift tax is it's 55 right if i hand you an asset that's worth 300 grand and i don't do it properly i get a tax bill for 150 000 bucks not 35 we're finding out a lot of things that we didn't know were happening and i think their intention

was to make it so that nothing would happen once they do die because my husband's an only child, and they were trying. I think their intention was to have everything move together. This is stupid on steroids. I'm telling you they have screwed this up. I'm telling you, you guys, really,

this is an emergency. They're getting ready to lose $100,000 more if this comes to light and they get audited and that may end up on you all if they die so you guys need to fix this you all need to get this cleaned up and get some advice and do this right um no i don't want anything to do with this money there's a freaking hot potato it's not free money there's nothing to do with it you don't have a choice to invest it you don't have a choice to use it on debt uh because not even really your money except it is in your name and you've taken on all the liability

for it no heck no man what a horrible thing to do some of you parents the things you do to your kids and and listen folks here's the deal you an individual can only, let's see, let me find it this year. What is it this year? 18,000. An individual can give another individual 18,000. An entity can give another entity 18,000. Anything in excess of that is subject to gift tax. If you don't use some estate tax planning tools like the Unified

Estate Tax Credit Program, which you can do, but you have to actually know it's there. You can't just hand stuff 200 grand to your kids and not have, you're going to get screwed to no end here by the government. This is the Ramsey Show. Hey, you guys, Health insurance costs are only moving one way, and that way isn't down. And if higher costs aren't enough, the wait times to see your doctor are longer, and it's harder than ever to get anything approved through the bureaucracy. So if you feel like the system is working against you, try a biblically-based alternative to health insurance, Christian Healthcare Ministries. CHM is a health cost-sharing ministry that's helped hundreds of thousands of families like yours take care of over $11 billion in medical bills since 1981. And CHM has also helped them stay

true to their values and avoid miles of red tape. And CHM support goes far beyond meeting financial needs. They'll also help meet spiritual needs. Members become part of a family who will pray with them and for them when they experience a medical event. So listen, y'all, there's no better way to take care of health care costs. CHM programs start as low as $98 a month. So learn more today and join at chministries.org slash budget at chministries.org slash budget. Ken Coleman, Ramsey personality, is my co-host today. Cole is in Memphis. Hi, Cole. Welcome to the Ramsey Show. Hey, guys. How are y'all? Better than we deserve. What's up? So I got a couple questions for you, or I just got one, I guess.

And I'll kind of give you a little background here. So I'm 24. I graduated in December with a degree in finance. And that was in December. So when I graduated, I started a co-op at a company here in Memphis, and that ended in June. And it was in accounting. It was in the tax department, and I was doing accounting work. Well, I actually ended up really liking it, actually. And I decided I wanted to do my master's program or start my master's program in accounting so my there are some road bumps or roadblocks

along the way and i've actually learned that my time schedule was my to get my accounting degree would be pretty uh it's going to be longer than i thought it was going to be so i guess my first question is it is going to be expensive should i try to take out a loan for it, or should I try to bankroll it or pay for it myself, I guess is a better way to say that, or should I just go ahead and go into the workforce and then come back to it later would be my first question. Are you in accounting now? I'm trying to follow what you just laid out for us.

What are you doing right this second? So currently I am waiting for school to start. So I went ahead and got accepted to the master's program, so my degree is in finance, and then I did this co-op in accounting. I know. So right now you're doing nothing right this second, and you're getting ready to go back to school full-time, and you don't have the money to do it.

Well, I do currently, so I've got $24,000 in savings and $5,000 invested. What's the program going to cost, and how long is it going to take? It's going to cost up to $29,000. Well, it was going to be $29,000. It's probably going to be more of $34,000 now. And what's the driving reason to get the master's in accounting, assuming that's what you're getting in it? Yes.

And the driving reason is I really wanted to be, well, honestly, I really fell in love with accounting, but really I would like to be a dual threat in that space, in the finance accounting space. Meaning what? What does that mean? I know what dual threat means, but specifically, does that mean what? CPA plus? Maybe, or more of kind of just have more experience in everything and kind of be able to understand more. So real quick, just let's run through this. Is a master's degree the only way to get where you want to be?

If you're going to be a CPA, yeah, he's going to have to finish. Oh, I know, but I want to hear him. Like if that is, is that the only way to get where you want to go or can you get there and then come back to it later? That's the question. Do you need it now to get where you want to go or can you start the path? What are your thoughts?

Well, I guess no, not necessarily right now. And I guess that could bring up something else. I'm kind of scared at this point in time to take out the loan. You should. Here's an option. Here's why I asked the question. I'm cutting you off because one of the things I think you have to explore is you tested the accounting field in the co-op.

You know you like it. That's half the battle. That's huge. I would be getting back into the field. I'd be getting a full-time job with a good firm and be looking at firms and in the interview process find out how many of these firms are willing to help you with your master's degree or maybe pay for the entire thing through either reimbursement or they're just going to fund it. This is very, very possible. And I'd be kicking the tires on this coal before I ever even sniffed at the idea of taking out a loan.

Plus, you've got the cash. So you don't need a loan anyway. You've got the cash. You can make the additional $5,000 between now and whenever you decide to start. There's no absolute reason at all for you to get a loan. You don't have to have it all up front. So if I were you, I'd get back in the business and see if one of these firms, let's get in there and bust it for six months and then say, hey, I'm kicking the tires on a master's. Here's why. you don't have to do an accounting master's you do not have to be a full-time student there's plenty of adult programs that people do while they work a

full-time job and finish up their master's they do it people do it every day and they're not that expensive what you're talking about paying is a little high for a master's degree um and so y'all be able to do that for around 20 really,000, really. And there's such a demand out there, Dave. I think you go get a job where they have a benefit that pays for your education. I agree. And you get it free, and you're working and making money, which means you're going to be, that's like a $20,000 signing bonus, a $40,000 signing bonus if you go do what Ken is suggesting.

So the delta between what you're talking about doing, making no money, not working, going to school, burning through your cash. So what would you have made during that two years? And what would you have spent that maybe someone else would have paid you during that two years and paid for your school. I mean, now we're talking, we're bumping up to a hundred thousand bucks here difference in that plan and the plan you're on currently. So no, I think you go get a job man and just make sure that the people you get a job with, um, you're doing accounting with a finance degree.

That wouldn't be that unusual at all. And you've got the, you got the chops to do that with an undergrad, nothing wrong with that at all. Uh, you just don't have the master's in accounting and you're not the chops to do that with an undergrad. Nothing wrong with that at all. You just don't have the master's in accounting, and you're not on a CPA track until you get that. But take a job with somebody that pays well, has reasonable hours, and is going to pay for your master's. And that's exactly what I would do if I were in your shoes.

Your idea is not bad. The process of how you're getting at it sucks. And that's what I would change. I just think these graduate degrees, folks, they're always going to be there. So don't feel this pressure to jump right into it if it doesn't make any sense. Those programs are always going to be there. And increasingly in today's world, we're seeing companies that are paying for these programs because they want to retain quality people. You know, there are a lot of post-grad work that you can do, graduate degrees that you can get that are economically useless.

That's right. They don't do anything. The MBA is actually useful. You actually can further your career, not because you have an MBA, but because of what you learn while you're getting the MBA. And it is a box that has to be checked if you're going to go to a CPA. That's correct. You don't have a choice on that one.

But the but you know there's a lot of stuff but people are going, I'm going to go get my, for what? You're just collecting certificates. And very expensive little certificates. Gold lined certificates. Steven is in New jersey hey steven

what's up hi dave hi ken thank you for taking my call sure how can we help so my wife and i got married in november congratulations thank you she's expecting congratulations december yes and so Expecting. Congratulations. Yes. And so we both listen to the show. We've been through FPU. We've got the EveryDollar app, which is the premium version. Very, very helpful. And so right now we're renting a one-bedroom apartment. Our lease is up in April. She's going to take three months off from the baby. That kind of lines up to the end of our lease. And we're

speculating moving in with my dad for a concrete period of time to save money. What is the concrete period of time? Six months. Which way are you all leaning? Because you called to get our take, so you guys are leaning one way or the other. Which way? So I think all parties agree that it would be not the idealist of situation. My dad still works.

My twin brother lives at the house. The other big factor that, that leans me towards it is right now we spend about 1750 a month on rent. And, uh, uh, uh, another factor is my neighbor who used to watch us as kids would be more than happy to babysit. What's your household income? We make about $130,000 together. You guys do whatever you want to do. I wouldn't do it. Yeah, I agree with that. I don't think your twin brother or your father has any idea

what they're signing up for with a brand-new baby in the house. Nobody going to sleep. And your wife's probably telling you she doesn't want to do this she may have not said it overtly she may be trying to be kind but i think she's sending you signals she doesn't want to do this um mine would mine would be going nope nope less than ideal davis code for it could get messy nope this is bad no i don't think i'm going there i'm gonna you know i'm gonna be okay you know one of the first things i discovered working in the financial world is how absolutely

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The key is finding an independent broker who represents a ton of companies and works for you, not for the insurance company. This is exactly what my friend Jeff Zander and his team at Zander Insurance are all about. They shop the term life companies to find you the best options, and they've been around for over 95 years so you know they'll be there when you need them zander is the real deal and that's why they've handled all my personal insurance for over 25 years i trust them and you can too visit zander.com for instant online quotes or for a more personal touch give them a call at 800-356-4282. Hey guys, if you want to help us out, we could use the help. Click the share button on your

podcast or your YouTube and share this show with people. Also subscribe and follow and do that. All those things help us considerably because it causes the algorithms to push the show forward and tells people about it that might not even know they were looking for it so it's very nice and so thank you for all the help you've given us because um and continue to do it please because it changes everything our numbers on youtube and on podcast are way up and it's all you people's fault thank you we appreciate it garrett is in bowling green kentucky hi garrett welcome to the ramsey show hey thank you so much for your time i appreciate it um i'll jump right into this and i'll be honest i really have no approach i know nothing uh about

what to do how to handle this this situation that will be coming in the future. My parents, they have roughly $700,000 in the bank, no debt, a 10-acre farm, and a house. I am the only biological child to my father. My brother and sister are stepchildren to him. Upon conversation with my dad, there is no plan in place of how the money will be dispensed or the farm, the house, other than my father says, well, when I leave this world, the assets, the money, everything, it'll go to your mom. She can do whatever she wants with it, and then when she leaves the world it goes to you garrett um the home and the farm are deeded to me they have a i think uh they you know they can live there while they're alive but then when they pass it's mine but when did they do that it's been about four years ago yeah so this whole situation makes me very uneasy it's a lot of money and i just don't want a a sibling rival yeah i agree i don't know what to do were your uh stepbrother and sister raised

by your father yes sir they were but it was not a good situation what's that mean well my father's an alcoholic and um it is a very abusive home for them and myself and my father unfortunately um is more inclined to give me more than them i don't like that but i know that that's where his heart's at because he's told me well if he leaves it all to your mother he no longer has a choice in it she can do what she wants yeah because she would have a will that dictated what happened to her assets we're pretty sure he's going to die first it sounds like yeah he's older and not in good health at all. Yeah, well, the drinking and all that. Yeah. Okay.

All right. Because I know that my dad doesn't have a will. I know that my mother doesn't have a will, which to me is kind of alarming. Yeah, it is alarming, and it puts you in a bad position. But it doesn't sound like your dad is the type that cares if he leaves you in a bad position he he doesn't see that he doesn't see that it put me in a bad spot yeah so if you went down and sat down with him in person had a cup of coffee and said dad look this is not good i'm not i'm not good with this. I need you to do a will. I need mom to do a will because you're going to leave me being the bad guy in this,

and I don't want to be the bad guy. Yeah. These people are going to end up mad at me, and I don't want that to happen. And once you get the will done, you need to tell everybody what the will says. Okay. So if they want to be mad at him or they won't be hurt by him or your mom or whatever else that's fine um yeah now so the truth is that if he just does a will and leaves it to your mom and your mom does a will and puts it three ways anything you can do about it yeah okay um you know if that's what she wants to do uh but who the lord

knows what these people are going to do right so the proper way to do this is for both of them to have a will and the will says that 100 goes to my spouse if i die 100 spent goes to the other spouse if i die so and then if we both die or upon the death of both of us here's how it's going to be divided up it's called a mirror image will their wills are identical we just switch the names out okay it all goes to my spouse all goes to my spouse if we both die or when we both die it all goes this way and they can lay that out it's not super expensive uh you can go to mama bear legal forms.com you can help them do it it you know it's like but it's just gonna the problem is it's gonna uh make him face your mother and he doesn't want to do that yeah yeah so i don't know if you're gonna be able to pull this off relationally or not but the answer to your question is the proper way to do this would

be to lay it all out and then meet with uh the other two and tell them this is what here's what the will says and have a reading of the will while everybody's alive okay and then you don't have all the people mad and trying to contest a will and they're angry at you like you did something because you're not allowed if you're left as the executor of the estate, you're not allowed to do anything except what the will says, regardless of if you like it or not. Yeah. Executor's estate. Okay.

So the executor is the one who conducts the business of the will after a person passes away. You follow me? Yes. So if your dad said sell the farm, oh, the farm's already gone. It's in your name. Yes, sir. Okay. Which may be a huge tax

problem but that's a side issue um oh boy but the um because you're now have a basis in the farm of what they paid for it which is little nothing so you when you sell it you're going to have a hundred percent gain just about gotcha putting it in your name early was really dumb on their part gotcha they did not do you any favors so uh they probably cost you whatever the farm is worth times 15 percent um whenever you do sell it someday anyway so um yeah laying it all out and everyone being in agreement ahead of time is the proper thing to do. But that requires a level of family for the family to be somewhat functional, not dysfunctional. And I don't know that your dad's going to do all this, but it's the right thing to do. Yeah. And it's, what is

he, what are his other options on that deeded property? Cause he said the farm in the house, I believe. So what does he do in that situation? Does he just pretty much stuck with it or can that be unwrapped? I don't know. He's four years old. You've got to see an attorney and get it done. I'm not positive. But, folks, let me walk this through because some of you have heard it before if you've listened to the show for a while,

but it's worth covering for the rest of you. This is two of these calls we've gotten this hour. That's correct. People just freaking move stuff around and don't act like there's any consequences. Okay, to start with, when Dad deeds the farm to his son, We've gotten this hour. That's correct. People just freaking move stuff around and don't act like there's any consequences. Okay. To start with, when dad deeds the farm to his son, dad is subject to gift tax of 55% of the value of the farm. You can't just deed stuff to people.

Well, it's my son. I don't care. You have voted people into office who have promised to tax you into oblivion and they're good at it. And so there's tax law in place that's going to take your freaking head off if you start just handing people assets. You cannot do this without getting good professional help, a good tax attorney or whatever. So let's pretend that dad and mom bought or dad bought this farm in 1960 or something, whatever the flip, I don't know. And he paid almost nothing for it. When you transfer an asset prior to death, whether it's

a share of stock, a piece of real estate, you transfer it prior to death. You move what you paid for it as the basis over to the person who got it so now our friend garrett it says when he gets ready to sell the farm it says if he paid thirteen thousand dollars for it he's going to sell it for a million bucks and he's going to pay taxes on a million bucks capital gains tax because it was transferred prior to death. If instead dad had left the farm in a will to be given to Garrett upon his death, Garrett's basis for tax gain would be the value of the farm at the time of death. We're using a million dollars as an example. Let's say this farm is worth a million bucks today.

Now Garrett's basis is a million dollars if dad dies this year. And if he sells it, he only pays taxes. If he sells it within six months, he pays zero tax. Wow. Because it's presumed to have been sold at market value. If he sells it after six months, three or four years from now, he only pays taxes on the amount over a million that he gets for it. So this discussion, if this farm's worth a million dollars,

and if he bought it many, many, many years ago, is probably a $150,000, $200,000 mistake that dad has made here. That Garrett's going to end up giving the government, when he sells his farm someday, $150,000 to $200,000, too much that he didn't have to do because his father was too big a goober to get a good lawyer to set this stuff up. Live from the headquarters of Ramsey Solutions, it's the Ramsey Show, where we help people build wealth,

do work that they love, and create actual amazing relationships. The phone number here is 888-825-5225. That's 888-825-5225. Ken Coleman is my co-host today. He's the number one best-selling author and, of course, the host of the Ken Coleman Show and talks to people about how to make more money in their lives. And that's one side of the equation, right? And I'm the other side.

Don't spend so much. There we go. So phone number here is 888-825-5225. You jump in. Rebecca is in New York City. Hi, Rebecca. Welcome to the Ramsey Show. Hi, Dave. Hi, Ken. Thanks to the Ramsey Show. Hi, Dave.

Hi, Ken. Thanks for having me on. Sure. What's up? So I have a question, a couple of questions. First, I called a couple years ago and paid off my house, so thank you. Way to go. That was your advice.

So very exciting. How does that feel? So really good. Really good. What's the house worth um so we bought our house for 322 and now it's worth over 700 yeah love it so yeah super exciting um so yeah so a couple years out and now now I'm, you know, doing pretty well, thinking about my future. I've got two children. I'm married.

And I pay a tremendous amount of money on taxes. And just wanted to know, are there any strategies that I can use to mitigate that or make my money work for me and my family and our future? Move out of New York is one. I know. It may not be a viable option. You gonna say that yeah that's the smart that's the smart aleck answer I know it's a southerner joke I apologize it's insensitive it's actually what it is because you live there no I agree with that I wish I could there you go uh okay so the thing you that the the mistake that people make when we get mad about taxes and i'm as mad as anybody about taxes i hate them um but the the mistake that we can make is we start doing things that don't make good business sense or economic sense all in the name of saving taxes okay you don't want to do that

okay so don't don't get so motivated by this that you get yourself in trouble so um i mean that you get yourself into some bad my fair share not 52 percent no that's not the point that's i'm not it's not about your fair share no, anybody that pays federal income tax pays more than their fair share because 48% of the people in the United States of America pay zero federal income tax. That is not fair. Okay. That's not fair. That's not, that's not reasonable. So, uh, the idea that you, you've done something wrong and should be punished is asinine but anyway not by you but just in general but okay so all that to say the only thing i would tell you to do is um it's probably going to be worth some money good tax preparation getting a really stellar super smart tax person in your corner it might cost you a few thousand dollars more but you guys are making enough and have enough that um that that it's worth it to look at every little thing um the amount of money i spend on preparing our taxes and managing our taxes every

year is ridiculous but it makes me but it saves me more in taxes than it costs me so i do it and uh because i'm not you know i want to know what every rule is what every law is that i can utilize morally and legally to keep those bozos from my money. And so I'm going to spend the money to find somebody that knows every one of those things. And they're not illegal things. They're not loopholes. They're not tricks. They're not something that's done wrong. All that kind of stuff is none of that.

It's just things in the law that there's no way, you know, the tax law is so, there's so much volume to it that to have somebody that really knows what they're doing is worth the money. So I would just tell you, look for a tax ELP, go to endorsed local provider at ramseysolutions.com for your area and interview a couple of them. There'll be two or three of them will pop up in your area and just find, you know, you're looking for somebody super smart and really knows her stuff and works with high income people and knows every little nook and cranny but don't spend money don't go spend ten thousand dollars to save on to create a ten thousand dollar tax deduction because that only saves you four thousand dollars in taxes

and you gave up ten to save four that's not a good trade that's the kind of crap people do when we get mad enough about taxes if you want to do that just increase your giving to your church and it happens you know at least the money's going to something good give you give if you want to turn ten thousand into four thousand tax savings just increase charitable giving you can do that without it's not fancy at all but it's not it's not a mathematical trade you want to do very often i mean you want to do good generosity but i'm talking about you don't do this for tax reasons you do it for giving reasons because the the economics of it you're turning ten into four yeah and that that don't that don't work. And real quick, it's really

important for our broader audience that you really have a tax pro in your life, no matter how much money you make. Because I'm just looking at this, and I know that the New York state taxes are very, very different, much more complex than Tennessee, for instance. And so the federal plus the state taxes, having that tax pro, Dave, is huge because of the minutia, loopholes, and all those things. It really is important. Well, I've got friends that are people of serious net worth and serious income, and when they sit down with a pro and they look at what California has recently done with an extra 15% on people that make serious money,

they said, you know, I really love California, but I'm not going to live here anymore. Absolutely. And they left. And, you know, I can name three or four people off the top of my head right now that have left there in the last three years because of their tax law and paid cash for a house in the Nashville area with the savings from one year. Yeah, that's exactly right. Not paying California.

So that's what this – but at least you may want to choose to stay. That's right. I'm not saying that Rebecca needs to leave. We were joking with her about that. Sort of. But my buddy could choose to stay in California if he wanted to stay there. That's right. But he needs to know what it's costing him to be correct to be there yeah and so they left yeah and um one of

us building a house over by you i know yeah trust me don't get him he shall remain nameless but if get him started talking about california taxes and uh and he lived there his whole life yeah so he's particularly pissed and and also palpably excited about what his income is going to look like after officially moving to Tennessee. With zero income tax. Bouncing up and down. We don't have a state income tax. Yes. And we're one of quite a few states that doesn't.

And the economies are booming in every one of those states. Go figure. There's your art laugher analysis of this, right? But that's true. I mean, it it's a math thing that's right and so when you look at the math and you go this is what it's doing to me here this is what's doing to me here you're punishing me i don't want to be punished for something i didn't do i don't want to be punished for my success and um that's what it gets down to yeah wow we did all that and it's not even april i usually get so pissed around April that I have to do a tax rant. Well, it's always, you know what, when you're coming up on Election Day,

it's always good for a Dave tax rant, just to remind people. One of the issues they should be thinking about. Yeah. See? See, did I get? Yeah, there it is. There it is. Now we've got to go to a break.

This is The Ramsey Show. Ken Coleman, Ramsey personality, is my co-host today. Open phones at 888-825-5225. Today's question of the day is brought to you by YRefi. If private student loan debt is taking away your peace of mind, you don't see any way out? Well, you need YRefi. I love this company. I love what they do.

YRefi refinances defaulted private student loans that other places won't touch. And they give you a low fixed rate loan built, customized for you. Go to YRefi.com slash Ramsey today. That's the letter Y R E F Y.com slash Ramsey might not be available in all states. Today's question comes from Craig in Iowa. I'm 42 years old and I work as a security guard earning close to $25,000 a year. I'm currently trying to find a second job to increase my income. Using one of the online recruiter websites is like playing the lottery and hoping to win. I have a teaching degree in high school math, but quickly realized I don't have what it takes to be a teacher. I've worked in fast food for 10 years until my body gave out and that's when I started working as a security guard. I have $35,000 in debt made up of credit cards and a car loan.

Rent is $800 per month. I don't have any retirement investments. I've been stuck for a long time, and I need help with how to get unstuck. Ken, be honest with me. Is there any way I can turn my career around since I have been a turkey for so long? It's funny, but it's not true. Let's start with that. You're beating yourself up here because you've not gotten through and you've not had any breaks, and it's really because you admitted you've been playing the job lottery after realizing that high school teaching wasn't for you.

I would be going back to the teaching degree because you actually have a degree that's going to help you. Two, I would be looking at what you enjoy about instructing. There was a reason why you chose being a high school math teacher. I think the thing I can pull from a question like this without being able to talk to you is obviously you're good in math, probably enjoy math to some degree, that kind of thinking. And the idea of instructing people, pouring into people, that was interesting to you. So you get into high school teaching, and for a variety of reasons,

it's not for you. What I wouldn't do is discount all of those signs that led you to high school teaching. And I think if you could think about that degree and how you could parlay that and your relationships into some type of role where you're instructing people, this could be very simple where you walk into a company and you become a training manager or a trainer. That's just one example. It's the art, the skill of instruction, and you're pointing to people, and yet you're dealing with adults who hopefully are there because they want to be there, not a high school

math situation with all of those extenuating circumstances. So what I'm looking at here is, what do I enjoy doing? What am I good at doing? I have some clues from the past. Security guard isn't it. Your soul's slowly seeping out of your body as you stand there and check on things. So believing, back to the very first point, that you have something to offer is huge. Figuring out what you can offer and you have some clues to that. And now it's where. Where in my community are they looking for somebody who has more skills than just instruction? The ability to plan. the ability to communicate?

You have several things that you have at your disposal. I think if you see it as I've got this tool belt with a lot of very good tools, then we can do something with that. And I wish I was with you on the phone. I'd give you the Get Clear assessment. I'd get the book, Find the Work You're Wired to Do, which has the Get Clear assessment in it. And it's going to give you a great self-awareness test. And Dave, the reason that I'm preaching this self-awareness here is because a person who is clear is confident. And this email is reeking in a lack of confidence for a variety of reasons. I'd pick up the proximity principle and get off the lottery.

Yeah, that's right, too. You don't have to do the lottery thing with the things now ken i'm reading here okay i'm just looking at his word choices yeah in this but quickly realized i don't have what it takes to be a teacher now we don't know what that means we don't yeah um let me give you a guess i have a guess too i don't want to deal with unruly misbehaving children where there's no discipline in the classroom or in the school because the helicopter parents are creating snowflakes you just took both that that is the environment and i don't want to work in that environment and i'm going to just guess okay that's my guess this is one of the reasons teachers are leaving

in mass is they're being asked to teach things uh on a value system basis that they hate in an environment that's completely chaotic and out of control and the inmates are running the asylums and so the teachers are running out the door with their hair on fire we're losing the best and brightest people to teach our young people because we won't freaking make the system behave where there is no law and order there cannot be prosperity yeah okay now end of rent but that's the reality it is this reality if that's why you left the classroom then you are a real candidate to be a fabulous one-on-one tutor i agree and as a tutor a math tutor to high school students you you can make $30 to $50 an hour.

That ain't $25,000. That's right. Let me throw another scenario out. That's $50,000, $60,000 a year. And just take a Chick-fil-A manager, okay? Because Chick-fil-A is a wonderful organization. They value their people. Somebody like this could walk into a Chick-fil-A that needs a manager,

and he's going to make more money than that, double, triple that money with a path to actual growth, and they're going to treat you like a million dollars. That's an example. Again, he's got so much that he can do because half of what – I've got a good friend who's a Chick-fil-A operator. And you'd be leading quality young people. Leading young people who want to be there. That you can fire.

That's right. So that's just one example. And tutoring, we could go down the list of all the things that a teacher brings to the table from a skill and experience standpoint. Yeah. Teachers actually have a lot of magical powers. They really do. I agree with that.

It's the ability to sell an idea yes and pull someone through a frustrating experience because 100 of learning has a frustration level to it when you're learning something new you have that moment where you kind of grit your teeth and get pissed off you know what the most magical power a teacher has what's that they transfer belief i think we can all look back in our lives at a teacher who believed in us, and it changed our trajectory. It may have been in the second grade, and it may have been in a small way, but I think teachers, that magical power, I'm glad you said that, I think they transfer belief.

And when someone believes in you, that's powerful stuff. I've written blogs about some of the teachers that we've had and some of the stories. And, you know, we've talked about it a lot of times. But, yeah, it's exactly right. And the number of times, you know what's running through my head, too, and I don't know how to monetize this or what the business model is, but the number of times someone says to us in the money world,

I'm not good with money because I hate math math intimidates me i'm not good with math so i'll never be able to have money yeah and so there is this with math people don't say that about english it's true they just destroy the english language like like i do and they don't think anything about it right and uh but they but about they don't think anything about it, right? But they don't go, well, English intimidates me. They don't say that, okay? It's true. But they say math intimidates me, like math has a spiritual power to it or something. Right. Which I'm a math nerd.

Math comes easy to me, so I never understood that idea. But I wonder if there's not something a guy like this could do to help the adult population that's intimidated by math. Well, again, financial coaching, you know, going to work in finance. Finance, excuse me. You know, there's so many ways that he can go. Accounting. Again, let me tell you what I know about tax pros. If you can do math, it opens up a lot of doors.

You want to have a massive opportunity for somebody who's good with numbers is jumping in the tax field. There is a – our team will tell you this. In fact, the personalities we're sitting down with, our tax team recently, and talking about the industry, and I'm telling you, you good with numbers, you want to make good money and be secure in your job, go into tax preparation.

They're looking for people who can handle the unbelievable crush of business. That's just one example. Well, and there's new crap you have to learn every year because they change it all. That's right. Just to make sure they steal more from you. I mean, tax you out more. Pay your fair share. It's a never-ending learning curve. But yeah, those are some great examples. He's got tons of options. There's a lot of things he can do. Security guard is not his destiny. No. That's i that's his i quit position i quit on life

position so yeah i i agree ken i'd pick up proximity principle and the work you're wired to do and take the take the get clear assessment and then go do something get get active again you're not a turkey you're you know you're just you're just parked in the wrong place you need a new parking spot ken coleman ramsey personality is my co-host today thank you for joining us america if you're going to buy or sell a house in the middle of this weird real estate market well if you do that you would need a pro right now you need a pro anytime But a pro is a real estate agent who does 30 to 300 transactions a year and actually knows what the flip they're doing. They didn't get their license last week.

You don't want to list your $500,000 asset with somebody who just learned to drive a car. I mean, come on. That's what you're saying. I got my license last week. I mean, come on. That's what you're saying. I got my license last week. I'm your aunt Sally. I don't care. Aunt Sally, good luck with your new business. I'm not listing my $500,000 asset with you. No, you need a pro Ramsey trusted is Ramsey trusted real estate agents are people that we have vetted that we regularly coach and talk to and they know the Ramsey systems and they'll help you do real estate the right way and

now is a great time to buy and a great time to sell a lot better time than it's going to be like a year from now what if you what if you had bought last year instead of this year yeah yeah you would have avoided all those price increases hello so if you're in a year instead of this year? Yeah, yeah, you would have avoided all those price increases. Hello. So if you're in a good position with your money and you're ready to buy and you need a Ramsey-trusted real estate agent, you can find one for free at ramseysolutions.com slash agent. Josh is in Tampa.

Hey, Josh, how are you? Hey, I'm doing well, Dave. How are you? Better than I deserve. What's up? Hey, so kind of a weird situation. Need to get some advice from you guys. So here's the gist of it. My wife and I are currently in the process of looking to buy our first home. We are debt free and have always been a big, big fan, big believer of just doing things debt-free and we are actually in

the position to pay the house entirely with cash way to go house poor awesome yeah so we are are super nervous excited it's as most people can know it's a huge purchase um but we're getting some pushback from friends and family, mainly because one of the main arguments is that that can be put into investment more in the market instead of just buying a house the normal way and doing a mortgage. So what they're saying is if you had a paid-for house, what these people are saying is if you had a paid-for house, you should go are saying is if you had a paid-for house, you should go borrow on it and put the money in mutual funds.

Yeah. Okay. Well, let me help you with this. We did the largest study of millionaires ever done in North America, detailed, airtight research. The conclusions we came to in that study have been so thoroughly vetted and the research methodology was so tight that if you don't agree with the conclusions of that study, you're what's known as wrong.

Because this is data. It's facts. Okay? We studied 10,167 millionaires. The vast majority of the people that had a one to a $5 million net worth were like 85, 88% of them were composed of a healthily funded 401k plan that ends up with, you know, seven, 800,000 bucks in it and a paid off home of seven or 800,000 or $800,000. So that's $1.5 million, $1.6 million net worth. The number of millionaires that we interviewed out of the 10,167

that used your broke family and friends idea, they're broke people, by the way. I know this because their theory they're using makes them broke. The number of millionaires that we interviewed that said we became a millionaire by taking our paid for house and borrowing on it and putting the money in mutual funds. The number of millionaires that said that out of 10 000 was precisely zero none of them became millionaires doing what you're i'll be nice ill-informed ignorant friends and family are saying that was nice that was like a hallmark card yeah that was not so sweet because i wanted to call

them all kinds of names but i'll just call their ideas stupid and inaccurate. And they're trying to influence you. So these people don't get a vote. Whoever they are, just go ahead and write their name down in the column of don't get a vote on money because they don't know what they're doing. They don't. There's no one we couldn't find a one out of 10 000 josh that did what your people are telling you to do that's how dumb the idea is it wasn't like it was only 70 of them and 30% did your friend's plan. No, no. None of them. Not one.

That's how dumb the idea is. It's like the number of them that became millionaires with their airline miles was precisely zero. The number of them that thought that leasing a car was a great idea there was actually a couple of those there was there was more of those than your idea which is also a stupid idea by the way but there was you know there's probably 15 or 20 out of 10 000 that thought leasing a car was a good idea but most of this is the kind of stuff we discovered so the the what the suggestion is so asinine that it's preposterous. Does that help you at all?

Yeah. No, it does. We're just, we've literally looked at or heard your show for a while, and it's one of those things of we always have gotten excited when people say, hey, we've gotten out of debt. We've never been there. We've paid off our mortgage. We've never been there. So, as we're walking. We've never been there. So as we're walking through this, we just want to make sure that we're making wise decisions in that. Okay, here's the thing.

Go pay cash for your house and if you hate it, then you can get a mortgage. Sounds good. Try that one. I mean, you know, I've never had anybody go, I really hate being debt free. People get pissed at me about a lot of stuff,

but none of them are pissed at me about paying off their house. None of them. I mean, it's just, you know. I like that you gave him the option to get the mortgage after he paid the house off. That's great. That's kind of a, hey, give it a shot. Scratch and sniff.

You know, if you lose 30 pounds and you hate it you can get fat again it's not hard it is true it's getting fats easier than losing the weight i'm telling true it's so true i mean it's not if you hate it you know if you cut up all your credit cards and you get out of debt and you hate it just wait about 10 seconds and there'll be 14 credit cards in your mailbox yeah you don't have to worry they'll send them right back to you they it's not like you broke up with them and they're mad they just they'll come back for more and they'll up your everything oh god yeah i mean it's try it try something different folks and listen you gotta listen if broke people are making fun of your financial I mean, try it. Try something different, folks.

And listen, if broke people are making fun of your financial plan, it's always a good sign. If fat people are making fun of your health and fitness plan, that's a good sign. It's a good sign. You know, it's just, you know, if people that have been married six times don't like the way that you treat your husband or your wife because you're nice to them, and, you know, it's a good sign. Yeah, if their kids are hoodlums and they're making fun of how strict you are, you might be doing something right.

It's a good sign. It's a good sign. You mean you don't allow your children? That's right, I don't. Nor my grandchildren, nor my dog you know so dave for the new people who are slightly cynical where does the theory come from from the people that you you just dismantled it but i think it'd be fun for you to explain if you borrow the money you borrow the money prevailing interest rates six percent okay that's and you put it in a good mutual fund at 11 people think you're making a five percent spread well you, you're not. You're not. Because you've

got to pay taxes on your gains. And so if you make 11% on your money, you've got to pay taxes on that 11%. And so your spread is reduced by the taxes on 11%, which in a 30% tax bracket would be about three points. So your five is now two. Okay. and so you're doing all this crap for two percent spread net of taxes it's very tax inefficient to start with and um if you did all that and you net net of taxes then you have not adjusted for risk because 100 of the foreclosures occur on a home with a mortgage and you've not mathematically adjusted for risk when you adjust for taxes and risk you don't even make money in this theory but the the naive formula is, oh, I'm making 11 or 12 and I've only paid six. I'm making the spread. No, you're not. You're just naive. You just don't know how this crap works.

That's all it is. This is the Ramsey Show. There's a time in your life and in 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.

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Equal housing lender. 1749 Mallory Lane, Suite 100. Brentwood, Tennessee 37027. This is the Ramsey Show. Open phones at 888-825-5225. Ken Coleman, Ramsey personality, is my co-host today. This is pretty interesting. One of our marketing guys pulled this up. Did a little statistical analysis, Ken. If in 1973, interest rates for homes were 8.04%. Okay. 1973. If you said in 1973,

I'm going to wait for interest rates to come down before I buy, it would have been 20 years that you waited until 1993. Wow. When they dropped to 7.3. That's a word to the wise for those of you that are saying, I'm not going to buy a house right now because of interest rates. You marry the house, you date the rate. Buy the house, and when the rates go down,

if your little theory that rates are going to go down is right, which I don't think it is probably, but if they did go down, then refinance. But, you know, about the only thing we can't be sure of is interest rates we can be pretty based on historic history anyway okay the thing we can be sure of is that house prices are going to go up that's history that'll help you wow so let me hit you with this dave real time uh this is three hour old article 30 year average mortgage this is 30 year 6.28 let me see if they got 15 year 5.32 right now okay so that's pretty good i'd move on that i wouldn't you well the thing is even if it goes down right we're just refinance that's exactly right it's refinance but if you if you're saying i'm going to wait for rates to go down to buy a

house you might be saying based on that example i'm going to wait 20 years and guess what the house prices are going to do during that 20 years hello caleb is in greenville south carolina hi caleb how are you hi i'm doing well mr ramsey how are you? Hi, I'm doing well, Mr. Ramsey. How are you doing today? Better than I deserve. What's up? So I'll make it short and simple for you, but I have a wedding coming up in a couple months. Congratulations. The love of my life.

I greatly appreciate it, sir. I got very lucky. But with the wedding coming up and the cost of the wedding along with living expenses, we are set for about six to eight months of emergency funds, and that is including the wedding paid for. Now, I am in real estate in Greenville right now, and the market's doing very, very well. And I'm currently on a team where I'm giving about 50% of my income a little over at times away, and I'm wanting to branch off and

create my own team. Now, my question is, is it financially and emotionally a good time for me to start doing that? It's a bad time emotionally. And when I say emotionally, I mean with... It's a bad time. It's a bad time in terms of your you know I'm gonna go take a big risk right at the moment I'm getting married um which um you know you've already got brand new everything getting ready to happen in your life and let's just go ahead and go over at work and do brand new everything too we're just increasing our stress level so I would uh you know I'd wait till six months after anyway, just cause I want you to concentrate on your bride, not your team.

Okay. You're not going to look, the money you're going to lose during that time is not much. Now, what did you make? What was your personal income last year in real estate? Uh, my personal income last year was a little over 30 this This year I'm looking at a little over 60. Okay. So you're not moving much property. Well, yes, I am in a way. This year I'm going to close around 35 to 40 properties, but all in all it's about 50 to 70% that I'm giving away to the team owner.

You told me a minute ago it was 50. It depends on the lead that we get. I'm sorry? It depends on the lead. Okay. And the price point you're working is low. Anywhere from $50,000 land to $3 million lake properties. Not many $3 million in the not many three million dollars in the equation

You just gave me of 30 people or 30 transactions, and you're only getting home at 50% with 30 grant with 60 grand That's not So correct yeah See you 30,000 is 3% of million. You only did $2 million in transactions.

You didn't do a $3 million transaction. Last year. So last year, honestly, one of my deals, this is only my second year in real estate, and last year I had a million and a half on one deal, and then the rest of them came to about 2.5, I would say, around total, 2.5, 2.6. Okay, 1% of 2.5. Okay, all right, 1.5.

Okay, all right, all right. You need more volume than that to go out on your own. You're not doing enough volume to a total dollar volume you're not to you're going to take on a lot of overhead and other things that you're not anticipating here your income is going to go down if you do this before your volume gets up so i would spend this year on your spouse and on getting your volume up and uh let's get another year of experience under your belt before you jump out from under this um the numbers i'm hearing are not you know if you told me you're doing 10 15 million dollars in volume then yeah we can talk about it but you're really not doing much volume

is that typical that high of a share or split for lack of a better word 50 would not be unusual okay for a new agent he's a new agent right uh for a starting point they usually work on a gradient uh depend on who i mean everybody's got some different deal there's no set deal right but the um but that's not that unusual no um so i mean if you so if you close a half of the if you're the listing agent the selling selling agent, you got 3%. You got, so you end up with one and a half percent on, um, yeah, that'd be, uh, on a hundred that that's 1500 bucks per a hundred thousand. Right. So yeah, to get to 60, you got to do about 3 million and, and that's just not a lot of

real estate. No. So, um, yeah. And you're, the thing is is you're you're thinking you're going to double your income and i'm thinking you're not just by i agree getting rid of this because you're you've got to go now generate your own leads and you haven't proven that you can that you can do the level of volume that you're going to need to do to support this so no definitely not in your marriage year i'd spend some time learning the business the rest of the way, jacking up, run your volume way up,

and then you might be able to renegotiate too with your team. Or maybe it is time to start a team. I don't care. Nothing wrong with either one. Good question. Hey, folks, here's the deal. The next 40 minutes of this show are now, as of this week, only available, the next 40 minutes of this show are now as of this week only available the last 40 minutes of the show only available on the Ramsey Network app if you're not listening on talk radio if you're listening on podcast or YouTube if you want the last 40 minutes of the show you can listen the whole show on the Ramsey Network app or you can get the last 40 minutes of the show starting right now. Ready, set, go. So go to the App Store or to Google Play and download the Ramsey app, the Ramsey Network app. There's other things on there. You'll be able to email us a question. We might be able to get

that on the air and some other stuff too. But the last 40 minutes as of this week of the show is no longer on the podcast platform and the YouTube platform. It's now on the Ramsey Network app. And so you can pick it up there. We hope you do. It's completely free, by the way. We're not charging a thing for it. We just moved it over there from an efficiency standpoint. And we want you to go check it out. We want you to check out the app. It's completely free. There's all kinds of goodies in there. By the way, you can search stuff by subject. We've got this beautiful algorithm built in there that if you want to say, okay, I want to hear what Dave has to say about buying a house for cash,

like that last guy, right? And you can just pull up four or five calls that are pulled up out of the database and put them right in front of you. And you can listen to several different versions of the opinion on the same subject if you wanted to. If you like trying to argue with your friend, here's what we say, you know, that kind of stuff. So it's all right there in the Ramsey network app, completely free.

That's how you're going to get the last 40 minutes and how you can listen to the whole show, by the way. Uh, now if you're on talk radio, you're still getting what you've always got. No change at all there, but you have to change stuff up around. That's how business works and life works. So we're changing some stuff that puts this hour of the ramsey show in the books live from the headquarters of ramsey solutions it's the ramsey show we help people build wealth do work that they love and create actual amazing relationships i'm d Dave Ramsey, your host. Ken Coleman, Ramsey Personality,

is my co-host today. Open phones at 888-825-5225. Tanya is in Phoenix. Hey, Tanya, how are you? Hi, Dave. Good, and you? Better than I deserve. What's up? That's good to hear. So I'm calling because I am kind of tired of having debt and not being able to be done with it. So I have a question. I was wondering if I should do the debt relief. I'm not sure. It's basically like kind of like bankruptcy but not... Yeah it is. Yeah. So how much debt do you have, hon? Well, credit cards total is $20,650, and I have a student loan for $26,696. Okay.

So $46,000 in debt. And, of course, student loans are not in debt relief programs. You know that, right? Correct. Okay. And what do you make? Right now, monthly is $2,000, about $300. What do you do? Well, that's another story.

I got let go about two two three months ago why but they put me on because they were cutting down departments okay what were you making there uh it's technically i'm still getting that money because right now i am in currently severance pay okay what was your what was your income before you were fired? It's the same. Exactly the same. Oh, that's the money that you're talking about you have coming in. So you don't have a job right now?

Correct. Why? I'm just doing, like, Grubhub orders on the weekends. Yeah, what were you doing? What was the job you used to have? I was working at a call center. Okay, and how old are you? I am currently 28. Okay all right. What was your hourly rate? 23 and some change. So what's keeping you from doing something Monday through Friday and you're only doing Grubhub on the weekend? Because I wasn't happy and I actually got the find the work you're wired to do

and I just took the assessment test about like a week and a half ago. You got your results in front of you? Yes I do. I have a purpose statement. All right read it read it to me not terribly quickly but roll through the top three talents first. Compassion, connection, and discernment. Compassion, connection, and discernment. Okay, that screams people work. Excuse me, people skills. That's a lot of people skills.

All right, passion, work you love to do, top three. Yeah, I do feel like I do get connected when I help others. Sure. What are the top three passions, type of work you love? Yeah, I do feel like I do get connected when I help others. Sure. What are the top three passions, type of work you love? Advising, researching, and analyzing. Advising, researching, analyzing. It got on point. Well, it's because you answered the questions honestly.

It's amazing how those things work. All right, and missional result. This is the result that most motivates you. You get out of bed Monday morning knowing you're doing this you're going to be fired up what is it what are those three it's just one primary mission service service service okay so this is how old are you again 28 okay and did you graduate college i do i have a bachelor's on business supply management i haven't currently used it though. What does that mean? Business supplied management. I think I know what it means, but these degrees, does that just mean managing people in the world of business? Is that what this is?

Basically, yeah. I mean, it's just an intro to how to start a business, manage it, etc. Well, you can't manage people if you aren't working. But I can tell you this about the American economy. You can manage people if you get in with a company and you get on the ladder and you do a really good job in that role and then they promote you and you keep doing a good job in that role and then after about two or three promotions you're generally going to be put in some type of management position to which you have some training in. But you've got to get to work. Like, let's just go. We're looking for $20 to $23 an hour jobs right now while we're trying to figure out what to do with these results. So we've got this short term we've got to fix

so that you can actually pay your debt off, and you can do that. The long term, the assessment results, and that will help. But before I even get into that, you need to be working, making $20 to $25 an hour right now. 40, 50 hours a week. Yeah, that's step one. Right now. Right now.

Yes, immediately. And then let's talk about what we can get you in as a long-term fix that implements what you learned in the Get Clear assessment, and there's some wonderful things you could do there that are $60,000, $80,000 a year coming in the door. You've got a great four-year degree that's very applicable. But you're going to have to plug in and put your shoulder to the wheel. What we're saying, Tanya, is you don't have a debt problem.

That's right. You have an income problem if you could make sixty thousand dollars a year at your day job and twenty thousand dollars a year at your second job that was after hours making twenty three dollars an hour you could clear up this debt in a year because you're used to living on nothing because you made nothing yeah you've never had a real good income if you had a real good income you could clear this up very quickly this is an income and a career issue that's being reflected in the debt no you do not use debt relief programs debt relief programs say hey you're current quit paying and when you go into default, we'll call the credit card companies and negotiate your defaulted,

destroyed credit with them. It damages your credit as much or more than filing bankruptcy does, and there's no need because it's not going to fix a thing because you don't have an income. What fixes this, what makes us the 19 000 or 20 000 in credit card debt and that student loan go away is to get your income up immediately and then get it up again by engaging in a career process so yeah you need to read uh every single thing can you're on the right track i'm glad you ordered that assessment and got it. And I want you to start thinking about, okay, by the end of next week, I have three jobs,

and I'm going to fill up 40 to 50, 60 hours at 23 bucks. I'm going to end up making more with my three side hustles, side jobs, than I was at the pitiful call center job. It was pitiful. Okay? You're not pitiful. The job was beneath you you have the ability to do much more do you agree yes i do good go get it now once you've got that in place by the

end of next week then you start laying out a game plan of where you want to be 10 years from now and you start taking the steps to become one of those it might take you a year to get there it might take you five months to get there you might might take you five months to get there. You might have to, you might want to get some kind of certification to get there. I don't think so though. I think you're just employable right now, but you got to believe in you again. And you've just been kicked around since you got that degree and you've accepted whatever. And you've not worked hard. You need to work hard. Yeah. You know, she does, she called asking, should I take relief? I think you need momentum. You don't need relief. Your own momentum will relieve you.

And the equation here that Dave's laying out, here's what's going to happen. When you start to see the momentum build and you're starting to pay off that debt because of the income coming in, you'll be amazed, David, how much clearer you can be about your future when you don't have all that stress weighing you down and you're sulking under the weight of that debt. And don't back your way out of this. Charge your way right through the wall. Run through the wall. That's the answer to your question. This is the Ramsey Show.

The best way to make the most of your money is by doing it on purpose. You ever been really scared about your bills? Or you felt overwhelmed and felt stuck? How many of you have been, that are married, have had a huge knock down, drag out fight with your spouse about money.

Everyone that's married and didn't raise their hand has another problem. You lie. Because everyone that's married has had one. Or two or six. Maybe this week, I don't know. If you want to get rid of that stress and those arguments, you could learn to work together. And the tool that working together,

or the causes working together is called a budget. When you spend your money together on purpose to goals that we have both agreed to, there's peace on earth, goodwill to men in your house. Changes everything, y'all. Changes everything. Marriage counselors tell me that oftentimes they have a couple start budgeting together because it makes them agree on their value system and it makes them communicate.

And they often were bottled up, didn't have a vote, didn't have a discussion, were bullied, whatever was going on inside the household, right? A silly budget forces communication. Red Book Magazine did an article that said they had researched, which I kind of thought was humorous, but Red Book Magazine didn't research. But I still love the statistic because, you know, it said 97% of women surveyed that were married would like to have more communication.

Well, of course. The other three were asleep i mean it's like they all want more i mean there's never been i mean never been a lady who said would you quit communicating i can't stand it it's too much it's never it never happened if ladies if you want more communication let me help you with this men speak budget you'll talk about everything going on in your life when you organize your calendar and your budget together. Where you spend your time and where you spend your money is who you are. And when you agree on that, you're aligned on that, it changes everything. That's why

when you give every dollar an assignment, that's why the budgeting app, the best one in the world, is called EveryDollar. And you can download it for free in the App Store or Google Play and do it right now. Christopher is in Montana. Hi, Christopher. Welcome to the Ramsey Show. Hi, Dave. Thanks for taking my call. Sure.

So I started a small business a couple years ago. I guess it was a little over a year ago. Last year, I only did about $30,000 of gross. This year, so far, I'm at $34,000, but I'm having a hard time generating leads. I've been trying not to go in debt with my business. What do you do? I started a pressure washing company, and also I do liquid fertilization. Until earlier last week, I hadn't had a truck that would be able to pull my trailer, so I couldn't do fertilizer, so I was just doing pressure washing. Dude, you ought to be busy 24 7 pressure washing yeah okay so when you book a time if you came if you if you

if i called you and said come to my house and be there at four o'clock and here's what i want you to do would you be there at 3 30 or at 4 30 i'd probably be there around 3 45 or so okay you need to be there early and you need to finish the job when you said you would and it needs to look right do you do good quality work yeah if you show up on time and do good quality work, you can't beat people off of the stick, man. So how many customers have you had in the last year? Probably around 20. So I've done construction for the past 10 years, and I keep getting small little construction remodels,

and that's like guaranteed money right now. Remodels? I thought you were pressure washing. I am, but I'm always tempted to go back to the money that I know is guaranteed. Okay, what is it you want to do? What is it I'm supposed to be helping you with? I want to be able to pay my bills and to just... If you had a pressure washing company and you were busy 50, 60 hours a week pressure washing,

you'd be making really good money. Is that what you want to do? Yeah. I just don't know how to generate leads when I don't have any money for... You don't need money to generate leads. You don't need money to generate leads you don't need money you have you have time you know you can walk down the street and see people that have stuff that needs to be pressure washed and leave a flyer on their front door it costs four cents or just knock on their door and go hey lady i'm in the neighborhood doing pressure washing so let me

tell you what happened they put a pipeline through a through a thing next to our house, through an easement, and it tore up jack, and it left dust and mud all over everything because they're allowed to do that. But they have to repair anything they break, right? And so they paid for pressure washing for parts of the houses that got dust all over them. And you know what that guy did? He walked down the street to people that didn't get free

pressure washing from the pipeline company but still wanted he just walked he ended up going and the guy three doors down walked up to my house while he was doing it he said hey would you come down do my house when you're done all you gotta do is when you set up shop so you need to call every customer you've ever done pressure washing for as soon as you get off the phone and ask them if they know anybody that needs pressure washing because you need some business and then you need to go out and find builders and you need to start pressure washing stuff and if you haven't got anything else to do just go do it for free for somebody because the neighbors around will hire you because you're out there doing it just go okay hey go find go find a single mom or a widow lady that needs some free

help and just go help her and while your stuff's set up walk up and down the street and talk to everybody on the street you're like a you're like keeping this a secret man yeah this this business needs some actual pressure and you know i hate to be so that be so, but I've been waiting to say that. Here's the thing. While you're at it, make the flyer and have someone who knows what they're doing, a photographer, not to spend a bunch of money. We're talking somebody who's got a decent camera in your church or whatever. You can use your dead-gum iPhone. I know.

The point is you make a simple flyer. And, by the way, add trash can cleaning to this you you just need to they need to see you and see that you're a mature person who's going to show up on time and do a good job and say look i'll come do pressure washing i'll come spray out your nasty trash cans give people a couple of there are more ways than one to make money off that pressure washer it's not just sidewalks start thinking about that stuff and today's point how many how many neighborhoods are in missoula montana yeah really but here's the deal business is not a field of dreams build it and they will come yeah no they don't they don't come you have to go get them and so get out in the highways and byways and walk up and down

the street and see something that needs pressure washing and look and go hey dude you want all that mildew crap i can do that for you know i'll be done in an hour and a half and it'll cost you this i'll be done in three hours it'll cost you that and he goes yeah i'll do that i everything you know clean up the sidewalk in front of somebody's store looks like crap they're not coming in the store because it's all mildew looking you man you just walk up and down there's people everywhere need it and it's like it's the easiest thing in the world a fun slogan that's memorable like this isn't it but i'll wash it so you don't have to that was horrible i know but the point is is that it makes it clear to somebody they go you know this is a thing my wife's been all after me about the dadgum stinky garbage cans i'm your guy christopher i'm

the guy i'll come spray the nasty i mean, a kid was making really good money in my neighborhood offering to spray out the garbage cans. And I'm telling you, I was primed for that because my wife was griping about it, Dave, and I didn't want to do it. So he solved a problem for you. That's my point. Business solves a problem. It doesn't have to be a great slogan.

It just solves an irritant. Don't even need a slogan. It just solves a problem. Listen, when you're doing stuff like that, if you show up on time, do what you said, and don't rip people off. You can't beat them. And just walk up and down the street and go, man, my trailer's out here.

While I'm here, I'll give you a deal. You know, 10% off my normal rate. Because I'm already in the neighborhood. And then I'm already in the neighborhood. I'm already in the neighborhood. And then you're going to stay in that neighborhood. That's awesome. Go get it.

Get up, leave the cave, kill something, drag it home. This is The Ramsey Show. Ken Coleman, Ramsey Personality, is my co-host today. Open phones at 888-825-5225. Amber's in Los Angeles. Hi, Amber. Welcome to The Ramsey Show.

Hi, Dave. Thanks for having me on. So my question is about paying off the debt that my husband and I have. We have about $119,000 in debt, and we're considering taking out either like a second or home equity loan to pay it off because we're getting impatient um it used to be 160 so we've been making progress but that's good it's kind of what's your uh what's your household income having children uh about 300 okay um you make $300,000 a year and you've paid off $50,000 in debt. When? It's probably taken us about a year. It's because we're in like our first home and there's just been like one thing after another unexpected issues and things. My husband had to end up selling his car so that we can pay off some

contractors from a leak we had. And then some of that went towards the debt. But also during this time, I've started a little side business, a little party business. I had my first customer this past weekend. My husband also takes on like extra, I don't want to call them shifts, but he volunteers for calls.

So what is the debt? What is the $119 on? What kind of debt? $55 is credit cards. $22 is student loans. $23 is a personal loan. and then 19 is my car. Okay. All right.

What do you do for a living? We're both engineers. Okay. All right. Good. And how long have you been married? Seven years. When did you buy this house you're talking about that's eating you alive?

2021. How much is your house payment um close to five thousand dollars yes okay all right all right okay so it takes sixty thousand dollars a year to pay your house payment all right so if you were to live on $200,000 you would be debt free in a little over a year. Kind of sounds absurd when I say it that way, doesn't it?

Where the flip are you people spending money? Yeah, there's just been, like, we had to get a new AC. We had to get a new furnace. We didn't have a fence around the property. Oh, darn. I'm not going to lie. There have been some vacations in there, too. Yeah, some vacations.

You eat out every night. You got to spend like you're in congress your lifestyle is eating you alive somewhere it's not a i mean a furnace doesn't throw this thing off as far as it's off we're off a hundred thousand dollars a year i mean people in los angeles can live on000. They do it all the time. They live on $100,000 in Los Angeles. But people do. So if you were to live on $200,000 and you put $100,000, so I want you to put $8,000 a month towards your debt.

I want you to sit down tonight, and I want you to quit acting like you're rich because you're freaking broke. You're broke people that make 300 grand. That's why we sold the second car. That's why we sold the other car. And I started up a business. The business is not, you don't have an income problem. You have a spending problem. You make $300,000 a year.

That's fair. Yeah. dollars a year that's there yeah i i think there's like an issue with like feeling so burnt out that we end up needing like treat yourself you know vacation what do you burn out from work i drive 140 miles round trip to work and we have pretty taxing jobs um and you know we didn't get any help from from parents we paid for our own wedding i don't think i can help you um i don't think i can help you the answer to your question though is no you should not borrow try to borrow your way out of debt you did not pay off your debt when you move it over to the home equity loan. You just moved it. And you left all the same habits and stupid butt spending in place.

And you're going to be right back into a mess again because you're rationalized. Every time I bring up, you've got some kind of dadgum excuse. Okay. And so you're going to have to decide that I make $300,000 a year, and it's embarrassing that I can't pay off $100,000 in a year. It's embarrassing. When you decide that, then I can help you. Because it should be embarrassing. I'm embarrassed for you.

It's awful. So, you know, you could clean this up in no time. And by the way, engineers is the number one career field that becomes millionaires and they don't become millionaires doing what you guys are doing i mean you're too smart too smart people and so i drive 143 miles each way and i'm burnt out but i'm gonna start a side business right that's just no don't drive 140 miles get a different job your life or change your job or move get rid of this house you can't afford it's killing you yeah so i mean you guys really need to look at this and get because you're just you're trying to find an easy way

through this and you got to deal with the person in the mirror and i love you and i want you to win and you have such potential can you imagine what it'd be like to have a budget that was under control making 30 making 300 000 25 000 a month with a five thousand dollar house payment how freaking rich you will be if you have no payments and you learn to live on less than you make with a budget and you and your husband are in control, you guys are out of control. You're chaotic. God, I mean, it's, you can do this.

This, I, I get so clear, but you know, no, no, you cannot borrow your way out of debt. Cause let me tell you what happens when people do debt con consolidation loans. It's a con because you don't change a person in your mirror. Your habits are still there. You're going to go right back into debt. And now you've got a debt on your house and all new credit card debt because we're right back where we were because we never got control of $300,000 worth of income. There are people out there listening right now that make $60,000 that are yelling at

you through their car radio right this second are yelling at you through their car radio right this second, yelling at you through their phone right this second going, you've got to be kidding me. You know, they are. And I'm not, I'm not trying to be mean to you, honey. I love you. I want you to win because you've got, you're going to be, you could do so much good. You're going to have an incredible life with this income and you're smart people. You're not dumb people. But, boy, you're doing some dumb butt stuff. And you've got to change that, kiddo. Sorry, but I love you, and I want you to win.

And thank you for calling. Open phones at 888-825-5225. So, Ken, you remember that Tom Stanley wrote the original book back in the 90s called Millionaire Next Door. Tom passed away in a car accident. His daughter daughter sarah still runs a bunch of research tom did another book after that a matter of fact i think it might have been the last book before he died he did called stop acting rich and because people have confused out there, a bunch of people have confused in America, that income means wealth. Income does not mean wealth.

Net worth means wealth. Net worth comes from living on less than your income. That's where it comes from. That's right. There's also this disease where I think people think, if I can balance it, and I'm thinking about the old cartoon. I don't know if it was Sylvester the Cat where the plates would fall off and he's scrambling trying to catch all the plates. So this idea of if I can balance all the stuff, then I can have what rich people.

And that's the idea that he's talking about. And there's a difference between balancing it versus affording it. They think they can afford it because they're balancing. And then what we see is the plates start to drop. And in this case, her health is dropping. The burnout, stuff like that. I mean, it's just you can't keep trying to balance all these plates, spinning all these plates. Yeah.

It'll kill you. It'll just kill you. That's what's burning you out. I agree. Plate spinning. Plate spinning will kill you. And guys, if you make a good income, you're not rich. You're not rich you're not rich not until you live on less than that and you build a net worth that's what makes you rich you can't out earn your stupidity i tried it i was good at it couldn't do it this is the

show our scripture of the day is Proverbs 1430. A heart at peace gives life to the body, but envy rots the bones. Theodore Roosevelt said, I have never in my life envied a human being who led an easy life. I have envied a great many people who led difficult lives and led them well. Oh, he was a beast. Just a beast. No question.

Beast mode. Wow. All right, let's see. Jason's in Louisville, Kentucky. Hey, Jason, how can I help? Hey, so I've got a question for you. I currently work in a sales position that puts me on the road a lot, and I currently make about $120,000 a year.

I have an opportunity to take a job back in the town I live in and not have to be on the road as much. But it's a significant pay cut, but it comes with a state pension that I've already got 16 years invested in, and I'm invested in early Tier 1 when it was the best pension that the state offered. So I'd be able to jump right back in where I left off. There's no age cap of when I could retire. So once I hit 27 years, I can retire. When do you – what do you make now?

$120,000. And what would you make there? $80,000. Okay. That's a bad choice. You don't think $40,000 a year will build you an incredible retirement well and make that pension look like nothing but in 11 years can i do mathematically 40 000 a year in 11 years is going to make you a multi-millionaire

a lot better than the stupid pension it's not your only option you're not even thinking about this financially this is all emotional because you don't like being on the road and i get that totally get that but you're good i'm good with you changing jobs why don't you find a sales job that pays 150 and you're not on the road i don't mind so much being on the road and i yes you do and i hate i it because I didn't want to put the emotion in there, but my parents are getting some age, and they live in town, and that's kind of what made me think. Are you in Louisville? Do you live in Louisville? Yes.

Okay. Good salespeople make $150,000 a year. How long have you been selling? I owned my own business for about 11 years where I did nothing but sale. I owned a tool franchise. And, you know, I've been doing sales off and on, and I've been in this position for about two years. Okay.

If you can make $120,000 in sales, you can make $150,000 in sales. Okay. And come off the road. So it's just a matter of what you're doing. I don't know what, you know, you've changed three times what you sell, it sounds like. And that's okay, which is good news because it means you can learn to sell something else. Selling is simply serving. You know that, right?

You're helping someone solve a problem. If you help a whole bunch of people solve their problem, you make a lot of money. Right. That's what selling is. And so I love good salespeople. i've been one my whole life i grew up in a household full of my parents were sales people they own a real estate company so i mean i've been in sales training since i could walk and so i love the whole concept of helping people serving them well and you you end up getting certificates of appreciation with president' faces on them.

Right. Yeah. So I think that option B, or you gave me A and B, we're going to say C, none of the above. D, find a local sales job that you're not traveling that makes more. That's right. But the pension is a bad motivator. Coming off the road is a good motivator. Right.

And it's okay, by the way. I want to make sure you understand. When I said the emotional piece, that's good. That's good emotion to want to be around your aging parents and not be on the road if something were to happen. Yeah, that's cool. So that's good. What I'm saying is that you're now trying to talk yourself into a financial reason with the pension when you know this is not a good decision. So I'm totally with Dave.

I think I would be patient. I would start hitting the, just, you know, shaking the trees in Louisville for a sales job where you can make the same, if not way more with a path for growth. And you're in Louisville and you're not on the road much at all. That's there. You just got to hustle for it. Yeah, it's very possible in today's world to do that. And you're worth it, by the way.

You know, you're actually a prize to be had by some great company that's going to pay you great. They're looking for you right now. They just don't know where you are. And so, yeah, you'll be able to do this. But no, for $40,000 or more a year difference, you can have a lot more money if you invest that money than you would have from any pension. Yeah, because, Dave, the choice in his head is the pension makes up for the cut, and it doesn't.

No, it doesn't. It does not any time. Not even close. Yeah. Not even close. The $40,000 beats the pension 100 times out of 100. Michael will be in Dallas, Texas. Hey, Michael, welcome to the Ramsey Show.

Hello, gentlemen. How are you doing today? Better than I deserve. What's up? So my wife and I are kicking the tires on a Roth conversion, and I wanted to run this plan by you to see if you think it's a good idea. Here's some information about our situation. I'm 42.

My wife is 39. We have a net worth just north of $1 million. No debts. We have approximately. The house has paid off. I'm sorry? The house has paid off. Yes, sir.

Way to go. Well done. 42-year-old millionaire. How much of this million dollars did you inherit zero okay cool all right so what's your what's the rest of the question then oh so we i have about we have about 240 000 in traditional funds and most of that's from company match from over the years so what i'd like to do, oh, and by the way, on our budget, we use all the extra margin to just about max out our retirement funds, Roth, 401k and IRA. on my company match and then use that amount to basically pay the taxes over a three-year period to be around $25,000 a year to convert the traditional funds over to a Roth. But I don't

know if that's a good idea long-term. It seems like it would be. Okay, what is it we're reducing to do this? My retirement contribution. And that's going into Roth? It is going into Roth, correct. So it's a complete wash then? Yes, it would be. Yeah, you're not gaining any ground by doing this other than you've got this moved over into Roth. What's your household income? $175 a year. Won't you cash flow the $25 and leave your retirement where it was? Yeah, I talked to my wife about that. She doesn't want to reduce the budget any further in order to cash flow it um at least

over a three-year period we could probably do it over a longer period of time let's do it over a little bit longer then let's put it on five if we have to and then any raises you get during that five go to the increasing the the speed of this not to increasing lifestyle okay okay so definitely a better idea to cash for i love the idea you're at baby step seven i like getting everything into roth okay because there's a whole bunch of stuff that's going to happen to you in about 20 years you're going to be really glad it's in roth that's where i'm sitting i moved everything into roth and i move all my match into roth at the end of every year and I pay the taxes just like you're talking about you're in baby step seven this folks is for only those of you that are in baby step seven and only those of you that can cash flow the taxes without using some of your

I wouldn't use any of the 240 either to pay the taxes by the way so um now and here's why. So we got 240 by cash flowing 25 a year or 25 over whatever period of time. By cash flowing the 75,000, the taxes, okay? What you're doing is mathematically it is as if you have invested another 75,000 in your retirement plan. That's what ends up happening because the Roth grows completely tax-free versus traditional. So you've converted that $75,000 by doing it outside of not reducing retirement and not reducing the $240,000, doing it with cash flow. It's as if you put that much more into retirement, which is brilliant, okay? And you're only going to do it one time. So here's why. 240 in seven years is 500 in seven more. You're 42. So when you're 49, when you're 50, it's a million when you're 56.

So you're going to have so much money in this account and your required minimum distributions of 72 and a half are going to clean your clock if you don't do this and you can leave a roth inherited to people and there's no taxes on it if you leave in a traditional to people there's taxes on it in your inheritance plan there you go so definitely do it this is the ramsey show We'll be back with you before you know it. In the meantime, remember, there's ultimately only one way to financial peace, and that's to walk daily with the Prince of Peace, Christ Jesus. you